What is Patent Evergreening?
The term evergreening in itself denotes the process of keeping something fresh and green for perpetuity. A statement to the effect of “George Clooney is evergreen” can be used to denote his appeal being timeless, for example. But the terms takes on a far less benign definition when applied to the context of IP.
Patents as a concept revolve around fostering innovation by ensuring that while the inventor of a particular technology will have exclusive rights on their work for a limited period of time, the technology in general would be made available to the public, allowing for further development.
Ideally and legally, these patent rights expire once the patent term of 20 years is over. It turns out, however, that there are ways of getting around this limitation. Larger corporations, especially those in the pharmaceutical industry, have been observed indulging in patent evergreening. This is done by making minor changes in the constituents of a drug and claiming a patent on them, effectively increasing the validity date of the previous formula which typically has the same active ingredients. This allows for the patent to remain exclusive, justifying higher rates.
In theory, 20-year patent protection is a win-win scenario. The two-decade monopoly granted by the patent allows industries to recoup their costs and make profits, after which drugs are let free into the generic market where it can reach more people at lesser prices. In practice, it is antithetical to the interests of any company to let go of a valuable performing asset.
The Pharma Industry and the Patent Tussle
With the pandemic creating a demand for medicines and drugs, many manufacturers have been in a tussle in to evergreen their patents. This strategy is focused more on retaining the hold that yields profits rather than helping the society, something in contravention with the basic theory of how patents help innovation.
Novelty is the base of a product or service getting a patent. Smaller tweaks result in almost no novelty and innovation, which then becomes unfair for the rest of the players in the market. The 2005 amendment to the Indian Patent Act, 1970 recognized this with Section 3(d), which states that the following is not patentable:
“the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the 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. Explanation. -For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy”.
This is a provision hotly contested in international circles, but it was created with the aim of preventing evergreening, keeping in mind India’s booming generic drug industry.
Cases and Precedents
The Landmark judgment of Novartis AG v. Union of India has been able to shed much needed light on the issue. The judgment ruled against Novartis’s attempt to try to patent a medicine which was exactly similar to the one before.
The case revolved around the fact that the company had applied for a patent of “Imatinib mesylate” in beta crystallized form. The judgment was against Novartis as the judges noted that merely making a change in the form of administering the said medicine cannot qualify the as innovative unless and until it noticeably increases the efficacy of the drug. In this case, even after running multiple tests it was noted by the court that there was no additional components added which made the medicine even more efficient in any way.
Global Outlook in Comparison with India
U.S. IP law has, in general, refrained from putting restrictions in and around the practice of evergreening. which also stems from the fact that the United states have held profitability above the reach of an innovative medicine to more and more people. As an illustration, Humira was a popular drug when it came to treating issues stemming from the presence of excess TNF – alpha in the body. The patent for the primary drug, held by AbbVie Pharmaceuticals, was originally set to expire in 2018. Following a few complicated patent strategies, it’s now due to expire in 2034. The consequence of this can be seen in how biosimilar drugs in India cost a fraction of the price they do in the USA.
Of course, patent abuse is only one part of what makes the US healthcare system so complicated and expensive. Other developed countries have found alternative ways of regulating drug prices while still allowing new patents to be filed.
In the short term, more stringent patentability rules have boosted the medical tourism in India. However, from a more global perspective, it may be important to take an additional look into the monopolization tendencies brought about by what some may call frivolous patents.
Health has also been a crucial point of conversation for quite a while now because of the pandemic. In that context, evergreening may be seen as even more of a threat. Not just as a threat to innovation and affordability in the medical sector, but as something that could socially impact countries.
Author: Apurva Kumar Das, Legal Intern at PA Legal.
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