Journal of Intellectual Property Rights Vol 17, May 2012, pp 256-261

IPR NEWS
IPR News General EU Parliaments draftsman urges ACTA rejection British MEP David Martin (rappoteur for EP Committee on International Trade), in charge of steering the Anti-Counterfeiting Trade Agreement (ACTA) through the European Parliament, recently said that he would urge lawmakers to reject the controversial treaty. He cited fears that the Agreement could discourage generic drug supplies to developing countries, and presented an outdated concept of intellectual property. Mr Martin made the announcement following a three-hour debate on ACTA in the European Parliament organized by the Socialist group. The event was streamed to up to 1,300 viewers online and prompted intense activity on Twitter. Besides, rapporteurs to two other committees of the European Parliament (legal and industry and trade) have also tabled reports on the plurilateral ACTA. While Socialist and Green MEPs have already voiced their opposition to ACTA, the overall position of the Parliament is less clear. The Parliaments approval is necessary to ratify the international agreement. The EU executive, which has referred ACTA to the European Court of Justice, invited the Parliament not to vote until the court rules. The ACTA seems to have suffered further setback, since now appears that the Group of 8 may have signalled a shift to a narrower approach on intellectual property rights at its recently concluded meeting. In a Non-paper on intellectual property rights protection, by G8 leaders who met in Washington DC, there was a narrower focus on counterfeit products and drugs. The non-paper, which is not part of the official statement of the G8 foreign ministers, proposes a G8 initiative to strengthen enforcement against counterfeiting and piracy (an integrated warning system, stronger penalties and border seizure possibilities), a G8 initiative to support voluntary best practices for securing global supply chains and a G8 initiative to promote pharmaceutical drug safety. Voluntary cooperation in IPR protection through the G8 moreover makes sense in the case that the G8 countries are doubtful about the future of ACTA. Despite the rough ride, ACTA certainly is not yet dead. All EP committees still have to vote on the respective opinions, and the plenary of the Parliament is expected to vote in mid-June 2012 (http://www.euractiv.com, http://www.ip-watch.org). Kenya set to repeal controversial anti-counterfeit law Kenyas High Court has ordered a review of a controversial anti-counterfeit law enacted in 2008 on the grounds that it could interfere with the supply of legitimate generic medicines to patients. The 2008 Anti-Counterfeiting Act has been under fire since before it was passed with critics claiming that it was too much of a blunt instrument to handle the complexities of the counterfeit and substandard medicines trade. The Act defined counterfeiting as an intellectual property breach of a protected good, which can include the manufacture, production, packaging, re-packaging, labelling or making, whether in Kenya or elsewhere, of any goods whereby those protected goods are imitated in such manner and to such a degree that those other goods are identical or substantially similar copies of the protected goods. In theory, this could encompass legitimate generic copies of drugs that are on-patent anywhere overseas. Given that the vast majority of drug patents are not registered in developing countries like Kenya, there had been fears that enforcement of the Act could reduce the range of generic medicines available to doctors and their patients. That was acknowledged by the High Court, with Judge Mumbi Ngugi saying in her ruling that the Act is vague and could undermine access to affordable generic medicines since [it] failed to clearly distinguish between counterfeit and generic medicines. The High Court has called on Kenyas Parliament to review the Act and remove ambiguities that could result in arbitrary seizures of generic medicines under the pretext of fighting counterfeit drugs. The judgment also stated that IP rights should not override the right to life and health. The judgment comes at a time when the World Health Organisation (WHO) is

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also struggling to contend with the controversy about the conflation of IP and public health issues in the area of what it refers to as substandard/spurious/ falsely-labelled/falsified/counterfeit medical products (http://www.securingpharma.com). Patent News Indias first compulsory licence Indias long struggle to ensure access to affordable medicines for its people recently took an interesting turn. In early March 2012, the Controller General of Patents passed an order on an application filed by Natco Pharma, headquartered in Hyderabad, requesting a licence to produce an anti-cancer drug (sorafenib tosylate), the patent for which is held by the German pharmaceuticals and chemicals giant Bayer. It produces and markets the drug under the brand name Nexavar, which is used in the treatment of patients diagnosed as being in the advanced stages of affliction with liver or kidney cancer. Having failed to obtain a voluntary licence for manufacture from Bayer, Natco had filed an application under Section 84 of the Indian Patents Act. Being the first in itself makes the Nexavar judgment historic. But there is more to the judgment than its pioneering character. It is the grounds on which the Controller of Patents accepted Natcos application and rejected Bayers opposition that are also path-breaking. One important ground was the assessment whether reasonable public requirement was being met with regard to the supply of Nexavar through importation. Noting that: (i) over the years, Bayer had imported the drug in volumes that could have treated only a small fraction (a little above 2 per cent) of those who could be credibly assessed as requiring the drug; (ii) that there were years in which no imports were made; and, (iii) that the company was relying only on the import route and not on local production to work the patent, the Controller General concluded that in a physical sense Bayer was not working the patent. It was not meeting the condition that the reasonable requirements of the public with respect to the patented invention were being satisfied. He also rejected the argument that these circumstances with respect to supply of Nexavar had to be judged in the context of the fact that Cipla, another domestic generic pharmaceuticals manufacturer, has without licence been marketing sorafenib in India at a price much lower than that charged by Bayer.

A second important conclusion of the Controller is that the failure to meet demand adequately was partly caused by the high price of the product, which made it unaffordable. While Natcos counsel referred to research findings on reasonable estimates of R&D costs and the per capita incomes of the poor in India to argue that the product was unreasonably priced, the judgment itself focussed on the issue of unaffordability. Even when assessing this, the fundamental issue was not the fact that Nexavar was being priced at around Rs 2.8 lakh for a months dosage of 120 tablets, when Cipla was supplying the drug at Rs 30,000 for a months treatment, and Natco was promising the same quantum at Rs 8,800 if granted a licence. Rather, starting from the fact that the sale of Nexavar over the previous four years was only equivalent to a fraction of the publics estimated requirement of this life-extending treatment, the Controller General of Patents concluded that the drug was not bought by the public due to only one reason, that is, its price was not reasonably affordable to them. This is an important precedent, since it lays down a condition for assessing affordability. If enough of a patented drug that is crucial for the public is not being actually consumed, it must reflect the fact that a significant share of patients are not able to afford the drug at the price at which it can be sold. That does warrant invoking the right to issue a compulsory licence. There are three points the judgment makes. The first is that while importation rather than local manufacture is not a ground for forfeiture of a patent, a country may use the discretionary powers it has when framing patent legislation to make it a ground for invoking the right to compulsory licensing. Second, the understanding of working the patent in the relevant conventions does not imply working the patent on a commercial scale. And, finally but most importantly, mere importation cannot amount to working of a patented innovation. According to the judgment, a patentee is obliged to contribute to the transfer and dissemination of the technology, nationally and internationally, so as to balance rights with obligations. A patentee can achieve this by either manufacturing the product in India or by granting a licence to any other person for manufacturing in India. This conclusion, if sustained, is also a precedent with implications that go far beyond this case and product. On these grounds the Controller of Patents issued an order giving Natco the right to manufacture and

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sell a generic version of sorafenib tosylate, subject to pricing it at Rs 8,800 for a monthly dose of 120 tablets and the payment of 6 per cent royalty on the net sales to Bayer (http://www.frontline.in). USPTO and UKIPO issue preliminary progress report on worksharing initiative A joint report published by the UK Intellectual Property Office (UKIPO) and the United States Patent and Trademark Office (USPTO) reports that both offices have been making efficient use of each others work, which has led to an improvement in the quality of patents being granted. The report also states that patent attorneys could speed up the patenting process by amending patent applications at both offices when an exam report is issued by either one. In 2010, the UKIPO and USPTO agreed to investigate ways to reduce patent processing backlogs in both countries. Through closer collaboration, both parties have improved the efficiency and quality of the patent examination process. This was achieved by enabling patent examiners from each office to make greater use of each others work on commonly-filed patent applications. Each office also surveyed its examiners to assess their perceptions in using the shared work products, and the results of this survey inform the joint report. Mr John Alty, Chief Executive Officer of the UKIPO, said that it highlighted their continued efforts to maximize quality and efficiency savings via worksharing. Mr David Kappos, Under Secretary of Commerce for Intellectual Property and Director of the USPTO, said that the work-sharing effort represented a major step forward in the ongoing cooperation with the UKIPO, and showed good results. He added that more efficient and effective use of each others work would reduce the cost of doing business and help innovators move their products to market faster, with more predictability and certainty (http://www.uspto.gov). US Supreme Court clears the way for generic patent challenges The United States Supreme Court lately handed down another decision affecting patent law in biotechnology. This decision follows a string of patent decisions during a Supreme Court session that has featured an unusually large number of cases involving healthcare. In two separate decisions earlier, the Court severely limited the ability of

universities and biotechnology organizations to patent genes or other biological facts and relationships, which were deemed to be observations of natural processes rather than patentable inventions. The cases in question involved the Mayo Clinic v Prometheus, in which the former successfully claimed that a diagnostic test using a drug metabolite to help with dosing could not be patented. Following that case, a case involving Myriads patents on two genes associated with breast cancer and ovarian cancer was sent back to lower courts for consideration. This left the implication that the Court wanted the patents overturned using the reasoning from the Prometheus case. It remains to be seen what effect those decisions will have on the pharmaceutical and in vitro diagnostics business. Unlike the diagnostic and gene patenting cases, the case decided in April 2012 will have an immediate impact on the makers of generic and branded pharmaceuticals. The case in question is Caraco Pharmaceuticals, a generics manufacturer, versus Novo Nordisk, who patented and markets the drug Prandin, a blood glucose lowering treatment usually used in combination with metformin. The case revolves around a generic makers ability to introduce a generic drug for uses not indicated on the branded products label. In this case, Caraco argued that Prandin is only indicated and patented for a single use, as a treatment for type II diabetes in combination with metformin. However, it is approved for two other uses - as a monotherapy and in combination with thiazolidinediones. The details of this case are very particular, but it has broad implications for the pharmaceutical industry. In order to determine if the generic application does not violate the issued patent, the FDA relies on a description of the patent, known as a use code, provided to the Agency by the originating company. In this case, Caraco argued that Novo, in amendments to their patent descriptions filed after Caracos ANDA, had provided descriptions of the Prandin patents that were vague and overly broad, effectively blocking the generic approval. In the Supreme Court, this case boiled down to an understanding of the intention of Congress when drafting Hatch-Waxman and related laws, and interpretation of the specific wording. Although Novo had prevailed in Appeals Court by citing specific language of the relevant statutes, the Supreme Court took a broader view and examined how Congress

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intended the generic challenge process to work. Overall, the purpose of the relevant laws was to encourage and speed-up the approval of generic drugs. After the ruling, generic manufacturers will now be able to challenge the content of patent descriptions and, if successful, ultimately force approval of the ANDA. Writing for the Court in a unanimous decision, Justice Elena Kagan chastised the FDA for using ambiguous or opaque guidelines and forms that lend to the confusion surrounding patent decisions. She also encouraged Congress to act quickly to fix this problem in order to avoid excessive patent litigation (http://www.healthcarepackaging.com). Copyright and Trademark News Australia called on for piracy solution after regulatory deadlock Copyright holders and Internet companies are headed for a regulatory deadlock after the Australian High Court recently cleared Internet service providers of liability for peer-to-peer online movie piracy. The landmark ruling made clear to anti-piracy groups that they were extremely unlikely to get remedies to the problem from the legal system. Both the telecommunications sector and content owners have supported calls for the federal government to step in and provide a solution. However, the anti-piracy lobby and the telecommunications businesses want very different approaches from the federal government. The High Court ruling cleared Perth-based iiNet of movie industry claims that it had authorized infringement of copyright held by 34 companies when its customers downloaded movies and television programs. Legal experts said the ruling made it clear that copyright holders would be able to hold ISPs liable for peer-to-peer online movie piracy only in extreme circumstances. Earlier, the anti-piracy groups and carriers including ISPs had been holding confidential negotiations overseen by the federal AttorneyGenerals Department. However, despite the ruling, the Attorney-Generals Department is expected to facilitate these discussions so that the industry continues to work together to find a range of solutions to illegal downloading. The Communications Alliance, which has been negotiating on behalf of carriers and ISPs, has tried to secure agreement from content owners to test its co-

regulatory regime announced in 2011. Since then, however, negotiations have stalled over who should bear the cost of the enforcement regime. Under the carriers anti-piracy regime, the code would be registered and enforced by a third-party regulator, such as the Australian Communications and Media Authority. The Australian Federation Against Copyright Theft (AFACT), which ran the case on the companies behalf, said the ruling was a clear indication that Australian copyright law was ill-equipped to deal with the online environment. The AFACT chief Neil Gane said the situation would hinder the convergence of traditional entertainment and Internet business models, pointing to increasing tension on copyright and access to content (http://www.theaustralian.com.au). US Supreme Court steps into copyright case The Supreme Court agreed to decide a copyright case with important implications for the large and growing markets in discount and Internet sales. The justices said they will hear an appeal from a Thai student doing graduate work in the United States who tried to make ends meet by re-selling textbooks that family and friends first purchased abroad. A jury awarded textbook publisher John Wiley & Sons US$ 600,000 after deciding that math graduate student, Supap Kirtsaeng, infringed on the companys copyrights. The issue at the Supreme Court is whether US copyright protection applies to items that are made abroad, purchased abroad and then resold in the US without the permission of the manufacturer. The high court split 4-4 when it tried to answer that question in a case in 2010 involving Costco and Swiss watch maker Omega. The high court has earlier ruled that copyright protections do not apply when the goods are made in the US, sold abroad and re-imported. This case concerns only foreign-made items. While studying for his undergraduate degree, Kirtsaeng arranged for family and friends living abroad to purchase textbooks and ship them to him. He resold the copies on eBay. Eight textbooks sold by Kirtsaeng were published by Wileys Asian subsidiary. The company sued the student in federal court in New York. eBay was among the outside parties urging the court to hear the case and decide it in Kirtsaengs favour. Federal judges have come to different conclusions about whether copyright law applies in Kirtsaengs and other cases (http://www.foxnews.com).

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Now sound can be protected in Canada Everything from the roar of a motorcycle engine to the sound of sizzling butter could eventually be trademarked in Canada. After a 20-year court battle, the Canadian Intellectual Property Office is allowing sounds to be trademarked. The decision announced in a recent CIPO Practice Notice was sparked by US entertainment giant Metro Goldwyn Mayer, which applied in 1992 to trademark the lions roar heard at the end of its movies. MGM and CIPO reached an agreement that was recently approved by a Federal Court judge. Legal and marketing experts say the move by CIPO could eventually see everything from engine sounds to commercial jingles subject to trademark. However, there are others who feel that though not every application is going to get granted, there is certainly going to be a rush of applications to test waters (http://www.thestar.com). Gmail trademark dispute settled in Germany Google has obtained control of the Gmail trademark in Germany, according to the German trademark office, and the legal battle for the related domain name is also over, according to Google. When Google introduced Gmail in 2004, it quickly ran into trademark trouble in the UK and Germany, where local companies asserted their rights to the Gmail trademark, forcing Google to rebrand its service there as Googlemail. The UK case was settled in 2010, but the German case dragged on until the Gmail trademark was transferred from the German company G-mail GmbH to Google on 13 April 2012, according to a transfer filing posted by the German Patent and Trademark Office (http://www.computerworlduk.com). Key Patents Patents for computer and robotic-assisted surgery platform Praxim received two patents from USPTO for their robotic-assisted surgery products and revolutionary computer platform.The first patent titled System for determining the position of knee prosthesis is related to Praxims BoneMorphing technology that supports knee replacement surgery. The second patent, titled Guiding device for bone cutting recognizes Apex Robotic Technology (ART) platform. Based on BoneMorphing, surgeons can intraoperatively construct a 3-D model of the patients

knee joint, eliminating exposure to radiation involved in CT or MRI and the associated costs. Successful knee replacement surgery entails soft-tissue balancing, highly accurate implant positioning, and sizing. With the help of 3D modelling technology from Praxim, surgeons can have an enhanced visualization and can better perform the specific procedures within the patients anatomy. BoneMorphing enables surgeons to devise intraoperative surgical plan on the patients soft-tissues and ligament balancing, which is a major mandatory process prior to knee replacement surgery. Designed to direct the surgical plan, the ART is a robotic cutting guide known for its precision. ART enhances the surgeons potential to perform more accurate and safer bone cuts with minimal intraoperative time and less complexity. With fewer instruments involved in this procedure, optimization of logistics in hospitals will be improved and instrument processing costs will considerably be reduced (http://www.azorobotics.com). Holovisions US patent for context-driven search Holovisions has received US Pat No 8,161,073 for its context-driven search. Context-driven search analyzes the semantic context for query phrases in web pages or other documents and clusters these sources into groups of results with similar meaning. This provides results that are organized by query phrase context. Search users no longer have to wade through pages of results to pick out those entries that relate to the semantic context in which they are interested. Present search engines do not produce search results that are driven by the major contextual uses of a search input phrase. Accordingly, search results can be a jumble of different contextual meanings. This makes a user wade through pages of results (manually scanning titles, text snippets, and URLs) in order to pick out those entries that relate to the context for the phrase in which the user is interested. Context-driven search solves this problem in three steps. First, a person provides an input phrase search query. Second, the search engine identifies sets of substantially-equivalent expanded phrases that are relevant to the input phrase. Third, the search engine provides the person with setspecific summary information concerning these sets of substantially-equivalent expanded phrases. This threestep method provides search results that are driven, consolidated, and summarized by search phrase context (http://www.virtual-strategy.com).

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IIT Delhi gets patent for fabric feel tester Indian Institute of Technology (IIT), Delhi has been a granted patent for fabric feel tester, an innovative product developed by the premier academic institute. The new device facilitates quality evaluation of the fabric on the industrial level at a much lower price. Earlier, in order to evaluate the quality of their fabric,

the textile industry used the Kawabata Evaluation System (KES), which apart from being very expensive, is a highly technical device which acted as a hurdle for extensive use by the industry. The new fabric feel tester was would only cost Rs 150,000, compared to the price of Rs 15 million for the KES system (http://www.fibre2fashion.com).