Challenging Patent Validity: Safeguards & Correctives in Global Patent System

1. EFFECTIVE MECHANISMS TO CHALLENGE THE VALIDITY OF PATENTS(PRE-GRANT & POST GRANT OPPOSITION-REVISION OF THE PRESUMPTION OF VALIDITY OF PATENTS)Presentation atWIPO – Open Forum on Draft SPLTGeneva - 2nd March 2006 BY Narendra B Zaveri, Advocate E-mail: narendraz@vsnl.net Tel: (022) 25163461 (Res) Sunflower, Rajawadi, Ghatkoper(E) Mumbai – 400 077 (India).

2. Harmonization envisages much larger & more extensive role & jurisdiction for WIPO/I.B. PCT + POs of all members = SPLT PCT – - international phase - facilitator / advisory - preliminary search/examination - no responsibility to third parties Members POs - national phase - final search/examination – opposition & grant of national patents as per national law – accountable to national stake holders WIPO/I.B. – international + national phase – facilitator-grantor of global patent rights as per SPLT – obligation to protect all other stake holders globally has to be accepted as part of SPLT scheme.

3. Pre / Post grant oppn.& no presumption of validity are correctives & safeguards The precise mechanism to make them effective safeguards can only be decided when the scheme of harmonization & the organizational set up are finalised for implementing. Whatever be the final scheme there can be no doubt that all the three safeguards have to be effectively provided in view of – • Grave consequences for other stake holders from questionable patent grants; • On consideration of principles of proportionality & quid pro quo; • The need to balance rights & obligations of all stake holders; • The actual past experience of working of POs & PCT; • The inherent problems & limitations of patent system, PCT & SPLT.

4. Global patent system – the disastrous consequences of weak patents HIV/AIDS crises AZT - Insignificant innovation – co-inventor (NIH) ignored - • AZT – a drug known since 1965, its anti-viral effects known since 1975, Burroughs Wellcome – ignoring co-inventors (NIH) contribution - claimed & secured product patents in USA, & several African & other countries merely on basis of discovery of its new use for treatment of HIV/AIDS Wide excessive claim - • While in USA product patent granted covering all formulations covering all uses, in Ireland, granted for specific formulations limited to treatment of AIDS/HIV. Heartless exploitation - • Patentee selling the drug at US$ 10000/- plus & obstructing supply of generic product @ 3% – millions dying / suffering untreated – appeals of UNO, WHO, Doha Declaration ignored. • Pre-grant opposition could have prevented questionable grant. Patentees insignificant contribution & the heavy price - The disastrous consequences of weak patents……..

5. Gross abuse of patent system –AZT patent not an isolated case Proliferation of ‘me-too’ drug patents Alarmed by FTC Report of brand name companies resorting to proliferation of drug patents & anti-competitive practices to maintain outrageously high drug prices, in October 2002, President Bush amended the FDA Regulations complaining: “…... When a drug patent is about to expire, one method some companies use is to file a brand new patent based on a minor feature, such as the color of the pill bottle or a specific combination of ingredients unrelated to the drug’s effectiveness. In this way, the brand name company buys time through repeated delays, called automatic stays, that freeze the status quo as the legal complexities are sorted out” US Congress also concerned & acts - Worried that anti-competitive practices adopted by brand name companies to maintain outrageously high drug prices, which required US consumers to pay 8 to 10 Bn $ per year, several Bills (S.812 etc.) have also been proposed & are pending in US Congress to control the abuse of patent monopoly Pre-grant opposition - the remedy

6. ONLY 50,000 RECEIVING TREATMENT AGAINST 1 BILLION VICTIMS !!!Does it benefit poor millions in developing countries? Addressing US Congress on 28.01.2003 President Bush highlighted the gravity of HIV/AIDS problem & public health • nearly 30,000,000 (including 3,000,000 children) people suffer from AIDS; • more than 4,000,000 require immediate drug treatment. • ‘Yet across that continent, only 50,000 AIDS victims—only 50,000—are receiving the medicine they need’. • ‘‘Because the AIDS diagnosis is considered a death sentence, many do not seek treatment. Almost all who do are turned away”. (Source: Sec. 2 of HR 1298)

7. “seldom has history offered a greater opportunity to do so much for so many” – President Bush TheChallenge before global patent system Addressing US Congress on 28.01.2003 President Bush highlighted the gravity of HIV/AIDS problem public health - • “A doctor in rural South Africa describes his frustration. He says, ‘We have no medicines. Many hospitals tell people, “you’ve got AIDS, we can’t help you. Go home and die.” • “In an age of miraculous medicines, no person should have to hear those words.” - AIDS can be prevented. Anti-retroviral drugs can extend life for many years “ • * * * Ladies and gentle-men, seldom has history offered a greater opportunity to do so much for so many.’ (Source: Sec. 2 of HR 1298)

8. EMR grant for Glivec – Disaster for blood cancer patients in India There being no pre-grant opposition, against Exclusive marketing Right (EMR), Novartis could secure EMR for insignificant innovation in imatinib mesylate (Glivec) formulation in November 2003, enabling them to obstruct production & supplies by generic manufacturers & block treatment to thousands of victims - of deadly blood cancer – many of them children, already receiving treatment by generic drugs available at less than 10% of Novartis’s price.

9. EMR grant for Glivec – Disaster for blood cancer patients in India However pre-grant opposition provided by law & preferred against Novartis’s same patent application for Glivec, was allowed & patent claim was rejected by PO enabling six generic manufacturers to resume production & more blood cancer patients to receive treatment. Absence/provision of pre-grant opposition can be a matter of life & death for many – particularly the poor millions in developing countries.

10. Global patents - quid pro quo Rights & interests of other stake holders - Grant of a patent, directly results in denial of, not only production, distribution and trading opportunities to all other than the patentee, but more importantly, it also denies to the consumers, community and the nation, alternate sources of supplies at fair and reasonable prices and in adequate quantities. It also blocks up for long periods, large areas for further R&D for the scientist and research workers working on the subject. Quid pro quo required - Creation and grant of an extensive statutory monopoly can be justified only on quid pro quo basis, i.e. on basis of the claimant making and disclosing an invention involving ‘important technical advance of considerable economic significance’ [TRIPS – Art. 31(l)] and satisfying the patentability criteria of novelty, inventive step and utility for the same [TRIPS – Art. 27].

11. Frivolous claims - questionable patents - serious problems Unscrupulous, irresponsible, fraudulent claims Many unscrupulous and irresponsible claimants are known to make false, frivolous, repetitive or excessive claims. Some of the patent grants by USPTO prompted, Mr. Levin of Yale University to submit before US Congress Sub-Committee on IPR in 2005 - “One can always find patents that appear dubious & some that are even laughable – the patent for cutting & styling hair using scissors or combs in both h&s.” Reference of few such ‘laughable’ patent grants depriving other citizens of their lawful rights fully justifies introduction of all the three safeguards – pre/post grant opposition & no presumption of validity

12. Laughable - frivolous patents only insignificant improvements The list of few such frivolous patents are – Title of patentDate • Food sclices & method 10.07.2001 for making same • Filled potato product 17.02.2004 • Extruded potato casing 7.05.2002 • Preservation of exposed cut fresh fruit 12.12.2000 • French fry potato with improved functionality & process for preparing 27.06.2000 • Drops of honey 26.08.2003 • Ice-cream with fat containing coating 10.04.2001 • Composite ice-cream cone 4.05.2001 • Food slices & method & apparatus 5.01.1999

13. Laughable - frivolous patentsissued by US Patent Office The list of few such frivolous patents are – Title of patentDate • Filled snack product having a 28.04.1987 hydrophilically coated filing • Use of turmeric in wound healing 28.03.1995 • Crispy chip sandwich 19.03.1996 • Sealed crustless sandwich 21.12.1999 Grant of frivolous/questionable patents deprives other stake holders of their legitimate right with no reciprocal benefit The facility of acquiring global patents at least cost will provide a strong inducement for such frivolous claims The correctives of pre/ post – grant opposition & no presumption of validity have to be provided as effective deterrents to discourage & control such tendency & questionable claims & patent grants. There can be no presumption of validity for such patent grants also because of the inherent unavoidable problems of search & examination at all POs (including US PO) & under PCT.

14. Laughable - frivolous patents Principles of proportionality & quid pro quo cannot be ignored Grant of such patents under SPLT will only deprive poor millions in developing countries of their existing rights & obstruct their normal lives & subject them to costly litigations but no development. There is no quid pro quo – such patents are granted with no corresponding benefit to the other stake holders for the sacrifice of their rights. The benefit to patentee from such patent grants is totally disproportionate to the technological or innovative contribution made by them, & sacrifices to be made by other stake holders.

15. Laughable frivolous patents-SPLT must protect developing countries • Grant of such laughable, frivolous or ‘me-too’ drug patents most disastrous for peoples in developing countries. • To protect their interests, SPLT should ensure stricter standards of patentability as recommended by U.K.CIP Report (2002): • “Limiting the scope of subject matter that can be patented” • “Applying standards such that only patents which meet strict requirements for patentability are granted & that the breadth of each patent is commensurate with the inventive contribution & the disclosure made” • “Providing extensive safeguards to ensure that patent rights are not exploited inappropriately.” Imperative to provide pre-grant & post grant opposition & no presumption of validity in the SPLT scheme.

16. The Pre/post grant opposition & no presumption of validity are correctives & safeguards necessary to: • Ensure that patents are granted only for qualifying inventions & claims; • Eliminate & discourage false, fraudulent, frivolous, excessive, repetitive claims; • Provide effective remedy for revocation of questionable patent grants; • Protect other stake holders against deprivation of their rights by wrongful patent claims & questionable patent grants. These cannot be discounted as unnecessary procedural requirements, delaying patent grant or as weapons in hands of unscrupulous rivals for delaying / harassing bonafide patent claims.

17. Inherent limitations of SPLT/WIPO/I.B Unlike national POs under national laws SPLT will not have – • Jurisdiction or powers to require oaths declarations / disclosures or enforce them (as in US & Australian Pat. Laws) • Powers to punish claimants making false /fraudulent /frivolous / repetitive / excessive patent claims – a serious handicap. • Such strong deterrent & disincentive against wrongful claims & questionable patents. • The benefit of independent search & examinations by several national POs will not be available. • The benefit of review by way of appeal against decisions of national POs will not be available. • Power to limit scope of adverse impact on other stake holders by excluding some patentable subjects (business methods, methods for treatment etc)

18. Limitations of PCT – also of SPLTProblems of language & delayed information(source – PCT/R/WG/7/7dt. 11.04.05) • “no Office in the world is capable of thoroughly searching disclosures written in all languages, even if it has access to them in its search databases; • the most relevant prior art for a particular invention will sometimes be in a language in which the International Searching Authority is not specialized --- ----leaving a significant risk that its relevance will not be fully appreciated; • any International Searching Authority whose official languages do not include Japanese, Russian or Spanish is entitled not to include in its documentation such language patents for which no abstracts in the English language are available. • at the time that the international search is performed, some relevant documents may not yet have reached the search databases • Documents published shortly before the filing date of the international application may also be missed because, ….. there will usually be a delay between publication and classification (where applicable) and loading into the search databases.”

19. Problems of National Pos in eliminating questionable patents • Increasing volume of work • Massive record of previous patents • Maintaining & updating records, classified indices, & search facilities & scientific & technical literature & references in different fields • Complexities of advanced technologies in different fields • Applications filed in different languages from the language of the examiner languages & translations • Documentation & updating prior art & traditional knowledge Increasing size of each application & number of claims • Extending patent protection for new technical fields like – biotechnology, genetic engineering, information technology, & to new subjects like business methods etc. • Tremendously increased workload at POs. • Inexperienced untrained examiners – with limited technological capabilities. It is absolutely necessary to supplement resources & expertise at POs through pre-grant opposition & to provide protection against questionable patents through post grant opposition & no presumption

20. Resources & problems of US Patent Office Amongst all POs, US PO has maximum facilities. • occupies total of over 1,400,000 sq.ft in 18 buildings • workforce is comprised of 6,939 Federal employees, including 3,538 patent examiners & approximately 4,000 contract employees. • the USPTO received 333,688 patent applications, published 169,729 pending applications 18 months after filing and issued 162,221 patent grants in 2002. Despite its vast resources, USPO also has inherent problems in weeding out questionable claims & ensuring validity of patent grants • review of granted patents showed error rate of about 5%, i.e. about 7000 to 8000 questionable patents had been issued.

21. Resources & problems of US Patent Office Despite its vast resources, USPO has inherent problems - Special problems of biotech applications. In 1996, some 350 gene patent applications, claiming over 500,000 sequences were pending in U.S. Patent Office. It reported:- • “Processing these applications presents unprecedented search and examination challenges, even with the most modern equipment. The PTO estimates that it would take one patent examiner 200 years to initially examine these applications, and it would take the entire biotechnology group of 200 examiners a full year at a cost of over $34 million..” • “We simply don't have the resources to tackle this challenge under current policy,” vide PTO press statement of 23.10.1996.

22. SPLT – WIPO/I.B – Harmonization schemeAll powers but no accountability !!! • Assumption of jurisdiction & powers to grant global patent rights – binding on all stake holders in all member countries including – • Consumers/users of patented invention; Research workers • Small & big industries; International trade • Governments of member countries • Deprives member countries of their powers / obligations to protect other stake holders – restricts rights of other stake holders - Obligation to protect them necessarily follows • But there is no accountability for SPLT/WIPO/I.B actions to any political power or system. • Need & obligation to provide built-in effective safeguards against wrongful grants to protect interests of other stake holders has to be accepted. • Only safeguards under SPLT for other stake holders – The pre/ post – grant opposition & no presumption of validity with right of appeal

23. Principle of proportionality requires all three safeguards to be provided Pre-grant opposition – The circumstances justifying post grant opposition also fully supports pre-grant opposition. The only objections to pre-grant opposition is based on apprehension that it will delay the grant of patents for bonafide claimants, put them to additional costs & may be abused by unscrupulous rivals to harass them. It will act as disincentive for research. The inconvenience delay & loss caused to any bonafide claimant is totally insignificant compared to the tremendous loss (including loss of lives) that can be caused by questionable patent grants to millions of stake holders in several countries for long periods. The rights & interests of millions in several countries cannot be sacrificed to benefit one applicant – individual or corporatation. On applying principles of proportionality, the pre-grant opposition has to be allowed

24. Principle of proportionality requires all three safeguards to be provided Post grant opposition - Patent Laws of most countries contain this provision. In USA in view of adverse experience of weak reexamination procedures, the post grant reexamination procedure has been progressively made more effective & stronger by amendments in 1999 & 2002 & a 2005 Bill to further amend the law to make the post grant opposition procedure more effective is pending in US Congress. The statements of expert witnesses made before IPR Sub-Committee fully endorsed the need for such safeguards. The need for post grant opposition is universally accepted.

25. Validity of patents not guaranteed It is for this reason and the inherent complexity of the problems in examination and enforcement of patents, that the form of patent under the Indian Patent Act, 1970, specifically states that “the validity of this patent is not guaranteed” and specific provisions are made to that effect in Section 13(4) of P.A. 1970, Sec. 116(1) of U.K. Act, 1977 and Section 20 of Australian Act, disowning, and claiming immunity from, any responsibility of guaranteeing validity of a patent.

26. No presumption of validityBurden of Proof only on patent holder U.S. Law on Burden of Proof - Burden is on the party asserting the right to exclude. Generally, the party seeking to establish a right to exclude another from using a creation or marketing tool has the burden to prove its entitlement to one of the forms of intellectual property. The burden of proving validity and infringement of an intellectual property right is on the party wishing to exclude. [Ref: Durham Inds. Inc. v. Tomy Corp., 630 F.2d 905, 908, 208 USPQ 10, 13 (2d Cir. 1980)] The law must clearly and specifically spell out that the primary and sole responsibility to support his claim or patent is on the inventor/ applicant. It must also spell out the consequences of suppression or failure to disclose.

27. Time being short this presentation avoids dealing with other organizational & procedural problems relating to pre/post grant opposition which would arise & require careful consideration before final adoption of SPLT & harmonization scheme.

28. Thanks