Patent Grant Procedure Filing of patent application Early

Patent Grant Procedure Filing of patent application Early Publication after 18 months Pre Grant Opposition / Representation by any person. Request for examination Examination: Grant or Refusal Publication of Grant of patent Post Grant Opposition to grant of patent (Constitution of Opposition Board) Decision By Controller

a P n te h T a i d n I e t c A 0 7 19

Journey of…. …. Indian Patent System 1856 Protection of invention 1911 Indian patents & designs act 1972 Patents act (act 39 of 1970) – only process patents | 14 year, 5 year (food/drug) 1975 India joins WIPO 1999 India signs TRIPS (after joining WTO) 1999, 2002, 2004, 2005 Amendments -Product patents | 20 years patent period

The Indian Patent Act, 1970 The Indian legislation which control the patents system In India the grant of patents is governed by the patent act 1970 and rules 1972 which is operative in the whole of India chapters 23 sections 162 Indian Patent Act, 1970

a h C s r e t p

CHAPTER I PRELIMINARY Short title, extent and commencement. ü This Act may be called the Patents Act, 1970. ü It extends to the whole of India. ü It shall come into force on such date as the Central Government may, by notification in the Official Gazette Contd. . .

Definitions and interpretation. ü Assignee includes the legal representative of a deceased inventor. ü Invention means any new and useful(i) art, process, method or manner of manufacture (ii) machine, apparatus or other article (iii) substance produced by manufacture, and includes any new and useful improvement of any of them, and an alleged invention ü Legal Representative means a person who in law represents the estate of a deceased person Contd. . .

ü Patentee means the person for the time being entered on the register as the grantee or proprietor of the patent ü True And First Inventor does not include either the first importer of an invention into India, or a person to whom an invention is first communicated from outside India

CHAPTER II: INVENTIONS NOT PATENTABLE just a theory, or based on known theory, arrangement or rearrangement in a known way related to atomic energy Invention or Discovery based on traditional knowledge contrary to natural laws injurious to public health

Contd…. . A method for Human health related Agriculture Horticulture

CHAPTER III APPLICATIONS FOR PATENTS Persons entitled to apply for patents True or first inventor His / her assignee Legal Representative Contd. . .

Form of application Provisional and complete specifications ü complete specifications within 12 months (3 months relaxation after the permission of controller but have to pay a prescribed fee). Contents of specifications ü Provisional : Title & idea of invention ü Complete : title, full description, its utility, scope, diagram, abstract etc. Priority dates of claims ü first to file (in India) ü first to document (in USA)

CHAPTER IV EXAMINATION OF APPLICATIONS Examination of application : ü after submission of complete specifications. Search for anticipation by previous publication and by prior claim : ü It is the duty of examiner to check applications Consideration of report of Examiner by Controller: Controller analyse it and make gist of objection, send to applicant & provide prescribed time to him to eradicate these objections. Contd. . .

Power of Controller ü to refuse or require amended applications in certain cases ü to make orders respecting division of application ü to make orders respecting dating of application ü in cases of anticipation ü in case of potential infringement ü to make orders regarding substitution of applicants, etc. Contd. . .

Time for putting application in order for acceptance ü An application for a patent shall be deemed to have been abandoned unless within fifteen months from the date on which the first statement of objections to the applicant by the Controller. Acceptance of complete specification: ü within 12 months from the date of filing of provisional application Advertisement of acceptance of complete specification

CHAPTER IVA EXCLUSIVE MARKETING RIGHTS Application for grant of exclusive rights: ü To sell or distribute article or substance in India (made in prescribed form and on payment of fees).

CHAPTER V OPPOSITION TO GRANT OF PATENT Opposition to grant of patent: ü four months from date of advertisement of acceptance of complete specification (1 month may exceed) In cases of "obtaining" Controller may treat application as application of opponent Refusal of patent without opposition : ü its all depends on controller. Mention of inventor as such in patent

CHAPTER VI ANTICIPATION ü ü ü previous publication previous communication to Government public display, etc. public working use and publication after provisional specification

CHAPTER VII PROVISIONS FOR SECRECY OF CERTAIN INVENTIONS To inventions relevant for defence purposes Secrecy directions to be periodically reviewed: ü within 9 months (extend period of 3 months) by central govt. Consequences of secrecy directions : ü central govt. provide him reward/payment

CHAPTER VIII GRANT AND SEALING OF PATENTS AND RIGHTS CONFERRED THEREBY Grant and sealing of patent: ü the application has been opposed and the opposition has been finally decided in favour of the applicant Amendment of patent granted to deceased applicant ü the Controller is satisfied that the person to whom the patent was granted had died before the patent was sealed, the Controller may amend the patent by substituting for the name of that person the name of the person to whom the patent ought to have been granted. Contd. . .

Date of patent ü every patent shall be dated as of the date on which the complete specification was filed Form, extent and effect of patent ü Every patent shall be in the prescribed form and shall have effect throughout India. ü A patent shall be granted for one invention only: Contd. . .

Grant of patents to be subject to certain conditions ü any machine, apparatus or other article, process, medicine & drug. Rights of patentee ü to make, use, exercise, sell or distribute the invention Rights of co-owners of patents ü Where a patent is granted to two or more persons, each of those persons shall be entitled to an equal undivided share in the patent. ü use, exercise and sell the patented invention for his own benefit without accounting to the other person or persons. Term of patent ü 5 years- for food, drugs & medicine. ü 14 yrs – for all other inventions (methods &/or processes)

CHAPTER IX PATENTS OF ADDITION Patents of addition ü any improvement in or modification of an invention which is not present in complete specification Terms of patents of addition- ü equal to the term of patents for the main invention.

CHAPTER X AMENDMENT OF APPLICATIONS AND SPECIFICATIONS Amendment of application and specification before Controller: ü Every application for leave to amend an application for a patent or a specification under this section made after the acceptance of the complete specification and the nature of the proposed amendment shall be advertised in the prescribed manner. Amendment of specification before High Court ü Where an application for an order under this section is made to the High Court, the applicant shall give notice of the application to the Controller and the Controller shall be entitled to appear and be heard, and shall appear if so directed by the High Court.

CHAPTER XI RESTORATION OF LAPSED PATENTS Applications for restoration of lapsed patents ü The patentee or his legal representative, and where the patent was held by two or more persons jointly, then with the leave of the Controller, one or more of them without joining the others, may, within one year from the date on which the patent ceased to have effect, make an application for the restoration of the patent. Rights of patentees of lapsed patents which have been restored. ü Same right as given to original patentee.

CHAPTER XII SURRENDER AND REVOCATION OF PATENTS Surrender of patents ü A patentee may, at any time by giving notice in the prescribed manner to the Controller, offer to surrender his patent. Revocation of patents in public interest ü Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.

CHAPTER XIII REGISTER OF PATENTS Register of patents and particulars to be entered therein ü the names and addresses of grantees of patents; ü notifications of assignments and of transmissions of patents, of licences under patents, and of amendments, and revocations of patents; ü Assignments, etc. , not to be valid unless in writing and registered ü Person or persons registered as grantee or proprietor of patent ü Register shall be the prim face evidence of any matter required or authorized by or under this act. Contd. . .

Register to be open for inspection ü the register shall at all convenient times be open to inspection by the public; and certified copies, sealed with the seal of the patent office, of any entry in the register shall be given to any person requiring them on payment of the prescribed fee.

CHAPTER XIV PATENT OFFICE AND ITS ESTABLISHMENT v Patent office and its branches : kolkata(H. O) Branches: Delhi, Mumbai, Chennai. Restriction on employees of patent office as to right or interest in patents ü All officers and employees of the patent office shall be incapable, during the period for which they hold their appointments, to acquire or take, directly or indirectly any right or interest in any patent issued by that office.

CHAPTER XV POWERS OF CONTROLLER GENERALLY Controller have certain powers of a civil court ü Examining patentee. ü Awarding cost ü Issuing commission for examination of witness of document ü Requiring the discovery and production of any document ü To correct clerical error in a patent or application of patent or other specification ü Give final decision if there is any opposition on a specification filed, then heard both of one and decide the case. ü Give extension of time in different provisions.

CHAPTER XVI WORKING OF PATENTS, COMPULSORY LICENCES, LICENCES OF RIGHT AND REVOCATION Definitions of "patented articles" and "patentee”. ü "patented article" and "patented process" mean respectively an article or process in respect of which a patent is in force General principles applicable to working of patented inventions ü To encourage inventions. ü Have commercial utility in India. Contd…

Compulsory licences ü At any time after the expiration of three years from the date of the sealing of a patent, any person interested may make an application to the Controller alleging at the reasonable requirements of the public with respect to the patented invention have not been satisfied or that the patented invention is not available to the public at a reasonable price and praying for the grant of a compulsory licence to work the patented invention. Contd…

General purposes for granting compulsory licences ü the patented inventions are worked on a commercial scale in India without undue delay and to the fullest extent that is reasonably practicable. ü the interests of any persons for the time being working or developing an invention in India under the protection of a patent are not unfairly prejudiced. Terms and conditions of compulsory licences ü the royalty and other remuneration, if any, reserved to the patentee or other person beneficially entitled to the patent. ü the patented invention is worked to the fullest extent by the person to whom the licence is granted and with reasonable profit to him. ü the patented articles are made available to the public at reasonable prices. Contd…

Matters to be taken into account in granting compulsory licences ü the nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patentee or any licensee to make full use of the invention. ü the ability of the applicant to work the invention to the public advantage. Contd. . .

Endorsement of patent with the words "Licences of right“ ü At any time after the expiration of three years from the date of the sealing of a patent, the Central Government may make an application to the Controller for an order that the patent may be endorsed with the words "licences of right" on the ground that the reasonable requirements of the public with respect to the patented invention have not been satisfied or that the patented invention is not available to the public at a reasonable price. Contd…

Certain patents deemed to be endorsed with the words "Licences of right" ü substances used or capable of being used as food or as medicine or drug; ü the methods of processes for the manufacture or production of any such substances ü the methods of processes for the manufacture or production of chemical substances (including alloys, optical glass, semiconductors and inter-metallic compounds)

CHAPTER XVII USE OF INVENTIONS FOR PURPOSES OF GOVERNMENT AND ACQUISITION OF INVENTIONS BY CENTRAL GOVERNMENT Meaning of use of invention for purposes of Government ü an invention is said to be used for the purposes of government if it is made, used, exercised or vended for the purposes of the Central Government, a State Government or a government undertaking. Contd…

Power of Central Government to use inventions for purposes of Government ü Where an invention has, before the priority date of the relevant claim of the complete specification, otherwise than in consequence of the communication of the invention directly or indirectly, by the patentee or by a person from whom he derives title, any use of the invention by the Central Government or any person authorised in writing by it for the purposes of government may be made free of any royalty or other remuneration to the patentee. Contd…

Acquisition of inventions and patents by the Central Government ü The Central Government may, if satisfied that it is necessary that an invention which is the subject of an application for a patent should be acquired from the applicant or the patentee for a public purpose, publish a notification to that effect in the Official Gazette, and thereupon the invention or patent and all rights in respect of the invention or patent shall, by force of this section, stand transferred to and be vested in the Central Government.

CHAPTER XVIII SUITS CONCERNING INFRINGEMENT OF PATENTS Power of court to make declaration as to non-infringement ü any person may institute a suit for a declaration that the use by him of any process, or the making, use or sale of any article by him does not, or would not, constitute an infringement of a claim of a patent against the patentee or the holder of an exclusive licence under the patent. Power of court to grant relief in cases of groundless threats of infringement proceedings ü Where any person threatens any other person by circulars or advertisements or by communications, oral or in writing addressed to that or any other person, with proceedings for infringement of a patent, any person aggrieved thereby may bring a suit against him

CHAPTER XIX APPEALS ü Every appeal under this section shall be in writing and shall be made within three months from the date of the decision. ü Procedure for hearing of appeals ü Every such appeal shall be heard by a single judge of the High Court. ü Every such appeal shall be heard as expeditiously as possible and endeavour shall be made to decide the appeal within a period of twelve months from the date on which it is filed.

Chapter XX- OFFENCES AND PENALTIES OFFENCES PENALTIES Contravention of secrecy provisions relating to certain inventions imprisonment for a term which may extend to two years, or with fine, or with both. Falsification of entries in register, etc. ----- do ----- Unauthorised claim of patent rights punishable with fine which may extend to five hundred rupees. Wrongful use of words, "patent office" imprisonment for a term which may extend to six months, or with fine, or with both. Refusal or failure to supply information ----- do ----- Practice by non-registered patent agents fine which may extend to Rs. 500 in the case of a first offence and Rs. 2000 in the case of subsequent offence. Offences by companies If the person committing an offence under this Act is a company offence shall be deemed to be guilty and shall be liable to be proceeded against and punished accordingly

CHAPTER XXI: PATENT AGENTS Register of patent agents üThe Controller shall maintain a register. ü Contains names and addresses of all persons. Qualifications for registration as patent agents üCitizen of India; üHe has completed the age of 21 years; ü Has a degree from any Indian university or equivalent. ü Is an advocate within the meaning of the advocates act, 1961. ü Has passed the qualifying examination prescribed for the purpose; . üHe has paid such fee as may be prescribed. Contd. .

Restrictions on practice as patent agents ü If he is not registered. ü No company or other body corporate shall practise, describe itself or hold itself out as patent agents or permit itself to be so described or held out Contd. .

Removal from register of patent agents and restoration Ø by error ü on account of misrepresentation or suppression of material fact ü that he has been convicted of any offence and sentenced to a term of imprisonment or has been guilty of misconduct. Ø The Central Govt. may, on application and on sufficient cause being shown, restore to the register the name of any person removed there from.

Power of Controller to refuse to deal with certain agents üany individual whose name has been removed from, and not restored to, the register. ü any person who has been convicted of an offence. ü any person, not being registered as a patent agent, who in the opinion of the Controller is engaged wholly or mainly in acting as agent in applying for patents in India.

CHAPTER XXII INTERNATIONAL ARRANGEMENTS World Intellectual Property Organization (WIPO) World Trade Organization (WTO) 1995 Paris Convention 1998 Patent Cooperation Treaty (PCT) 1998 Budapest Treaty 2001

CHAPTER XXIII MISCELLANEOUS ü Avoidance of certain restrictive conditions ü Fees ü Restrictions upon publication of specifications ü Reports of Examiners to be confidential ü Publication of patented inventions ü Power of Controller to call for information from patentees ü Evidence of entries, documents, etc. ü Service of notices, etc. , by post ü Security for costs Contd. .

ü Transmission of copies of specifications, etc. , and inspection thereof. ü Information relating to patents ü Loss or destruction of patents ü Reports of Controller to be placed before parliament ü Power of High Courts to make rules ü Power of Central Government to make rules

m A n e m d s t n e

An overview of amendments (2005) • • Product Patent New use of existing pharma product Patentability of software EMRs eliminated Oppositions Compulsory licensing Infringements Mail-box application Contd. .

Pharmaceutical substances Fast track granting introduced Indian filing compulsory Time period of request for examination reduced • Time period for examination and grant reduced • Revision of fees • •

Current Law in India • The current law of Patents is governed by the Patents Act, 1970 along with the relevant rules. The Act was last amended vide the Patent Amendment Act of 1999. • The latest amendment to this Act is in the form of the Patent (SECOND AMENDMENT) BILL, 1999 passed by the Parliament in May 2002 (awaiting Presidential Assent). • This presentation shall focus on the major changes bought by this new Bill.

Salient features of the Indian Patent Act, 1970: · A more elaborate definition of invention; · Abolition of product patents for drugs and medicines including certain classes of chemicals; · Declaration of certain inventions as nonpatentable; more stringent requirements regarding the description of the invention;

Salient features of the Indian Patent Act, 1970: (2) · Extension of the area of search for novelty among documents published anywhere in the world; · Extension of the grounds for opposing the grant of a patent; · Exempting certain categories of prior publication, prior communication and prior use from anticipation; provisions for secrecy of inventions relevant for defence purposes;

Salient features of the Indian Patent Act, 1970: (3) · Provision for use of inventions for the purpose of Government or for research or instruction to pupils; · A more precise definition of the rights of coowners of patents; · Reduction in the term of patents relating to drugs, medicines and substances used as food;

Salient features of the Indian Patent Act, 1970: (4) · More elaborate provisions for patents of addition; · Enlargement of the grounds for revocation of a patent; · Stricter requirements regarding assignments and transfer of patents; · Provision for compulsory licences, licences of right, and revocation of patents on the ground of non-working.

Patent Cooperation Treaty

Overview Ø Patent Cooperation Treaty (PCT) is an international patent law treaty that provides a unified procedure for filing patent application to protect inventions in each of its contracting states. Ø It is an special international treaty organized by WIPO that only provides access to member states of Paris Convention for the Protection of Industrial Property.

Purposes 1. Procedures for obtaining legal protection for inventions 2. Dissemination of technical information • save effort (time, work and money)for applicants & national offices • increase the likelihood of granting deserving patents • facilitate and accelerate access by the public to the technical information contained in documents describing new inventions

Why Do We Use PCT System 1. Bring the world within reach 2. Simplify the filing procedures 3. Postpone both costs and time 4. Provide a strong basis for patenting decisions 5. Alleviate the burden of national offices in member states

Basic Features of PCT System One language One patent office One application International application/PCT application

Basic Features of PCT System Formal examination is done by one office Retrieval is carried out by one office International publication is made by international office Examination and authorization are finished by national offices

About These Offices in PCT Application Ø Receiving Office (RO) — Office where an applicant might file the international application Ø International Searching Authority (ISA) — Patent office which performs the search Ø International Preliminary Examination Authority (IPEA) — Offices responsible for international preliminary examination Ø International Bureau (IB) — Belong to WIPO; responsible for international coordination and management of PCT system Ø Designated Office (DO) — Office that provides protection for inventions according to the requirements of applicants in international application Ø Elected Office (EO) — The contracting states for which the examination is demanded in the claim

Development Course 17 -18 th • Patent systems were born and inventions got protection. • The emergence of Paris Convention in 1883 provides a channel foreign patent applications. • Background: issues exist that for the application procedure of one invention to many states, repeated work should be reduced. • PCT was signed at the Washington Diplomatic Conference. June, 1970 Jan, 24 1978 • On January 24, 1978, PCT went into effect in initial 18 contracting states, and was put into force in June, 1978. Now, PCT has 141 Contracting States.

PCT System ! TWO phases are included in the procedure of an international patent application. International phase National and regional phase

PCT System 20 30 File demand 30 International (months) 0 publication 12 16 File first File International application PCT Search report and ISA Written Opinion typically a national patent application in the home country of the applicant Enter national phase 18 19 22 OR 28 International Preliminary Examination PCT Timeline Enter national phase

PCT System － International Phase 1. Filling of a PCT application • Up to 12 months from the filing date of your local (first) application to file your PCT application with the receiving Office of your national or regional patent Office. Or file PCT application directly with the RO of WIPO if permitted by the national security provisions in your national law. 2. International search report & written opinion • At around 16 months from the filing date of your local application, an international search report (ISR) and a written opinion from a national or regional patent Office will be received. 3. International publication • The International Bureau of WIPO publishes the PCT application on PATENTSCOPE shortly after 18 months from the priority date of PCT application.

PCT System － International Phase 4. Supplementary international search (optional) • The request from supplementary international search may be filed anytime prior to the expiry of 19 months from the priority date. It is completely optional but may be of interest in cases where a more complete overview of the prior art is desired, particularly in respect of specific languages. 5. International preliminary examination (Optional) • If you are not entirely satisfied with the contents of the written opinion, you may decide to continue the assessment of your invention under the PCT by filing a demand for international preliminary examination with a national or regional patent.

PCT System － National Phase 1. It falls at 30 months from the filing date of the international application or from the earliest priority date of the application if a priority is claimed. 2. In national phase, the patent application is subject to the patent laws, regulations and practices of each country. 3. Rejections on form and content may not be raised provided that they conform to the requirements of the PCT.

PCT System PCT vs Paris Convention PCT provides applicants with longer period of time (30 months vs. 12 months) to determine marketing plans, to evaluate the strength of their potential patent, and to be more selective as to the countries in which they will file. 0 (months) File first application 12 File international application

Paris Convention • The Paris Convention for the Protection of Industrial Property, signed in Paris, France, on March 20, 1883, was one of the first intellectual property treaties. It was revised at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in 1958 and at Stockholm in 1967, and it was amended in 1979.

• The Convention applies to industrial property in the widest sense, including patents, marks, industrial designs, utility models (a kind of “small patent” provided for by the laws of some countries), trade names (designations under which an industrial or commercial activity is carried on), geographical indications (indications of source and appellations of origin) and the repression of unfair competition

Contd… • The principal features of the Paris Convention have been listed below: v. National treatment; v. Right of priority ; v. Independence of patents; v. Parallel importation ; v. Protection against false indications and unfair competition. • The total number of Nation States party to the Convention are 173.

Contd… ØArticle 10 -False Indications: Seizure, on Importation, etc. , of Goods Bearing False Indications as to their Source or the Identity of the Producer (1) The provisions of the preceding Article shall apply in cases of direct or indirect use of a false indication of the source of the goods or the identity of the producer, manufacturer, or merchant. (2) Any producer, manufacturer, or merchant, whether a natural person or a legal entity, engaged in the production or manufacture of or trade in such goods and established either in the locality falsely indicated as the source, or in the region where such locality is situated, or in the country falsely indicated, or in the country where the false indication of source is used, shall in any case be deemed an interested party.

Ø Article 10 ter-Marks, Trade Names, False Indications, Unfair Competition: Remedies, Right to Sue (1) The countries of the Union undertake to assure to nationals of the other countries of the Union appropriate legal remedies effectively to repress all the acts referred to in Articles 9, 10, and 10 bis. (2) They undertake, further, to provide measures to permit federations and associations representing interested industrialists, producers, or merchants, provided that the existence of such federations and associations is not contrary to the laws of their countries, to take action in the courts or before the administrative authorities, with a view to the repression of the acts referred to in Articles 9, 10, and 10 bis, in so far as the law of the country in which protection is claimed allows such action by federations and associations of that country.

Purpose of the Hatch-Waxman Act • The purpose of the Act was “to make available more low cost generic drugs by establishing a generic drug approval process for pioneer drugs first approved after 1962. ” – H. R. Rep. No. 98 -957, Pt. 1, at 14 (June 21, 1984). • The Act was legislatively negotiated to strike “a balance between two potentially competing policy interests—inducing pioneering development of pharmaceutical formulations and methods and facilitating efficient transition to a market with low-cost, generic copies of those pioneering inventions at the close of a patent term. ” – Novo Nordisk A/S, et al. v. Caraco Pharmaceutical Laboratories, Ltd. , et al. , No. 2010 - 1001 (Fed. Cir. , April 14, 2010), at 2. 78

Basic Structure of the Act I • Orange Book Listings by NDA Holder • Abbreviated New Drug Applications (ANDA) – Bioequivalence vs. Repetitive Clinical Trials • Patent Certifications by ANDA Applicants – Especially Paragraph IV Certifications • Notice Letter to Patent Owner • 45 -Days for Patent Owner to Sue • 30 -Month Stay of FDA Approval of ANDA • 180 -Day Marketing Exclusivity for Successful First-Filer – delayed FDA approval of 2 d ANDAs 79

Basic Structure of the Act II • Patent term extension - up to five years to compensate a patent owner for the marketing time allegedly lost in the FDA drug approval process. • Total patent term extension of up to 14 years. • NDA holder has Data Exclusivity for five years after date of FDA approval of a New Chemical Entity (NCE) • NDA holder has Data Exclusivity for three years after date of FDA approval of a new use of an existing and previously approved chemical entity, or new dosage form using that chemical entity. 80

Basic Structure of the Act III • FDA is not permitted to approve an ANDA that relies upon clinical trials during the NDA holder’s Data Exclusivity period. • Applicants permitted to file ANDAs one-year prior to expiration of Data Exclusivity period (NCE-1). • MMA (2003) provides forfeiture of ANDA First-Filer’s 180 -day Marketing Exclusivity under certain circumstances. • MMA also creates right to file counterclaim seek correction or de-listing of Orange Book patents. 81

I. Data exclusivity - what is it, and what are its implications? - does TRIPS require it? II. Data exclusivity/linkage in FTAs - what is happening? - what are the options for damage control?

Data exclusivity: During the data exclusivity period, Authorities may not rely on those data to register generic equivalents.

As long as data exclusivity lasts: Generic manufacturers will have to submit their own data to prove safety and efficacy => They will have to repeat the clinical trials and other tests Alternatively, they can only enter the market after expiry of the data exclusivity period

When is data exclusivity important?

1. NCEs, standard situation: Patent Registration; market entry End patent term

1. NCEs, standard situation: Patent Registration; market entry Data exclusivity End patent term

1. NCEs, standard situation: Patent Registration; market entry End patent term Data exclusivity ? During this period, generics may not be able to enter the market, even when a CL has been issued

1. NCEs, standard situation: Patent Registration; market entry End patent term Data exclusivity ? During this period, generics may not be able to enter the market, even when a CL has been issued

1. NCEs, standard situation: Patent Registration; market entry End patent term Data exclusivity ? During this period, generics may not be able to enter the market, even when a CL has been issued

1. NCEs, standard situation: Patent Registration; market entry End patent term Data exclusivity ? During this period, generics may not be able to enter the market, even when a CL has been issued

1. NCEs, standard situation: Patent Registration; market entry End patent term Data exclusivity ? During this period, generics may not be able to enter the market, even when a CL has been issued

2. Second indication: Patent Registration; market entry Data exclusivity End patent term

2. Second indication: Patent Registration; market entry Data exclusivity Registration 2 nd indication End patent term

2. Second indication: Patent Registration; market entry Data exclusivity Registration 2 nd indication End patent term Data exclusivity => If data exclusivity is allowed for 2 nd/subsequent indications: additional delay for generic market entry

3. When there is no patent: • When the drug is not new • No patent law, or patents not granted for pharmaceuticals

Article 39. 3 Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves 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 the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Article 39. 3 Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves 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 the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Article 39. 3 Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves 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 the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Undisclosed data about New Chemical Entities should be protected: • against unfair commercial use • against disclosure

Thus: • Publication of such data is not allowed, except when necessary to protect the public. • Authorities are not to share these data (for instance with generic companies).

“Unfair commercial use” Does the Drug Regulatory Authority actually use the data? ? - Often not; the DRA may not even have the data; - Even if the DRA does use the data, it is not commercial use.

Data exclusivity creates additional barriers to access to medicines. TRIPS Article 39. 3 does NOT require data exclusivity, and national laws do not need to provide data exclusivity.

Another unnecessary barrier to access to medicines is the so-called ‘linkage’. ‘Linkage’ means that the DRA cannot register a generic version of a medicine that is still protected by a patent Thus, it indirectly turns a DRA into a ‘patent police’.

What can countries do – data exclusivity? • No Free Trade Agreement • Avoid data exclusivity in the FTA (stick to TRIPS wording) • Limit the duration of data exclusivity • Limit the scope of exclusivity: - only for NCEs - only for undisclosed data - don’t extend it to foreign registration • Create national exemption mechanisms

For this to happen (and to be successful) We need to be alert, We need to learn more, We need to learn faster, And we need to talk to and convince our trade negotiators

Compulsory license: Right to use the patent without permission of the patent holder subject to certain conditions (Art. 31 TRIPS)

Compulsory Licensing Article 31 TRIPS (a) (b) authorization of such use shall be considered on its individual merits; such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.

Article 31 TRIPS (c) the scope and duration of such use shall be limited to the purpose for which it was authorized (d) such use shall be non-exclusive; (e) such use shall be non-assignable (f) any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;

Paragraph 6 TRIPS Declaration of TRIPS and Public Health addressed the difficulties WTO Members with limited pharmaceutical production capacity have in making effective use of the compulsory licensing: “We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002”

Contentious points: --countries eligible to export the generic medicine --the limited scope of the diseases being allowed for CL --anti-diversion measures to prevent parallel import of medicines to other countries rather than the intended beneficiary

• Waiver Decision: 30/8/2003 • Article 31 bis TRIPS Agreement : 6/12/2005 (first TRIPS amendment) allowing countries with inadequate production facilities to import medicines produced under compulsory license in third countries. . . under certain cumbersome conditions

• Compulsory licenses are controversial but… • • 1000 United States 600 Europe 300 Japan 1 -5 Developing countries

Transition Periods • Developed countries had 1 year (1/1/1996) • Developing countries had 4 additional years (1/1/2000) to apply the TRIPS provisions following date of entry into force (1/1/1995) plus 5 additional years to comply with the TRIPS Agreement provisions on pharmaceutical patents (1/1/2005) • In view of special needs of LDCs, they had till 1 January 2006 to apply TRIPS with possible extension to allow them to “create a viable technological base”

• The Decision of the Council for TRIPS of 29 November 2005 called ‘Extension of the Transition Period Under Article 66. 1 For Least-Developed Country Members’ provides under paragraph 1 that: • “LDCs shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until 1 July 2013, or until such a date on which they cease to be a least-developed country Member, whichever date is earlier. ” • Par 7 Declaration on TRIPS and Public Health extends till 1/1/2016 for pharmaceutical protection

TECHNOLOGY TRANSFER AND LICENSING

CONTENTS • Intellectual assets, commercialization and competition • Alternatives to get revenues • Commercialization of research results • Licensing and technology transfer in practise • Summary

KNOWLEDGE AND MONEY IN EDUCATION : - MONEY IS TRANSFERRED TO KNOWLEDGE IN COMMERCIALIZATION : - KNOWLEDGE IS TRANSFERRED TO MONEY ( AND WELFARE )

PRINCIPLES FOR SUCCESS Focus the business Identify other winners Identify market requirements Identify internal performance Benchmark best competitors

COMPARISON – HOW DO WE PERFORM? “Not important” - - - - -“Very important” Price Quality Fast delivery Reliable delivery Small lots/ customization Design Frequent product change How well our best competitor performs How we actually perform What the market wants Source LESI

WHAT INTELLECTUAL ASSETS SHOULD YOU CONSIDER? Marketing Trademarks Trade Names Brand Names Logos Customer Lists Contracts Relationships Open purchase orders Technical Patents Patent applications Technical Documents Know How Trade dress docs Trade secrets Contract Favorable supply contacts Licensing Franchising Non-compete agents Artistic Literary works Copyrights Musical composition Maps Engravings Human Trained and Assembled work force Employment agents Union contracts Data Processing Proprietary Software copyrights Automated databases Integrated circuits Location Leasehold interests Mineral exploitation rights Easements Air rights Water rights Engineering Industrial design Product patents Trade secrets Engineering drawings Schematics Blueprints Goodwill Institutional Professional practice Personal goodwill of a professional Celebrity Going concern value

THE VALUE CHAIN IN THE USE OF INTELLECTUAL PROPERTY Patent Idea Know How Trade Secret Trade Mark Publish Utility Model & Design Copyright

ALTERNATIVES TO MAKE BUSINESS AND TO GET REVENUES

POSSIBILITIES TO GET REVENUES FROM AN INVENTION Start-up company Production in a current company Selling / purchasing Licensing ( in or out ) Technology transfer Franchising Partnership arrangements Collateral

HOW TO START AND CONTINUE? Make an inventory – what do you own or have? Identify the goals and needs for your company Evaluate the resources, environment and competition Determine gaps, threats and opportunities Fill the gaps it needs human resources, funds and hard work it takes time and requires patience Check and evaluate results

BUSINESS VIEWPOINTS OF AN INVENTIVE PRODUCT • Who are your customers and what are your channels of distribution? • Does your profitability analysis look promising? • How important is the product to your business and to your image? • Do you have the requisite intellectual and economic resources for product development? • How will the product impact to your operations and bottom line?

NETWORK FOR COMMERCIALIZATION OF INVENTIONS Inventor Financer Manufacturer Marketing organization

COMMERCIALIZATION METHODS FOR INVENTIONS, NEW PRODUCTS AND SERVICES • • • Direct business contacts Licensing bulletins Prototypes Videos, CDs, DVDs E-mail and Internet Electronic marketplaces Commercialization projects Entrepreneurship education Cooperation contacts • Legal services • Fairs, meetings and exhibitions • Professional publications

INTERNATIONAL NETWORKS ARE USEFUL AS INFORMATION SOURCES, IN EDUCATION AND IN NETWORKING 1. 2. 3. 4. For instance: WIPO, EPO and local patent offices offer large sources of information in addition to their main activities Associations of technology, IPR, innovation and licensing professionals around the world like - LES (Licensing Executives Society International Inc. ) and its regional LES societies - TII (Transfer of Technologies, Innovation and Industrial Information) - AIPPI (The International Association for the Protection of Intellectual Property), etc. - Inventors’ associations Universities and domestic and international educational institutes and organizations Internet is a huge library, information and contact source

SOURCES FOR IP BASED BUSINESS IP and innovation sources for future business: Internal sources - Tacit knowledge - Internal R&D External sources - Purchasing - Licensing Combination of internal and external - Strategic partnership - Cross licensing

BUSINESS FROM LICENSING AND TECHNOLOGY TRANSFER

BUSINESS FROM LICENSING • ADVANTAGES & BENEFITS - Costs and risks less than internal R&D - Less time to market - Implementation support available • DISADVANTAGES & RISKS - May not have exclusivity - Implementation risks, costs Do not develop internal capability • COST FACTORS - Up-front and royalty payments - Implementation costs

LICENSE License is an agreement, by which the licensor grants permission to the licensee to use intellectual property rights, owned by the licensee, for whatever mutually agreed purpose, which the licensor normally has the power to prevent or stop the licensee from doing. A licensing contract specifies the terms and scope of the agreement. Source: Fahllund-Wik 200 and, WIPO

LICENSING IS ADVANTAGEOUS FOR COMPANIES • Shortage of research and development activities as well as new products • Fast and easy possibilities to new products • Entrepreneural, manufacturing and logistics skills exist already in SMEs • Own manufacturing and licensed products give more revenues • Goals may be specialization and subcontracting • Steps to internationalization

VALUATION METHODS TO CALCULATE THE VALUE OF IP • • Cost Approach - based as realised costs or by comparing costs of a similar patent or product Market Approach - based on selling or buying of patents, comparing similar technologies or products Income Approach - based on a licensed IP and estimate of future cash flow over time, including estimates of success and risks. Popular method. Other methods - Business Results Method is based on calculated or estimated cash flow and revenues of business and estimated role of the patent in it. This value changes according to time and business. It may also include the influence of goodwill or value of other IPR - Monte Carlo is a simulation method.

IMPORTANCE OF THE PATENTS IN A COMPANY High Value Patents Often these patents are bought or sold Overhead Patents Value Defensive Patents 0% 5% 50% Portfolio Source Intellectual Ventures

MAIN PARTIES OF A LICENSE AGREEMENT Licensor Licensee - inventor A - company - other owner of the IPR - company (usually in the field of the invention)

GOALS OF THE LICENSOR • • Revenues, income Larger possibility for marketing Larger possibility for manufacturing Larger possibilities for distribution Internationalization Collaboration Specialization Social values

GOALS OF THE LICENSEE • • Revenues Better or more business Manufacturing Technology Specialization Rights to use IPR Collaboration

PARTIES IN LICENSING • The seller ( the licensor ), the owner(s) of the invention (or patent ) • Purchaser ( the licensee ), often a manufacturing and marketing company in the field of the invention or technology • Collaboration partners • Financiers, investors • Technical specialists, subcontractors • Lawyers ( IPR, business, international business) • Marketing and other consultants

LARGE POSSIBILITIES FOR LICENSING A license or technology transfer agreement may be based on: • A patent, an utility model ( like technical solution ) • Trademarks, brands • Copyright ( like software ) • Know-how, business secrets • Business methods ( the whole business or parts of it like processes, research and development, testing. materials, logistics, e-business B 2 B ja B 2 C, formats, etc. ) • Different combinations

LICENSING AGREEMENT, MAIN CONTENTS • The title • The parties and contact information • What will be licensed and related IPR ( product, for what purpose, copyright, patent, trademark …) • Extent of rights ( exclusive, territory, sublicenses…) • Life of the agreement, date of effectiveness • Commercial considerations ( lump sum, fees, royalties, annual minimum royalties, payment terms…) • General considerations ( applicable law, confidentiality, infringement, failure to perform, disputes, termination…) • Concluding comments, date and place, signatures

EXAMPLES OF LICENSE FEES • Initial fee: at least the amount of sunken costs ( patenting, plans, R&D, prototypes…)( plus profit? ) • Royalty: 0. 5… 5… 10 % ( depending on the product, its quality, life span, mass product or unique…) ( % or amount ) • Minimum royalty: annual amount to protect the licensor if product not manufactured • Other fees: consulting costs of development work, possible additional royalties…

EXAMPLES OF THE VALUES OF ENGINEERING PATENTS Number of active 2002 licenses income University Number of US patents Mean income per U. S. patent owned MIT 776 $28, 706, 848 1, 475 $19, 462 CMU 105 $3, 750, 000 255 $14, 706 CIT 239 $11, 218, 000 1, 112 $10, 088 Va Tech 113 $2, 348, 680 264 $8, 897 Rutgers 232 $4, 017, 620 555 $7, 239 Georgia Tech 173 $2, 242, 319 473 $4, 741 UCF 18 $279, 028 176 $1, 585 NJIT 4 $44, 826 64 $700 NMSU 23 $8, 938 42 $213 RPI 20 $8, 000 139 $58 Mean 273 $5, 262, 426 456 $6, 769 Median 232 $2, 295, 500 260 $5, 990 Standard Deviation 277 $8, 905, 825 478 $6, 631 Source: Intellectual Ventures 2006

Success = Product x Passion 2 Source: Olavi Linden, Fiskars

SUCCESS IN LICENSING • Know your technology transfer environment ( including countries, laws and taxation) • Know your partners and their strengths and weaknesses • Strong IPR usually gives better business • Prefer finished products/processes instead of prototypes • Know your minimum business and price limits • Evaluate risks and avoid or manage them • Use experts in technology and legal matters • Remember the human factors

POSSIBLE PROBLEMS IN LICENSING AND TECHNOLOGY TRANSFER • • • Not enough resources for commercialization Demand supply do not meet You do not find the other party Reasons in IPR or in the company management strategy Pricing or value of the invention or patent Technology is still in the development stage The invention is not much better than existing products NIH ( not invented here ) – principle Deatails in the contract Culture, language, human factors

RISKS IN LICENSING AND TECHNOLOGY TRANSFER Markets – price, quantity, quality Political risk Technology risk Financing risk Environment Schedule Operational risk Risks in the organization, cooperation and in human factors • Force majeure • •

CHALLENGES FOR THE 21. CENTURY Innovations have the possibility to become successful around the world, if they: • Are commercially strong • Develop the society • Are good for the environment • Can use advantages of the information technology • Are friendly and easy to the users

COMPETE AGAINST TIME: TODAY´S INVENTIONS HAVE TO BE ON THE MARKET BY TOMORROW MORNING, OTHERWISE OTHERS WILL CONQUER THE MARKETS FIRST