Monthly Archives: July 2014

The Nagoya Protocol – Convention on Biological Diversity

A new international treaty named the “Nagoya Protocol” will be giving some relief to India and other developing countries. The Nagoya Protocol on Access to Genetic Resources with an objective of ensuring access of genetic resources to the signatory countries and ensuring fair and equitable sharing of benefit to the local community and signatory country that provides genetic resources is a supplementary agreement to the Convention of Biological Diversity. The protocol singed in Nagoya, Japan on 29th Oct 2010 having 50 signatory states (ratification by 50 countries being the threshold requirement) as on today is all set to come in force on 12 Oct 2014.

Let’s look at the different perspective of The Nagoya Protocol and how it would help the providers (country)/ local community, sourcing country and users in the coming days after its implementation.

BACKGROUND

It all started in June 1992, when Convention on Biological Diversity (CBD) was opened for signature. CBDs inspiration came from the world’s community growing commitment to sustainable development.

Genetic resources are the heritable characteristics of a plant or animal of real or potential benefit to people. The core idea of CBD is to allow its members to get easy access to genetic resources (GR) and provide an equitable share of derived profit to the sourcing country/ local community and to the people who have helped to grow and protect the genetic resources.  The Nagoya Protocol was adopted after nearly six years of negotiations to provide a legal framework which will create transparency for both the country (provider) and users of genetic resources by establishing a unified system for allowing access to genetic resources, stopping illegal international trade of GR and by creating a equitable sharing model wherein both the user and provider can acquire equal benefits.

The Protocol has three main objectives i.e. access, benefit- sharing and compliance which lets the users and provider to establish more predictable conditions about usage of genetic resources, and ensure that only legally acquired genetic resources are used.

Now for these above conditions to lay down in an appropriate manner a unified protocol system was required. The protocol should find a practical way in order to share these benefits since until now the lack of a coherent global standard has resulted in a high level of mistrust and obstacles to biodiversity research and its potentially valuable outcomes.

Parameters under which the Protocol gets Applied

The Protocol will be applied only when genetic resources pathogens are ‘accessed’ and ‘used’. Under the Protocol, the term ‘used’ also means to include research and development work on the genetic and/ or biochemical composition of genetic resources. In addition to genetic resources in its original form, the protocol also covers traditional knowledge (TK) associated with genetic resources. On the other hand the protocol does not apply to genetic resources covered by benefit-sharing agreements and specialised access such as the International Treaty on Plant Genetic Resources for Food and Agriculture, or the framework for pandemic preparedness of the World Health Organisation. Also it will not be applied to human genetic material, or to resources that were acquired before the Protocol comes into practise.

Ratification of Nagoya Protocol by India

India and other developing countries with biological diversity and natural resources will be benefited by commercial use of these resources. India lead group of nations for over two decades in UN negotiation to get the other developed countries signed the Nagoya Protocol in 2011 and the Union Cabinet ratified it in 2012. India is one of the mega diverse countries rich in biodiversity and traditional knowledge is expected to get maximum benefits as this protocol gets implemented this October.

It has also been seen that our country has been a regular victim of misappropriation of our genetic resources and associated traditional knowledge, which have been patented in other countries (well known examples include haldi and neem). It is expected that the Access Sharing and Benefit (ABS) Protocol which is a key missing pillar of the CBD, would rectify this problem.

Who will Be Affected

A myriad of industries globally are likely to get benefited due to easy access of genetic resources and associated traditional knowledge that was kept protected by the local community and was hard to procure in absence any established protocol. Because of the transparent, fair and equitable sharing of benefits derived from commercial/R&D use of genetic resources, the local community or provider country would be motivated to offer their natural/genetic resources, and tradition knowledge to industry. However companies in the pharmaceutical industry, agriculture space, and FMCG/CPG are likely to get impacted due to the profit sharing clause of the protocol and will have to carefully evaluate their long term sourcing strategies, new product launches, brand positioning etc since they would be expected to share their profits with local communities for not only using the original resource, but also for any derivative products developed from it.

Intellectual Property Rights (IPR’s)

As the genetic resources and traditional knowledge is transfers from provider country to the user (industry), property rights including intellectual property rights (IPR), are the most relevant critical factors in the access and benefit sharing of genetic resources (ABS) concept. There are two possibilities that exist for strengthening the property rights of resource managers. On the one hand, national governments can ensure that the local level participates in the property rights over biodiversity and the benefits that arise from their use. On the other hand, international and national patent law requires the disclosure of the origin of genetic resources when IPR’s are granted.

It is hoped that the Nagoya Protocol would address the imbalance arising from property rights distribution. The Protocol has strengthened the local level by asking the parties to take legislative, administrative or policy measures to ensure that benefits arising from the utilization of genetic resources that are held by indigenous and local communities are shared in a fair and equitable way with the communities concerned.

High Level observation

The industries that could get major impacted are Pharmaceutical Industries, Health Care Products and its various verticals, fast moving consumer foods (FMCG)/ Consumer Packaged Goods (CPG), Agriculture Products, Non-Commercial Research, and chemical industries etc.

It will also definitely provide the R&D sector with the certainty they need to invest in biodiversity-based research. Further the Indigenous and local communities may receive benefits through a strong legal system that respects the value of traditional knowledge associated with genetic resources.

Also the provider (country) of genetic resources is obliged to receive either monetary or non-monetary benefits which will include a portion of the total revenue generated from the sales of the final product by user from the source (within that country/ region) to the end used. Examples of the monetary and non-monetary benefits include Up-front payments; Payment of royalties; Joint ownership of relevant intellectual property rights; Transfer of technology and expertise etc.

The exploitation of natural resources and small-scale players (farmers) is expected to decrease, and key constituents within the supply chain are likely to obtain higher benefits with the implementation of the Nagoya Protocol.

On the other hand some of the drawbacks associated with this system will be with respect to ownership of patents since with the implementation of new rules and standards set up by various bodies including CBD, ownership of patents could become a serious threat. Also, problems associated with multiple patent ownership can erupt, because of a benefit-sharing scheme.

Companies might  have to look up for  alternative strategies of usage of genetic resources to ensure that it should not fall within the framework of the Nagoya Protocol and also assess the criteria on new product development costs and strategies surrounding it.

As the organizations are required to provide benefits to the provider country, the organizations may increase the market prizes of the products obtained from genetic resources in order to sustain higher profit percentage with shrinking operating margins. Further there will also be an increase in the timeline involved for product development because of various documentations and approvals required to source the products.

Though protocol in its essence has lot to offer, both to the provider and user, its enforceability and compliance may be a real challenge because of the complexity evolved in identifying the amount of profit to be shared, identification of beneficiaries, procedural requirements, technology transfer issues and overlapping property rights.  It is yet to be seen how the signatory countries establishes the procedures and comply with the articles of the protocol.

About the Author: Ms Sugandhika Mehta, Patent Associate at Khurana & Khurana and can be reached at:  sugandhika@khuranaandkhurana.com.

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Indian Patent office rejects Patent claim over Abraxane

In a major setback, the Indian Patent Office denied a patent to an anti cancer drug Abraxane manufactured by US-Based Abraxis BioSciences. Here we will discuss the decision given by IPO at the back drop of the arguments advanced by the respective parties. The copy of the decision made by Controller General of Patents can be accessed here.

 Background

In a brief, Patent application no. 2899/DELNP/2005 filed by Abraxis Biosciences was earlier rejected by Indian patent office on 24th July 2009, based on u/s 2(1)(j), u/s 3(e ) and u/s 10 of the Patents Act, 1970. Being aggrieved by the decision of Controller General of Patents, the applicant filed an appeal (M.P.NO. 57/2010 IN OA/3/2010/PT/DEL and OA/3/2010/PT/DEL) in ‘Intellectual Property Appellate Board’ (IPAB) against said decision. The Honorable IPAB vide its decision dated 20/01/2014 (Order No. 9 of 2014) set aside the said controller’s order and remanded the matter to the Assistant Controller for a fresh consideration by affording opportunity to both sides based on the Principle of natural justice. The detailed article is already discussed on IIPRD blog here.

Pursuant to that order, fresh consideration was given to Abraxis and hearing was held on 01/04/2014 and 02/04/2014. Further, the opponent NATCO Pharmaceuticals filed a fresh representation u/s 25(1) on 28/03/2014 under the grounds of section 25(1)(g) and 25(1)(f) limited to section 3(d). The said representation was forwarded to the applicant. The applicant filed reply statement on 15/04/2014. The hearing on the fresh representation was held on 17/04/2014.

 Decision made by Controller

On the issue of admissibility of fresh representation by the opponent, it was contended that the opponent was unaware about the amended claims 1-12 which were previously 1-93 and hence, the fresh representation by the opponent must be taken on record. The Controller upheld this contention and the fresh representation were taken on record.

Moreover in respect of the contention on the ground of lack of novelty raised by the opponent it was held by the controller that the invention does not lack any novelty and thus the contention u/s 25 (1) (b) is dismissed.  Therefore the contention that the claims are in public use or publicly known under section 25 (1)(d)  was also dismissed. However, the Controller maintained the contentions raised by the opponent on three grounds which are as follows.

Ground u/s 25 (1)(e)

The contention raised by the opponent u/s 25 (1)(e) that the claims lack inventive steps was upheld by the Controller as the applicant failed to provide any substantial evidence regarding the improved unexpected properties in the claimed composition as contended by the applicant. Moreover, the teaching of cited reference reveals that a person having ordinary skill in the art would have sufficient teaching/ suggestion and motivation to reach at every element of the claimed composition.

 Ground u/s 25 (1)(f)

The opponent raised contention u/s 25 (1)(f) that the claims are not patentable u/s 3(e) and 3(d). It was observed by the Controller that the applicant failed to provide any comparative data supporting the claimed unforeseen effect. Further, the examples given in the specification are more of routine pharmacological study of the composition to analyze therapeutic and toxicological effect on the body on the administration of claimed composition. It was claimed by the applicant that by this invention the associated side-effects of said composition are reduced and enhancing transportation of claimed composition. However, it was further observed by the controller that the specification as provided neither indicates any enhanced effect nor provides any significant properties relating to therapeutic efficacy as claimed. Hence, the application falls under the purview of section 3(d) of Indian Patent act, 1970 which makes the invention non patentable (Relied on the decision by Honorable Supreme Court in the case of Novartis vs. Union of India).

Further in relation to the contention raised under section 3(e), it was held that the claimed composition is considered as a mere admixture resulting only in the aggregation of the properties and therefore, the instant amended claims 1 to 12 fall u/s 3(e) of the Patents Act, 1970. The rationale behind this is that the claims by the applicant is routine experimentation work for a person with ordinary skill in the art as inferred from the prior art references. Hence, the contention u/s 25(1)(f) is maintained and the application also fails under the purview of section 3(e) of Indian Patent act, 1970 which makes the invention non patentable.

Ground u/s 25 (1)(g)

The Controller upheld the contention u/s 25 (1)(g) as raised by opponent that there exists insufficiency of disclosure as provided by applicant. It was observed that the specification lacks disclosing any working demonstration or any example regarding claimed invention.

 Conclusion

By this judgment the Controller strengthen the rational and provisions of the patent act to be followed stringently by the applicants so that the application shall not fall under the purview of the provisions that makes the invention not patentable on the grounds of insufficiency, lack of inventive step and the category of invention which are not patentable under the patent act. The decision given by Controller General of Patents is another safeguards against evergreening of pharmaceutical drug patents as provided under section 3 (d) of the Indian Patent act, 1970.

About the Author: Mr Sitanshu singh, Patent Associate at Khurana & Khurana and can be reached at:  sitanshu@khuranaandkhurana.com

Tesla Motors Decide to Open Source their Patents

On June 12th 2014, Elon Musk, CEO and Chief Product Architect of electric car company Tesla Motors announced that Tesla Motors will let other companies use its inventions under an open source inspired agenda at the company. This is how Elon Musk put it in his blog post- “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” This initiative came as a huge surprise to the technology space, and got a lot of people thinking. Considering Tesla’s exhaustive Patent portfolio, this move came as a bigger surprise to some, as the company holds the largest number of Patents in the electric vehicle industry having pioneered the technology and having gained constantly improved efficiency in process and technology in the industry. Tesla pioneered innovations lowered cost and increased safety of battery packs. Its cars recharge much faster than others on the market, thanks to connector, software, and power-management advances. Now this public company will offer these novel technologies to its rivals and ask nothing but goodwill in return.

Tesla has set the industry standard as far as their technology is concerned, which is quite evident from the hundred of Patents they hold and a number of applications pending. The question though arises that why would they open source their Patents for competitors to use after having spent huge resources in the process..There is more than one perspective to the argument though. This was probably a step Tesla Motors was contemplating and waiting to initiate once they feel no threat from competition. From a competition standpoint Tesla’s place is secure. “What we are doing is a modest thing,” he said. “You want to be innovating so fast that you invalidate your prior patents, in terms of what really matters. It’s the velocity of innovation that matters.” As long as Tesla keeps inventing and pushing the limits of the technology, it will remain ahead of rivals.

According to Tesla Motors opening up the patents around the charging technology could pave the way for important partnerships and collaborations. Musk has spoken to executives from BMW about sharing the cost of building recharging stations and creating a common infrastructure. Tesla’s nationwide network of recharging stations and its plans to build huge battery factories strengthens Musk’s point of view.  Tesla’s planned gigafactory, due to start production in 2020, will be the biggest battery-making facility in the world. At peak production, it alone will create 500,000 lithium-ion packs a year, more than all batteries produced worldwide last year. That’s more than enough to fuel the competition. No other automaker is planning these types of investments in electric cars. The rate of innovation in the electric car industry when you look at Tesla’s competitors does not in any way match Tesla’s progress. Musk would like to see the industry focus shift and would want automobile manufacturers to invest more heavily in the electric car business, and change their thought process from treating electric vehicles like a hobby to making them a top priority. This could be one of the objectives behind taking such a drastic step to promote a culture that is more environment friendly and realises the pace at which the climate change situation could drastically affect life in the near future, apart from being a culture which seems to be extremely business friendly as well.

An interesting analogy can be drawn when we think of electric cars in terms of smartphones. Tesla, which has been long compared with Apple, with its sleek design, luxury prices and chargers that exclusively plug in to Apple products, now wants to become open-source like Android. Like the micro-USB chargers that fit Android and Blackberry smartphones, all compatible cars could use Tesla’s superchargers. That way, other companies will use and enlarge Tesla’s existing network of 100 charging stations that currently dot a path across the continental United States, making it more and more feasible to swap fuel-burning cars for battery-electric ones, even for long distance travel. Also considering the electric cars account for less than 1% of the total cars manufactured and sold, this decision from Tesla seems like a smart strategy to encourage electric car manufacturing, get more players in the business and initiate profitable collaborations.

Reaction received from Tesla by the big 3 car manufacturers has been interesting though. General Motors Co. and Fiat Chrysler Automobiles haven’t reached out to Tesla, while Ford Motor Co. didn’t comment directly on the matter.

Although multiple reports said BMW inquired about the patents, industry analysts say most automakers find Tesla battery technology outdated or not compatible with their own programs, but would be open to collaboration on other parts like charging stations in the future. In a June blog post, Musk said, “If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.” This sentiment was not strongly felt by a number of top automobile companies. The value, some  analysts believe, may lie in Tesla’s charging stations. Tesla in June opened its 100th Supercharger station for its electric Model S car. The stations can charge an electric car in about 20 minutes, about 16 times faster than other public stations.

Detroit’s automakers said they’re open to working with other car companies. “We encourage the adoption of innovative technology across the industry,” Ford said in a statement. “We are the first and only automaker to have dedicated open-source hardware and software platforms, Smart Device Link and OpenXC.” Ford has a Focus Electric vehicle that’s powered by a lithium-ion battery, as well as C-MAX and Fusion hybrids.

GM has three plug-in electric vehicles: the Chevy Volt, the Chevy Spark and Cadillac ELR. “We have not talked to (Tesla) about the patents,” said Kevin Kelly, GM’s manager of electrification communications. “We don’t have anybody looking at those right now. It’s not something that’s on the front burner for us to look at.” Still, Kelly didn’t rule out the use of shared technology in the future. “I think anything that can help to advance the adoption of electric vehicles is a positive,” he said.

While Chrysler Group’s powertrain strategy includes vehicle electrification, a technology we have successfully demonstrated to date, we have no immediate plans for such outreach,” Chrysler said in a statement.

Gloria Bergquest, spokeswoman for the Alliance of Automobile Manufacturers, said, “It’s such a competitive industry, that if anyone can find a benefit in sharing info, they will do so.

If other manufacturers use Tesla technology and make cars that could plug in at Tesla Superstitions, Musk’s company stands to make a fortune simply from giving away its blueprints to competitors..This explains the strategy from purely a business stand point ignoring other theories that this position is taken by Tesla in good faith for society at large. While the consequences of the initiative would definitely help society at large, the reason for Tesla going ahead with the bold move is a subjective matter.

Sun Microsystems (ORCL) once made a similar intellectual-property move in the computer world. Known for its pricey, proprietary software, Sun opted to open-source all its products. The decision was a result of hard times faced by Sun and was looking to generate interest in its products to revive the company.

Tesla is in quite a different situation. Its share price has been rising for a year helped by the excellent response received by the Model S. That car, just the second made by Tesla, has already swept the automotive awards, including top safety and customer-service ratings. Next year, Tesla plans to begin shipping the Model X, a sports-utility vehicle.

Considering Tesla’s excellent rate of innovation, further improving their own Patented technologies sooner than you would expect, their strategy has caused one to rethink patent terms.  Technology and software have shorter life spans than most products in terms of their market value. In industries whose technology will be much different in a couple decades, a twenty year patent term is of little use to companies like Tesla. The benefit to such a lengthy term is enjoyed by Patent trolls who can use old patents and subjectively argue them as prior art that anticipates genuine inventions.

Having said that, just because Tesla has decided not to sue good-faith users of its patents does not mean the company will not face litigation from patent trolls. This kind of mentality would kill the mere purpose of existence of patent trolls who hunt for older patents on technology still used into today’s products, including automobiles and contribute heavily to the rising number of Patent litigations seen in the industry today. While Tesla’s initiative will provide limited relief to automotive companies from a Patent litigation perspective, only time will tell how well Tesla’s invitation to others to use its technology will work.

NOTE: Quoted text taken from certain sources such as ‘The Detroit News’

About the Author: Mr Ankur Sehgal, Patent  Associate at Khurana and Khurana and can be reached at: Ankur@khuranaandkhurana.com.

ODISHA COURT ADMITTED CASE AGAINST AAMIR KHAN PRODUCTION’S PROPOSED ‘SATYAMEV JAYATE’ USE AS TRADE MARK

As per the sources, the court in the Odisha capital, Bhuvaneshwar has admitted a petition challenging Aamir Khan Production’s plans to use ‘Satyamev Jayate’, the national motto of India, as a business brand under which it is proposed to sell everything from kitchen utensils to footwear.

A city based journalist and social activist, Dr. Subash Mohapatra has filed case against Amir Khan Productions challenging the trade mark ‘Satyamev Jayate’ which is in public domain and thus cannot be monopolised in respect of any goods and services. The SDJM court, Bhubaneswar has admitted the case filed.

The petitioner has claimed that Aamir Khan Production in the year 2012 has filed various trademark applications at Trade Marks Registry Mumbai for exclusive rights to use the term ‘Satyamev Jayate’ as trade mark for goods and services under various classes not only in respect of the television show but also for the goods from kitchen utensils to footwear. These trademark applications are pending with the Trade Mark Registry and were objected on the ground of non distinctiveness.

The petitioner contended that the Bollywood superstar was seeking to exclusively use ‘Satyamev Jayate’ for commercial purpose, which is the most important feature of India’s Constitution and was adopted as the national motto after prolonged debate in the Constituent Assembly.

It is also contended in the petition that the word “Satyamev Jayate” is exclusively property of all citizens of India having authority under the Government of India. It is a symbol of nation and offices in India, the President of India, Judiciary and Executives, also of the Constitution. The people of India glorify and feel proud for that particular word as it enshrines the national sentiment, identity, symbol, faith and culture. So, Satyamev Jayate cannot be property of any private individual person for his personal benefit and interest.

The petitioner also claimed that ‘Aamir Khan already being conferred with the coveted civilian award of Padma Bhushan, was able to influence officials of the Mumbai Trademark Office into granting him two stages of clearance to his proposal, which he said amounts to ‘waging war’ against the country and its Constitution’.

However the question which intrigue our mind is that whether the registration of the term ‘Satyamev Jayate’ is prohibited under section  9(2) (d) which provides that a mark shall not be registered if it is prohibited by the Emblems and Names (Prevention of Improper use) Act, 1950. In order to find the applicability of Section 9 (2) (d) of Trade Mark Act, 1999, it is necessary to determine whether the term ‘Satyamev Jayate’ is an integral part of the National Emblem and if dissected from the Abacus can be referred to as National Emblem as per the Emblems and Names (Prevention of Improper use) Act, 1950. However the State Emblem Of India (Prohibition Of Improper Use) Act, 2005 provides that the motto “Satyameva Jayate”-Truth alone triumphs-written in Devanagari script below the profile of the Lion Capital is part of the State Emblem of India.

Thus it will be interesting to note the Court’s decision in this case that whether the Aamir Khan Production will be able to get the Trade Mark over the term ‘Satyamev Jayate’ without the Central Government’s prior approval or it will be injunct to obtain Trade mark registration over the term ‘Satyamev Jayate’ being the integral part of the National Emblem and its use is prevented by couple of legislations.

News Source: http://odishasuntimes.com

About the Author: Mr Abhijeet Deshmukh, Trademark Attorney at Khurana and Khurana and can be reached at: Abhijeet@khuranaandkhurana.com.