Saturday, February 4, 2017


A patent consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission.
'Evergreening' is not a formal concept of patent law. It is best understood as a social idea used to refer to the myriad ways in which patent owners utilize the law and related regulatory processes to extend their high rent-earning intellectual monopoly privileges.

In recent times, it has become a practice by a number of innovator companies to extend the patent term of their innovative molecules to maintain market dominance. The extension of monopoly term ‘Evergreening’ is a predominant aspect of pharmaceutical patenting. ‘Evergreening’ refers to different ways wherein patent owners take undue advantage of the law and associated regulatory processes to extend their IP monopoly particularly over highly lucrative ‘blockbuster’ drugs by filing disguised/artful patents on an already patent protected invention shortly before expiry of the ‘parent’ patent.

In India under the Patent Act 1970 the term of patent is given for 20 years. And the TRIPS Agreement also provides for a minimum length of 20 years for any patent. At the same time, Art. 1.1 of the TRIPS agreement recognizes every party’s right to implement more extensive protections in their laws. FTAs allows for an extended patent term in cases where an unreasonable delay occurs in granting the patent (e.g. Art. 15.9 CAFTA) are thus compliant with the TRIPS Agreement.


Evergreening of patents refers to increasing the life of the patent or the patent term beyond 20 years to reap the benefits for much longer period of time. Drug patent evergreening is the single most important strategy that multinational pharmaceutical companies have been using since 1983 in the US (and since 1993 in Canada) to retain profits from “blockbuster” (high sales volume) drugs for as long as possible. When the original patent over the active component of a brand name drug is about to expire, these drug companies often claim large numbers of complex and highly speculative patents.

Evergreening" refers to the idea of continually extending patents and making knowledge-sharing more difficult by making incremental changes that would permit the issuance of a new patent.[1] In response to the risk of 'evergreening', the scope of patentability by “modifying the definition of an inventive step” is restricted. An “inventive step” is now defined as “a feature of an invention that involves a technical advancement.” In other words a “new invention” is defined as “any invention or technology that has not been anticipated by publication or used in the country or elsewhere in the world before the date of the filing of the patent application.”

Evergreening "is a potentially perjorative term that generally refers to the strategy of obtaining multiple patents that cover different aspects of the same product, typically by obtaining patents on improved versions of existing products.[2]

Medicine patent evergreening is an important strategy that multinational pharmaceutical companies use to extend excessive profits from so-called "blockbuster" medicines for as long as possible. Medicine companies try to extend the patent by slightly modifying the formulation of existing medicines.


India alongside Brazil, Thailand, South Africa and Israel is one of the few countries with laws against evergreening.  Prior to the TRIPS agreement, India did not provide patent protection for pharmaceutical products.[3] Instead, India only protected the drug manufacturing process, and only for up to a seven-year term. India's first independent Patents Act sought to create a domestic pharmaceutical market and decrease the cost of medication. Thus, the Patents Act turned away many foreign pharmaceutical companies and resulted in a larger market share for domestically owned companies. India flourished at reverse-engineering drugs and selling them both domestically and in other developing countries that did not honor patent protection for pharmaceutical products. However, once TRIPS became fully effective in India in 2005, the country was obligated to honor patent protection of pharmaceutical compositions.[4]

Indian Patents Act requires that, to satisfy the non-obvious standard, an invention be non-obvious and either involve the advance of technology or be economically significant.[5] However, the Patents Act does not specify the standard that should be used to determine whether technology is advanced or whether the invention is economically significant.[6] While scholars have criticized the definition as “vague and arbitrary”. It appears that India has successfully implemented a high standard of non-obviousness that will enable judicial flexibility in protecting competition and driving down market costs.[7]

Preamble of the TRIPs Agreement says, “Recognizing the underlying public policy objectives of national systems for the protection of intellectual property including developmental and technological objectives.” Article 1 (1) says, “Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensixe protection than is required by this Agreement.”

Article 27 (1) says, “ …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.”

Article 27 (2) says, “Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect public order or morality, including to protact human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.”

When India amended its patent law to comply with the TRIPS agreement, it also added a controversial provision intended to curtail evergreening of pharmaceutical patents.[8][9] The provision, Sec. 3(d), bars companies from patenting new forms of known substances unless the new form demonstrates a significant enhancement in efficacy.[10] But Section 3 (d) does not define ‘efficacy’; it is still questionable that what constitute sufficient improvements in a drug to qualify as substantial increase in efficacy. In January 2006, the Patent Controller in Chennai used Sec. 3(d) in refusing to grant pharmaceutical manufacturer Novartis a patent on its beta crystalline salt form of an existing anti-cancer drug.[11]

Section 3(d) of Patents Amendment Act, 2005 says, “The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”

Explanation - For the purpose of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.

Novartis argued that the more stable salt form could be absorbed more easily into the bloodstream, resulting in an increase in bio-availability of up to 30 percent. The Assistant Controller saw the difference as "only" 30 percent and ruled that the free base form could be used wherever the salt was used. Novartis has challenged the ruling, arguing that Sec. 3(d) of the 2005 Patents Act does not comply with TRIPS.

In May 2006, Novartis petitioned before the Madras High Court, contending that the Patent Controller erroneously rejected its patent application for the drug beta crystalline form of imatinib mesylate under Section 3(d) of the Patents Act.[12] According to Section 3 (d) of the Patent Act 1970, a new form of a known medicine can only be patented if it shows significantly improved therapeutic efficacy over existing compounds. Novartis also argued that the provision violated Article 14 [13] of the Constitution of India because the wide breadth of discretion given to the patent controller could lead to discriminatory results. The case was split up between the Madras High Court and the Intellectual Property Appellate Board ("IPAB").[14] The challenges on TRIPS compliance and the constitutionality of Section 3(d) were heard by the Madras High Court, which issued a judgment against Novartis. The issue dealing with patentability was heard by the IPAB, which also ruled against Novartis.[15]

The High Court had to examine three issues. The first was whether Indian courts had jurisdiction to review Section 3(d)'s consistency with Article 27 of TRIPS, and to grant declaratory relief if the section was not consistent with TRIPS. The second issue involved examining whether Section 3(d) was consistent with Article 27 of TRIPS. The third issue was whether Section 3(d) violated Article 14 of the Constitution of India because it was vague, arbitrary, and conferred uncontrolled discretion to the Patent Controller.

The Court held that it did not have jurisdiction to adjudicate a case dealing with the compliance of a domestic Indian law with an international treaty. And declined to deal with the issue of whether Section 3(d) was compliant with TRIPS. Thus, it did not grant any declaratory relief to Novartis.

On the third issue, the Court held that Section 3(d) did not violate Article 14 of the Indian Constitution. And it was not vague or arbitrary, and did not confer uncontrolled discretion to the Patent Controller. The Court concurred with the contention of the Indian Government that it had a constitutional duty to provide good health care to its citizens by giving them easy access to life-saving drugs. The Court also agreed that in doing so there should be suitable legislative measures put in place to prevent evergreening of patents, which could have disastrous consequences with respect to availability of affordable medicines.[16]

International agency Oxfam has hailed the Indian High Court's ruling against a patent protection petition filed by multinational pharmaceutical company Novartis as a huge victory for public health. By dismissing the Novartis application which was seeking to patent the anti-cancer medicine Gleevec, the Court “has put public health before commercial profits” said Nisha Agrawal, CEO of Oxfam India. The ruling allows Indian makers of generic medicines to continue making affordable versions of the medicine, used to treat chronic myeloid leukaemia, which kills 80-90 per cent of sufferers.

Nisha Agrawal, CEO of Oxfam India said: “We're not against companies making profits, but against companies charging exorbitant amounts for life-saving medicines in the name of patents. Patenting this medicine would have defeated the very purpose of it – “to treat patients” suffering from cancer. This important medicine would be of no use to cancer survivors if they can't afford to buy it.”

Currently, Gleevec is priced at $2200 (120,000 Indian rupees) for a monthly dosage. This ruling will make way for generic version of the medicine which will cost about $184 (Rs.10,000) a month - more than 90 per cent cheaper than the patented version. However, even the generic version may still not be affordable to millions of patients in India where health expenditure is one of the most important reasons for indebtedness.

After the decision of the Madras High Court an appeal was made by the Novartis to the Supreme Court. But on 1 April 2013 The Supreme Court also denied Novartis a patent for its anti-cancer drug Gleevec. For seven years Novartis tried and failed to challenge this provision.  This leaves the door open for Indian pharmaceutical companies to produce their own versions of the drug. Since these are sold at roughly one tenth of the patented brand price, for thousands of cancer patients it means the difference between medicine and no medicine at all.

In Roche v. Cipla[19], The plaintiff here who happened to be Roche, attempted prohibiting the defendant company Cipla from manufacturing the former’s anti-cancer drug formulation “Erlotinib”. This drug’s generic equivalent costs the 1/3rd the amount of the protected and patented drug formulation available as, over the counter antidote in the markets, thereby running the risk of relatively less adoption or possibly, rejection by the consumers. The plaintiff then sought an interim injunction against the defendants. But the prime hassle arose with the morphed or an altered substitute, here in this case, a Polymorphic Form B belonging from the same class of drug but wasn’t one of Roche’s patented drug, thereby rendering the court to decide in favor of the defendant along with the light of the provision mentioned in the leading statute of Section 3 (d) of the Indian Patents Act, 1970 following a stance that Cipla didn’t infringe Roche’s Indian Patent IN 196774.

Like India, Israel endorses a demanding non-obviousness requirement for patentability. Israel's use of non-analogous art as references for obviousness rejections stretches the bounds of what is considered obvious. Consequently, pharmaceutical companies run the risk of developing a drug therapy that is genuinely innovative, but that still is denied patent protection by the court system. The uncertainty in Israel's non-obviousness standard would not support the U.S. pharmaceutical industry.
Israel's strict non-obviousness requirement is based in the country's status as a dominant producer of generics. Israel is home to Teva Pharmaceutical Industries, the world's largest generics company, and its pharmaceutical exports constitute 3 percent of the country's gross domestic product. Israel also has a strong domestic pharmaceutical market. Israel pushed the development of the generics pharmaceutical industry in order to provide healthcare to its citizens at the cheapest possible cost. Accordingly, the domestic industry is supported by “sick funds” which provide medical insurance and hospital services for Israelis and constitute 70 percent of domestic pharmaceutical sales.

Section 5 of Israel's Patent Act indicates that, to be eligible for patent protection, an inventor must achieve an inventive step that is not obvious to the PHOSITA at the time of filing. Additionally, Appendix G of Israel's Patent Office Guidelines for Examination indicates that an “inventive step” requires a “quantum” advancement over the prior art.[25] In 2011, the Israeli Supreme Court confirmed that an “inventive step” requires a significant contribution to the relevant art and possesses the “spark of invention”. Therefore, like India, Israel requires an inventor to overcome a greater threshold than mere likelihood of success and mandates that a patentable invention contribute to the progress of science by providing a significant advancement to the technical field.

The problem is a severe one in the United States. Evergreening began in the US in 1983 with the so-called Hatch-Waxman legislation.[26]  In 2002 an extensive and lengthy inquiry by the US Federal Trade Commission (FTC) found that as many as 75% of new drug applications by generic drug manufacturers suffered legal actions under patent laws by the original brand name patent owner. These were driving up US drug costs by keeping the cheaper generic versions off the market. The FTC recommended that only one “evergreening” injunction against a potential generic market entrant be permitted per product  and this change was  implemented in legislation in December 2003. The US legislature passed its Medicare Prescription Drug Improvement and Modernisation Act 2003. This included, in Sec. 1101 a complicated process of early declaratory relief to assist remedying the problem of brand name pharmaceutical patent “evergreening.” This implemented a specific recommendation in the report of the US Federal Trade Commission (“FTC”) in 2002. The FTC recommendation was that only one “evergreening” injunction against a potential generic market entrant be permitted per product.

35 United States Code of Patent Law 101,102,103 state that the requirements for patentable subject matter are utility, novelty and non-obviousness. 35 USC 101 “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of the title.” United States of America allows patents to be granted for “new and useful improvements” to already patented inventions. But the United States Patent and Trademark Office (USPTO) places limits on what may be patented on the grounds of obviousness.

Graham v. John Deere[27] : TSM & RES: In this case US Supreme Court announced a 3 factors test for analysis of non-obvious:
Ø  Scope and content of prior art.
Ø  Difference between prior art and the claims at issue.
Ø  Level of ordinarily skill in the pertinent act.

KSR Intern Co. v. Teleflex Inc.[28] : In this case the patent validity of Teleflex’s patent for an adjustable automobile accelerator pedal was in issue. The US Supreme Court recognized that the fact based TSM test was a helpful insight and warned against mere conclusory statements and called for both “articulated reasoning” and conclusions of “when prior art teaches way” as emphasis on flexibility and common sense. On this result US Supreme Court made the requirements for patentability more strict. But the Court did not clearly define the requirements for determining obviousness. This leaves the standard for patentability ambiguous.

Under the 1984 Hatch-Waxman amendments to the Food, Drug and Cosmetics Act, generic manufacturers can get regulatory authority to market copies of brand-name drugs by submitting an "Abbreviated New Drug Application" (ANDA). While makers of new drugs must show their product is safe and effective in a New Drug Application, ANDA applicants must only show that the generic version is chemically equivalent to, and works the same as, the brand-name product. This enables the generic manufacturers to avoid duplicative, unnecessary and expensive testing that would deter many from ever entering the market.

In filing an ANDA, the generic manufacturer must note the patent status of the brand-name version of their product. If the generic maker hopes to sell the drug during the term of the brand-name drug's patent, it must certify that the patent is either invalid or will not be infringed by the generic product. This is known as a "Paragraph IV Certification," and it triggers a right for the brand-name company to sue to enforce its patent and prevent the generic from coming to market.

In 1985, Barr Laboratories, a major generic manufacturer, submitted an ANDA seeking FDA approval to market a generic version of tamoxifen. In 1987, it amended the ANDA to include a Paragraph IV Certification. Imperial Chemical, which held the patent, sued to enforce the patent. In 1992, following a trial, a federal judge ruled the patent invalid.

In Canada, a similarly extensive investigation by the Competition Bureau revealed similar problems with drug patent “evergreening” arising from the Patented Medicines (Notice of Compliance) Regulations in 1993 required as an obligation of entering the North American Free Trade Agreement (“NAFTA”). It found that over 200 legal actions involving “evergreening” claims had been brought and that this was having an adverse effect on the sustainability of the Canadian generic drug industry and drug prices in that country.

In Australia, Patents Act 1990, already permits non-use-related patent extension for up to five years (section 77) for delayed pharmaceutical marketing approval but AUSFTA has “locked-in” this monopoly protection and for the Preservation and promotion of the so-called ‘anti-evergreening’ amendments were passed by the Australian Parliament.

In the Indian geography, after the patent on the main compound is obtained, firstly it is extremely difficult to get a subsequent selection patent on polymorph (or other forms) on ground of Section 3(d) and secondly and importantly the marketed drug based on polymorphic form would easily be prone to generic competition without infringement of the main patent.

In India, for example, only 215 generic drugs received marketing approval during 1998-2004, despite nearly 5,000 patent “claims” being made in the same period through a “mail box” system. One reasons was that the Indian government passed legislation required by the World Trade Organisation (WTO) Trade-Related Intellectual Property Rights (TRIPS) agreement, allowing brand name patent claims for new “uses,” rather than new chemical entities.


Critics of evergreening assert that the ability to obtain multiple patents on a product, over a period of many years, effectively extends the term of exclusivity that the patent holder obtains. They further assert that this practice is abusive, impedes the introduction of generic medications, and has a negative effect upon public health.

Patent evergreening promotes development of unfair means of competition and related abuse. Enhanced IP scrutiny may remove the curse of these unfair practices which are widely followed by the innovator companies to create a roadblock for generic companies that are trying hard to provide safe and efficacious medicines to the masses at cost effective prices. Landmark case decisions may serve as an aid to understand the complex domain of ‘Evergreening’. There is a need for developing countries to develop and foster effective mechanisms to counter evergreening practices of innovators. It is important to promote innovations of big companies and at the same time honor efforts put down by the generic companies so that with equal balance, cost effective products are launched in the market, thereby benefiting the masses.

Given the limited term of patent duration, the patent system is, at least theoretically, of a fundamentally deciduous character. However, in practice, a constantly replanted patent thicket can appear the biological equivalent of an evergreen. Over time we should expect to see the shade provided by such cover deepen rather than lessen. The ever-increasing reach of the proprietarian trend in intellectual property seems set to continue, with evergreening practices in relation to drug patents being merely one example. In terms of end results, not all such instances of extended protection will be inimical to downstream innovation and health costs, but it is hard to envisage a future without instances of abuse.

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