Exclusive marketing rights
Exclusive marketing
rights revisited in
India
preserved novelty and priority of product
Interest in the repealed exclusive patent applications in the fields of
marketing rights provisions has pharmaceuticals and agrochemicals, given
been revived by a Supreme Court that under the 1970 act substances classified
as “food[s], medicine[s] or drug[s]” were
ruling which clarifies the effect of entitled only to process patents; product
the repeal on the litigation of patents in these fields were not granted. The
pending and decided applications WTO panel concluded that India was in
breach of Article 70.8 (a) of TRIPs and had
By Nupur Maithani and Priyanka Vyas, violated its obligation under Article 70.9 to
Anand And Anand provide EMR during the transition period.
The WTO Appellate Board upheld the
The Dunkel Draft - the foundation of the panel’s conclusion.
World Trade Organisation (WTO) - proposed Consequently, the Patent Act 1970 was
that countries which did not offer product amended in 1999 to bring it into line with
patents for pharmaceuticals and agricultural Articles 70.8 and 70.9 of TRIPs. Section 5(2)
chemicals as of 1st January 1995 should of the 1999 act provided for mailbox
provide a pipeline system for accepting applications, while a new Chapter IVA
product patent applications (the “mailbox introduced EMR. The amendment had
provision”) and grant exclusive marketing retroactive effect from 1st January 1995. All
rights (EMR) on certain mailbox applications. applications filed under Section 5(2) – known
Article 65.4 of the Agreement on Trade- as WTO applications or mailbox applications
Related Aspects of Intellectual Property – were not considered for grant until 31st
Rights (TRIPs) provided that developing December 2004. However, applicants could
countries which did not grant patents for seek EMR to sell or distribute the substance
pharmaceuticals and agrochemicals would be covered in the patent application if the criteria
required to introduce a product patent regime specified in Sections 24A and 24B were
within 10 years. In the interim, these satisfied. The EMR lasted for five years from
countries were expected to provide pipeline the date of grant or until the date of grant or
protection to product patents, allowing rejection of the patent application, whichever
product patent applications to be filed during was earlier. The grant of EMR did not
the transition period and granting EMR as guarantee the subsequent grant of a patent, as
proposed in the Dunkel Draft. the application could be rejected at a later
stage if the invention failed to meet the
TRIPs and the adoption of EMR criteria for patentability laid down in the act.
TRIPs came into force on 1st January 1995. Around 9,000 mailbox applications
However, the first amendment to India’s were filed in India. Of these, 973 concerned
Patents Act post-TRIPs did not come into agrochemicals and the remainder drugs and
force until 1999. This amendment was pharmaceuticals. A majority of 7,520
introduced after the United States took applications were filed by multinational
action before the dispute settlement body of corporations, while Indian drug companies
the WTO in 1997. The issue in United States filed 1,406 applications. Fourteen
v India was whether the Indian Patents Act applications requesting the grant of EMR
1970 included a mechanism that adequately were filed between 1995 and 2005, four of
www.iam-magazine.com IP in the life sciences industries 2009 17
Exclusive marketing rights
which were successful (Novartis for Glivec, concerned the maintainability of the writ
Eli Lilly & Company for Cialis, Wockhardt petition under circumstances where the If a pre-existing
for Nadifloxacin and United Phosphorus for legislative amendments had come into
the fungicide Saaf). operation from 1st January 2005. According right of appeal
On 1st January 2005 Parliament passed to the appellants, there was no scope for any
the Patent (Amendment) Act, which further consideration on the question of continues to exist,
repealed Chapter IVA. Under Section 78 of EMR, as Chapter IVA of the act had been
the amendment act, all pending applications repealed with effect from 1st January 2005, then by implication
for EMR made under Chapter IVA were to and Section 78 of the amendment act made
be treated as claims for patent under clear that all pending applications for EMR the old law which
Section 5(2) of the 1999 act and were to be filed under Chapter IVA were to be treated
deemed requests for examination for the as requests for examination under Section created the right of
grant of patents under Section 11(B)(3) of 11(B)3 of the amendment act. In their
the amendment act. rejoinder, the appellants stated: “It was not appeal also exists
The new patent regime generated lively possible to give any retrospective effect as
debate upon implementation. Following its well as any prospective effect in absence of to support the
repeal Chapter IV A was almost forgotten; the provisions of EMR.”
but interest in this provision has since been The appellants thus took the position continuation of
revived by the recent Supreme Court decision that after 1st January 2005, there was no
in GlaxoSmithKline LC and others v Controller scope to consider pending applications for that right
of Patents and Designs and others. This case EMR and further there was no scope to revive
clarifies the effect of the repeal of the EMR for further consideration any such EMR
provisions on the litigation of pending and applications which had already been decided.
decided applications for the grant of EMR. On the other hand, the writ petitioners
argued that on 1st January 2005 there was
Supreme Court ruling “no pending application” made by them for
GlaxoSmithKline (GSK) filed two mailbox the grant of EMR. Section 78 of the
applications under Section 5(2) of the amendment act applied only to “pending
Patent Act 1970 on 28th August 1998. Based applications” and not to EMR applications
on this application, GSK filed an application that had been rejected. Therefore, Section
for the grant of EMR for its anti-diabetes 78 did not apply to the facts of the case. The
drug Rosiglitazone on 30th June 2000. The application for EMR had been disposed of at
examiner issued an examination report as a point in time when the amendments had
regards the EMR claim on 28th July 2000. not yet come into force, as a result of which
In May and June 2002 the Patent Controller there was a vested right to challenge the
refused GSK’s applications for EMR. order before an appropriate forum in
Dissatisfied with this decision, GSK accordance with the law.
filed two writ petitions (WP No 20469 (W) The Division Bench of the High Court,
and WP No 20407 (W) of 2004) with the headed by Justice H K Seema, accepted the
Calcutta High Court. In an order dated 16th preliminary objection regarding the
December 2004, the High Court set aside maintainability of the writ petition, thus
the rejection by the Patent Controller (order allowing the appeal. The Division Bench
dated 3rd May 2002) and directed the Patent was of the opinion that EMR were granted
Controller to consider the application for for a temporary period as there was a
EMR afresh, keeping all points open. “prohibition created by law”, and EMR
On 28th December 2004 the Patent could not be granted afresh since the
Controller rejected the EMR application for “embargo” had been lifted. The merits of
a second time. On 9th June 2005 GSK filed the third parties’ appeal were not
another writ petition before the Calcutta considered.
High Court challenging this second GSK challenged this ruling before the
rejection. By this time the Patents Supreme Court. It contended that a
(Amendment) Act 2005 had come into force crystallised right had accrued because of
and the provisions relating to EMR Sections 24A and 24B, and that the original
applications had been repealed. In an order orders dated 3rd May 2002 and 16th
dated 10th February 2006, the High Court December 2004 were under challenge. GSK
ruled in favour of GSK. further referred to Section 24(B)1 to show
The Patent Controller and Union of that the right had accrued. Counsel for the
India each appealed the ruling. Two other Patent Controller submitted that the
appeals were filed by a third party to the intention of the statute appeared to be to the
proceedings that wanted to be added as contrary, and that the transitional provision
party-respondent in the writ application. clearly applied even if the impugned
The appellants’ preliminary objection application were treated as pending under
18 IP in the life sciences industries 2009 www.iam-magazine.com
Exclusive marketing rights
Section 11B(3) of the amendment act. exist, then by implication the old law which
Counsel for GSK relied on Section 6 of created the right of appeal also exists to
the General Clauses Act 1897, which support the continuation of that right, and
discusses the effect of repeal as follows: hence the old right must govern the exercise
Where this Act, or any Central Act or and enforcement of that right. In the
Regulation made after the commencement of absence of a stated intention to the contrary
this Act, repeals any enactment hitherto made in repealing the enactment, the rights under
or hereafter to be made, then unless a different the old statute are not destroyed.
intention appears, the repeal shall not- A second judgment of relevance was M/s
a. Revive anything not in force or existing Gurcharan Singh Baldev Singh v Yashwant
at the time at which the repeal takes effect; or Singh and Ors (1992 (1) SCC 428), where it
b. Affect the previous operation of any was observed that the right to proper
enactment so repealed or anything duly done consideration of an application by a
or suffered thereunder; or statutory authority remains alive even after
c. Affect any right, privilege, obligation or repeal of the enactment under which the
liability acquired, accrued or incurred under consideration was sought.
any enactment so repealed; or Based on these facts, the Supreme Court
d. Affect any penalty, forfeiture or held that the High Court ruling disregarding
punishment incurred in respect of any offence the application of Section 78 of the
committed against any enactment so repealed; or amendment act to proceedings which had
e. Affect any investigation, legal been concluded before the appointed day
proceedings or remedy in respect of any such appeared to be correct. Since Chapter IVA
right, privilege, obligation, liability, penalty, was merely repealed, the situation was to be
forfeiture or punishment as aforesaid; dealt with under the provisions of Section 6
And any such investigation, legal of the General Clauses Act, which
proceeding or remedy may be instituted, specifically states that repeal affects no right,
continued or enforced, and any such penalty, privilege, obligation or liability acquired,
forfeiture or punishment may be imposed as if accrued or incurred under any enactment so
repealing act of Regulation had not been passed. repealed. The provisions of Section 78 were
One of the important decisions cited in conditional and did not apply to cases where
this case was M/s Hoosain Kasam Dada the application for EMR had already been
(India) Ltd v The State of Madhya Pradesh and rejected. Thus, the order of the Division
Ors (AIR 1953 SC 221), where it was held that Bench could not be sustained. The appeal
if a pre-existing right of appeal continues to was allowed with no order as to costs.
Nupur Maithani is an associate in the patent department of Anand And Nupur Maithani
Anand, New Delhi. She is registered as a patent agent at the Indian Patent Associate
Office and holds a postgraduate degree in microbiology from the University Email: [email protected]
of Delhi. She was also associated with the Patent Facilitating Center of the Tel: +91 120 4059300
Department of Science and Technology, Government of India. Her main
areas of practice include patent specifications, patent prosecution and Anand And Anand
oppositions, patentability and validity analysis, freedom to operate and India
prior art searches, patent mining in the areas of biotechnology, www.anandandanand.com
pharmaceutical and life sciences. She has worked on contentious matters
such as those relating to the compulsory licensing provisions in India.
Priyanka Vyas is an associate in the patent department of Anand And Priyanka Vyas
Anand, New Delhi. Priyanka Vyas holds a postgraduate degree in Associate
biotechnology and has published research papers in international journals. Email: [email protected]
She has also completed a course on bioinformatics at Jamia Hamdard Tel: +91 120 4059300
University. She was associated with the Patent Facilitating Center of the
Department of Science and Technology, Government of India. Her areas of Anand And Anand
practice include patent applications, patent prosecutions and oppositions, India
patentability and validity analysis, freedom to operate and prior art www.anandandanand.com
searches, and patent mining in the areas of biotechnology,
pharmaceuticals and life sciences. She has worked on contentious matters
such as those relating to the compulsory licensing provisions in India.
www.iam-magazine.com IP in the life sciences industries 2009 19
