Proposed Revisions to the Canadian Patent Office’s Examination Guidelines on Pharmaceutical Solid Forms

The Canadian Patent Office (CPO) is seeking comments on its proposed revisions to Chapter 17 of the Manual of Patent Office Practice (MOPOP) as it relates to pharmaceutical solid forms (namely, polymorphs, salts, hydrates, solvates, desolvates and co-crystals).  In this post, we will examine various section of this amended chapter in detail.

Considerations Respecting Anticipation and Obviousness (Chapter 17.08.01)

This section of amended Chapter 17 describes the considerations to be used in assessing anticipation and obviousness of pharmaceutical solid forms.  According to this section, where a particular crystalline form (such as a polymorph) of a small chemical molecule has not been disclosed and enabled in the prior art, either explicitly or inherently, a claim to that crystalline form is considered to be novel and satisfy subsection 28.2(1) of the Canadian Patent Act (Patent Act).  However, if a polymorph is disclosed and enabled in the prior art, a claim encompassing that polymorph is considered to be anticipated.  Thus, a known polymorph will not be novel simply by making it dependent on a new process.  Nonetheless, a claim to a process used to prepare a polymorph may be novel if it can be distinguished over the prior art.

When assessing obviousness of a new crystalline form, the chapter notes that one factor to be considered is the process by which the new form is produced.  Inventiveness may be acknowledged for a form that can only be produced using an inventive process (such a process is considered to go beyond the mere application of common general knowledge and routine experimentation).

Nevertheless, the chapter further states that even if a process used to prepare a new solid form relies on basic crystallization techniques that are standard in the field, the solid form may still be non-obviousness.  Specifically, inventiveness may be acknowledged if the originally-filed application discloses that the form provides an unexpected benefit, such as a beneficial physicochemical property that is attributable to the form itself.  Specifically, the chapter further notes that:

Only benefits disclosed in the originally-filed application will be taken into account during an obviousness assessment.  The disclosure of the benefit may be either explicit (e.g., direct statements) or implicit (e.g. supportive data provided in the application).  In a patent application the most persuasive disclosure is one that provides data comparing the form of the invention to the prior art form (or all of the closest prior art forms when more than one exist) and confirms that there is a significant difference or improvement in one or more physicochemical properties compared to the prior art form(s) of the same chemical molecule.  Where the specification comprises statements indicating a solid form ‘may’ have a particular benefit or ‘has at least one’ benefit selected from a list of benefits (without clearly stating which it has), this amounts to an inexplicit indication of potential benefit.  Unless the benefit would be implicit from data provided in the application, such statements would not be considered during an obviousness assessment.  Likewise, a benefit that is recognized subsequent to the filing of the original application would be given no weight in the assessment.

It is important to note that the person skilled in the art would generally expect or predict that a crystalline form will have certain benefits over an amorphous form of the same small chemical molecule, including easier isolating, purifying, drying, and in batch processes, easier handling and formulating.  However, such expected are generally not sufficient, when taken alone, to support a finding of non-obviousness.

Considerations Respecting Utility (Chapter 17.08.02)

This portion of amended Chapter 17 states that although the utility of a polymorph does not need to be expressly set out in the application, the subject matter must have utility.  Moreover, a person skilled in the art would reasonably expect that polymorphs of a known small chemical molecule that have a previously established utility (either pharmacological or therapeutic) would also possess the same activity.  In such cases, because the utility of the polymorph will generally be self-evident to the skilled person, the utility requirement of section 2 of the Patent Act would be satisfied.

A utility defect will be made if the specification is silent regarding the utility of the claimed polymorph and the utility of other known forms of the same small chemical molecule are neither disclosed in the specification or common general knowledge to a skilled person in the art.

In instances where the claimed crystal form has a utility different from other known form(s) of the small chemical molecule, the utility must be established by demonstration or sound prediction.  However, if the utility relies on a physicochemical property that was not established and could not have been predicted, then the utility of the subject-matter of the invention cannot be established by sound prediction.  Specifically, this portion of the chapter states, “[R]ecall that the specific physicochemical properties of a particular crystalline form are generally considered as unpredictable since the crystal form must be prepared and tested before its properties can be ascertained (see 17.08.01). Given that such properties cannot be predicted and would not be implicit to the skilled person, in order to establish utility the applicant must be in a position to show that the property associated with the utility was demonstrated no later than the filing date of the application.”

Defining a polymorph in the claims (Chapter 17.08.03)

This portion of amended Chapter 17 states that with respect to claiming polymorphs, that the polymorph must be defined in terms of physical characterization data and/or physicochemical properties that are specific to its solid state structure and which serve to distinctly and explicitly distinguish it from all other forms of that molecule or in terms of the process by which it is made.

Polymorphs can be defined in a claim by: (1) the physical parameters relevant to its particular crystal structure; (2) spectral analysis parameters (such as X-ray powder diffraction (XRPD) pattern, Raman spectrum and/or solid-state nuclear magnetic resonance (NMR)); or (3) parameters associated with methods of thermal analysis (such as infrared (IR) absorption, differential scanning calorimetry (DSC), thermogravimetric analysis (TGA), melting point or combinations thereof).  Polymorphs should not be defined by an internal designation (such as Form I, polymorph B, etc.), molecular formula or chemical name.

Examples (Chapter 17.08.05)

This portion of amended Chapter 17 provides two hypothetical examples involving claiming strategies for polymorphs and the application of the anticipation, obviousness and utility requirements discussed previously.  These examples are very useful from a practical perspective in understanding how the CPO will examine these claims.

Considerations relating to particular solid forms (Chapter 17.08.06)

This portion of amended Chapter 17 notes that the patentability of pharmaceutical salts, hydrates, solvates, desolvates and co-crystals involve the same considerations as those described earlier with respect to polymorphs.

Salts (Chapter 17.08.06a)

With respect to assessing whether claims to a novel salt are inventive, this portion of amended Chapter 17 notes that the process used to prepare a salt and any unexpected beneficial properties of the salt may be informative.  Where the originally-filed application discloses that a salt can only be produced using an inventive process that goes beyond routine methodologies or that the salt has a beneficial property that is unexpected, the claimed salt is inventive and complies with section 28.3 of the Patent Act.  Additionally, a person skilled in the art would reasonably expect that salts of known small chemical molecule having a previously established utility would also possess the same utility despite incorporation of a counterion in its structure.

In terms of defining a salt in the claims, inclusion of the counterion in the structure of the molecule is often sufficient to satisfy the requirements of subsection 27(4) of the Patent Act (such as, for example, by claiming “A besylate salt of compound of Formula (I)…”).  In cases where the claim is directed to a specific polymorph of a salt, the physical parameters relevant to the polymorph’s particular crystal structure must also be defined in order to satisfy the requirements of subsection 27(4) of the Patent Act.

Hydrates, solvates and desolvates (Chapter 17.08.06b)

With respect to assessing whether claims to a novel solvate or desolvate are inventive, the amended chapter notes that the process used for the preparation and any unexpected benefits of the particular entity may be informative.  As with novel salts, where the originally-filed application discloses that a solvate or desolvate can only be produced using an inventive process that goes beyond routine methodologies or that the solvate or desolvate crystalline form has a beneficial property that is unexpected, the claimed solvate or desolvate is inventive and complies with section 28.3 of the Patent Act.  Additionally, a person skilled in the art would reasonably expect that solvates and desolvates of known small chemical molecule having a previously established utility would also possess the same utility despite incorporation of a solvent into the crystal lattice (solvate) or the removal of a solvate form the solvated form (desolvate).

In terms of defining a solvate in the claims, inclusion of the number of solvent molecules per small chemical molecule is often sufficient to satisfy the requirements of subsection 27(4) of the Patent Act (such as, for example, by claiming, “A dihydrate of the compound of formula (I)”).   In cases where the claim is directed to a specific polymorph of a solvate, the physical parameters relevant to the polymorph’s particular crystal structure must also be defined in order to satisfy the requirements of subsection 27(4) of the Patent Act.

With respect to defining a desolvate in the claims, inclusion of the physical parameters relevant to its particular crystal structure are often sufficient to satisfy the requirements of subsection 27(4) of the Patent Act.

Co-crystals (Chapter 17.08.06c)

With respect to assessing whether claims to a novel co-crystal are inventive, as with salts, solvates and desolvates, the amended chapter notes that the process used for the preparation and any unexpected benefits of the particular co-crystal may be informative.  Specifically, the chapter notes that “[G]iven the state of the art and recognizing the extensive number of potential co-crystal formers that can be used, screening for co-crystals may involve an inventive process and co-crystals produced by such an inventive process would also be inventive”.  Additionally, a person skilled in the art would reasonably expect that co-crystals of known small chemical molecule having a previously established utility would also possess the same utility despite incorporation of a co-crystal in its structure.

In terms of defining a co-crystal in the claims, like polymorphs, inclusion of the relevant physical parameters to the particular crystal structure of the co-crystal are often sufficient to satisfy the requirements of subjection 27(4) of the Patent Act.

The deadline for submitting comments to CIPO on the above amended Chapter 17 is August 17, 2018.

This post was written by Lisa Mueller.

 

 

Brazil Implements Patent Prosecution Highway with the United Kingdom – Opportunities for Biotechnology Applicants

On July 24, 2018, the Instituto Nacional da Propriedade Industrial (INPI) published Rule #222/2018 implementing the Patent Prosecution Highway (PPH) Pilot program (PPH program) with the United Kingdom patent and trademark Office (UKIPO).  Implementation of this PPH program may expedite the examination of pending Brazilian patent applications which have received a “Notification to Grant” or “Intention to Grant” issued by the UKIPO in counterpart applications.  This is good news for biotechnology Applicants as discussed further below.

The program will accept applications belonging to patent families whose earliest application has been filed with INPI or the UKIPO, or for PCT applications containing no priority claim(s), those filed using INPI or the UKIPO as the receiving office.

Applications eligible for the PPH program include:

  1. Biotechnology;
  2. Electric apparatus and machines and power;
  3. Audiovisual technology;
  4. Telecommunications;
  5. Digital communications;
  6. Communication basic processes;
  7. Computer technology;
  8. Information technology methods and management; and
  9. Semiconductors

Additionally, the application must also be specifically classified under the IPC codes listed in the table below to be accepted:

Technical area

IPC Code (Includes all subcategories within an indicated classification unless otherwise noted)

Biotechnology C07G, C07K, C12M, C12N, C12P, C12Q, C12R, C12S (except for A61K (drug-related patent applications))
Electric apparatus and machines and power F21#, H01B, H01C, H01F, H01G, H01H, H01J, H01K, H01M, H01R, H01T, H02#, H05B, H05C, H05F, H99Z
Audiovisual technology G09F, G09G, G11B, H04N-003, H04N-005, H04N-009, H04N-013, H04N-015, H04N-017, H04R, H04S, H05K
Telecommunications G08C, H01P, H01Q, H04B, H04H, H04J, H04K, H04M, H04N-001, H04N-007, H04N-011, H04Q
Digital communications H04L
Communication basic processes H03#
Computer technology G06# (G06Q not included), G11C, G10L
Information technology methods and management G06Q
Semiconductors H01L

To be accepted into the PPH Pilot program, the Brazilian patent application must:

  1. Have been filed in Brazil for more than eighteen months or requested anticipated publication by INPI (as provided for in Article 30 Paragraph 1 of the Brazilian Patent Statute); or, for PCT national phase applications, the corresponding PCT application must have already been published by WIPO;
  2. A request for examination submitted to INPI; and
  3. Have not been accepted in any other fast-track examination program.

Divisional and their corresponding original applications may be eligible for the program provided that the PPH is requested for each application independently.

In terms of mechanics, participation in the PPH Pilot program must be requested electronically.  Documents that must be submitted along with the request include: (1) documents evidencing that the application meets the above requirements; (2) a table demonstrating the correspondence between the pending claims in the Brazilian application and those allowed by the UKIPO; and (3) a copy of any non-patent literature deemed to be prior art by the UKIPO.  A translation must be submitted for any documents not in Portuguese, English or Spanish.

It is important to note that an application will be removed from the PPH program if the Applicant voluntarily (1) divides the application; or (2) submits any amendments before issuance of a first technical opinion on the application by INPI.

INPI will evaluated applications submitted for compliance with the requirements of the PPH program according to the date the request is made.  Applications that fail to meet the requirements will either be (1) given an opportunity to correct any defects or irregularities within 60 days after issuance of an Office Action; or (2) denied participation in the PPH program.  Applicants may appeal any decision denying participation in the PPH program within 60 days of notification thereof, provided that all the requisite documents and information required for participation in the program and a brief are submitted within this period.

The PPH program will be limited to 100 applications per year (for a total of 200 applications at most over the life of the program).  An Applicant will be limited to one application per calendar month except during the last month of the program, when this limitation will not be applied.  Request for participation in the PPH program with the UKIPO will be accepted from August 1, 2018 until July 31st, 2020.  Rule #222/2018 will remain in force until a final decision is reached for each application accepted into the program.

This post was written by Lisa Mueller.

 

 

Tadalafil Patent Found Valid by Danish Maritime and Commercial High Court

Eli Lilly and Company (Eli Lilly) globally markets its product tadalafil (Cialis®) a PDE5 inhibitor, for use in the treatment of erectile (or sexual) dysfunction as well as for treating the signs and symptoms of benign prostatic hyperplasia.   Tadalafil is available as a tablet in four strengths – 2.5 mg, 5 mg, 10 mg and 20 mg, respectively.   Not surprisingly, worldwide, Eli Lilly has several issued patents covering tadalafil.  One such patent, European Patent No. 1 173 181 T6 (the ‘181 patent), covers a pharmaceutical unit dosage composition comprising 1 to 5 mg of tadalafil that is suitable for oral administration up to a maximum of 5 mg per day.

Over the last several years, there has been significant interest by generic manufacturers in developing a generic version of tadalafil.  As a result, in Europe, the ‘181 patent has already been litigated in several countries and been found to be invalid by courts in the Netherlands, Great Britain (on appeal to the Supreme Court) and Germany.  In Belgium, a nullity action is currently pending (despite the fact that a trial took place a few months ago, the parties are still waiting to receive a judgment).

Sandoz has launched a generic version of tadalafil in a few countries around the world, most recently in Denmark, where the product was made available in all strengths.  As a result, Eli Lilly filed a patent litigation action and a request for preliminary injunction with respect to the 2.5 mg, 5 mg and 10 mg tablets.  On June 15, 2018, the Danish Maritime and Commercial High Court, in Eli Lilly and Company, ICOS Corporation, and Eli Lilly Danmark A/S v. Sandoz A/S found the Danish equivalent of the ‘181 patent valid and issued the injunction.

During the proceeding, Sandoz argued that the preliminary injunction should not be granted because the ‘181 patent was invalid for added subject matter, lack of priority, lack of novelty and lack of inventive step.  However, the main focus of Sandoz’s arguments during the proceeding centered on lack of inventive step.  Specifically, Sandoz argued that the ‘181 patent was obvious in view of WO 97/03675 (Daugen II) and Viagra® (a well known PDG5 inhibitor).  In finding that the ‘181 patent was likely valid, the Court described the objective problem to be solved as providing a selective, potent tetracyclic derivative as described in Daugen II for the inhibition of PDE5 for treating erectile dysfunction as well as providing an improved dosing regimen. According to the Court, the “skilled person” would have consisted of a “team”, namely, a clinician as well as persons with knowledge about toxicology, pharmacokinetics, urology and pharmaceutical formulations.  Eli Lily argued that this team would have been lead by a clinician.  In contrast, Sandoz argued that the team would have been lead by a clinical pharmacologist.

According to the Court, the ‘181 patent solved the problem through the use of a unit dosage comprising 1 to 5 mg of tadalafil in the manufacture of a medicament for administration up to a maximum total dose of 5 mg tadalafil per day in a method of treating sexual dysfunction.  Specifically, the Court said that the general route of determining the optimal dose of a drug to administer does not in and of itself constitute inventive step.  However, this simply was not the case here.  Instead, the Court found that the recitation in the claims of a unit dose comprising 1 to 5 tadalafil up to a maximum of 5 mg daily did not lack inventive step in view of Daugan II.  Therefore, based on the evidence presented, the Court stated that one could not determine in advance of the clinical trials that a skilled person would have been lead to the claimed invention, and moreover, a computer model could not have sufficiently described the complicated conditions of the patent including the physical and psychological factors that can play a role in erectile dysfunction.  In fact, in view of what was known about Viagra®, the skilled person would have concluded that the higher the dose of tadalafil used the better the effect (in treating sexual dysfunction).  As a result, a skilled person would not have included a 5 mg or less dose in a dose response study and therefore would not have tried to develop a daily dosing regimen for treating sexual dysfunction.  Additionally, the Court found it surprising that tadalafil could be use daily at such an effective low dose with minimum side effects.

This post was written by Lisa Mueller and Verena Simpson of Guardian IP.

 

USTR 2018 Special 301 Report – Priority Watch List Country – China

In April, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report (the Report) identifying trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.  The Report called on U.S. trading partners to address IP-related challenges with a special focus on the countries identified on the Watch List and Priority Watch List.

Countries identified on the Watch List are:

  • Barbados
  • Bolivia
  • Brazil
  • Costa Rica
  • Dominican Republic
  • Ecuador
  • Egypt
  • Greece
  • Guatemala
  • Jamaica
  • Lebanon
  • Mexico
  • Pakistan
  • Peru
  • Romania
  • Saudi Arabia
  • Switzerland
  • Tajikistan
  • Thailand
  • Turkey
  • Turkmenistan
  • United Arab Emirates
  • Uzbekistan
  • Vietnam

Countries identified on the Priority Watch List are:

Priority Watch List Country – China

In this post, we will examine several of the USTR’s concerns relating to China which has been on the USTR’s Priority Watch list for several years.  At the outset, the Report notes that although some positive developments emerged in China’s complex and fast-changing IP environment during the last year, U.S. right holders continue to identify the protection and enforcement of IP as well as IP-related market access barriers as the leading challenges in an already very difficult business environment.  The Report notes that concerns extend not only to gaps in legal authorities and weak enforcement channels, but also to investment and other regulatory requirements that promote the acquisition of foreign technology by domestic firms at the expense of providing reciprocity, a level playing field, transparency and predictability that the U.S. and other countries insist upon.  In fact, the Report suggests that China lacks an underlying commitment to address longstanding problems and its failure to do so undermines any confidence that might stem from any positive developments and high-level statements made by the country in support of IP and innovation.

Initial Positive Developments

Some positive developments that occurred in China during the last year include:

  1. A positive conclusion to China’s three-year pilot program for its specialized IP courts located in Beijing, Shanghai, and Guangzhou. Last year, China continued with its IP courts and added specialized IP tribunals which enjoyed cross-regional jurisdiction (sometimes including having jurisdiction over criminal, civil, and administrative enforcement as well), which aided in promoting the quality, efficiency, and consistency of IP adjudications.  The Report notes that according observers, the IP courts generally demonstrated competence, expertise and transparency to a greater degree than that seen in other Chinese courts.  Moreover, in August 2017, China opened the country’s first Internet Court in Hangzhou, with 40 judges and assistant judges.  Additionally, China is considering creating a national-level appellate IP court to lend consistency to outcomes.  Nonetheless, despite these developments, intervention by local government officials, powerful local interests, and the Chinese Communist Party remain obstacles to the independence of the courts and rule of law.  As noted by the Report, a truly independent judiciary is critical to promote rule of law in China.    In addition to the lack of true independence of the judiciary, stakeholders continue to report issues with respect to the onerous authentication requirements for evidence and documentation, lack of means to require evidence production and insufficient damage awards, all of which undermine the effectiveness of China’s court system for addressing IP infringement.
  2. Notices issued by China’s Food and Drug Administration. Last year, China’s Food and Drug Administration issued notices for public comment that set out a conceptual framework to protect against the unfair commercial use and unauthorized disclosure of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products and to promote the efficient resolution of patent disputes between right holders and the producers of generic drugs.
  3. Approval of government reorganization by the National People’s Congress on March 17, 2018. According to the State Council Reorganization Plan, the reforms place several IP-related government functions under a new State Administration of Market Supervision and Management.  According to Chinese officials, these reforms will increase the efficiency of IP protection and enforcement.  Time will tell whether these reforms will accomplish these goals and improve market access for persons that rely on IP in the country.

Disappointments and/or Failures

  1. Trade secrets. China’s 2017 amendment to its Anti-Unfair Competition Law (AUCL) represented a major missed opportunity to address a number of critical issues.  Unfortunately, China did not address major flaws in its outdated legislation, including the overly narrow scope of covered actions and actors, obstacles to injunctive relief, the need to allow for evidentiary burden shifting in appropriate circumstances as well as other concerns.  However, most importantly, despite long-term engagement with the U.S. and others, China chose not to establish a stand-alone trade secret law.  Instead, the government decided to continue to seat important trade secret provisions in the AUCL, which is an unfortunate arrangement that contributes to definitional, conceptual and practical shortcomings relating to trade secret protection.
  2. Manufacturing, domestic sale and export of counterfeit goods. In 2017, China failed to take decisive action to curb the widespread manufacture, domestic sale, and export of counterfeit goods.  Unfortunately, during the past year, China, together with Hong Kong (through which Chinese merchandise often transships), accounted for 78 percent of the value (measured by manufacturer’s suggested retail price) and 87 percent of the seizures by the U.S. Customs and Border Patrol.  Interestingly, these figures are similar to those reported by the European Union.  In fact, by one estimate, counterfeits may account for over 12 percent of Chinese merchandise exports.
  3. Failure to promote innovation through sound patent and related policies. Currently, China’s fourth amendment to its patent law remains pending.  With respect to this latest amendment, concerns exist regarding:  (i) the presence of concepts involving competition law that belong elsewhere; (ii) an undue emphasis on administrative enforcement; (iii) a one-size fits-all disclosure obligation in standards setting processes; (iv) a failure to clarify that a patentee’s right to exclude extends to manufacturing for export; and (v) the need to harmonize China’s patent grace period and statute of limitations with those of international practices.  For example, effective April 1, 2017, China’s revised patent examination guidelines came into effect that appeared to address, among other issues, the treatment of supplemental data submitted in support of pharmaceutical patent applications.  However, right holders report that Examiners still have not applied the guidelines to all examination questions to which supplemental data is germane which often leads to the denial of such applications on alternative grounds despite the fact that counterpart applications are granted by other major patent offices.  By way of another example, the U.S. was encouraged by the China Food and Drug Administration’s draft Notices 52-55 issued in May 2017.  This draft notice stated that China’s regulatory authorities would define a “new drug” as one that was new to China, including those first marketed outside of China.  However, in November 2017, China issued its draft Drug Registration Regulations (DRR), which failed to reinforce the notion set forth in the draft Notice 55.  Specifically, the draft DRR defined a “new drug” as only one that was new to the world, meaning that if a drug had been marketed outside of China, but had not yet launched in China, it would not quality as a “new drug”.  Unfortunately, only a “new drug” can receive full regulatory data protection in China.  Clearly, this regulation puts foreign pharmaceutical applicants at a competitive disadvantage with domestic counterparts which may have the indirect effect of forcing companies to file first in China, despite the fact that market demand or health needs reside elsewhere.
  4. China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. Unfortunately, despite years of negotiation and other engagement, China has repeatedly failed to address a range of measures and practices that force or pressure U.S. right holders to relinquish control of their valuable IP as a condition for accessing the large and growing Chinese market.  Specifically, the USTR has determined that the followings acts, policies, and practices by China are unreasonable or discriminatory and burden or restrict U.S. commerce: (i) China’s use of foreign ownership restrictions, such as joint venture requirements and foreign equity limitations, and various administration review and licensing processes, to require or pressure technology transfer from U.S. companies; (ii) China’s regime of technology regulations that force U.S. companies seeking to license technologies to Chinese entities to do so on non-market-based terms that favor Chinese recipients; (iii) China’s direct and unfair facilitation of systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies in order to obtain cutting-edge technologies and IP and the generation of technology transfer to Chinese companies; and (iv) conducting and supporting unauthorized intrusions into, and theft from, computer networks of U.S. companies to access their sensitive commercial information and trade secrets.

Thus, for these reasons, the Report states that China “remains a hazardous and uncertain environment for U.S. right holders hoping to protect and enforce their IP rights”.  Therefore, absent a significant commitment by China to address these longstanding problems, it appears that China will remain on the priority watch list for the foreseeable future.

This post was written by Lisa Mueller.

USTR 2018 Special 301 Report – Priority Watch List Country – India

In April, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report (the Report) identifying trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.  The Report called on U.S. trading partners to address IP-related challenges with a special focus on the countries identified on the Watch List and Priority Watch List.

Countries identified on the Watch List are:

  • Barbados
  • Bolivia
  • Brazil
  • Costa Rica
  • Dominican Republic
  • Ecuador
  • Egypt
  • Greece
  • Guatemala
  • Jamaica
  • Lebanon
  • Mexico
  • Pakistan
  • Peru
  • Romania
  • Saudi Arabia
  • Switzerland
  • Tajikistan
  • Thailand
  • Turkey
  • Turkmenistan
  • United Arab Emirates
  • Uzbekistan
  • Vietnam

Countries identified on the Priority Watch List are:

  • Algeria
  • Argentina
  • Canada
  • Chile
  • China
  • Colombia
  • India
  • Indonesia
  • Kuwait
  • Russia
  • Ukraine
  • Venezuela

Priority Watch List Country – India

In this post, we will examine several of the USTR’s concerns relating to India which has been on the USTR’s Priority Watch list for decades.  Although the Report acknowledges that despite a number of recent administrative actions taken by the Indian government to try and improve its IP system, the country still has not addressed a number of key, longstanding deficiencies in its IP regime. Not surprisingly, the Report notes that India remains one of the world’s most challenging major economies with respect to the protection and enforcement of IP.

Some longstanding patent issues listed in the Report include:

  1. Narrow patentability standards;
  2. Threats of compulsory licensing and patent revocations;
  3. Overly broad criteria for issuing licenses and revocations under the India Patents Act;
  4. Costly and time-consuming patent opposition hurdles;
  5. Long time lines to receive a patent; and
  6. Excess reporting requirements.

Additionally, the Report further states that in the pharmaceutical and agricultural chemical sectors, India continues to lack an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure of undisclosed test and other data generated to obtain market approval for such products.  Another contentious area in the pharmaceutical sector involves Section 3(d) of the India Patents Act which provides that the discovery of a “new form” of a “known substance” that does not result in increased efficacy of that substance is not patentable.  This restriction on patent eligible subject matter poses significant obstacles to innovators seeking timely entry into the Indian market for these products.  Moreover, the Report further notes that India continues to lack an effective system for notifying interested parties of marketing approvals for follow-on pharmaceuticals in a sufficient manner that allows for the early resolution of any potential patent disputes.  Moreover, in 2017, the Indian Ministry of Health and Family Welfare created additional uncertainty in the pharmaceutical market when it issued a notification eliminating a requirement from Form 44 which required applicants seeking approval of a drug to declare the patent status of that drug to the regulator.

Other issues involve the pressure faced by innovative industries to localize the development and manufacture of their products due to high custom duties directed to IP-intensive products, such as medical devices, pharmaceuticals, ICT (information, communication, technology) products, solar energy equipment and capital goods.    With respect to agricultural biotechnology, the Report notes that the Ministry of Agriculture and Farmer’s Welfare’s “Licensing and Formats for Genetically-Modified Technology Agreement Guidelines, 2016” contained overly prescriptive terms that, if implemented, would undermine market incentives critical to the agricultural biotechnology and other innovative sectors.

With respect to IP enforcement, the Report notes that India’s overall efforts remain deficient.  Unfortunately, the lack of uniform progress across the country threatens to undercut the positive steps that certain states have taken.  In fact, a 2017 publication produced by the OECD and EU Intellectual Property Office entitled, “Mapping the Real Routes of Trade in Fake Goods,” reported that India was a key producer and exporter of counterfeit foodstuffs, pharmaceuticals, perfumes, cosmetics, textiles, footwear, electronics and electrical equipment, toys, games and sporting equipment. With respect to counterfeit pharmaceuticals, the 2017 publication found that 55 percent of the total value of global counterfeit pharmaceutical seizures originated in India – the largest of any country.  Additionally, the publication also noted that these counterfeit pharmaceuticals are shipped around the world with particular emphasis placed on the African countries, Europe and the U.S.

Not surprisingly, the Report also notes that the overall level of trademark counterfeiting in India also remains high.  Moreover, U.S. brand owners continue to report issues with respect to opposition and cancellation proceedings, as well significant challenges and excessive delays in obtaining trademarks and efficiently utilizing opposition and cancellation proceedings as well as issues with the quality of examination.  Moreover, uncertainty continues to exist for companies due to insufficient legal means to protect trade secrets in the country.

It appears that unless significant changes are made and strongly implemented by the Indian government to specifically address these above issues that the country will remain on the Priority Watch list for the foreseeable future.

This post was written by Lisa Mueller.

USTR 2018 Special 301 Report: Pharmaceutical and Medical Device Innovation and Market Access

Last month, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report (the Report), identifying trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.  The Report calls on U.S. trading partners to address IP-related challenges with a special focus on the countries identified on the Watch List and Priority Watch List.

Countries identified on the Watch List are:

  • Barbados
  • Bolivia
  • Brazil
  • Costa Rica
  • Dominican Republic
  • Ecuador
  • Egypt
  • Greece
  • Guatemala
  • Jamaica
  • Lebanon
  • Mexico
  • Pakistan
  • Peru
  • Romania
  • Saudi Arabia
  • Switzerland
  • Tajikistan
  • Thailand
  • Turkey
  • Turkmenistan
  • United Arab Emirates
  • Uzbekistan
  • Vietnam

Countries identified on the Priority Watch List are:

  • Algeria
  • Argentina
  • Canada
  • Chile
  • China
  • Colombia
  • India
  • Indonesia
  • Kuwait
  • Russia
  • Ukraine
  • Venezuela

With respect to pharmaceutical and medical device innovation and market access, the Report details the efforts of the USTR over the last year to engage with trading partners to ensure that U.S. IP owners have a full and fair opportunity to use and profit from their IP, including by the promotion of transparent and fair pricing and reimbursement systems.  In addition to ensuring that trading partners have robust IP systems, the USTR has sought to reduce market access barriers to pharmaceutical products and medical devices, including measures that discriminated against U.S. companies, were not adequately transparent or did not offer sufficient opportunity for meaningful stakeholder engagement.  Additionally, the USTR pressed trading partners to appropriately recognize the value of innovative medicines and medical devices so that these partners can fairly contribute their share to the research and development of new treatments and cures.  USTR activities with respect to specific countries are described in more detail below:

  • Canada and Mexico: Sought strong IP provisions during the renegotiation and modernization of the North American Free Trade Agreement (NAFTA) including seeking provisions that ensure the national-level government processes for the listing and reimbursement of pharmaceutical products and medical devices are transparent, provide procedural fairness, are nondiscriminatory and provide full market access for U.S. products.
  • South Korea: Sought to obtain, through negotiations, improvement and better implementation by South Korea of the U.S.-Korea Tree Trade Agreement (KORUS FTA).  Specifically, the USTR sought to obtain Korea’s commitment to better implement its KORUS FTA commitments to provide fair and non-discriminatory treatment of pharmaceutical products, including imported products, under certain medical pricing and reimbursement programs.
  • Japan: Engaged with Japan in the context of the U.S.-Japan Economic Dialogue to ensure transparency and fairness and address other concerns with respect to pharmaceutical and medical devices pricing and reimbursement policies.
  • China: Pressed China on a range of issues that impact and affect the pharmaceutical sector.  These included: providing for effective protection against unfair commercial use, unauthorized disclosure of test and other data generated to obtain marketing approval for pharmaceutical products, as well as expediting the implementation of an effective mechanism for the early resolution of potential patent disputes.
  • India: Engaged with India to secure meaningful IP reforms on a number of longstanding issues. These issues included:  criteria for patentability and compulsory licensing as well as protection against unfair commercial use, as well as unauthorized disclosure of test or other data generated to obtain marketing approval for pharmaceutical products.
  • Indonesia: Engaged Indonesia to resolve a number of concerns regarding revisions to Indonesia’s patent law. These revisions included:  criteria for patentability, local manufacturing and use requirements and the grounds and procedures for issuing compulsory licenses.
  • Argentina: Engaged Argentina with respect to concerns regarding the scope of patentable subject matter and effective protection against unfair commercial use, as well as unauthorized disclosure of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products.
  • Saudi Arabia: Engaged Saudi Arabia regarding its protection and enforcement of patents and effective protection against commercial use as well as the unauthorized disclosure of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products.
  • United Arab Emirates: Sought confirmation that the United Arab Emirates will continue to protect pharmaceuticals through local procedures and the Gulf Cooperation Council (GCC) patent system.

The Report also highlights concerns regarding IP protection and enforcement and market access barriers affecting U.S. entities that rely on IP protection, including those in the pharmaceutical and medical device industries.  Examples of such barriers by trading partners include:

  • Unfair issuance, threat of issuance, or the encouragement of others to issue compulsory licenses. Trading partners being monitored with respect to such activities include Chile, Colombia, El Salvador, India and Malaysia.
  • Employment of measures that are discriminatory, nontransparent, or otherwise trade-restrictive that have the potential to hinder market access in the pharmaceutical and medical device sectors and which might potentially result in higher product costs. Examples include unreasonable regulatory approval delays and non-transparent reimbursement policies (such as pricing and reimbursement systems which are non-market-based or that do not otherwise appropriately recognize the value of innovative medicines and medical devices).  Trading partners being monitored with respect to such activities include Algeria, Australia, Canada, Japan, Korea, Turkey and New Zealand.

In our next few posts, we will examine in detail the USTR’s findings with the countries on the Priority Watch List.

This post was written by Lisa Mueller.

Brazilian Mailbox Patents: Big Loss for Alexion

On April 20, 2018, Alexion Pharmaceutical Inc.’s (Alexion) patent (PI9507594-1) covering Soliris® (eculizumab) was the subject of an unfavorable decision by the Superior Court of Justice involving the term of mailbox patents in Brazil.  Soliris® (eculizumab) is a humanized antibody targeting complement 5 and is used to treat paroxysmal nocturnal hemoglobinuria (PNH).

The Third Panel of the Court decided that the patent term for mailbox patents should be 20 years from the filing date and not 10 years from the date of grant.  The Court was persuaded by public health interest arguments made by associations representing various generic companies, specifically those citing the high price of Soliris® in Brazil (around 5,000 USD per unit).

The Soliris® patent is what is known as a “mailbox patent”.  Mailbox patents arose in Brazil following the creation of the World Trade Organization (WTO) on January 1, 1995.  When the WTO was created, one of the agreements that came into effect was the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. At the time, most member countries agreed to apply the TRIPS Agreement immediately upon joining the WTO. However, developing countries were permitted certain transitional periods in order to have sufficient time to enact new laws that were TRIPS compliant. One transitional period allowed developing countries up to ten years (specifically, until January 1, 2005) to introduce patent protection for pharmaceutical and agrochemical products. However, Article 70.8 of the TRIPS Agreement provided that developing countries that utilized this transitional period were required to allow patent applications to be filed on pharmaceutical and agrochemical products beginning on January 1, 1995, even though a decision to grant a patent on such applications could be delayed up until January 1, 2005. This provision of the TRIPS Agreement is often referred to as the “mailbox” provision (meaning that a “mailbox” would be created to receive and store such applications) and patents issuing from applications filed pursuant to this provision are frequently referred to as “mailbox” patents.

When Brazil became a member of the WTO, the grant of patents on pharmaceutical and agrochemical products was not permitted. As a result in 1996, Brazil enacted a Patent Statute that provided patent protection for these inventions.  Pharmaceutical and agrochemical product related patent applications filed in Brazil between January 1, 1995, and May 14, 1997 (date of publication of the Patent Statute) received the same treatment as other patent applications filed after 1997. When the Brazilian Patent Office (Instituto Nacional da Propriedade Industrial (INPI)) started to examine and grant pharmaceutical and agrochemical patents, the concept of transitory and mailbox applications no longer became relevant.

The issue involving the Soliris® patent involved the patent term of mailbox patents. In general, the Brazilian Patent Statute (Article 40) provides that the term of a patent is 20 years from its filing date or 10 years from the date of grant, whichever is longer. Specifically, Article 40 establishes:

Article 40 – The term of a patent for an invention shall be 20 (twenty) years and for a utility model 15 (fifteen) years as from the filing date.

Sole Paragraph – The term shall not be less than ten years for inventions and seven years for utility models, as from the date of grant, except where INPI is prevented from carrying out the substantive examination of the application due to pending litigation or for reasons beyond its control.

However, for patents filed between January 1, 1995 and May 14, 1997, Brazil’s legislators decided to establish a limit on the pendency of examination of such applications by INPI (which was already struggling with backlog at the time) until December 31, 2004.

The legislation reads as follows:

Article 229…Sole Paragraph – The patenting criteria of this Law shall apply on the effective filing date of the application in Brazil, or on the priority date, if any, to applications relating to pharmaceutical products and to chemical products for agriculture filed between January 1, 1995 and May 14, 1997, and protection is assured as from the date of grant of the patent for the remaining term, counted from the date of filing in Brazil, such term being limited to the one prescribed in the heading of Article 40.

Article 229-B – Product patent applications filed between January 1, 1995 and May 14, 1997, which were not granted protection under Article 9 letters “b” and “c” of Law No. 5.772 of [December 21,] 1971, whose applicants failed to exercise the right specified in Articles 230 and 231, shall be decided until December 31, 2004 in conformity with this Law.

For many years, INPI issued mailbox patents well beyond December 31, 2004. These patents have been receiving a term of 10 years from grant. For example, Alexion’s patent covering Soliris® was granted on August 10, 2010 and received a 10-year term having an expiration date of August 10, 2020.

In 2013, INPI filed several lawsuits involving mailbox patents against companies like AbbVie, Alexion, Astellas, Bayer, and Merck seeking to reduce the term of mailbox patents from 10 years from grant to 20 years from filing. For a general overview of the cases see infographic here:  MAILBOXLITGATION.

The decision by the Superior Court of Justice involving Alexion’s patent is limited to the arguments balancing the public and private interests namely, that 20 years from is sufficient time for companies to enjoy patent protection over their inventions.  Unfortunately, this decision ignores the incredible backlog of applications pending at INPI.

What are the next steps for Alexion?  Alexion can appeal the case to the Supreme Court.  Alternatively, Alexion can wait for a favorable decision on a mailbox patent by another Brazilian court.  Specifically, as will be discussed in a subsequent post, the Brazilian courts can may still change their opinion regarding the patent term of mailbox patents.

Please continue to watch BRICS & Beyond for updates on litigation involving mailbox patents in Brazil.

This post was written by Lisa Mueller, Roberto Rodrigues Pinho and Brenno Telles.