(2000; 91 pages)
3.2 Standards for patentability
TRIPs requires that patents are granted when the typical standards for patentability, that is, novelty, inventive step and industrial applicability, are met. But the Agreement does not specify how these criteria should be defined and applied. So there is room for WTO members to decide how to apply these criteria, in a strict way or in a very flexible way.
Some countries apply these criteria in a very flexible way and, paradoxically perhaps, a good example is the US. An example is the novelty requirement. Usually, the novelty requirement means that a patent will not be granted if the invention has been disclosed anywhere in the world. This is the universal standard of novelty. Disclosure can take place through publication or through use (if an invention is used, it means the public knows it). These are the typical ways in which disclosure can destroy novelty, and therefore can destroy patentability.
But the US has standards for novelty which are lower. Under US law, novelty is destroyed if an invention has been disclosed through publication or through use in the US. But outside the US, novelty will only be destroyed if the disclosure took place via publication. Novelty is not destroyed if disclosure was done through use of an invention outside the US. This is the reason why, in the US, patents have been granted, and this has created a lot of concern in developing countries, on traditional or indigenous knowledge, plants and genetic materials used for centuries in developing countries; the Indian Neem tree is one of the well known cases.
Similarly, the way in which the inventive step requirement is applied, is very loose. This has drawn a lot of attention lately, because of a number of patents granted on so-called business systems, for instance the “one-click” method for buying books by e-commerce. This has been patented and as a result no other company can use a system for ordering a product via the internet, based on only one click.
Figure 10 Animal hat patent
Animal Hat Apparatus and Method
Patent Number: 4,969,317
Date of patent: Nov. 13, 1990
Inventor: April Ode, Lake Havasu City, AZ
Figure 10 shows an example of a patent granted in the US in 1990, which is still in force: patent number 4,969,317 Animal Hat Apparatus and Method. There are many other examples of trivial inventions for which patents have been granted, and this has created considerable controversy. The patent in this example is not very significant, since it has little economic importance. But the same loose criteria are applied in other sectors, such as pharmaceuticals.
When thinking about patents for pharmaceuticals. implicitly one thinks about new drugs, about new chemical entities (NCEs). Each year, only a limited number (less than 100) of NCEs are being developed. Yet thousands of pharmaceutical patents are being granted, since around most NCEs, there is a large number of patents which relate to processes, dosage forms, formulations etc. This creates a very difficult situation for companies which are interested in producing a generic version.
Some concrete examples:
• Processes: Ertythropoietin is a human protein, an important biotechnology based product. The first to sequence the gene that codifies for this protein was a US company, Amgen. But with 2-3 months time lag, another company, Genetics Institute (GI) also sequenced the gene and each claimed to be the inventor. In fact, it could be argued that the inventor was nature and that the companies just discovered it. However, in the US, a decision was taken in favor of Amgen, and as a result GI was unable to commercialize this product in the US. GI then applied for a number of process patents, not in the US, where it had lost, but in several developing countries in Latin America. So in Chili. Argentina, Mexico and some other countries, GI owns process patents related to ertythropoietin, on the basis of which it has tried to stop any production and commercialization of ertythropoietin. A process patent puts the burden of proof on the defendant11, therefore, once the patent has been granted, it can be used aggressively to stop competition since there is an assumption of validity. Maybe the defendant can prove after 2-3 years (this is how long it usually takes) that he has the right to produce ertythropoietin, because the patent was invalid or because a different process is being used, but in the meantime the defending company may already have gone out of business.
11 TRIPs Article 34 requires that for process patents, the burden of proof is on the defendant.
• Uses: Some countries are also issuing patents for new uses of a known product; e.g. the second indication for pharmaceuticals. An example is AZT. AZT was a known product but a new patent was granted for use in case of HIV infection. There was no real novelty, so it is under a fiction of novelty that such patents are granted. It is important for countries to consider whether they will grant patent protection for such new uses.
• Polymorphs: Polymorphs are different crystals of the same molecule. So chemically, it is the same thing. Sometimes, the originator company asks for a new patent for a different polymorph; this may lead to an extension of the patent protection. A well-known case is cimetidine. SK-F obtained a patent for cimetidine and 4 or 5 years later applied for and obtained a patent on a polymorph, with which the patent protection would effectively have been extended for 4 to 5 years. In this particular example, the second patent was challenged and eventually invalidated, but this creates situations in which companies are forced to litigate.
Due to such flexible application of patentability criteria, a growing number of patents are granted, which leads to over-protection. So while there is a role for the patent system to protect real inventions, the system should not be misused by granting patents for polymorphs, dosage forms, formulations, processes etc., which limit the scope for generic introduction and competition.
Finally, it is important to realize that it is not relevant whether the secondary patents are strong; even if they are weak, big companies can use them aggressively against small, local or generic companies and stop competition, because litigations are cumbersome and costly. Therefore, defining the scope of patentability, including patentability of secondary inventions, is a very crucial issue.