2 years ago

Pharmaceutical mailbox patents and LDC graduation

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Bangladesh, a least developed country (LDC), possesses a vibrant US$2 billion, or around 1 per cent gross domestic product from its pharmaceutical industry that produces off-patent generic and on-patent medicines and supplies them at home to fulfill almost 98 per cent of the entire domestic needs and also exports to more than 100 countries including the United States. A fifth of the total medicines produced are on-patent but patented elsewhere (UN LDC Portal) since the country's Department of Patents, Designs and Trademarks (DPDT) stops patenting pharmaceuticals through a notice (executive order) issued on January 7, 2008 (DPDT/P&D Act/2007/74/129). Instead of offering patents to pharmaceuticals, the executive order provides for storing patent applications in the mailbox and processing them after the TRIPS Agreement 1994 set transition period granted for LDCs or upon their graduation to the developing country status-- whichever is earlier. This patent relaxation in a way suspending the patent provisions of the Patents and Designs Act 1911 relevant to pharmaceuticals, and other government efforts including legal, infrastructural and investment facilities since 1982 through the much-celebrated Drug Policy 1982 and he Drugs (Control) Ordinance 1982 helps the industry booming.

Let us illustrate how the patent relaxation helps. For example, Sofosbuvir is a groundbreaking drug launched by the Gilead Sciences Inc, under its brand 'Sovaldi' to treat hepatitis C. One of its nine US patents is set to expire in 2024. For a 12-week course, by taking per day a patented tablet of around TK 84,000, the total treatment will cost around TK 71,00,000 whereas a locally manufactured tablet pricing at Tk 600 produced in absence of local patents and without licence will cost the full treatment at around Tk 50,400 (The Daily Star, June 30, 2015).

Under the Patents and Designs Act 1911, pharmaceutical companies like Gilead, AstraZeneca and others can apply for patents as regards their pharmaceuticals in Bangladesh; however, in line with the executive order, their applications will be held in the mailbox and processed in 2026 when Bangladesh will formally graduate to the developing country status. Further, under the TRIPS provisions if their applications are assessed for patents, they will be given the retrospective effect (Articles 70.8 read with 33).  

Suppose the AstraZeneca which does have patents registered for its Oxford- AstraZeneca Covid-19 vaccine under the brand names 'Covishield' and 'Vaxzevria' in the United Kingdom, European Union, US, and other parts of the world submits a patent application in 2021 for its vaccine at the DPDT. On receiving the application, the DPDT puts it in the storeroom. In the meantime, some local companies (e.g., the Incepta, Healthcare and Popular have vaccine manufacturing capability) could identify the molecules of the vaccines in their laboratories, make the generics of the vaccine by following the required test and error rules and supply them at home and overseas. Later, in 2026 the DPDT processes the vaccine application and grants the patent to the Oxford-AstraZeneca Covid-19 vaccine with effect from 2021.

Now the question arises whether the generic manufacturing of the Oxford-AstraZeneca Covid-19 vaccine would fall within the ambit of patent infringements. Along the patent infringement lines of section 29 of the Patents and Designs Act 1911, the local companies' acts of making generics of the Oxford-AstraZeneca Covid-19 vaccine and supplying them at home and abroad will attract the statutory words of 'making, selling, or using the invention without the patent owner's licence, or counterfeiting it, or imitating it during the continuance of a patent acquired by the owner in respect of an invention. Regarding remedies in a suit for infringement of a patent, section 31 empowers the District Court to 'make such order for an injunction, inspection or account [meaning compensation], and impose such terms and give such directions respecting the same and the proceedings thereon, as the Court may see fit.' In a similar issue, in July 2019 the Brazilian Federal Court of Appeals for the Second Circuit in the INPI Soliris case ruled that mailbox patents shall be granted from the date of filing meaning a patent infringement suit may lie for producing generics of a mailbox patent.

Another question arises whether the above consequence is due to the setting up of the mailbox and whether Bangladesh, an LDC having an existing patent regime was required to establish the mailbox. Under TRIPS Article 70.8&9 and several TRIPS Council and WTO General Council decisions, LDCs having no existing patent regime were required to establish the mailbox with effect from January 1, 1995 for storing applications of pharmaceutical and agricultural products and handle them after their transition period or upon their graduation to the developing country status, whichever is earlier (WTO Doc. IP/C/W/25). The mailbox rules also initially required LDCs to offer exclusive marketing rights (EMR) for products for whose patent applications are stored in the mailbox (Document WT/L/478). However, these mailbox rules do not apply to LDCs having an existing patent regime. Hence, Bangladesh who is an LDC and did have an existing patent regime in 1995 should not have established the mailbox in 2008; it seems not to have any legal effect in accordance with the TRIPS. Rather, the country should have been patenting pharmaceutical and agricultural products since 1995.

Further, the DPDT's 2008 order which is merely an executive order does not either form part of the Patents and Designs Rules 1933 made under section 77 of Patents and Designs Act 1911 or have the authority to amend any substantive patent provision of the Patents and Designs Act 1911 relating to pharmaceutical and agricultural products. To be noted that India, who did not have any existing product patent regime for pharmaceuticals under the Patents Act 1970 tried to amend the Act through an Ordinance (an interim primary legislation) for incorporating pharmaceutical product patents although the Ordinance was not turned into an Act of Parliament and hence India had to face the WTO's Dispute Settlement Body. On the contrary, Bangladesh being on a different footing and having an existing patent regime tries to amend the primary legislation by an executive order (a secondary legislation).

In addition, on November 6, 2015, the TRIPS Council in a decision exempted LDCs from implementing patents on pharmaceutical products and protection of undisclosed information until January 1, 2033 (WTO Doc. IP/C/73). Then, on November 30, 2015, the General Council called on the LDCs to remove the mailboxes with EMRs for patent applications arising from pharmaceutical products (WTO Doc. W/L/971).

As a result, from November 30, 2015 the LDCs whether having an existing patent regime or not, will now be able to roll back their laws to stop patenting pharmaceuticals. However, the DPDT's 2008 notification initiated the rollback of the country's patent law on January 7, 2008. This has made the DPDT storing the patent application for pharmaceutical products in the mailbox since then instead of patenting them. Further, processing and patenting some of the pending applications wherefrom generics might already be produced and supplied at home and abroad may later be bitter causes of potential patent infringement suits. Against the backdrop, the easiest way to get rid of this conundrum is to withdraw the DPDT's 2008 mailbox rule with a retrospective effect as per the General Council's rollback decision of November 30, 2015 or to issue compulsory licences for pending patents under section 22 of the Patents and Designs Act 1911 amidst diplomatic backlashes and threats.

Dr Mohammad Towhidul Islam is a professor of Law, University of Dhaka. [email protected]

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