September 1, 2008
Ignacio Sapalo and Anne Mariae Celeste Jumadla of Sapalo Velez Bundang & Bulilan outline the development of a law protecting against monopoly.
The pharmaceutical patents landscape in the Philippines is expected to change with the passing by the Senate and House of Representatives, on April 29 2008, of Republic Act (RA) 9502, otherwise known as the Universally Accessible Cheaper and Quality Medicines Act of 2008, effective from July 4 2008. The law was enacted to protect public health by adopting measures to promote and ensure access to affordable quality drugs and medicines for all, recognizing as a primary instrument an effective competition policy in the supply and demand of quality affordable drugs and medicines.
For a number of years, the Philippines has had the highest prices of medicines compared to its Asian neighbours. This phenomenon has been attributed to, among other things, the cost of patents and the monopoly that a few corporations have on essential drugs and medicines. Among the measures adopted by the drafters of RA 9502 were: (i) amending the Intellectual Property Code (RA 8293) in order to limit the monopoly of patent owners by expanding the provision on non-patentable inventions and redefining the inventive step provision, apparently with the purpose of limiting the patentability of drugs and medicines; (ii) introducing the concept of the international exhaustion of
patents on drugs and medicines, thereby allowing the parallel importation of drugs and medicines already released on the international market as limitations to patent rights; (iii) providing for the use, by the government or its authorised third party, of the invention, even without the agreement of the patent owner, in cases of national emergency or circumstances of extreme urgency, public non-commercial use or inadequately-met demand; and (iv) adding the latter as a ground for the grant of a compulsory licence.
RA 9502 – AMENDMENTS OF PATENTABILITY
RA 9502 amended Section 22 of the Intellectual Property Code as follows:
“Sec.22. Non-Patentable Inventions – The following shall be excluded from patent protection:
22.1. Discoveries, scientific theories and mathematical methods, and in the case of drugs and medicines, the mere discovery of a new form or new property of a known substance which 01 September 2008 does not result in the enhancement of the known efficacy of that substance, or the mere discovery of any new property or new use for a known substance, or the mere use of a known process unless such known process results in a new product that employs at least one new reactant.
For the purpose of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of a known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”
Thus, the following were included in the enumeration of what are considered non-patentable inventions:
- the mere discovery of a new form or new property of a known substance that does not result in the enhancement of the known efficacy of the known substance;
- the mere discovery of any new property or new use for a known substance;
- the mere use of a known process unless such known process results in a new product that employs at least one new reactant; and
- the derivatives of a known substance, namely salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives that will be considered to be the same substance unless they differ significantly in properties with regard to efficacy.
It is apparent that the purpose of enacting this legislation is to bring down the cost of medicine by eliminating loopholes in the law on patents that will allow the patentee to extend his exclusive rights to manufacture and sell the patented drug and medicine beyond the normal life of a patent, which is ordinarily 20 years from the date of the filing of the patent application. In RA 9502, the legislator has sought to add new items that will be considered as non-patentable subject matter. These items were chosen based on the awareness of the legislators of the perceived objectionable or predatory practices of the owners of patents for drugs and medicines, who exploit broad provisions on the patentability of these products. Thus, they obtain patents on enhancements or improvements on drugs that are no longer covered by any patent and continue to sell them at very high prices.
As a rule, a discovery is not patentable. This is highlighted by a decision of the US Supreme Court in Funk Brothers Seed Company v Kalo Inoculant Company, 333 US 127, where it was ruled that the product claims relating to an inoculant for leguminous plants comprising of mutually non-inhibitive strains of different species of bacteria were not patentable because they were merely a discovery of the laws of nature in action. The court rejected the argument that it was inventive because no one had yet discovered such a combination of non-inhibitive strains of different species of bacteria that resulted in a new and useful inoculant. The amendment introduced by RA 9502 that includes in its enumeration of non-patentable subject matter “the mere discovery of the new form or new property of the known substance xxx or new use for a known substance” is therefore a superfluity.
Regarding the treatment of what is non-patentable, “the mere use of a known process unless such known process results in a new product that employs at least one new reactant” is misplaced on the list of non-patentable subject matter. It is indeed non-patentable, but for the reason that it lacks novelty.
THE DERIVATIVES OF A KNOWN SUBSTANCE
Under RA 9502, “salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of a known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy”. It is our view that its objective to stop any attempt by patentees of drugs and medicines to extend the life of their monopoly by applying for a patent relating to the derivative of the same drug or medicine after the original patent has or is about to lapse may not be accomplished through this amendment.
There are important considerations that render this amendment legally objectionable because it disregards several basic concepts of the patent law.
The amendment expanded the concept of what is to be considered a known substance to include even substances different in chemical structure and physical properties, among others, from those disclosed at the filing date or priority date of the patent application covering the known substance. The new forms or derivatives: salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives will be considered part of the disclosure. That is, the same as that substance disclosed in the originally filed patent application, even if these new forms or derivatives do not exist yet, or their existence is not yet determined to be probable (such as polymorphs and optical isomers), are not yet determined to be synthetically obtainable (such as complexes) or capable of isolation (such as pure forms). Being considered the same substance as that disclosed in the specification and claims, the new forms or derivatives would be part of the patent protection granted to the applicant claiming a new compound (the new general structure or Markush formula).
This treatment of the term “known substance” would admittedly not allow any other person to obtain a subsequent patent for the new forms or derivatives. It would effectively limit the instances when patents may be granted for these derivatives after the original grant of the patent for the compound. In the same manner, however, the amendment has the effect of broadening the scope of protection of the patent, thus widening the breadth of the patentee’s monopoly over the product to include its so-called derivatives. Clearly, this would benefit the patentee rather than the consumer, a result not sought by the legislator.
Another undesirable consequence of this amendment is that it renders futile the carrying out of a so-called search of patent documents by a patent applicant for drugs and medicines to determine if his invention is new and inventive. This is because the claims of the patent relating to a drug or medicine may not include their derivatives in the disclosures of the patent but would still be considered within the scope of the protection of the patent. Obviously, the same difficulty will be encountered by the government patent examiners in carrying out the substantive examination of patent applications for drugs and medicines. Likewise, a businessman’s due diligence assessment regarding the availability of a certain pharmaceutical product for public use will be seriously hampered. The patent applicant, the patent examiners and the businessman will have to determine if the considered known but actually undisclosed derivatives have different properties with regard to efficacy compared to the actually known substance, in addition to verifying whether these derivatives do exist, are biologically active, are stable, can be isolated in their pure forms, and are safe and non-toxic, among other things.
It is therefore quite clear that the provision stating that certain derivatives of a known substance relating to drugs or medicines will be considered to be the same substance, without the requirement that it should be sufficiently disclosed as a condition to give effect to this provision, would give rise to the absurd result that the derivatives be considered known regardless of whether or not they have been disclosed or made available to the public before the filing date or priority date of the patent application. Clearly, this violates the universally-accepted principle of novelty that an invention will not be considered new if it is not part of prior art, prior art being everything made available to the public anywhere in the world before the filing date or the priority date of the application claiming the invention (see Sections 23 and 24, Intellectual Property Code). In this case, even if the derivatives of the known substance have not been made available to the public they are considered prior art.
The amendment also appears to violate the provision of Section 35 of the Intellectual Property Code, providing that “the application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art”.
Fortunately, the implementing rules and regulations of this law are now being drafted by a committee composed of representatives of several government agencies, including the Intellectual Property Office, the Department of Health and members of the private sector such as those from the pharmaceutical industry, consumers and patent lawyers. It is hoped that, where possible, they will adopt regulations that will clarify and amplify many of the provisions of the law that, as discussed, need to be retooled or explained to effectively accomplish its objectives.
IGNACIO SAPALO
Ignacio Sapalo is the managing partner in Sapalo Velez Bundang and Bulilan. He obtained a bachelor of science in engineering in 1963 and a bachelor of law from Ateneo de Manila in 1967. He was director of the Philippine Bureau of Patents, Trade Marks and Technology Transfer from 1987 to 1996. During this time, he led the group that drafted the 1998 IP Code of the Philippines. Ignacio is the author of Background Reading Material on the Intellectual Property System of the Philippines (WIPO, 1994) and has been a professor of IP at the Ateneo School of Law since 1991. He has also lectured at WIPO seminars and acts as a consultant on intellectual property matters for the Department of Trade and Industry of the Philippines. Ignacio worked for the Association of Southeast Asian Nations Secretariat in 1998 and acted as a WIPO consultant to Cambodia in 1999. He is the founder and president of the Intellectual Property Foundation, President of Iprobe (an IP investigation and consulting firm), a member of the executive board of the International Chamber of Commerce of the Philippines and of the board of trustees of the Philippine Dispute Resolution Center. Ignacio is also a member of the Integrated Bar of the Philippines, the Philippine Bar Association, Association Internationale pour la Protection de la Propriété Intellectuelle, the Asian Patent Attorney’s Association and the Intellectual Property Association of the Philippines.
ANNE MARIAE CELESTE JUMADLA
Anne Mariae Celeste Jumadla obtained her bachelor of science in chemistry from the Ateneo de Manila University, her bachelor of law from the University of the Philippines and is a candidate for a master of chemistry degree at the Ateneo de Manila University. She is a licensed chemist, a registered patent agent and a member of the Integrated Chemists of the Philippines and the Philippines Association of Certified Patent Agents. Anne Mariae has been handling intellectual property cases for the firm since December 2003.
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