Protecting IP assets

Dr Jonathan D.M. Atkinson - Partner,
Head of the Asia Team at HGF.
HGF Limited

A number of challenges face pharmaceutical companies protecting their IP assets domestically within India, and globally. This article is intended to highlight some key issues facing the global pharmaceutical industry. Indian pharmaceutical companies are particularly wellpositioned to compete globally because of their significant expertise built up over the last 30 or 40 years .

The domestic industry began by serving Indian markets with lowcost generic products with no patent protection. These drugs would not otherwise have been available to the wider population because of cost. Indian companies had (and still have) a competitive advantage relative to foreign pharmaceutical companies because they can produce generic drugs more cheaply than the originator. The legal IP framework in India reflected this need to protect the local population and worked well for many years. However, the advent of The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) between member states of World Trade Organisation (WTO), including India, altered forever the legal and commercial landscape within India for pharmaceutical companies.

India has only relatively recently recognised patents for pharmaceutical products but the legal framework has advanced quickly in that time. The implementation of India’s TRIPS obligations into national law on 1st January 1995 changed the patent landscape radically. Previously, Indian law provided no patent protection for pharmaceuticals. In 1995, the Indian Patent Office first received applications for pharmaceutical subject matter in "mail box" applications. At that time, there were no facilities to examine these applications which were simply afforded a filing date and number. On 1st January 2005, further amendments to national law enabled the prosecution of pharmaceutical patent applications in exactly the same way as many overseas jurisdictions.

Evolution of the Indian Pharmaceutical Industry
As the law in India evolved, so did the nature of the activities of the domestic pharmaceutical companies. These companies started seeking their own IP protection in India for generic formulations and synthetic processes. Some companies also started work on research programs to generate new pharmaceuticals and capture relevant IP. Many also looked overseas to the US and European for sales. It is within this context which the wider challenges in the pharmaceutical industry must be considered.

Raising the Bar
Patent systems around the world are becoming harmonised and interconnected. A Trilateral Agreement between the European Patent Office (EPO), United States Patent and Trademark Office (USPTO) and Japanese Patent Office (JPO) has led to cooperation on searching and examination of patents. Similar approaches to the examination of subject matter are adopted and prior art sharing occurs between these offices. The Patent Prosecution Highway (PPH) also allows applicants to use examination results in one patent office to streamline the prosecution in another. The PPH agreement includes the patent offices of Europe, US, Japan, China, Korea, Australia and Canada.

One consequence of this cooperation is that standards for assessing patentability have generally been raised to the requirements of the more rigourous countries. The Trilateral Agreement also recognised the need to "raise the bar" and established stricter grounds for allowing patent protection.

Technical challenges
Particular challenges arise in the area of secondary patents. This includes patents for methods of treatment, new formulations, and dosing regimens. Some of these innovations are based on observations made during clinical trials. Secondary patents, although weaker than compound patents, are very important because of the potential additional patent life they afford. Historically, the test for novelty of subject matter meant that the conduct of clinical trials did not prevent an applicant for subsequently obtaining a patent for inventions arising from them. Indeed, it was quite common for the results of clinical trials to be scrutinised for potential inventions.

Early case law at the Boards of Appeal of the EPO, such as T158/96, confirmed this point. Following a shift towards more transparency in clinical trials there has been a tendency in the case law for resulting inventions to be open to challenge based on publiclyavailable information. However, in T2506/12, a challenge based on disclosures of clinical trials relating to two known anti-cancer medications was not ultimately successful in prejudicing the novelty of a combination of both medications since, separately, they did not disclose the safety and efficacy of the combination . The prior art effects of clinical trial disclosures can be an issue but inventions arising from trials remain patentable; applicants just need to exercise extreme care.

Stricter assessment of the requirements for patentability causes problems for applicants when considering plausibility and data surrounding a disclosure. In Europe, the origins of this issue can perhaps be traced back to T939/92 which concerned a patent covering a huge number of herbicidal compounds. The Board held that it was not credible that all compounds within the claim scope had herbicidal activity. This author understood from private discussions at the time with senior members of the EPO that an internal policy decision had been taken by the Examining Division to try and control overly-broad chemical patent claims which were becoming prevalent at the time. Broad claims could be challenged on the grounds of lack of inventive step. Reasonable predictions of the relationship between chemical structure and biological activity are in principle possible but it must be credible that substantially all the claimed compounds possess the relevant activity. If not, then the claimed technical effect is considered arbitrary and lacking in an inventive step.

More recently, in T0488/16, the Board decided that it is not always necessary to include experimental data or results in an application but it is essential to demonstrate the technical problem is at least plausibly solved. If, as in that case, the invention relies on a technical effect which is neither self-evident nor predictable or based on a conclusive theoretical concept, at least some technical evidence is then required.

The practice point is that applicants must ensure that the scope of claims is proportionate to the availability of data to support the application. The case law has progressed in the direction of requiring adequate data to substantiate inventions around pharmaceutical activity. This presents an increasing burden to applicants and heightens the tension between seeking an early filing date, when little data may be available, and delaying filing until sufficient data has been acquired but then risking a third party may have filed first.

Legal challenges
Changes in the legal framework also present potential challenges (and opportunities, depending on circumstances) to patent holders. For example, implementation of the Unified Patent Court is likely to alter significantly the patent litigation landscape in Europe when it comes into existence(and this author believes that this should take place soon) because it will immediately enable third-party challengers to invalidate a patent with pan -European effect. Generics will no longer need to seek revocation in each territory where they plan to launch a drug. Similarly, an originator will not need to engage in separate national patent infringement proceedings in each territory where patent infringement occurs. The situation surrounding BREXIT should not prevent the Unified Patent Court coming into existence since the UK has already agreed to sign up to the UPC agreement. A significant change in the litigation landscape is expected when the UPC commences.

In the US, The America Invents Act established post-grant review (PGR) as a further mechanism for challenging the validity of issued patents. Congress intended the PGR process to be similar to European opposition proceedings. A post-grant review can be filed up to 9 months after issue of any patent with an effective filing date on or after 16 March 2013. Validity of the patent can be challenged on grounds including: novelty, inventive step and written description. Inter partes review (IPR) can be initiated once the period for filing a PGR has expired but is much more limited in the grounds that can be raised. In IPR proceedings only novelty and obviousness may be raised and then only on the basis of prior art consisting of patent or printed publications. The PGR provides potentially fertile grounds for challenges to invalidate issued US patents and is expected to significantly affect the way in which pharmaceutical patent litigation is conducted in the US.

The legal framework for pan-European patent term extensions presents another challenge. The situation surrounding supplementary protection certificates (SPCs) has yet to be clarified under the new UPC regulations. To date, no new legal framework governing patent term extensions has been proposed to sit alongside the UPC. We do know that the UPC system will apply to SPCs which raises two important issues. Firstly, how will SPCs based on existing and future classical European patents be treated? Secondly, what provisions might be created to govern SPCs based on new unitary patents? At the moment, pharmaceutical companies can only base their future plans on the current framework.

The industry is rapidly changing as originator and generic companies expand their activities into each other's territory. Major patent systems around the world are becoming stricter, placing increasing burdens on applicants. Patent law will continue to develop as increasingly complex innovations require deeper consideration of the technical and legal issues they present. The legal framework will also continue to develop as the debate between market exclusivity and public access to medicines continues. The most significant challenge facing any pharmaceutical company is the ability to judge how those factors will impact on their own future developments.