T H E W O R L D J O U R N A L O N J U R I S T I C P O L I T Y. BOLAR EXEMPTION VS. DATA EXCLUSIVITY: RIGHT TO HEALTH vs RIGHT OF PATENT HOLDER

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1 BOLAR EXEMPTION VS. DATA EXCLUSIVITY: RIGHT TO HEALTH vs RIGHT OF PATENT HOLDER Rhea Roy Mammen M.S. Ramaiah College of Law, Bangalore Introduction Pharmaceutical Patent has seen an increasing conflict for the past decade especially when we have a constitutionally guaranteed right of Right to Health. The same has been covered under the international conventions. Right to health, necessarily includes the access to the medicines especially the essential drugs. This has been a major consideration in the international arena as well. This was evidenced by the 2001 World Trade Organisation(WTO) ministerial Conference. 1 When Experimentation and research are necessary to meet the developmental needs of the future, it is equally important to have a balance maintained in the right to health. India s accession to the WTO, and to comply with the provisions of Trade related aspects of Intellectual Property Rights (TRIPs), amendments were brought about in the Patent Law in India. With 2005, major amendments were inserted which disrupted the balance between Right to Health and Right of the patent Holder. One of the amendments brought about in the patent Act was with respect to Bolar Provisions. It was introduced as an exemption to the patent holders right. On the contrary, Data Exclusivity has been widely discussed as one of the protective step available for the patent holders. This was considered by the western state prior to TRIPs in and Though the discussion was widely available around the globe, India was reluctant to accept the concept. but currently we can see that, it has been re-introduced into the patent system of the country with respect to pharmaceuticals. Bolar Exemption Bolar Provision refers to the particular circumstances in which the proprietors of the patent is precluded from preventing the third person from carrying out an act which is otherwise not permitted under the patent laws. 4 It permits the third party, access to the information 1 WTO, declaration on the TRIPs agreement and Public Health, Ministerial conference, Fourth Session, WTO Doc. WT/MIN(01)/ Dec/2(2001). 2 It was talked applied in United States of America 3 It was introduced in European union 4 Heinonline, Shamnad Basheer and Prashant Reddy on The Experimental use exception through a developmental Lens, available at 50 IDEA pdf(last visited on 11 feb, 2017) 1 THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.

2 of the patented medicine during the patent period for the purpose of research, experiment use and education. 5 The exemption was to encourage the generic drugs in the market, so as to ensure that soon after the expiry of the period of 20 years, they will be able to provide the medicines at a cheaper rate into the market. Generic Drugs Generic Drugs is a drug which is identical or bioequivalent to the brand name (patented) drug in dosage form, safety, and strength, route of administration, quality and performance character 6. They are not patent protected as they use the information of the patented drug and develop the same through the mechanism of reverse engineering. They are sold and made available at cheaper rates due to the low manufacturing cost. Generic Drugs have been encouraged in the markets as these are made available to the needy parts of the society at a cheaper price. History 1. The Patent ACt, S.47(3) Amendment into the 1970 Act 2. in 1984, Roche v. Bolar case 4.TRIPS- Art.30 3.The Hatchwaxman Act - 5 Roche Product, Inc v. Bolar Enterprises, 733 F.2d International Journal of Pharmaceutical, chemical and Biological Sciences, Ajay Bera and Ashish Mukerjee on the importance of generic drugs in India, available at last visited on 11 feb, 2017 ) 2 THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.

3 1. The Patent Act, 1970: Patent Law of India was enacted with the objective of ensuring that the patent rights are not worked in a manner detrimental to the consumer interest. For the same reason, provisions were included in the Act where exceptions were given in using patented product. Under S.47, where the exceptions are provided, clause 3 pertains specifically to the purpose merely of experiment or research including the imparting instructions to pupils The exception was to ensure that the innovations are brought to stand still merely because certain products are patented. the provision applies to all the inventions and not restricted to the Pharmaceutical inventions Bolar Pharmaceutical Case: In the case of Roche Product, Inc., v. Bolar Enterprises 7, where Bolar enterprises produced generic version of the Petitioners patented drugs. When they were sued before the court of law, the argument that the defendant took was on research and experimental use. But the court provided that the intended use of the research was the commercial exploitation of the market. This was not permitted by the court. It was held that limited use of the patented drug for testing and investigation must be strictly related to FDA drug approval requirements during the last 6months of the term of the patent. The exemption brought forward in the case came to be known as the Bolar exemption. 3. The Hatch Waxman Act, 1984: The Drug Price Competition and Patent Term Restoration Act which is informally known as the Hatch- Waxman Act, 1984, was enacted following the decision of the Court in Bolar case. It encouraged the manufacture of the generic drugs by the pharmaceutical industries. 4. Trade Related aspects of Intellectual Property Rights (TRIPs): TRIPs do not provide for particular provision with respect to Bolar exemption, but Art.30 specifies general exemption. Art.30 reads as follows: Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exception does not unreasonably conflict with a normal exploitation of patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking into account of the legitimate interests of the parties The provision was intended to provide a balance between the patent holders right and the interest of the consumers. India being a member to the TRIPs agreement had made corresponding amendments the law. 5. The Patent Act, 1970 with 2002/2005 Amendment: 7 Supra n.3 3 THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.

4 In 2002, the second Amendment After TRIPs was witnessed with the introduction of Art.107A, which specifically referred to the pharmaceutical Patents. The provision provided as follows: For the Purpose of this Act- (a) Any act of making, constructing,[using, selling or importing] 8 a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, [use, sale or import] 9 of any product The amendment of 2002, was exclusively for pharmaceutical patented products. But the amendment can be seen to have encroached upon the rights of the Patent holder, by the insertion of the terms selling and importation. The purpose of the provision was said to meet the demands of the society and make sure that the medicines are available at the cheaper rate soon at the expiration of the patent term. But the inclusion of the above said terms have defeated the very objective of the Patent law. This can be further clarified with two case laws, F.Hoffmann la Roche Ltd v. Cipla Ltd 10 and Bayer Corporations v. union of India & Ors 11. In the facts of the former case, the petitioners had sought for an injunction against the defendant company, which was engaged in the manufacture of the generic version of the petitioner s drugs. The injunction was not granted on the ground that if it be granted, it will violate the rights of many unknown persons. The court failed to consider the fact that the sale and importation of the generic Drugs was carried out during the subsistence of the patent period. Similarly, in the latter case, right to health was given higher weightage than the rights of the patent holders right. Right to health v. Right of the Patent Holder: India being a welfare state has the duty to ensure that the right to access to medicines are safeguard. At the same time, there exist the duty to respect and acknowledge the right of the person over the property he has created. It is the natural right of the person to enjoy the ownership of the property. Through the incentive Theory and Social Contract Theory, we can see that IP laws have made an attempt to bring a balance between the rights of the Patent Holder and the citizen. Art.48 enumerates the right of the patent Holder, where under he has been given the exclusive right to sell and import the drugs for 20 yrs. 8 Subs by Act of 2005, sec 58 (a)(i), for using or selling (w.r.e.f ) 9 id (2008) DLT LAP 443/2009, decided on February 9, 2010, available on visited on 30 th Jan 2017) 4 THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.

5 In the claim of welfare, there is clear encroachment into the exclusive rights guaranteed under the constitution. Furthermore, provisions like Compulsory licensing are prevalent to ensure that the drugs are made available to the public at affordable price as the situation demands. The Advantages and Disadvantages of Bolar Exemption in consideration to our society can be better under from the below table. Advantages 1. Increase in the production of generic drugs 2. There is increase in innovation around the patented information Disadvantages a. Loss of incentive to the patent holder b. Decrease in the flow of foreign direct investment due to poor patent protection c. Lack of innovation due to poor patent protection While considering the recent amendments made in the provision we can see that the balance has been disrupted which strikes at the soul of the Patent Act. In order to balance the interests considering the health care requirements yet to encourage the innovations, the following suggestions are put forward. Suggestions 1. Data Exclusivity: Data Exclusivity refers to the time period after approval of a new drug before the competitor can rely on the data submitted in the original approval process for its own filling to the regulatory authorities 12. In simple words, the regulatory authorities 13 are not permitted to disclose any information for a limited period of time. The whole limitation pertains to commercial utilisation of the pharmaceutical information and not to the genuine case. Moreover, it is essential to compensate the time lost by the patent holder in the regulatory procedure. This has been recognized under the TRIPs agreement, Art.39(3) and the US law. The Provision provides as: 12 Satwant Reddy, Gurdial Singh Sandhu, Report on Steps to be taken by government of India in the Content of Data provisions of Art.39.3 of TRIPs agreement, 13 In India, the Authority is the Controller of Drug and Cosmetics. the Drug and Cosmetics Act, THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.

6 Members, when requiring, as a condition of approving the marketing of pharmaceutical or agricultural chemical products which utilize the new chemical entities, the submission of undisclosed test or other data, the origination of which shall involve a considerable effort, shall protect such data against unfair commercial use. In addition, members shall protect such data against disclosure, except where necessary to protect public or interim steps are taken to ensure that the data are protected against unfair commercial use. This is to ensure that the patent holder s right is safeguarded against unfair commercial purpose and to protect his exclusive right. Presently, where Bolar Exemption has been introduced with such encroachment into the exclusive rights of the patent holder, such provision in law ensures that the adequate protection is provided to the patent holder. The Advantages of data Exclusivity are that: a. During the initial stages of patent process, safety and efficacy can be ensured. Without having the fear of the information being used by the competitors. b. The inventor will be able to enjoy the monopoly right for the speicified time period, without being interfered. c. This will reduce the commercial exploitation of the patented product in the initial stage. d. Will promote Foreign direct investment in to the market, due to safe market condition, thereby encouraging and promoting innovation. 2. The use of term selling and importation must be removed from the patent law, it is in clear violation with the exclusive rights guaranteed to the patent Holder. 3. Unlike in compulsory licensing and other exceptions, use of such information s by the generic drugs does not require the payment of royalty. Royalty provisions must be specified, taking into consideration the investment made into the R& D. 6 THE WORLD JOURNAL ON JURISTIC POLITY ALL RIGHTS RESERVED.