Unveiling the Intricacies of Evergreening of Patents

Introduction

In the world of intellectual property, patents play a pivotal role in fostering innovation by granting inventors exclusive rights to their creations for a limited period. However, the concept of "evergreening" has been a subject of heated debate in recent years. Evergreening refers to the controversial practice where pharmaceutical and biotech companies extend the lifespan of their patents, often leading to prolonged monopolies on life-saving drugs. This practice raises complex ethical, legal, and economic questions. In this blog, we will explore the concept of evergreening, its mechanisms, its impact on various stakeholders, and the ongoing debates surrounding it.

Understanding the Basics of Patents

Before diving into the intricacies of evergreening, let's establish a foundational understanding of what patents are and why they exist. Patents are legal instruments that grant inventors exclusive rights to their inventions for a specified period, typically 20 years from the filing date.[1] These exclusive rights are intended to incentivize innovation by allowing inventors to recoup their research and development costs, make a profit, and maintain a competitive edge in the marketplace. In exchange for these rights, inventors must disclose their inventions to the public, contributing to the collective body of knowledge.

The Necessity of Patents

The core rationale behind patents is to promote innovation. By providing inventors with a temporary monopoly on their inventions, patents encourage investment in research and development. This stimulates technological progress, spurs economic growth, and enhances overall well-being. When inventors know they will have a period of exclusivity to commercialize their inventions, they are more likely to invest time and resources into bringing new and improved products to the market.

The Lifecycle of a Patent

The lifecycle of a patent typically follows a structured path:[2]

1. Invention and Creation (Section 2(1)(j)): In this initial phase, an inventor conceives and creates a new, useful, and non-obvious invention. This marks the starting point of the patent lifecycle.
2. Filing and Application (Section 7-10): The inventor, or the entity they represent, prepares and files a patent application with the relevant patent office. This section covers the essential details related to the application, including the invention's description and claims.
3. Publication (Section 11A): Once the application is deemed compliant, the patent office publishes the application, making the details of the invention publicly available. This section discusses the publication process and the importance of making the invention's information accessible.
4. Examination (Section 12): The patent office reviews the filed application to determine its compliance with patent requirements. This section deals with the evaluation process and may include the examination of prior art.
5. Grant of Patents and Exclusive Rights of Patentees (Section 43, 48): When the application successfully passes the examination and meets all requirements, the patent office grants the inventor exclusive rights to the invention. This section discusses the grant of the patent and the exclusive rights it confers to the patent holder.
6. Challenges and Opposition (Section 25): Opposition includes both pre-grant (after the publication stage) and post-grant opposition(after the grant of patent). The Act provides an opportunity to challenge the grant of a patent. This section addresses the procedures and considerations related to patent challenges and opposition.
7. Term of Patent, Maintenance, and Fees (Section 53): The term of a Patent is 20 years from the date of filing its application. To keep the patent in force, the patent holder is required to pay maintenance fees at regular intervals. This section explains the importance of maintaining the patent and the associated financial obligations.
8. Remedies for Infringement and Enforcement of Suits (Section 108, 104): This section covers the legal measures available to the patent holder in case of infringement. It may detail the steps required to enforce patent rights and seek remedies for infringement.
9. Licensing and Assignment (Section 84): Patent holders have the option to license their patent rights to others or assign them to a different entity. This section discusses the process and implications of licensing and assignment.
10. Expired Patents: When a patent reaches the end of its term, it expires, and the invention becomes part of the public domain.

Evergreening: An Elusive Maneuver

In the world of pharmaceuticals, the practice of "evergreening" has raised significant ethical and economic concerns. Evergreening refers to the strategy employed by pharmaceutical companies to extend their monopolies on existing drugs by making minor, often inconsequential, modifications and then seeking new patents for these slightly altered versions. This practice not only keeps drug prices high but can also hinder competition and limit patients' access to more affordable medications. To tackle this issue head-on, the Patents Act has Section 3(d), a provision designed to address evergreening, particularly in the pharmaceutical and chemical sectors. This blog also explores the implications of Section 3(d), its role in preventing evergreening, and the landmark case of Novartis AG v Union of India,[3] which brought Section 3(d) into the spotlight.

Section 3(d) Explained:

Section 3(d) is a critical provision in the Patents Act of 1970. It was introduced to prevent the grant of patents for minor modifications of known substances, particularly pharmaceutical and chemical compounds. The primary goal is to ensure that patents are granted only for significant innovations that genuinely enhance therapeutic efficacy, rather than trivial variations of existing drugs.

Key Elements:

1. New Form of Known Substance: Section 3(d) explicitly states that the mere "discovery of a new form of a known substance" is not patentable. In essence, if a pharmaceutical company seeks a patent for a known drug but in a new form, it must prove that this new form significantly improves the substance's efficacy.
2. Enhanced Therapeutic Efficacy: The section mandates that the new form of a known substance must exhibit a substantial increase in therapeutic efficacy compared to the known substance. This requirement demands compelling evidence demonstrating the improved effectiveness of the modified drug.
3. Secondary Patents: Companies file secondary patents related to the original invention, covering new formulations, dosages, or methods of administration. These secondary patents provide an extended period of exclusivity, effectively prolonging their control over the market.
4. Patent Term Extensions: In some cases, companies can obtain extensions on the patent term, primarily to compensate for the time spent during clinical trials and regulatory approval. This can result in a longer period of market exclusivity.
5. Continuation Applications: Companies file continuation applications based on the original patent, claiming priority to the original filing date. This strategy allows them to keep pending applications for new innovations under the umbrella of the original patent.
6. Evergreening through Data Exclusivity: In addition to patent protection, pharmaceutical companies can also gain exclusive rights through data exclusivity. This means that generic drug manufacturers cannot use the data submitted by the original innovator company to gain regulatory approval for their products for a certain period, usually several years.

Implications of Evergreening[4]

1. Economic Impact:
   1. Higher Prices: Prolonged monopolies on essential drugs often result in significantly higher prices. This can be detrimental to patients and healthcare systems.
   2. Reduced Competition: Evergreening can discourage competition, as generic manufacturers are kept at bay for longer periods. This lack of competition can hinder price reductions and limit patient access to affordable medications.
2. Ethical Concerns:[5]
   1. Access to Medications: The most critical concern is access to life-saving medications. When companies use evergreening tactics to maintain monopolies, it can be a matter of life and death for patients who cannot afford expensive patented drugs.
   2. Public Health: The ethics of evergreening are particularly pronounced in the context of public health, especially when it involves medicines needed to combat infectious diseases or widespread epidemics.
3. Legal and Regulatory Challenges:
   1. Regulatory Systems: The evergreening of patents often exposes shortcomings in patent systems and regulatory mechanisms. These must adapt to deal with evolving patent strategies and protect the interests of the public.
   2. Challenges to Evergreening: Legal challenges to evergreening have led to landmark cases in several countries, with courts having to balance the interests of patent holders and the broader public.
4. Innovation or Stifling Competition: While proponents of evergreening argue that it incentivizes continued innovation, critics contend that it can stifle competition and limit the development of alternative treatments.

Debates Surrounding Evergreening

The issue of evergreening has sparked intense debates and discussions across the globe, with stakeholders from different sectors offering varying perspectives. Here are some of the key arguments on both sides of the evergreening debate:

Proponents of Evergreening:

1. Incentivizing Innovation: They argue that evergreening encourages companies to invest in research and development because it allows them to recoup their investments over an extended period. This, in turn, can lead to more discoveries and advancements in the field.
2. Quality Improvements: Some proponents contend that secondary patents and extensions can lead to improvements in the quality and safety of products, which benefit the end-users.
3. Regulatory Compliance: They also highlight that evergreening can ensure that products meet evolving regulatory requirements, such as safety and efficacy standards.
4. Market Stability: Proponents argue that evergreening can provide market stability, as it allows companies to plan for the long term and recoup their investments in research and development.

Critics of Evergreening:

1. Monopoly Power: Critics argue that evergreening provides excessive market power to a few corporations, enabling them to charge exorbitant prices for essential medicines, often at the expense of patients and healthcare systems.
2. Inhibited Competition: The practice can stifle competition and limit access to generic drugs, delaying the availability of more affordable treatment options.
3. Distorted Incentives: Some believe that evergreening distorts incentives for genuine innovation by focusing more on extending monopolies than on creating truly novel and groundbreaking solutions.
4. Public Health Concerns: The most compelling argument against evergreening is the risk it poses to public health, particularly in developing countries where access to critical medications is already a challenge.

Preventing Evergreening:

Section 3(d) serves as a powerful deterrent against evergreening. It imposes stringent criteria for patentability, ensuring that patents are granted only for genuine innovations that offer a substantial benefit to patients. This is crucial in maintaining access to affordable generic medicines and preventing extended monopolies that could lead to exorbitant drug prices. The practice of evergreening has far-reaching implications for various stakeholders, and they are not without controversy.

The Case of Novartis AG v Union of India

Case Background:

The case of Novartis AG v Union of India is a landmark legal battle that brought Section 3(d) to the forefront of international discussions on pharmaceutical patents. Novartis, a multinational pharmaceutical giant, sought a patent for a modified version of the cancer drug 'Glivec' (imatinib mesylate)[6], which had already been patented in various forms.

Key Issues:

The central issue in the Novartis case was whether the modified form of Glivec met the requirements of Section 3(d) and deserved patent protection. Novartis argued that the new form had improved stability and bioavailability, which constituted a significant enhancement in therapeutic efficacy.

Court's Ruling:

In a historic decision, the Supreme Court of India ruled against Novartis, denying the patent for the modified version of Glivec. The court held that the new form of the drug did not meet the enhanced efficacy requirement of Section 3(d). The court's verdict reinforced the stringent patentability criteria set forth by the provision.

Implications:

The Novartis case had far-reaching implications for the pharmaceutical industry. It reaffirmed the importance of Section 3(d) in preventing evergreening and ensuring that patents are granted only for innovations that genuinely benefit patients. The ruling preserved access to more affordable generic versions of critical cancer medications and set a precedent for evaluating the efficacy of modified drugs. Section 3(d) of the Patents Act stands as a powerful tool in the fight against evergreening in the pharmaceutical industry. By setting strict criteria for patentability and demanding evidence of enhanced therapeutic efficacy, the provision ensures that patents are granted only for substantial innovations. This landmark case exemplifies the critical role of Section 3(d) in preventing evergreening and preserving access to affordable medications. This legal provision, and cases like Novartis, continue to shape the global discourse on balancing patent protection with public health interests, ultimately working to benefit patients and society as a whole.

Global Efforts to Address Evergreening

Recognizing the ethical and economic challenges posed by evergreening, various countries and international organizations have taken steps to address the issue:

1. Patent Law Reform: Some countries have amended their patent laws to restrict evergreening strategies, making it more difficult for companies to obtain secondary patents on minor changes.
2. Compulsory Licensing: In certain situations, governments can issue compulsory licenses to allow generic manufacturers to produce patented drugs, typically during health emergencies or when there is a public health need.
3. Access to Medicines Initiatives: International organizations, such as the World Health Organization (WHO), have launched initiatives to increase access to essential medicines in developing countries, reducing the impact of evergreening.
4. Transparency and Public Interest: Efforts to promote transparency in patent filings and to ensure that patent systems consider the public interest are gaining traction.
5. International Agreements: Some international agreements, like the Trade-Related Aspects of Intellectual Property Rights (TRIPS),[7] are being revisited to balance patent protection with public health concerns.

Conclusion

The evergreening of patents remains a contentious issue at the intersection of innovation, economics, ethics, and public health. While patents are essential in promoting and protecting innovation, the abuse of the patent system through evergreening can lead to detrimental consequences, including high drug prices, limited competition, and restricted access to life-saving medications.

Balancing the interests of inventors and the public is a complex task, but it is crucial to ensure that patents continue to serve their intended purpose of fostering innovation. To address evergreening effectively, governments, patent offices, and international organizations must strike a delicate balance between rewarding inventors for their efforts and safeguarding the broader interests of society. This can involve refining patent laws, promoting transparency, and adopting mechanisms to safeguard public health, particularly in the face of global health crises.

As the debate surrounding evergreening continues, it remains critical to foster open dialogue and cooperation among stakeholders to develop more equitable and sustainable solutions that prioritize the welfare of individuals and communities around the world. Ultimately, the goal is to harness the power of innovation while ensuring that essential medicines remain accessible to all. By addressing evergreening responsibly, we can create a world where innovation and public health go hand in hand, fostering a brighter, healthier future for all. Section 3(d) and cases like Novartis have firmly established the principle that patents should reward genuine innovation that improves patient outcomes rather than protecting minor tweaks for the sake of extending monopolies.

References:

[1] Section 53 of The Patents Act, 1970.

[2] The Patents Act, 1970 (Act No. 39 of 1970).

[3] Novartis AG V. Union of India, 2013 (6) SCC 1.

[4] National Institute of Health: Drug Patents; the evergreening problem

[5] Mondaq; An overview of evergreening patents

[6] 'Imatinib Mesylate' is marketed in India as 'Gilvec.'

[7] Shamnad Basheer, India's Tryst with Trips: The Patents (Amendment) Act 2005. Indian Journal of Law and Technology, Vol. 1, 2005, Available at SSRN: https://ssrn.com/abstract=764066

Disclaimer: The author affirms that this article is an entirely original work, never before submitted for publication at any journal, blog, or other publication avenue. Any unintentional resemblance to previously published material is purely coincidental. This article is intended solely for academic and scholarly discussion. The author takes personal responsibility for any potential infringement of intellectual property rights belonging to any individuals, organizations, governments, or institutions.

About the Author: Abhinav Raizada is a fourth-year BA.LL.B student at the Faculty of Law, The Maharaja SayajiRao University of Baroda, Vadodara.