Article 39.3: A myth or evolving reality?

Complying with the provisions of Article 39.3 is imperative to protect the interest of innovators and originators and provide a healthy platform to encourage investments and innovation for societal benefit, says Dr Prabuddha Ganguli

INTELLECTUAL Property Rights (IPR) has evolved over the years as a strategic tool to create and sustain competitive positions in the global marketplace. Patents protect inventions that are novel, non-obvious and demonstrate utility. Patent laws in most countries give a protection term of 20 years from the date of filing the complete specification. In the field of pharmaceuticals, foods and agrochemicals, marketing of products require statutory clearances from national regulatory bodies.

The mandatory clearances are meant to ensure that the products to be introduced in the public domain satisfy certain minimum criteria of quality, efficacy, safety, environmental friendliness, toxicological clearance, etc. Generating such data generally involve elaborate experimentation, trials in various phases, chemical analysis, estimation of impact on the environment, which can be time consuming and expensive.

Patent Exclusivity

Thus to carve a competitive position an organisation would seek exclusivity with granted patents in different countries for its business interest and also through protection of its proprietary data generated and submitted by it for the statutory clearances from the governmental bodies. It may be appreciated that the clearances from the statutory bodies is mandatory for all products to be marketed, whether, patentable, patented or otherwise.

The concept of patents and exclusivity of propriety test data are distinctly different but are complimentary to each other in building a competitive platform to the innovators and first to marketers. Thus patent protection protects the invention and not the data generated by the innovator.

It has been debated for sometime whether it is necessary for the state to provide for a separate statutory platform, on which propriety test data generated and submitted to governmental authorities to obtain marketing approvals, be protected in terms of confidentiality in favour of the owner of such data. Arguments in favour of the proprietor of such data requiring governmental authorities to maintain confidentiality of proprietary test data as described above may be justified in economic terms due to the high costs involved in generation the data.

Adequate Protection

On the other hand several governments have limited the "originator’s" proprietary data rights only to a brief period of exclusivity, because of their concern on repetitive use of animals, humans and other resources for repetitive tests/trials by the ‘follower’ organisations to generate their own data independently. There are other countries, which do not have any explicit data protection laws and appear to depend upon their national Official Secrets Acts that bind the public servants from disclosing or using confidential information in an unauthorised manner that may affect the security, sovereignty and integrity of the country.

A key question is whether the protection under the Official Secrets Acts in different countries provide appropriate and adequate protection to originator’s of their proprietary test data and whether it mandates the governments not to disclose or rely on the proprietary data for the marketing approval of "generic" ("follower") copies of the pharmaceutical products without the explicit approval of the originator at least for a reasonable period.

Another point to be debated is whether the countries, which tend to believe that the Official Secrets Acts provide the necessary protection, have built in mechanisms within the meaning of such Acts, for the originators to enforce their rights for the proprietary test data. Even the US Trade Secret Laws have proved to be inadequate to protecting proprietary data submitted to regulatory authorities.

The position of the courts in exploiting the Trade Secrets Law in the even of the authorities relying on the data submitted to them earlier by the originator, to evaluate the application of the "follower" is not clear. Moreover a few cases have been decided on "public policy" grounds but the difficulties faced by the originators have been inordinately high.

Exclusive Marketing Rights

In the context of TRIPs one may argue that the ‘Exclusive Marketing Rights’ (EMR) conferred under Article 70.9 for pharmaceutical and agricultural chemical products provides for indirect protection of the data submitted by the ‘originator’ which secured such authorisation and designation stops a second applicant for authorisation during the term of the EMR even the ‘follower’/generic company generates its own data.

However the concept of EMR is organically connected to the originator having obtained a patent and approval to market the drug in at least in one member country of the WTO. It obviously does not protect the test data for items that either are not patentable or for which patents have not yet been granted.

Necessary Steps

Article 39.3 of TRIPS explicitly recognises the significance of "protection of undisclosed information" as another category of IPR, which states:

‘‘Members when requiring as a condition of approving the marketing of pharmaceutical or of agricultural chemical entities, the submission of undisclosed test or other data, the origin of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.’’

To get national laws compliant with Article 39.3 the following are imperative steps:

• The passing of an independent legislation related to the protection of undisclosed information with exception provisions for public use. - Explore the possibility of introducing subordinate legislation appropriately in an existing law such as the Drugs and Cosmetic Act 1940
• Explicitly define the nature of information that is protectable under the legislation and the term of such protection
• The role and conduct of the Appropriate Statutory Authorities be clearly defined with respect to their activities in the formal marketing approval process.
• Respecting and recognising the considerable effort of the originator in the development of the test data and giving him data exclusivity
• Protect data against disclosure by the authorities and treat the originator’s submitted data as secret information
• Define the legitimate rights of the originator who submitted the test data in the dossier to the statutory authorities
• Protection against unfair commercial use. Though the article does not explicitly define ‘unfair commercial use,’ one is expected to interpret it by keeping in mind the spirit and principle of the article by referring to the development process of this article.

The foregoing discussions while formulating this article were directed towards setting up a framework to prevent the any direct or indirect reliance by the statutory authority in any country to the originator’s proprietary data in the submitted dossier without the originator’s consent in the consideration/review of a ‘follower’s’ application for registration of a generic drug

• De-link the issue of protection of proprietary data from any of the articles in TRIPs dealing with patent or other forms of intellectual property rights such as design registration, trademarks, geographical indications, etc
• Build-in the framework for effective enforcement in the event of infringement or violation of the provisions of the enacted law
• Construct and effective competition Law with in-built provisions for data exclusivity and enforcement against unfair commercial use.

Uniform Standards

It may be appreciated that there is no uniform standard that is followed by the countries while introducing and implementing the laws related to exclusivity of test data and protection of undisclosed information. However, there is a common principle that is followed in that the laws generally specify the conditions under which data exclusivity can be sought and the period for which the "originator" can enjoy the exclusivity after the marketing approval is granted in the country, which is typically between 5 to 10 years. For example in some European countries in their implementation of the European provisions conferring protection of regulatory data in relation to medicinal products do not confer such protection ‘after patent expiry.’

The regime for medicinal products in the USA confers a shorter period of protection on a second applicant who challenges any patent, which also protects the product. In the USA there are specific procedures for notifying the patent holders who wish to be alerted to a third party request for approval of a product covered by a patent. However such matters have nothing to do with the protection of regulatory data.

The brief survey illustrates the approaches taken by various counties while implementing their domestic laws related to data protection and granting exclusivity to proprietary data and information. These could serve as a guide for the legislators in India and other countries while formulating their own national laws related to this issue.

Whatever the form of the protection offered it is imperative that that all member states of the WTO will have to comply with the provisions of Article 39.3 to protect the interest of the innovators and originators and provide a healthy platform to encourage investments and innovation for societal benefit.

The writer is Advisor, VISION-IPR and can be contacted at ramugang@vsnl.com