Bitter Pill

On the evening of 9 May, the office of the controller general of patents, designs and trademarks posted a new verdict in a closely watched case on its official website. This was the American pharmaceutical company Gilead’s patent application for its blockbuster hepatitis C drug, Sovaldi, which the office had at first rejected, in January 2015. But Gilead challenged the decision in the Delhi High Court, which set the decision aside and instructed the office to re-evaluate the application. The court’s order proved advantageous to the company: Rajesh Dixit, the officer who re-examined the case, granted the company the patent for the compound.

The drug, whose generic name is sofosbuvir, had revolutionised the treatment of hepatitis C, by boosting cure rates while avoiding the side effects of earlier drugs. The new verdict gave Gilead exclusive rights to sell the drug in India, at any price it chose. As it happened, the company had already entered into “voluntary licence” agreements with several Indian generic pharmaceutical companies, allowing them to manufacture and sell the drug at $900 for an 84-pill course—significantly lower than the astronomical $1,000 per pill Gilead charges patients in the United States. The patent office effectively buttressed Gilead’s control over these agreements, which included clauses barring the sale of generic versions of the drug to a specified list of countries, putting them out of the reach of approximately 73 million hepatitis C patients around the world.

But some of the circumstances surrounding the application and the hearing raise questions about the conduct of the patent office. Further, many experts believe that the verdict was poorly reasoned—an opinion shared by advocacy groups that have mounted a legal challenge against it.

The visitors’ register of the patent office shows that representatives of K&S Partners—a law firm that specialises in intellectual property matters, and that represents Gilead—visited the office in Dwarka, in south-west Delhi, a day before the verdict was issued. This was confirmed to me by two senior patent officials. “This is highly unusual for two reasons,” one of the officials said. Lawyers “do not come to the patent office that often—especially when the case is not being heard.” Developments in the case were kept secret, even from other patent officials. The proceedings were so “hushed up,” he added, that many officials learnt about the verdict only after it was released.

The access to the patent office that lawyers for multinational pharmaceutical companies enjoy has long caused activists unease. “There are major concerns regarding the independent working of the patent office,” Leena Menghaney, an intellectual property lawyer and an activist with the humanitarian organisation Médecins Sans Frontières, told me last month. “Law firms and IP lawyers who represent the multinational pharmaceutical industry regularly visit the patent office” to meet with the officials, she told me. “It is not uncommon for patent examiners to feel pressurised, or just get a biased view why their claims should be granted.” In contrast, she added, “petitioners from patient and public interest groups, mindful of the fact that their patent challenges are pending before the patent office, do not visit or try to meet with examiners.”

In taking up the Gilead case, Rajesh Dixit replaced Hardev Karar, who, according to three officials I spoke to in February, was made to recuse himself after he rejected Gilead’s claim. The officials told me that Karar had faced intense backlash after his decision, which he delivered less than two weeks before the US president, Barack Obama, was scheduled to visit India as the chief guest at India’s 2015 Republic Day celebrations. The timing of Karar’s decision was seen as inconvenient, since the United States has long exerted pressure on India to adopt an intellectual property regime that is more favourable to American companies. The rejection of the patent application of a pharma company’s flagship drug was likely to be a sore point during the interactions between Obama and Prime Minister Narendra Modi.

If Karar’s decision was awkwardly timed, Dixit’s was very well timed. Modi is set to tour the United States this month, and, among other engagements, to address business groups that have been lobbying for a more corporate-friendly patent regime. This April, as it has in previous years, the United States placed India on its “priority watch list” in its annual “Special 301 report,” which examines the “adequacy and effectiveness” of the country’s trading partners. The priority watch tag indicates concern about India’s policies.

Opponents moved quickly against Dixit’s verdict. On 13 May, a few days after it was announced, an appeal was filed against it in the Delhi High Court, by the US-based Initiative for Medicines, Access & Knowledge, or I-MAK, along with the Delhi Network of Positive People, or DNP+—both groups that advocate for, among other things, access to affordable medicines. The petitioners held that the patent office had failed to assess the full scientific and legal evidence presented in the case. Menghaney described it as “strange that the new decision does not even refer to the older decision even once, as if it did not happen.”

Much of the analysis in Dixit’s verdict—which includes the arguments of both Gilead and its opponents—is deeply technical, and can only be fully appreciated by those who have a substantial understanding of pharmaceutical chemistry. It examines the properties of the compound under question, as well as other related compounds, to determine whether it was deserving of a patent. In his 2015 verdict, Karar had reasoned that sofosbuvir did not meet the standard needed for patenting in India. Dixit, in contrast, dismissed those arguments, stating that he found the compound “novel, inventive and patentable.”

While the scientific arguments may be inaccessible to most people, some of the objections raised by Gilead’s opponents point to broader conceptual and procedural flaws. By way of example, Shamnad Basheer, an expert in intellectual property law and a visiting professor at the National Law School of India University in Bengaluru, cited in an email to me the fact that the verdict, in the course of arguing that the compound deserved a patent, mentions that it has received approval in the United States. “Merely citing US regulatory approval does not mean you can cross the Section 3(d) hurdle, as the patent controller seems to suggest in this case,” Basheer wrote. “This is flawed reasoning for the grant of a patent in India, since the former should have no bearing on the latter.”

Basheer also criticised the portion of the verdict that deals with the opposition to the patent claim on the grounds that it did not meet the terms laid down by section 3(d) of the Indian Patents Act. “The order is very badly reasoned, particularly the section 3(d) part,” Basheer wrote. This was particularly hard to justify, he added, given that “the Supreme Court handed down a well reasoned decision in the Novartis case explaining the contours of section 3(d)”—referring to the court’s refusal to allow Novartis to patent its cancer drug Gleevec. According to the procedure laid down by that case, he explained, it is necessary while evaluating a substance for patent-worthiness to compare it to a similar previously known substance. “The controller completely misses this analytical frame and simply states that Gilead has demonstrated an added layer of efficacy without spelling out as to what prior known ‘substance’ he is comparing Gilead’s alleged invention against,” Basheer said.

Tahir Amin, the co-director of I-MAK, also claimed that there were glaring lapses in the procedure followed by the patent office. For one, the office decided, without any consultation with the opposing parties, to conduct “separate individual closed-door hearings such that counsel for other opponents or the public were not allowed to sit in on all the individual hearings.” This, according to him, and also Anand Grover, a lawyer with the Delhi-based legal-activism group Lawyers Collective, is contrary to the rules of the Indian Patents Act, which mandate that hearings be public unless the controller consults with the opposing parties and decides otherwise.

Further, though the hearings in the case concluded on 29 February, Amin said, Gilead amended its claims in the patent application at the end of April—a development that neither the office nor the company’s lawyers communicated to the opposing parties. “This late amendment unfairly prejudices our opposition and the principles of natural justice,” Amin said.

The amendment in question pertained to Gilead’s dispute with Merck, a competing American pharmaceutical company. In March, a California jury held that Gilead was infringing upon a patent held by Merck, and ordered it to pay the company $200 million. Though this was raised by the parties opposing Gilead’s India claim, on 21 April the company filed a letter to the office arguing that that case was not relevant to its patent application in India. The examining officer “failed to take into consideration evidence we submitted that showed in the US, the same patent of Gilead’s was recently held as infringing a Merck patent which covers compounds encompassing Gilead’s compound for sofosbuvir,” Amin said. And though Gilead amended its claim, “we were not copied on or allowed to address it,” he added. (The California case saw a twist after the verdict, with allegations emerging that a scientist associated with Merck had lied to the court. But, according to Amin, “the issue in contention is very specific and may not necessarily affect the decision that Gilead’s patent may still be infringing.”)

Dixit’s decision, Amin pointed out, failed to discuss the California case or Gilead’s April letter arguing that that decision was not relevant. He described this as “a significant omission” on the official’s part. Basheer decried the patent office’s failure to communicate Gilead’s amendment to its opponents. “From a procedural-justice perspective, how on earth can you permit a claim amendment soon after the opposition hearings without so much as a notice to any of the opponents?” he said.

Basheer also suggested that this omission, along with the patent office’s other oversights, could become new rallying points for Gilead’s critics. “In fact,” he said, “the controller seems to have done all he could to hand down a legal challenge on a platter to the various opponents.”