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MASHELKAR REPORT II UNDERESTIMATES INDIA’S RIGHT TO DEFINE PATENTABILITY STANDARDS
Professor Brook K. Baker
Northeastern U. School of Law, Program on Human Rights and the Global Economy;
Health GAP (Global Access Project)
October 9, 2009
Click here to download the analysis as a Word Doc
Click here to read media article in Business Standard
The Indian Technical Expert Group on Patent Law Issues, the so-called Mashelkar Committee, was tasked with determining “whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substances to new chemical entity or to new medical entity involving one or more inventive steps and whether it would be TRIPS compatible to exclude micro-organisms from patenting.” Its first report, “Report of the Technical Expert Group on Patent Law Issues (Dec. 2006)” [Mashelkar I Report] was strongly criticized and ultimately withdrawn for “technical reasons,” namely a dispute over unattributed sources with respect to some of its findings. Although Dr. R.A. Mashelkar attempted to withdraw from the Technical Expert Group during ensuing controversy, his resignation was not accepted. Instead, the Mashelkar Committee submitted a Revised Report of the Technical Expert Group on Patent Law Issues in March of 2009 [Mashelkar II Report]. The Revised Report was accepted by Ajay Shankar on behalf of the Government of India on August 5, 2009.
For the second time, the Mashelkar Committee has misinterpreted India’s flexibility under international law to limit patents of pharmaceutical products to new chemical entities, or new medical entity involving one or more inventive steps [NCEs]. Although it has slightly modified and extended its analysis, it has made three fundamental mistakes: (1) it still incorrectly analyzes India’s flexibilities under TRIPS to define pro-health standards of patentability, (2) it fails to analyze key TRIPS-minimum patent standards, especially novelty and inventive step, and (3) it incorrectly concludes that a NCE-only standard of patentability for pharmaceutical products would constitute discrimination against a field of technology and in doing so misinterprets and misapplies the expert analysis of Professor Carlos Correa, an internationally renowned IP specialist.
The errors in the Mashelkar II Report include:
- The Mashelkar II Report provides only limited analysis of the most relevant provision of the TRIPS Agreement, Article 27. Although it references the patentability standards of newness (novelty), inventive step, and industrial applicability, it undertakes no real analysis of the core minimums of these imprecise terms. Likewise, the Report paraphrases Article 27.1 as saying that “’Member states may not exclude any field of technology from patentability as a whole and they may not discriminate as to the field of technology, place of innovation’ etc.” but provides no real analysis of the actual textual language. Instead, the Report rushes to its conclusion and asserts “Reading this obligation in light of the overall purpose of the agreement, it appears that linking the grant of patents for pharmaceutical substances only to a new chemical entity or a new medical entity may prima facie amount to excluding a ‘field of technology’ even when they satisfy the basic requirements of patentability.” (¶ 5.6.) In reaching this erroneous conclusion, the Committee ignores the interpretative flexibility that WTO Members have to define standards for patentability, to take into account human rights, public health, and a balance of rights and obligations and of the interests of producers and users of technological knowledge, and to differentiate between fields of technology. It further fails to analyze how non-NCEs might well fail the TRIPS-minimum standards for novelty and inventive step, and it misidentifies non-NCEs as a specific field of technology, in part by misinterpreting and misapplying Professor Correa’s expert opinion.
- In its first fundamental error, the Report erroneously implies that the definition of invention (newness, inventive step, and industrial capacity) contained in Article 27.1 has any particular and definite meaning within the WTO TRIPS Agreement and that India lacks interpretive flexibility to give pro- health meanings to those terms. In particular, the Report ignores (does not even address) the flexibility that countries like India have under Article 1.1 of the TRIPS Agreement, which states that “Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.” (Emphasis added.) Likewise, it ignores interpretive flexibilities arising from Articles 7 & 8, from the Doha Declaration, and from India’s right-to-health human rights commitments.
- Even though Members must “give effect to the provisions of [the TRIPS] Agreement,” Article 1.1, that same Article clarifies that Members have considerable flexibility in doing so, especially with regard to the Agreement’s under-determinate language, including that governing scope of patentability. In essence Article 1.1 of TRIPS devolves interpretive authority and discretion to sovereign nations to balance national interests within a minimally constraining international intellectual property system. Rather than seeking harmonization at any particular level of intellectual property protection, the WTO negotiators agreed to core of minimum standards only. Moreover, even in setting minimum standards, the negotiators left considerable implementation flexibility. Especially, where Members elected to adopt general rules rather than specific rules, as they did with respect to the imprecise definition of “invention,” there is necessarily broader discretion left to Members to determine the strictness of their subsidiary definitions of newness, inventive step and industrial applicability. Although these terms are not infinitely elastic, they are flexible enough to accommodate a stringent standard of patentability limiting pharmaceutical patents to new chemical entities or new medical entities involving an inventive step. The existence of this reservoir of flexibility is particularly apparent given the wide variability of patentability standards and exceptions among the many Member countries.
- The Mashelkar Report asserts that neither Articles 7 and 8 of the TRIPS Agreement nor the Doha Declaration on the TRIPS Agreement and Public Health can be used to derogate from the specific mandates of Article 27.1. (¶ 5.22 and ¶5.29.) However, rather than promoting derogation as such, the Doha Declaration sought to clarify that there is interpretive flexibility within TRIPS and that the TRIPS Agreement “can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.” (¶ 4, emphasis added.) The Doha Declaration further states that “each provision of the TRIPS Agreement shall be read in light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.” (¶ 5(a).)
- As aids to interpretation, Article 7 elucidates some of the basic principles of the Agreement that provide for “a balance of rights and obligations,” “the mutual advantage of producers and users” and for “social and economic welfare” broadly construed. (Emphasis added.) Article 8 also sets forth some of the basic principles of the Agreement, providing that “Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health ... provided such measures are consistent with the provisions of this Agreement.” Contrary to the Committee’s claim that Articles 7 and 8 should only apply where “there are special overriding circumstances critical to their objectives to be achieved” and that neither applies in “normal circumstances” (¶¶5.17-5.22), Articles 7 and 8 of the TRIPS Agreement provide interpretive guidance to help define the core minimums of inherently ambiguous or imprecise terms – guidance that can be used to tilt the balance in favor of defining “newness” and other patentability standards so as to maximize access to medicines. This interpretive flexibility supports the adoption of the stringent new-chemical-entity-only standard.
- Mashelkar II Report II, like its predecessor, makes no mention whatsoever of India’s obligations under binding human rights law. The Universal Declaration of Human Rights (UDHR), the founding document of the international human rights regime, recognizes that every person has a right to a standard of living adequate for his or her health and medical care (Article 25), the right to share in scientific achievements (Article 27), and the right to a social and international order in which the Declaration’s rights can be fully realized (Article 28). The skeletal framework of a human right to health, articulated in the UDHR, has been further specified in the International Covenant on Economic, Social & Cultural Rights (ICESCR), a legally binding treaty signed by India. In Article 12, the ICESCR guarantees the right of everyone worldwide to "the highest attainable standard of physical and mental health" and requires State Parties to take steps necessary for “the prevention, treatment and control of epidemic, endemic, occupational and other diseases” and to provide “conditions which would assure to all medical services and medical attention in the case of sickness.” This skeletal right to health provision received further clarification when the Committee on Economic, Social and Cultural Rights (CESCR) issued General Comment No. 14 which concluded that there is a basic obligation to ensure a sufficient quantity of essential medicines (¶ 12(a)) and that these medicines must be affordable (¶¶ 12(b), 17). In sum, universal access to essential medicines is a core, non-derogable duty of all member States as is preventing, treating, and controlling epidemic and endemic diseases. (¶ 43(d) and ¶ 44(c)). India’s binding commitment to the right to health can be advanced by adopting stringent standards of patentability that nonetheless meet core TRIPS minimums.
- Ignoring the interpretive flexibility granted by Article 1.1, the interpretive guidance provided by Articles 7 and 8 and by the Doha Declaration, and human rights mandates imbedded in India’s legal regime, the Report instead focuses on the language of Article 1 that requires what it calls “compliance with the provisions of the Agreement.” (¶ 5.9.) It is here that the Mashelkar II Report makes its second fundament error – it assumes, without prior proof or discussion that “limiting pharmaceutical patents to new chemical entities only, and excluding new forms of crystals, polymorphs, etc., if they satisfy the criteria of patentability, is not consistent with TRIPS Agreement.” (Emphasis added.) Having never discussed the meaning of “new,” “inventive step” or “industrial application” as minimally articulated in the TRIPS Agreement, the Mashelkar Committee nonetheless immediately assumes that “new forms” of existing chemical entities might automatically satisfy all the criteria of patentability. However, this is precisely the question the Committee was asked to address, which it never does.
- On this issue, the Committee has failed to analyze the serious question of whether non-NCEs might fail properly articulated, TRIPS-minimum standards for newness and inventive step. Many of what the Committee calls “new forms” of existing chemical entities may actually be part of the prior art or are disclosed within the patent grant of the original new chemical entity. However, even when this is not the case, non-NCEs will almost always fail the inventive step test. Once, the NCE is invented, it is now common practice – the routine discovery-oriented drudgery of applied chemistry – for research chemists to look for salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of [a] known substance. The resulting routine discoveries – not inventions – are the obvious byproducts of elbow grease, not inspiration, and use discovery and production methods well known in the industry. According to this same analysis, discovery of new uses of known chemical entities also lacks a true inventive step.
- In its third fundamental error, Mashelkar Report II claims that limiting pharmaceutical patents to NCEs would constitute prohibited discrimination against a field of technology and thus be prohibited by Article 27. To the contrary, the TRIPS Agreement clearly permits differentiation between fields of technology, even though it does not permit out-and-out discriminatory exclusion of pharmaceutical patents as a class nor discrimination against other discrete fields of technology such as pollution control devises. Such a right to differentiate is implicit in the many diverse forms of Article 30-related limited exceptions to patent rights, including that are specific to pharmaceutical products such as allowance of individual pharmaceutical preparations and early working to permit regulatory review (Bolar). In fact, this later exception was explicitly addressed in the Canada Pharmaceuticals Case at the WTO, where the panel made a careful distinction between the concepts of discrimination and differential treatment and expressly held that Canada’s early working provision was TRIPS compliant. Moreover, in further support of Members’ right to treat pharmaceutical patents differently, patent offices and courts in Member countries have routinely come up with patent standards specific to particular fields of technology. Thus, if India were to adopt a NCE-only standard for pharmaceutical patents, India would have simply chosen to clarify the applicable standard of patentability to be applied to the unique characteristics of pharmaceutical products, and in doing so would neither be unfairly discriminating against a field of technology nor creating an erroneous exception to patentability.
- In an attempt to justify its third fundamental error, the Mashelkar II Report mischaracterized and misapplies the expert opinion of Professor Carlos Correa. Although it correctly cites that Professor Correa had previously opined that Article 27.1 does not permit the exclusion from patentability of medicines in general as a field of technology nor, arguably, specific sub-groups thereof [for example, WHO essential medicines] (¶ 5.8), it then over-extends that analysis to conclude that non-NCEs are such a “field of technology” and that it would be improper to exclude what it calls new forms of crystals, polymorphs, etc. from patent protection (¶ 5.9). Professor Correa has stated publicly that his quoted text had addressed “a very different question than the TEG was apparently asked to answer. … In my opinion, the approach taken by the TED – to treat the issue as a binary, yes or no situation – overlooks an array of interesting, complicated and critically important issues relevant to the Indian situation.”
- If the Committee had read further in Professor Correa’s work, it would have seen in the very text the Committee relied on that Professor Correa had discussed countries’ right to refuse to extend patent rights to common variations of existing chemical entities – what he calls commonly known compounds, such as salts of acids, bases, isomers, homologues, polymorphs and optical isomers. Professor Correa himself suggested that the Committee should have read his later work, Guidelines for the examination of pharmaceutical patents: developing a public health perspective, Working Paper, WHO, ICTSD and UNCTAD, 2006, available at http://www.iprsonline.org/resources/docs/Correa_Patentability%20Guidelines.pdf. (Although he did not address it directly, it is also worth noting that Professor Correa’s discussion of “special overriding situations” that might create an “emergency” exception to normal patentability standards was also misapplied to the Committee’s interpretation of Articles 7 and 8. (¶¶ 5.18-5.22).)
- In its discussion of India’s national interest, the Mashelkar II Report, like its predecessor, creates a legally incoherent differentiation between what it calls “incremental innovation,” meaning “sequential developments,” and “ever-greening,” meaning trivial and inconsequential changes to an existing patented product. In doing so, it provides no litmus test by which such differentiations might be made. How small a change must there be to be inconsequential instead of incremental? Where minor modifications to existing molecular structures in now routine in low-standard countries, like the U.S., or where obvious new doses or new combinations of existing products are likewise patentable, how would Indian patent examiners make the distinction the Report proposes?
- In addition to creating a distinction without an apparent difference, the Mashelkar Report incorrectly assesses and references additional national interests of India, of its medicines consumers, and even of its domestic pharmaceutical industry by:
- Ignoring public-health and access-to-medicines needs in their entirety;
- Confusing the practice of Indian producers in filing new use and new form patents in low-standard, high-income countries with the issue of setting proper TRIPS-compliant standards of patentability in India;
- Failing to acknowledge that Indian pharmaceutical companies can simultaneously earn high returns in U.S., European, and Japanese markets for off-patent medicines and for medicines patented under those countries’ lower patent standard, and still earn money and serve the needs of much poorer Indian and developing country consumers who rely on India for expanding and affordable access to newer life-saving and life-enhancing medicines that are not patentable under strict, but lawful, standards of patentability;
- Misunderstanding India’s role as an international leader and defender of developing-country interests and flexibilities on intellectual property-related issues to advance public health and to ensure access to medicines for all.
- The flawed Mashelkar II Report undermines the interests of people suffering from life-threatening diseases in India and worldwide and represents a capitulation to the interests of the multinational drug companies and a narrow spectrum of India manufacturers that stand to benefit from increased rights to charge unconscionable prices and to extract monopoly profits on the basis of trivial changes to existing chemical entities. Although it is highly likely that India will continue its ongoing experiment with Section 3(d) of its revised Patent Act (2005) and not seek to amend its Act to limit pharmaceutical patents to new chemical entities that involve one or more inventive steps, India should retain the right to do so unfettered by an ill-advised and poorly reasoned Report full of errors, omissions, and mischaracterizations of expert opinion.
- Fortunately, Mashelkar Report II redacts its earlier discussion of the TRIPS-compatibility of section 3(d) of the India Patents (Amendment) Bill, 2005, but there is still some danger that multinational pharmaceutical firms (including Novartis in its ongoing litigation against the Patent Office over Glivec), which might misuse the Report to argue that section 3(d) must be reinterpreted in light of the Report’s analysis. Such use would be extremely disingenuous and dangerous.
Endnotes:
Although the full submission by Shamnad Basheer that the Committee relied on was appended to the Mashelkar Report, the textual findings of the Report did not directly cite to the Basheer submission.
The actual language of Article 27.1 is as follows: “Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.” (Emphasis added.)
Footnote 5 to the TRIPS Agreement gave Members flexibility to deem “inventive step” as synonymous with “non-obvious” and “capable of industrial application” to be synonymous with “useful.” However, the footnote does not restrict Members to those less strict standards, suggesting that they have flexibility to adopt much more rigorous tests.
Different standards concerning patentability of computer programs, business methods, and new uses of chemical entities are but a few examples of this inter-Member variability. Another testament to the degree of flexibility latent in TRIPS is efforts within WIPO to enact a new Substantive Patent Law Treaty. Why would such a treaty be required if there were universal agreement and practice about standards of patentability?
U.N. Gen. Assembly Res. 217A, U.N. GAOR, 3d Sess., at 71, U.N. Doc. A/810 (1948).
International Covenant on Economic, Social and Cultural Rights, Dec. 16, 1966, 993 U.N.T.S. 3, 6 I.L.M. 360 (1966) (entered into force Jan. 3, 1976). The ICESCR has been ratified by 152 U.N. Member states, and another seven, including the U.S., have signed, signaling their intent to become legally bound.
Report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, Anand Grover, ¶ ¶ 19, 32-35 (March 31, 2009) available at http://www2.ohchr.org/english/bodies/hrcouncil/docs/11session/A.HRC.11.12_en.pdf.
See, India Patent Act Amended (2005), section 3(d).
See, Christopher Garrison, Exceptions to Patent Rights in Developing Countries (UNCTAD-ICTSD 2006).
“The ordinary meaning of the word "discriminate" … certainly extends beyond the concept of differential treatment. It is a normative term, pejorative in connotation, referring to results of the unjustified imposition of differentially disadvantageous treatment. Discrimination may arise from explicitly different treatment, sometimes called "de jure discrimination", but it may also arise from ostensibly identical treatment which, due to differences in circumstances, produces differentially disadvantageous effects, sometimes called "de facto discrimination". The standards by which the justification for differential treatment is measured are a subject of infinite complexity. "Discrimination" … is a term to be interpreted with caution, and with care to add no more precision than the concept contains.” ¶7.94 WT DS114/R
Posting, IP-Health Mashelkar Commission Report (October 6, 2009) available at http://lists.essential.org/pipermail/ip-health/2009-October/014311.html.
Integrating Public Health Concerns into Patent Legislation in Developing Countries (South Centre 2000) available at http://apps.who.int/medicinedocs/pdf/h2963e/h2963e.pdf.
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