India’s IPR Policy on Biotechnology Intellectual Property of Biotech Processes : Main Regulatory and Legal Aspects Presented by Vidya B. Mehrish Dua Associates, India (vidyamehrish@duaassociates.com) on February 16, 2006 Forum: AIDIC, BIOTECH GROUP BIOTECH PROCESSES OVERVIEW WORKSHOP, MILANO, ITALY Dua Associates, India

Overview of Presentation What is Biotechnology? Why is Biotechnology Important for India? Indian Government Initiatives Potential Areas for Investment in the Indian Biotechnology Sector Intellectual Property Rights of Biotechnology (Legal Frame Work) Dua Associates, India February 16, 2006

What is Biotechnology? Biotechnology includes: Recombinant DNA and Genetic Engineering Cell Cultures Waste Treatment and Utilization Enzymes and Biocatalysts Fuels Nitrogen Fixation Fermentation and Pharmaceuticals Dua Associates, India February 16, 2006

Why is Biotechnology Important for India? For a country like India, biotechnology is a powerful enabling technology that can revolutionize agriculture, healthcare, industrial processing and environmental sustainability . Biotechnology as a business segment for India has the potential of generating revenues to the tune of US$ 5 million and creating one million jobs by 2010 through products and services. Clinical development services can generate in excess of US$ 1.5 billion while bio-services or outsourced research services can garner a market of US$ 1 billion over this time scale. Dua Associates, India February 16, 2006

Why is Biotechnology Important for India? With approximately 200 industries, the growth of the biotech sector in India has been rapid. Current estimates indicate that the industry grew by 39% annually to reach a value of US$ 705 million in 2003-2004. Currently, the bio-pharma sector occupies the largest market share of 76% followed by bio-agri 8.42%, bio-services 7.70%, industrial products 5.50% and bio-informatics 2.45%. The current policy review envisages an annual turnover of US$ 5 billion by 2010. Dua Associates, India February 16, 2006

Indian Government Initiatives Import Duty Exemption (Promotion of Import Duties on key R&D, contract manufacturing / clinical trial equipment and duty credit) Tax Deduction on R&D Expenditure (Extending the 150% weighted average tax deduction on R&D expenditure under section 35 (2AB) of the Indian Income Tax Act until 2010). Priority Sector Lending (Enable lending by Indian banks to biotech companies as priority sector lending). Customs Duty Removal (Remove customs duty on raw materials imported into India, that go into making the finished product is imported duty free). Simplification of Procedures (Simplification and streamlining of procedures for import, clearance and storage of biological, land acquisition, obtaining environmental and pollution control approvals would be simplified and streamlined within shorter time frame lines through consultations with various central and state government departments). Fostering Inter-Company Relationships (The Indian Government further intends to make efforts to remove hurdles for contract research especially for input output norms and tax on revenue generated through contract research / R&D). Developing Communication Systems (One significant feature of the biotech industry is the fluidity and variety of its inter-company relationships, traditionally much greater than in other industries). Dua Associates, India February 16, 2006

Potential Areas for Investment in the Indian Biotechnology Sector Agriculture and Food Biotechnology Industrial Biotechnology Preventive and Therapeutic Medical Biotechnology Regenerative and Genomic Medicine Pharmaco-genomics Bio-engineering and Nano-biotechnology Bio-informatics and IT Enabled Biotechnology Clinical Biotechnology and Research Services Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology : Legal Aspects In India, a patent can be obtained only for an invention which means a new product or process involving an inventive step and capable of industrial application. In order to be patentable, an invention must concern a new and useful manner of manufacture. The word “manufacture” applies not only to things made but to the practice of making, to principles carried into practice. Essentially, if the starting material remains unaltered by the process, and the end product also remains the same as the starting material, the process is understood as “no manufacture” from the patentability perspective. To be patentable an invention must have (i) technical advancement over existing knowledge, (ii) economic significance, (iii) or both which makes the invention not obvious to a person skilled in the art. If the subject matter of the invention is novel, non-obvious and the invention has industrial applicability, it can be patented in India. Indian Patents Act, 1970 § 2(j). Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology : Legal Aspects Changes to Indian legislation in keeping with international legislative framework Subsequent to the enactment of TRIPS, Indian Patent law has changed in the following ways : A uniform twenty (20) years for all patents granted after May 20, 2003; A reciprocal arrangement with all convention countries, union of countries and inter-governmental organizations; Products made patentable in all fields of technology from January 1, 2005; The extension of the rights of the patentee; For product patent applications on pharmaceuticals and agro-chemicals filed before January 1, 2005, under the mail box system, request for examination is to be filed within thirty six months from the date of priority. Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology: Legal Aspects Rights of patentee for mail box applications extend from the date of grant of patent. For patents granted on mail box applications which include Biotechnology inventions, patent holder is entitled to receive reasonable royalty from such enterprise which has made significant investment and has been producing and marketing the concerned product prior to January 1, 2005 and which continues to manufacture the product covered by the patent on the date of grant of patent and no infringement proceedings can be instituted against such enterprise. Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology: Legal Aspects Compulsory licenses are available for manufacture and export of patented pharmaceutical products to any country which has insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems subject to the condition that compulsory license has been granted by such country or such country by notification allows importation of patented pharmaceutical product from India. A major concern of pharmaceutical industries concerning amendments in the compulsory license procedure is that it can be granted to any interested person if the patented invention is not available to the public at a reasonable affordable price. The term ‘Affordable’ is a relative term which however, has not been defined. Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology: Legal Aspects Yet another concern is that amended act allows generic manufacturers who were producing and marketing products of a mail box patentee before January 1, 2005 to continue doing so on payment of a reasonable royalty. Bolar provision included making, using or selling patented product before expiry of the term of patent for obtaining regulatory approvals. Bolar provision now includes “Importing”. Thus, while considerable period of the patent holder is wasted in obtaining regulatory approvals, the generic producer has advantage that immediately on expiry of the term of patent, he can commence production. Dua Associates, India February 16, 2006

Intellectual Property Rights of Biotechnology : Its Regulatory Framework Legislative framework : The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945 as amended from time to time, regulate recombinant pharma products. Authorities : The Drugs Controller General of India (DCGI), the State Drugs Controller and the Recombinant Drugs Advisory Committee (RDAC) constituted by the Ministry of Health and Family Welfare regulate the recombinant pharma products. Steps involved in the approval process of a biotechnology product - Proposal (examination of proposal in light of the bio-safety regulation and guidelines) Approval of Review Committee on Genetic Manipulation (RCGM) (Examination of information for R&D work, approval of pre-clinical trial based on evaluation of data physico-chemical and biochemicals characterization of the process and the final product Genetic Engineering Approval Committee Drugs Controller of India (Approves Clinical Trials and Containment Facilities and Evaluates Clinical Trials) February 16, 2006 Dua Associates, India

Intellectual Property Rights of Biotechnology : Its Regulatory Framework Approval for Manufacture and Marketing (Currently, there are multiple regulators, multiple ministries, lack of coordination, lack of a linear progression in the responsibilities of a regulator and lack of a linear progression in the approval process and committees working outside their areas of expertise). Proposals to streamline the process : The Institutional Bio-Safety Committee will monitor all development work (up to 20 litres) and recommend to RCGM for Animal Toxicity Tests (ATT) & Scale Up. RCGM will evaluate the recombinant technology and grant permission for scale up – R&D, review and approve for pre-clinical animal toxicity tests and evaluate ATT data and recommend to DCGI for Human Clinical Trial (HCT). DCGI will permit Human Clinical Trials, review Human Clinical Trial Data, grant permission for Manufacture and Marketing of the product and inspect the facility where the product is manufactured. GEAC will review the manufacturing process to ensure that the LMO (Living Modified Organism) is “inactivated” during the process and send its recommendations to the Drugs Controller General of India within the specified time. February 16, 2006 Dua Associates, India

Future Proposals by the Indian Government to further steam-line the Regulatory Aspect of the Indian Biotechnology sector National Biotechnology Regulatory Authority In-service Center for Training of Professionals Guidelines for Transgenic Research Special Regulatory Cell Review Committee on Genetic Manipulation (RCGM) Evaluation of Recombinant Technology Dua Associates, India February 16, 2006