A patent grants the patentee exclusive rights, title, and interest in an invention. This creates a right in rem – a right to restrict a third party from making, using, offering for sale, selling, or in any manner commercializing the invention (as claimed in the patent)[1] for a period of 20 years[2]. In case of drugs, grant of patent, does not give the patent owner an automatic right to market the product. Such additional right in the form of a marketing approval/ license/ registration is granted by the concerned drug regulatory body acting under the auspices of the relevant legislation that regulates the import/ manufacture/ sale/ marketing of the drug in the relevant jurisdiction.
In India, a patent is granted by the Patent Office following the provisions as contained in the Indian Patents Act, 1970 while relevant regulatory approvals are granted by the DCGI [3] under the provisions of the Drugs and Cosmetics Act (“D&C Act”). Patent approval depends on the drug invention meeting standards of patentability while regulatory approval is granted after the drug meets established standards of safety and efficacy. In respect of a drug, patent grant and marketing approval/ license are distinct, as they impart separate and distinct rights unto the applicants based on separate and distinct legal provisions and standards by separate and distinct government agencies. The term Patent Linkage often refers to the connect between these two – a connect that has mixed recognition and appreciation across the globe.
Simply put, Patent Linkage refers to the relationship and effect of patent grants on regulatory approvals. Mostly used to protect innovators whilst striking a balance between easy and cost-effective availability of life saving drugs, the patent-linkage system as first revealed in the USA requires that a generic manufacturer intending to market a drug make a showing to the drug regulator that the generic version of the drug that such manufacturer intends to market (in the US) is not covered by an active patent. In the United States of America, the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, creates such a link.[4] The Orange Book contains a detailed list of all patented drugs including details of their patent status (date of grant/ expiry etc.). When seeking marketing approval from the FDA, especially in the case of generic drugs, companies refer to the Orange Book to identify patents that may cover their product(s).[5] Where any proposed product is listed in the orange book, a generic company would need to establish non-infringement or invalidity qua such listed patents.[6] If unable to show that, the generic company may need delay marketing the products until the expiration of the patents as listed in the Orange Book.
In addition , the United States also has a strict “data-exclusivity” provision.[7] For instance, the data exclusivity for a new chemical entity is five (5) years.[8] A generic drug manufacturer in the United States cannot use the original clinical data generated by the patent holder (of a new chemical entity) for the granted duration of data exclusivity (i.e., 5 years).
The Hatch-Waxman Act regulates the process for generic companies involved in making small molecule drugs, whereas the Biologics Price Competition and Innovation Act (BPCIA) performs a similar function for biosimilars.[9] Before marketing a biosimilar, the applicant may need to resolve potential patent issues with the innovator company.[10] For biologics, the data-exclusivity is four (4) years after the date of first licensure, whereas the marketing exclusivity[11] is 12 years[12] from the first licensure of the reference product.
Europe has no patent linkage for new chemical entities, but it does allow longer regulatory exclusivity or data exclusivity than the United States. Article 14(11) of Regulation (EC) No 726/2004[13] provides an eight-year data protection and an additional two-year marketing protection for medicinal products. The 10-year period (8 years of data-exclusivity and 2 years of market-exclusivity) can be extended by one (1) year for some new indications that demonstrate additional clinical benefit over previous indications (“extra market protection”).
In China, marketing authorisation holders of innovator drugs can list the patents covering the drugs on a platform. With the application for marketing approval, generic applicants must submit one of the following four types of certifications for each patent listed and inform marketing authorisation holders:
- Patent information related to the reference-listed drug is not available.
- The patent has expired or declared invalid, or the generic drug applicant has obtained a patent licence from the patentee.
- The generic drug applicant vows not to market the product before the expiration of the listed patent.
- The patent is invalid or does not cover the generic drug.
In the event, certification number 4, i.e., the patent is invalid or does not protect the generic drug is provided by the generic company, the patentee or the marketing authorisation holders of the innovator drug can take legal action. Once the case is accepted, the National Medical Products Administration (NMPA) sets a nine-month waiting period during which the marketing authorisation application of the generic cannot be approved. After the waiting period, the regulator may approve or postpone, based on the decision of the legal action. In China, the same patent-linkage system governs both small molecule and biologic drugs.
In addition, countries such as Australia,[14] Japan,[15] South Korea,[16] Singapore[17] (to name a few) also have provisions of patent-linkage. In India, while the drug license form requires the applicant to list down the patent status of the drug, the same is nowhere close to the patent linkage regime as discussed above. Unlike in the United States and Europe, India does not have an express data exclusivity provision either.
Patent Linkage affords yet another tool to an innovator whereby entry of generics can be barricaded by invoking regulatory sanctions. Multiple attempts have been made by players in India as well but with mixed levels of success. In the Dasatinib case [18] the Delhi High Court, in a patent infringement case, prohibited the drugs regulator from granting marketing approval. Interestingly in Bayer Corporation and Ors. vs. UoI,[19] the Delhi High Court clarified and confirmed absence of a link between IP rights and issuance thereof and regulatory approval. The court was of the view that such a link cannot be read into the existing laws in India given that the Patents Act, on one hand, is a regime for conferring monopoly in favour of inventors, the expertise of the Controller of Patents varies from that of the officials under the D&C Act; while the D&C Act is a public regulatory method that prescribes standards for safety before the introduction of a drug in the market, the drug regulator does not have the requisite technical or legal background to adjudicate issues of patentability. The Court further held that if patent-linkage were to be read into the provisions of law enacted in India, it would mean taking a legislative path and incorporating a policy avoided by the Parliament. Further, in a non-pharma case,[20] the Calcutta High Court endorsed the Delhi High Court view in Bayer Corporation vs. UoI and refused to create a patent-linkage with the provisions of the Motor Vehicles Act, 1988, and the Central Motor Vehicles Rules, 1989.
What then flows from the absence of a patent linkage regime? In the absence of such a link, a patentee may approach the Court at the earliest (in a quia timet action) should they become aware of a generic drug approval application and/or the approval of the patented drug. If convinced a prima-facie case and the balance of convenience exist and that the patentee would suffer irreparable injury if not provided any interim relief, the Court may grant that interim relief. However, on failing to establish a case for interim relief, the patentee may need to wait for the Court to decide such an action on merit. In many such cases, the defendant may need to submit an undertaking that despite having applied for or obtained the marketing approval, the product launch will be withheld until the term of the expiration of the patent and the case is decreed on such premise. Of course, any settlement between the parties is always a preferred end over protracted litigation. As is the case in any IP litigation, the right holder needs to look at how well they can defend their IP right which faces a direct attack on validity thereof. Likewise, the person looking to benefit from such IP right needs to weigh in consequences of infringement should the same be proven. Settlements in such cases are not uncommon.
The absence of patent linkages and data exclusivity in a way promote generic medicine curations and increase competition.[21]In addition, for similar goals, the Patents Act incorporates the Bolar exemption[22] provisions to promote research – a compulsory license provision[23] that may help open up the possibility of providing generic versions of a medicine that is still patent protected. The Government of India also regulates the pricing of the drugs, via the Drugs Prices Control Orders, issued under Sec. 3 of Essential Commodities Act, 1955.[24] Compulsory Licensing and Price Controls are also subject to inherent issuance parameters. Separate regulatory agencies and pathways no doubt, India has seen its fair share of compulsory license applications and more than its fair share of drugs that have been bought under active price control.
India’s rapidly growing economy has facilitated the rise of the Indian pharmaceutical industry’s position to the third rank globally in pharmaceutical production by volume. India is referred to as “the pharmacy of the world” in terms of quantity and quality.[25] Only time will tell if a modification in the link between patents and pills will affect drug manufacturing in the future. It would also be interesting to see what the future holds for biologics and biosimilars, which are inherently different from small-molecule drugs in that they have complex secondary and tertiary structures and are manufactured in living systems.[26]
For further information, please contact:
Ashwin Sapra, Partner, Cyril Amarchand Mangaldas
ashwin.sapra@cyrilshroff.com
[1] Section 48, Indian Patents Act, 1970 (as Amended) (“Patents Act”)
[2] Section 53, Patents Act
[3] The Drugs Controller General of India heads the Central Drugs Standard Control Organization (CDSCO) in India which is an authority that is analogous to the Food and Drug Administration (FDA) in the United States of America (USA)
[4] https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/hatch-waxman-letters
[5] https://www.fda.gov/drugs/development-approval-process-drugs/orange-book-preface
[6] https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/patent-certifications-and-suitability-petitions
[7] https://www.fda.gov/media/92548/download
[8] See 21 C.F.R. 314.108, 316.31, 316.34 and sections 505A, 505E, 505(j)(5)(B)(iv), and Section 505(j)(5)(B)(v) of the FD&C Act.
[9] https://www.fda.gov/drugs/guidance-compliance-regulatory-information/implementation-biologics-price-competition-and-innovation-act-2009
[10] One of the provisions of BPCIA is the “patent dance”. It starts when a biosimilar company provides a copy of its abbreviated Biologics License Application (aBLA) and additional information about its manufacturing process to the innovator company. Within 60 days, the innovator company must provide a list of patents that it might reasonably claim are infringed. The biosimilar company and the innovator company then exchange position on infringement and validity. Eventually, if no settlement is reached, the innovator company may bring an infringement action on at least some of the patents.
[11] Market exclusivity refers to a period where a party wishing to sell a generic product is prohibited from doing so, even if regulatory approval has been obtained.
[12] https://www.fda.gov/media/89049/download
[13] https://health.ec.europa.eu/system/files/2016-11/reg_2004_726_en_0.pdf , Page 20 of 70
[14] Australian Therapeutic Goods Act 1989 (As amended) Article 26B – https://www.legislation.gov.au/Details/C2023C00240
[15] https://www.mhlw.go.jp/web/t_doc?dataId=00tb5511&dataType=1&pageNo=1
[16] Pharmaceutical Affairs Act (Article 31-3, Article 31-4).
[17] https://ustr.gov/sites/default/files/uploads/agreements/fta/singapore/asset_upload_file708_4036.pdf , Article 16.8
[18] (Bristol-Myers Squibb Company & Ors v.Dr. BPS Reddy & Ors, CS (OS) No. 2680 of 2008
[19] Delhi High Court, Bayer Corporation & Ors. vs UoI & Ors. Dated 18 August, 2009 in WP(C) No.7833/2008
[20] Kanishk Sinha and Anr. v. Union of India and Anr. [W.P.A 17414 of 2021, Cal HC]
[21] See order of December 2008 in CS(OS) 2680/2008
[22] https://ipindia.gov.in/writereaddata/Portal/ev/sections/ps107.html (Section 107A, Patents Act)
[23] https://ipindia.gov.in/writereaddata/Portal/ev/sections/ps84.html#:~:text=(4)%20The%20Controller%2C%20if,reasonably%20affordable%20price%2C%20may%20grant (Section 84, Patents Act)
[24] https://pharmaceuticals.gov.in/sites/default/files/ECommoditiesAct.pdf
[25] https://pharmaceuticals.gov.in/sites/default/files/Annual%20Report%202022-23%20Final-3_0.pdf
