Patent Evergreening and Its Effects

What is Evergreening?

With the introduction of several vaccines against COVID-19, there have been debates over a controversial topic in the IP regime: the Evergreening of Patents. Evergreening denotes the practice where the players in the pharmaceutical industry try to extend the term of a granted patent which is about to expire by making some minute changes in the patented subject.

Consider the following scenario: the patent regime allows for a maximum term of 20 years. After the expiry of a patent, every invention goes into the public domain making the patented subject free to use, manufacture, and sell. However, the patentees can make some trivial changes to make the product similar to the old subject matter but still distinct, in order to get a new patent. This leads to the elements of the parent patent getting protection due to the claims made in the new patent, thereby pushing back the generic market from capitalizing on the expired term of patent. Although the substance is distinct, the use/effects remain the same, and hence the product retains its identity. This strategy is focused more on retaining the revenue/royalties from the patent, rather than increasing the therapeutic efficacy.

greening

This technique has often been criticized because of it leads to market monopolization and stagnation in innovation. The patented drug or substance is now produced only by the actual owner, which limits the production capacity and gives room for price manipulation. Needless to say, this can easily effect the lives of those with fewer financial resources, particularly in the case of essential drugs. Due to this, the Indian Patents (Amendment) Act, 2005 was introduced, which brought some significant changes in the Indian patent landscape. It leveraged the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) flexibilities, which allow the developing countries to develop IP policies in line with local challenges.

Section 3(d) of the Patents Act

Section 3 of the Indian Patents Act, 1970 gives a broad description of inventions that cannot be patented, or products that cannot be counted as inventions themselves. However, it was the amendment of 2005 which brought a complete shift in the paradigm of patents. The amendment, seen as a means to move closer to the TRIPS standards, addressed some very important points such as the additions of ‘mere discovery of a new form of known substance’ and the ‘new use for a known substance’ into the list of non-patentable subject matters.

The amendment also, crucially, introduced Section 3(d) in the Indian Patents Act, 1970, which elaborated upon the term ‘new invention’ and also introduced restrictions about acquiring patents. It has been mentioned that patents would not be granted on the following grounds:

  1. The mere discovery of a known substance, which does not result in the enhancement of the known efficacy of that substance,
  2. The mere discovery of any new property or new use for a known substance, and;
  3. 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 step has been taken by the Indian legislators to strike a balance between the interests of all the relevant stakeholders and promoting access to medicine in the country. India was able to take this step under the light of Article 8 of TRIPS which states that each country can introduce a patent regime that is more suited to its socio-economic context.

The Novartis Judgment

Just after this amendment, the landmark case of Novartis AG V. Union of India (2013 6 SCC 1) came up in the Supreme court of India, which brought the discussion of evergreening in the mainstream. In this case, Novartis filed a patent application for a drug, which was slightly a different version of its previous patent. This application was rejected, since it violated Section 3 (d) of the Indian Patents Act, 1970. The court explained the intent behind introducing the amendment of 2005, which is:

  1. Prevent the ever-greening of patents
  2. Providing easy access to people for life-saving drugs
  3. To perform their constitutional duty of providing health care to the citizens

Additionally, the court also explained that the amendment is in no way contradictory with the actual patent act. Since public interest is a factor to be considered and the right to health being a fundamental right, this would come under the ambit of reasonable restrictions permitted by the constitution.

Conflicting Viewpoints

The 2005 amendment along with the Novartis case has contributed in increasing the accessibility and affordability of drugs in India. Critics of this move, primarily hailing from first-world countries, protest that the move has made the process of acquiring a patent needlessly difficult. Pharma companies and other similar business entities have been opposing this move, stating that it will affect the incentive for innovation. This can adversely affect India, a developing country that relies on foreign investment to shore up its unstable economy. There have been calls for a more balanced approach to keeping drug prices low, such as the implementation of mutual licensing programs and greater usage of compulsory licensing.

On the other hand, many non USA/EU/UK nations have favored India’s move, some to the extent where they have started to adopt similar practices in their own nations. Countries such as the Philippines [Section 22 Amendment, Republic Act, 8293] and Mexico [Mexican Industrial property Law, Article 19] feature language similar to that in Section 3(d), prioritizing efficacy and innovation over pure novelty. Critics of evergreening have also pointed out instances of the practice being used to considerably harm societies at a social level, as can be seen from the USA’s crisis surrounding affordable insulin.

As always, balancing existing laws with public benefit is a long and rocky process, and it makes sense that less economically developed nations or nations which put a premium on the human resource would be the ones at the vanguard for more accessible healthcare. Meanwhile, technological innovation continues to be the primary interest of more well-off nations. This disagreement is cultural as much as it is technical, and it will be interesting to see how it plays out in the future.

Author: Unnat Akhouri, Legal Intern at PA Legal.

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