Patent evergreening in India

INTRODUCTION

“Patent evergreening” is a strategy used by pharmaceutical companies to prolong the protection and profitability of their patents. In India, the Patents Act of 1970 introduced measures to prevent this practice. Evergreening is worrisome because it can indirectly increase the cost of critical life-saving medications. 

A patent, as defined in the Indian Patents Act of 1970, grants an inventor the exclusive right to prevent others from making, using, or selling their invention. This also includes the right to license others to use or sell the invention. Essentially, it’s an official document that provides the inventor with a temporary monopoly over their invention for a specified number of years. Once this period expires, the exclusivity ends, and the technology or product becomes accessible to anyone, allowing competition.

Under Chapter II of the Indian Patent Act, 1970, Section 3 deals with what is not patentable. Sub-section (d) reads “the mere discovery of a new form of a known substance or mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant”. This provision aims to prevent a practice called “evergreening” and to protect genuine innovators. A famous example illustrating this shift in approach is the Novartis case.

The Doha Declaration underscores the importance of implementing and interpreting the TRIPS Agreement in a way that prioritizes public health. In simpler terms, it means that countries can protect public health while respecting intellectual property rights, striking a balance that benefits everyone.

What is evergreening?

“Evergreening of patents” is a term used to describe a practice where pharmaceutical companies try to extend the exclusivity period of their patents on drugs without making any significant improvements to the drug’s effectiveness in treating diseases. This means that they can maintain their monopoly on the drug for an additional 20 years without necessarily providing a better treatment for patients.

When this exclusivity ends, the price of medicines often drops significantly as generic competitors can enter the market. To avoid this loss of income, pharmaceutical companies employ strategies to extend their exclusivity. Evergreening, also called secondary patenting, is one such strategy. It involves obtaining additional patents for modifications to the original drug, such as new dosages, forms, releases, or combinations. In simpler terms, evergreening is a way for companies to maintain control over their products and prevent generic competition by getting new patents for minor changes to their existing drugs. This helps them continue to profit from the drug for an extended period.

The Process of Evergreening

“Evergreening” is a strategy used by pharmaceutical companies to extend the life of their patents for profitable drugs. “They do this by adding various inventive aspects or making small changes to the original drug, ensuring that these changes are different enough to avoid patent rejection. This results in the extension of the patent term for the same drug for another 20 years. In simpler terms, it’s a practice where drug companies get new patents for slightly modified versions of a drug, even if these changes don’t significantly improve the drug’s effectiveness. This allows them to maintain a monopoly on the drug for a longer period than usual under the law.”[1]

Multinational pharmaceutical companies often use a strategy called “evergreening,” which is a way to extend the patent protection of a drug. One common method of evergreening involves obtaining separate 20-year patents for various aspects of the same product. These patents can cover things like the drug’s manufacturing process, the colour of the tablets, or even the substances produced by the body when the patient takes the drug.

The result of this strategy can be that generic versions of the drug are kept out of the market, even after the original patent expires. This means the innovator company can keep charging high prices for the drug without competition from generic drug makers. Governments may want to regulate against evergreening because it can delay the entry of cheaper generic competitors after the patent expires. When multiple generics enter the market, it tends to bring down drug prices and encourage competition, which is generally seen as a positive thing.

In the pharmaceutical industry, we have a situation where many patients struggle to afford expensive patented drugs, while the innovator companies are trying to ensure the long-term value of their creations. Here are some common evergreening strategies used by pharmaceutical companies:

1. Creating slight variations of a product and then patenting it as a new one, even if the changes are not substantial.
2. Changing a prescription drug into an over-the-counter (OTC) product, allows it to be sold without a doctor’s prescription.
3. Forming exclusive partnerships with leading generic drug manufacturers before the patent expires, which enhances the brand’s value and allows the innovator to earn royalties.
4. Using defensive pricing strategies where innovator companies lower the price of their product to compete with generic alternatives.
5. Establishing subsidiary units in the generic drug sector before rival generic companies enter the market.

These strategies can help pharmaceutical companies protect their market share and extend the life of their patents but can also impact drug affordability for patients.

Different Theories of Evergreening

1. Evergreening, which involves re-patenting the same thing during an existing patent’s life, is prevented in India. The Indian Patent Office demands new patents to show an “inventive step” and “novelty.” If a second drug is identical, it’s obvious, and no patent is granted. The issue arises when slight improvements are made, leading to the question of whether these changes warrant a new patent.
2. Additionally, Indian patent law prohibits the patenting of a drug reformulation that would allow the original patent’s term to be extended. Generic versions are permitted to be created after a patent has expired. In an interview, Tapan Ray said, “Patent expiration is a legal process. A generic entity may start manufacturing it because there is no way for a drug business to simply ignore or override it. In addition to being inaccurate, articles that claim that “ever-greening would… allow a patent holder, nearing the end of the 20-year life of a patent, to renew the patent for a fresh 20-year period” are also deceptive. Even if evergreening is taking place in some way, it is not thanks to the extension of an already-issued patent.[2]
3. Another theory of evergreening suggests pharmaceutical companies patent a new version of a drug, let’s say “version 2.0,” even if it’s not better than the original, “version 1.0.” The idea is to make patients continue paying higher prices even after the first patent expires. However, this theory doesn’t hold up. If version 2.0 isn’t an improvement, patients wouldn’t have any reason to choose it over version 1.0 once version 1.0’s patent expires. In fact, with generic competitors entering the market after version 1.0’s patent ends, the demand for version 1.0 should increase significantly.[3]

Indian Patent Law Post 2005 Amendment Act

Limitations to Evergreen in India

• Pharmaceutical companies used evergreening to extend patent protection by making small, unimportant changes to the drug. Indian laws weren’t strict enough, allowing innovative companies to benefit. There was a need for stricter laws to prevent evergreening. Stopping evergreening requires rejecting patents for minor changes in the original product.
• In India, the ability to patent products was introduced through the Indian Patents (Amendment) Act, 2005. This new system aimed to protect the rights of patent holders. This Act was in line with India’s commitment to the World Trade Organization (WTO) and its Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
• The Amendments Act brought key changes related to patents:
• Annotations for Pharmaceutical Products: Clarifying rules for pharmaceutical items.
• Eliminating New Forms and New Applications: Removing patents for slight modifications or new uses of existing products.
• Defining Substances for Protection: Specifying substances eligible for patent protection under the new rules.
• The Act defined what qualifies as a ‘new invention’ and set limits on patenting under Section 3(d). It also outlined specific criteria for granting protection.[4]
• “The changes involved applying a strict interpretation to the definition of “new invention” as it appears in Section 2 of the IPA. This clause can be explained as any new invention or technology that hasn’t been previously published in India or anywhere else in the world before the application is filed with complete specifications, meaning that all of its essentials haven’t been made known to the public or that it has never been considered the state of the art.”[5]
• The 2006 Reports give governments the ability to acquire legislation and a number of examination criteria necessary to assess the degree of creativity and thwart patent evergreening. The paper also claims that all WTO members now have the power to decide which restrictions are necessary for the “inventive step.”[6]

SAFEGUARDING THE INTEREST OF PATIENTS OVER PATENTS

• Pharmaceutical companies use evergreening to extend their monopoly over patented products, ensuring continued profits. It’s necessary to stop this practice and find a balance between patent laws and setting affordable prices for medicines. This way, everyone can access the needed drugs.
• Critics argue that evergreening mainly benefits a company’s profits without significant drug improvements. Brand name firms claim they extend patents to protect their investments in research and development, ensuring the quality of their drugs remains under patent protection.
• Before the TRIPS Agreement, India was a major provider of affordable medicines globally. Initially, most medicines were imported because of the product patent regime. However, after a shift to a process patent regime in the early 1970s, Indian pharmaceutical companies developed their own medicines. This change made India self-sufficient in meeting its medical needs and allowed it to supply affordable drugs to many countries in need.
• Under the process patent system, India produced affordable generic medicines. However, due to the TRIPS Agreement, India had to shift to a product patent system. Amendments were made to minimize negative effects. Non-patentable items were expanded, and Section 3(d) was rewritten, preventing the evergreening of pharmaceutical patents.
• Compulsory licensing allows non-patent owners to produce specific patented medicines, helping reduce their prices. It’s a way to make essential medicines more affordable.
• The Bayer Corporation’s patented medicine Nexavar was manufactured in India for the very first time under a compulsory license issued to Natco Pharmaceutical Company. This drug was used to treat liver and kidney cancer. The Bayer Corporation used to sell its products at a price that was simply too high and hence unaffordable to many segments of society. After confirming that the requirements of “Section 84 of the Patent Act of 1970” were satisfied, the Indian government awarded a compulsory license on the grounds of the general good.[7]
• For underdeveloped countries compulsory license is the only ray of hope for patients with low economic support. The challenge in front of India is that to progress with the method of compulsory licensing with respect to international guidelines of protection of patents on one side and creating a structure of public welfare on the other.[8]

HOFFMANN-LA ROCHE LTD. &ANR. V. CIPLA LTD[9]

Facts

OSI jointly owns a patent with Pfizer Products Inc. in respect of a small drug molecule popularly known as “Eriotinib”. “It is claimed that the said drug marked a major breakthrough and innovation in the treatment of cancer. It is administered in the form of a tablet and sold under the trademark name ‘Tarceva’, which is registered in the name of Roche. It is claimed that Eriotinib and Tarceva have been approved by the U.S. FDA (2004) and by the EU (2005). The patent in respect of Eriotinib was granted by the Controller General of Patents, New Delhi, and recorded as of July 6, 2007.”

“In 2008, media reports alleged that Cipla announced its plan to launch a generic version of Tarceva (Eriotinib) in India under the name of ‘Eriocip’. On hearing of this, the plaintiffs alleged infringement and violation of the patent owner’s rights by claiming that the drug had been developed after a long sustained research and after incurring enormous expenditure. Roche claimed before the Single Judge in Honourable High Court of Delhi to restrain Cipla from manufacturing the said drugs so that their business of drugs would not be affected.”

ISSUES

1. Whether Cipla’s Product Erlocip, encroached, Roche’s Patented compound ‘Erlotinib’ (Polymorph B)
2. Whether Roche’s patented compound ‘Erlotinib’ is a legitimate patent?

JUDGEMENT

In the end, the division bench ruled that there was no infringement because the drug Tarceva had solely Polymorph B, while the patent in question contained a mixture of Polymorphs A and B. “The point here to be noted was that Roche had applied for a patent of Polymorph B but was denied by the Indian Patent office as it did not satisfy the criteria of Section 3(d) and the test of patentability was not satisfied. Moreover, the court considered the intent of the legislature in enacting Section 3(d) and anti-ever greening laws and held public interest above everything. The court realized that here a lifesaving drug was in question, and hence the drug which was made available by Cipla was three times less priced than the drug which was manufactured by Roche.”

NOVARTIS AG V UNION OF INDIA[10]

FACTS

In 2006, “Novartis” applied for a patent for their drug “Glivec” in India. However, the Patent Office in Madras rejected the application because they found that there was no significant difference or improvement in the drug compared to what had already been patented in other countries. This decision was based on Section 3(d) of the Indian Patents Act, which requires a new or enhanced efficacy for a drug to be eligible for a patent.

In response to this rejection, “Novartis” filed two writ petitions with the Madras High Court under Article 226 of the Indian Constitution. They argued that Section 3(d) wasn’t in line with international trade rules related to intellectual property rights. They also claimed that this section was unclear and arbitrary, and it violated Article 14 of the Indian Constitution, which guarantees equality before the law.

The Madras High Court also rejected the writ petition, stating that it didn’t have the authority to decide whether Indian law complied with Trade-Related Aspects of Intellectual Property Rights (TRIPS). The court emphasized that the amendment to the patent law was intended to make it easier for people to access life-saving drugs, so Section 3(d) couldn’t be considered unclear, arbitrary, or in violation of Article 14 of the Indian Constitution.

This decision led to a discussion within the Intellectual Property Appellate Board, which recognized “Novartis’s” discovery as a new and inventive one. However, they still refused to grant the patent because it conflicted with Section 3(d) of the law. In the end, “Novartis” challenged the High Court’s order in the Supreme Court of India by filing a Special Leave Petition (SLP).

ISSUES RAISED

1. Whether or not the Invention is inconsistent with section 3 (d) of the patent act?
2. What is the interpretation of Section 3 (d) of the said act?
3. Whether or not said invention qualifies to be “enhanced efficacy” for the alleged product.

JUDGEMENT

The Supreme Court carefully considered the facts and the law. They noted the appellant’s argument about the “Zimmerman patent,” stating that it didn’t involve a new discovery yet was granted a patent. The Supreme Court clarified that when applying Section 3(d), the term “efficacy” specifically refers to “therapeutic efficacy” because it relates to the medical value of the drug. Even if the physical properties have improved and could enhance effectiveness, it doesn’t meet the criteria. The Court emphasized that, under the Indian Patent Act, granting pharmaceutical patents requires inventive steps and application, in addition to proving traditional aspects like novelty. There’s also a new requirement of “enhanced therapeutic efficacy,” especially for claims involving minor changes to existing drugs.

CONCLUSION

A complex and challenging issue in patent law is determining where to draw the line between unethical attempts at evergreening and proper incremental innovation. The Indian patent authorities are reluctant to give patents for every pointless modification as a result of changes to the country’s patent laws, which have severely limited the scope of evergreening. In addition, centralised methods that are designed to cut costs and time have been implemented in the patent application process. The conditions for registering patents have also increased in difficulty and rigour in tandem with the development of new technologies and inventions. The effect of Indian patent law modifications is twofold, i.e., protecting generic and innovative industries and protecting public health, even at the cost of numerous multinational pharmaceuticals withdrawing their research, development, and investment from India.

To combat the issues in relation to evergreening, there was a dire need for robust patent laws in the country. Consequently, India introduced the Indian Patents Amendment Act, 2005, which allowed the patenting of products in the country and introduced a new patent system aimed at protecting the rights of patent holders. This Act aligned with India’s commitment to the World Trade Organization (WTO) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).

REFERENCES

1. Narayanan P, Patent Law (Eastern Law House 2017)
2. ‘The Wrongs of Evergreening’ (2008) Managing Intellectual Prop 100
3. Guide To Patents Law | Edition 4th | Lexis Nexis Publications | 2023 Edition
4. Understanding Patent Law | Edition 1st | Lexis Nexis Publications | 2023 Edition.
5. Somdyuti Das, ‘Patent Evergreening Prevention: Ensuring Innovation and Access to Affordable Medicines’ (2023) 5 Indian JL & Legal Research 1
6. Uri Y. Hacohen, ‘Evergreening at Risk’ (2020) 33 Harv J L & Tech 479
7. Joli Patel, ‘India’s Crackdown on the Practice of Pharmaceutical Evergreening: The 2013 Novartis Decision’ (2017) 85 UMKC L Rev 503
8. Dorothy Du, ‘Novartis AG v. Union of India: Evergreening, Trips, and Enhanced Efficacy under Section 3(d)’ (2014) 21 J Intellectual Prop L 223
9. Ashley Newsome, ‘Side Effects of Evergreening May Include Decreased Competition & Increased Prices in the Pharmaceutical Industry’ (2017) 45 AIPLA Q J 791
10. Jodie Liu, ‘Compulsory Licensing and Anti-Evergreening: Interpreting the TRIPS Flexibilities in Sections 84 and 3(d) of the Indian Patents Act’ (2015) 56 Harv Int’l LJ 207

[1] Ijlsi (2019) Acceptability of evergreening method in India – IJLSI, International Journal of Legal Science and Innovation. Available at: https://www.ijlsi.com/acceptability-of-evergreening-method-in-india/ (Accessed: 26 September 2023).

[2] Dorothy Du, ‘Novartis AG v. Union of India: Evergreening, Trips, and Enhanced Efficacy under Section 3(d)’ (2014) 21 J Intell Prop L 223

[3] Dorothy Du, ‘Novartis AG v. Union of India: Evergreening, Trips, and Enhanced Efficacy under Section 3(d)’ (2014) 21 J Intell Prop L 223

[4] Section 3(d) of The Patents (Amendment) Act, 2005

[5] Section 2(1) of Indian Patents Act, 1970

[6] WHO Public Health, Innovation and Intellectual Property Rights Report, 2006

[7] THE PATENTS ACT, 1970

[8] Debarchan De & Kevin Samuel, ‘Evergreening of Patents: A Barrier to New Inventions’ (2020) 22 Supremo Amicus [252]

[9] I.A. 642/2008 IN CS (OS) 89/2008

[10] Novartis AG v Union of India (2013) 6 SCC 1