‘Evergreening’ Pharmaceutical Patents

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Novartis AG v. Union of India (UOI) and Others on April 2013

A landmark decision by the Indian Supreme Court to deny Novartis a patent for a modified version of its anti-cancer drug Glivec (imatinib) marks the end of a seven year long litigation battle fought by Novartis. This decision has come down hard on the common practice of “evergreening” of pharmaceutical patents by preventing the extension of patents on flimsy grounds.

In 1996 the United States granted Jurg Zimmerman a patent on behalf of Novartis for imatinib derivatives (N-phenyl-2-pyrimineamine). In 2000, Novartis filed for separate patents on the beta crystalline form of imatinib mesylate (the mesylate salt of imatinib), the patent was granted in 2005. When the law in India changed to allow the filing of product patents, Novartis attempted to patent imatinib in its beta crystalline form in India.

The Intellectual Property Appeal Board (IPAB) ultimately rejected the application stating that, the drug is a modified version of a known compound and that it failed to provide a significant increase in efficacy of the drug as required in section 3(d) of the Indian Patent Act. Section 3 of the Indian Patent Act indicates that the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance is not patentable.
Novartis appealed directly to the Supreme Court and argued that imatinib in beta crystalline form has enhanced efficacy over imatinib as previously patented. Novartis stated that the crystalline from has more beneficial flow properties, better thermodynamic stability and increased bioavailability.

The Supreme Court found that the application is neither novel nor non-obvious and that even though the product has increased physical efficacy, no evidence has been offered to indicate that the product has increased therapeutic efficacy.
According to Senior Advocate Anand Grover, “The judgement is a victory and will enable generic drug companies to continue manufacturing cheaper drugs which will be beneficial to many middle income countries.”

The debate surrounding ‘evergreening’ remains controversial. Many being of the opinion that this issue is “much ado about nothing” when considering the fact that the initial patent is not extended by filing a patent application for an improved or modified version of the drug and, therefore, nothing stands in the way of generic companies manufacturing and selling the drug as first patented.

This decision may possibly be a major stumbling block for pharmaceutical companies around the world which attempt to patent incremental improvements on existing drugs. However, this is not the case in non-examining countries, such as South Africa where patents are granted without examination. Novartis obtained a patent in South Africa on imatinib in beta crystalline form. The onus to disprove the patent’s validity, rests on generic companies or any other interested third party.

MRF
info@rademeyer.co.za

The (Social) Light

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MRF on Social Media

Social media has become a very powerful business tool especially in marketing and networking strategies. We at MRF have spent the better part of 2013 creating, updating and cultivating a presence on Facebook and Twitter and are very excited to launch our fresh new website in September 2013. We wish to invite you to like, follow, friend and view us on our various social media pages and profiles where you can keep updated on local and global developments in the legal sphere or simply show your support for the growth and development of our firm.

Patenting (Human) Genes

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The Monopoly on Genetic Human Genes

The US Supreme Court recently decided this very issue in the case of Association for Molecular Pathology, et al v Myriad Genetics, Inc.

Myriad Genetics (“Myriad”) carries out tests for BRCA genes, the genes responsible for diagnosing an elevated risk of breast and ovarian cancer. Patients can undergo genetic testing to see if they have mutations in their genes that are associated with a significantly increased risk of breast or ovarian cancer. Woman with the faulty gene have a three to seven times greater risk of developing breast cancer and also have a higher risk of ovarian cancer. This form of testing recently made news headlines when Angelina Jolie revealed that she underwent a double mastectomy after one of the BRCA genes was identified in her body.

Myriad obtained patent protection for the two human genes known as BRCA1 and BRCA2 which correlate with this increased risk, along with cDNA, which is a synthetic product that mirrors the coding sections of the BRCA genes.

These patents granted Myriad the right to control access to the BRCA genes and prohibited others from researching or doing diagnostic testing of the genes.

In their patents, Myriad claimed protection for every naturally-occurring version of those genes, including mutations, on the basis that they had invented something by isolating the genes from the body. The Association of Molecular Pathology (“AMP”) representing a variety of genetic researchers, medical organizations and patients, all of whom had been accused of infringing on Myriad’s patents on the BRCA genes, contended that human genes were not patentable on the basis that they are a product of nature. Patent protection cannot be obtained for products of nature by virtue of Section 101 of the United States Code and AMP alleged that the mere fact that the genes were isolated from the body did not mean that it was patentable.

The Supreme Court agreed with AMP and held that the BRCA1 and BRCA2 genes were naturally occurring and were therefore not patentable. However, it was held that the synthetically created genetic material, or cDNA, was patentable.

The decision has had mixed reviews. While the decision comes as a relief to geneticists who can now make use of the BRCA genes, companies involved in biotechnology research might find it to be a financial blow by limiting commercial incentives to continue researching into DNA.

In the wake of this decision, companies and universities announced that they will provide the tests for the BRCA genes. Myriad last week sued two such companies, Ambry Genetics and Gene by Gene, claiming that the tests infringed other patents owed by Myriad which had not been invalidated by the court.

The outcome of this on-going litigation will help to shape the biotechnology research industry and the way in which companies approach the protection of the fruits of their research and development.

Hillary Brennan – Candidate Practitioner
hillary@mrf.co.za

Business (Not) as Usual

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REPERCUSSIONS OF THE NEW COMPANIES ACT

The Companies Act No. 71 of 2008 (‘the new Act’) came into effect on 1 May 2011. The new Act has modernised and simplified South African company law and has been brought into line with international best practices and other South African legislation. It has changed the face of company law in South Africa with increased accountability and transparency, the phasing out of Close Corporations and a new set of auditing requirements.One of the major changes brought about by the new Act is that no new Close Corporations (CCs) may be registered. CCs already existing before 1 May 2011 may continue to operate. However, the new Act and amendments to the Close Corporation Act No. 69 of 1984 (‘the CC Act’) allow CCs to be converted into private companies.There are many reasons why it is advisable to convert a CC into a small private profit company. All CCs have to meet the requirements of the CC Act and certain sections of the new Act which places an onerous strain on the CC. The new Act distinguishes the rights and duties of shareholders from those of directors whereas the CC Act does not separate the rights and duties of owners and managers where they are both members of the CC. Furthermore, the enhanced accountability and transparency requirements of the new Act promote a new level of corporate governance responsibility of shareholders and directors of companies, a concept with which the outdated CC Act is unfamiliar.

Auditing requirements have undergone a complete transformation with the new Act. A Public Interest Score (PI Score) has been formulated to assess whether a close corporation or company requires an audit or independent review and which financial reporting standards apply. The PI Score considers factors such as the average number of employees, total turnover and total outstanding third party liabilities. It is important to conduct a PI Score assessment before converting your company constitution or registering a new company so that you are aware of what is required of your company.

Under the old Companies Act, companies were governed by a Memorandum of Articles and Articles of Association. The new Act has introduced a single, comprehensive document known as the Memorandum of Incorporation (MOI).

A transitional period of two years ran from 1 May 2011 until 1 May 2013 wherein the Companies and Intellectual Property Commission (CIPC) waived the official lodgement fees to encourage companies existing prior to the effective date to amend their company constitution in line with the new Act.

Where a company existing prior to 1 May 2011 did not adopt a MOI by 30 April 2013, its existing constitution is deemed to be its MOI and any provisions that conflict with the new Act would be null and void. Therefore, we strongly recommend that companies existing prior to 1 May 2011 convert their Memorandum of Articles and Articles of Association into an MOI to ensure that its company constitution is up to date.

MRF is able to assist in all company secretarial work including incorporation of all types of companies under the new Act, conversion of a Memorandum of Articles and Articles of Association into an MOI and conversion of CCs into private profit companies. Please contact our offices for a quotation.

Kim Rademeyer – Partner
kim@rademeyer.co.za

A (Bright) Light at the End of the Tunnel

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A BRIEF ON BUSINESS RESCUE

In today’s competitive economy, many businesses are finding it difficult to stay afloat thus causing financial distress. Such financial distress may be caused by, for example, fewer goods being bought by customers, less need for services being rendered which affect the bottom line of the business or banks refusing to lend capital to assist in the running of a business. As a result of this distress often a business is not able to pay its debts as they become due and payable and the reasonable possibility exists that the business could be insolvent within a period of six months. For some, they may feel that there is no other option but to start liquidation proceedings.The new Companies Act (Act 71 of 2008) has brought hope to these financially distressed businesses with the introduction of business rescue proceedings in terms of Chapter 6 thereof, by providing for the assistance of the rehabilitation of a company that is financially distressed.This assistance could be in the form of:

  1. providing temporary supervision of the company;
  2. management of the affairs, business and property of the company;
  3. placing a temporary hold on the rights of claimants against the company or in respect of property in its possession; and
  4. the development and implementation of a plan to rescue the company by:
  • restructuring its affairs, business debt and liability;
  • maximizing the likelihood of the business continuing its existence; and
  • ensuring a better return for creditors other than that which would result if the business were to be  liquidated.
Business rescue proceedings can be brought voluntarily or via an application to court. Each option has different requirements and time periods which need to be strictly adhered to.RADEMEYER ATTORNEYS is able to provide further information as to the different options available under business rescue as well as the requirements involved. Please do not hesitate to contact our offices if you require any further information regarding the above.
Kim Rademeyer – Partner
kim@rademeyer.co.za

It’s the end of the (Electronic Commerce) World as we know it

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TRADE MARKS, WEBSITES AND gTLD’s:  PROTECTING YOUR TRADE MARK IN THE ERA OF ELECTRONIC COMMERCE
In today’s era of electronic commerce before selecting a mark a trade mark proprietor not only has to consider if any same or similar trade marks exist on the Trade Marks Register (e.g. IPBOFFIN); but also whether any common law marks such as company names (e.g. IP Boffin (Pty) Ltd), domain names (www.ipboffin.co.za or www.ipboffin.com), and well known marks exist on search engines such as Google. Even once a trade mark has been selected, an application filed and a mark registered, a trade mark proprietor must remain vigilant to ensure that a third party is not unlawfully using its mark or a mark similar thereto. It is becoming more and more difficult to prevent third parties infringing registered trade marks. A new relatively simple and cost effective programme has been implemented which provides a further mechanism by which trade mark rights can be protected, and all trade mark proprietors should consider utilizing this mechanism for maximum benefit.

During the course of 2013, approximately 1900 gTLD’s (Generic Top Level Domains) are likely to be released, making domain name space vast. These will include names such as .accountant, .practitioner, .africa, .shop, .hotel etc. In order to provide protection for trade mark proprietors and to prevent cyber squatting ICANN (the Internet Corporation for Assigned Names and Numbers) has established a Trademark Clearinghouse (TCH). The TCH, which was launched on 26 March 2013, allows trade mark proprietors to register their marks before the new TLD is launched, thereby providing protection from third parties registering a website using their trade mark after the TLD is operational. For example, a trade mark proprietor will be entitled to register www.ipboffin.practitioner (ipboffin being the trade mark which is registered with the TCH, and .practitioner being the new gTLD).

The TCH is operated jointly by Deloitte and IBM, and can be considered a centralized repository and database of validated trade marks. The TCH will not necessarily prevent trade mark infringement, cybersquatting or typosquatting, however it will assist trade mark proprietors in mitigating any damage that may arise. More importantly, if a trade mark is registered within the Sunrise Period, a preferential registration right is obtained which will allow the registration of the trade mark as a website name prior to registration thereof being open to the general public. A further benefit is that the clearinghouse will send alerts to the trade mark proprietor or its trade mark agent if a third party tries to register a website domain identical to a registered trade mark, thereby granting an opportunity to challenge the website domain registration.

RADEMEYER ATTORNEYS is able to register your trade marks with the TCH on your behalf, and assist with matters incidental thereto. Please do not hesitate to contact us if you require any further information regarding the above, including the fees and process involved.

Kim Rademeyer – Partner
kim@rademeyer.co.za
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