National Pharmaceutical Policy 2012

In an earlier post (here) we had blogged about the National Pharmaceutical Policy 2011 and its essential features.  The last post left off at AIDAN’s (All India Drug Action Network) PIL (Public Interest Litigation) and the Supreme Court’s (SC) observations that the government should ensure that the prices of essential drugs reduce rather than escalate.  During the hearing of this PIL the SC recently directed the Government to expedite the notification of the policy. It was notified on 7 December 2012. The full policy can be found here.

The National Pharmaceuticals Pricing Policy, 2012 will replace the Drug Policy of 1994 and is intended to be a continuation of the 1994 Policy.

Key points in the policy are:

• The ceiling price of drugs will be fixed by adopting simple average price of all brands having a market share more than or equal to 1% of the total market turnover of that medicine. The ceiling price would be fixed on the basis of dosage per tablet, capsule standard injection volume. This approach is different from the weighted average price of top brands which was a severely criticised feature of the earlier policy. Experts believed that the weighted average calculation method would have driven up prices of essential drugs rather than reduced them.
• Imported drugs have been brought within the purview of the policy for the first time.
• Drugs patented under the Indian Patents Act, 1970 and which have been made as a result of indigenous products or process have been exempted from price control for a period of five years. Further, a formulation involving a new delivery system developed through indigenous R&D would be eligible for exemption from price control for a period of 5 years from the date of its market approval in India.  This could mean that some essential medicines will be kept outside the ambit of price control. However on the face of it, it seems to have been brought in to incentivise investment by pharma companies.
• One of the fears was that since the new policy introduces price controls at the formulation stage manufactures could easily bypass price control by combining the essential drug with another drug or a non-essential drug however the policy addresses this problem by stating that in such cases manufacturers shall be required to seek price approval from the Government before launching the new drug.
• Prices of non price control drugs will also be regulated to a certain extent, the policy states that the Government will ensure that their prices are not raised by more than 10% in a year.
• There is still no final decision of the status of patented drugs. Their prices will be decided by a separate committee.

Reaction from the Industry

The policy seems to have been received with mixed feelings. Neither the industry not the activists seem completely happy with it. 

• Most feel that the recent changes to the calculation of prices will definitely bring down prices of drugs but will severely hit the larger players (who may have to take a hit of about 15%-20% in revenues) in the market which could in turn effect investment in the sector. (However in this article available on Pharmabiz here, P.A.Francis argues why he thinks this is an industry friendly policy after all).
• One view from the industry seems quite favourable to the policy, Shakti Chakraborthy, the President of Lupin Ltd Group while commenting on the policy stated, “It is a good thing that the government has chosen to adopt a market-based mechanism as against a cost-based mechanism, thus protecting industry interest to a large extent as also ensuring that drugs reach patients in a cost-effective manner."
• The main bone of contention for the activists seems to be the government’s decision to opt for market based pricing rather than cost based pricing. They feel that this method will almost certainly lead to an overall rise in prices.

The SC is expected to examine the policy and hear further contentions based on AIDAN’s PIL in the second week of January. This seems to be a policy whose full effects will probably be clear only once it is implemented.

Read More

Weekly Wrap (December Week 1)

The week began with Swaraj’s post on the lack of transparency surrounding the World Conference on International Telecommunications (WCIT) being held from Dec 3rd to 14th, 2012. An agency of the UN known as "International Telecommunication Union" (ITU) is hosting the WCIT to go over and revise the decades old International Telecommunication Regulations (ITRs) which govern standards and regulations for information and communication technologies. The preparatory documents to the meeting have been very secretive, with only member governments and a few other parties being given access rights. Some leaked documents have made their way out though and include proposals for restrictions on online privacy, free expression and access to information. The entire post can be accessed here. 

Delhi University’s (DU) appeal before the Division bench of the Delhi High Court consisting of Justices Pradeep Nandrajog and Manmohan Singh was set aside as infructuous.  The bench asked DU to return to the single judge and clarify the scope of their alleged admission/undertaking.  More on this order can be found here.

The Delhi High Court set aside the single judge bench judgment in Star India on the grounds of serious procedural flaws. The Division Bench restored the civil suits along with all the pending applications which included the application seeking interim injunction. The Division Bench observed that the Single Bench judgment was a “self-contradictory decision” on the ambit of broadcasting rights. The entire post is available here and our previous posts on the single judge bench decision are available here and here.

We launched our First SpicyIP Fellowship. The 2013-2014 fellowship is now open and carries a stipend of Rs. 15,000. Details on eligibility, procedure for applying, evaluation criteria, terms and conditions etc can be found here.

FICCI announced its online certificate course on Intellectual Property which will run from January-March 2013. Registration for it closes on 25 December 2012. More details can be found here.

And finally the NLSIR Public Law Symposium on "Delimiting Media Freedoms: Discovering the 'Delicate Balance' Between Article 19 and Article 21” will be held on December 22, 2012. This will be held in collaboration with the Alternative Law Forum, Bangalore. The symposium will be attended by renowned luminaries including Justice Muralidhar (Delhi High Court), Geeta Seshu (The Hoot), Apar Gupta (Partner, Advani & Co.), amongst others. More details can be found here.

In other news, the ‘Thanjavur Veena’ may get a Geographical Indication registration shortly, making it the first musical instrument to get such a registration in India. The application has been submitted to the Geographical Indications (GI) Registry. The Hindu carries a full report at

 http://www.thehindu.com/news/states/tamil-nadu/when-music-makes-a-mark/article4164584.ece

International Developments

The Second Intellectual Property forum was held in Hong Kong on the 7th of December. More than 1,400 intellectual property professionals and government officials from 21 countries and regions took part in today's Business of IP Asia Forum at the Hong Kong. More on it can be found at http://www.itnews.it/news/2012/1207113002440/second-intellectual-property-forum-held-today-in-hong-kong.html

Apple’s crucial multi touch patent (also known as the Steve Jobs patent) was ruled invalid by the USPTO. Samsung had earlier been found guilty of infringing this patent by an International Trade Commission (ITC) judge in October. However, this is only a temporary ruling, known as a first Office ruling. A full report is available at http://www.techradar.com/news/computing/apple/crucial-apple-multitouch-patent-temporarily-ruled-invalid-1117986

The European Commission held a special meeting to discuss whether the current copyright framework remains fit for purpose in the digital context. An interesting blog post on it can be found at http://blogs.computerworlduk.com/open-enterprise/2012/12/european-commission-meeting-on-copyright/index.htm.

Richard O’Dwyer the student who was extradited to the US for running a website where users could stream pirated films has settled his case after paying £20,000 to US authorities. The money will be distributed among victims whose copyrights were infringed. A full report can be found at http://www.thestar.co.uk/news/local/sheffield-student-settles-copyright-case-and-avoids-extradition-1-5205157

A court in Beijing disallowed a clothing manufacturer, from using “Haager-Dasz” as a trademark for clothing items as it would mislead the public and create confusion with the well-known Haagen-Dazs ice cream. This ruling overturned a decision of the trade appeal board of the State Administration for Industry and Commerce which had earlier granted the Haager-Dasz registration and had ruled that the materials provided by General Mills (owners of the Haagen-Dazs trademark) had failed to prove that it was well-known and enjoyed high reputation. More can be read at http://usa.chinadaily.com.cn/china/2012-12/03/content_15981876.htm.

And finally with effect from 10 December 2012 New Zealand accedes to the Madrid Protocol. New Zealand businesses can utilise an international trade mark registration system to protect their brands in over 85 countries in a more efficient and cost effective manner. A full report can be found at http://www.lexology.com/library/detail.aspx?g=8d1015eb-06ab-48fd-ab54-f12d84ade34c and http://www.managingip.com/Article/3128573/Latest-News-Magazine/Madrid-Protocol-takes-effect.html. 

Read More

Supreme Court grants BharatMatrimony stay against Shaadi.com

Last week a three judge bench of the Supreme Court passed an order restraining Shaadi.com and other rival matrimonial websites from infringing BharatMatrimony’s trade mark. This was in response to a SLP filed by Consim Info P. Ltd, that whenever BharatMatrimony’s name was keyed in on Google search, the names of the rival websites appeared on the right hand side in the Ad words column.

Earlier The Madras High Court had refused to pass an order restraining Google and other matrimonial websites sites from displaying their ads when BharatMatrimony was Google searched. A full report on the order published in last week’s Hindu is available here. The Supreme Court order is available here. Our earlier posts on this dispute are available here and here.

On a related note, in a similar fact scenario involving Interflora and Marks & Spencer (2011) which was referred to the Court of the European Union (ECJ) for a preliminary ruling from the High Court of Justice of England and Wales it was held that  the proprietor of a trade mark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of the functions of the trade mark. The functions the court elaborated on were the trade mark’s advertising, investment and origin function. It was held that use adversely affects the trade mark’s investment function if it substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

It was further held that the proprietor of a trade mark with a reputation is entitled to prevent a competitor from advertising on the basis of a keyword corresponding to that trade mark, which the competitor has, without the proprietor’s consent, selected in an internet referencing service, where the competitor thereby takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or where the advertising is detrimental to that distinctive character (dilution) or to that repute (tarnishment).

Advertising on the basis of such a keyword is detrimental to the distinctive character of a trade mark with a reputation (dilution) if, for example, it contributes to turning that trade mark into a generic term.

However the proprietor of a trade mark with a reputation is not entitled to prevent, inter alia, advertisements displayed by competitors on the basis of keywords corresponding to that trade mark, which put forward an alternative to the goods or services of the proprietor of that mark without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark with a reputation. The full ruling is available here.

The ruling in this case is however fact specific and open to wide interpretation, but portions of the ruling were in Interflora’s favour, maybe we could see something similar being passed in the coming days by the Supreme Court going by the initial prima facie ruling in favour of BharatMatrimony.

`

Read More

EBC granted injunction against Lexis Nexis for infringement of copyright

Last month we had blogged about the interim injunction granted in favour of Eastern Book Company (EBC) restraining Thomson Reuters (including Westlaw and Indlaw) from infringing the copyright in their law report Supreme Court Cases (SCC). In a further development, EBC has now been granted an interim injunction against LexisNexis India (including LexisIndia) and Butterworths by an order dated 22 September 2012 issued by the District Judge of Lucknow.  

As with the previous order the court held based on an illustration submitted by the Plaintiffs, that the editorial notes of law books, journals, online journals of the Plaintiffs publishing SCC exactly matched the editorial notes of the Defendants online journals. On this basis the court held that a prima facie case had been established and granted an injunction to the Plaintiffs.

22 October has been set as the date for filing the written statement and framing issues.  The entire order is available here and the previous order against Westlaw is available here.

We would like to thank Sumeet Malik for bringing this order to our attention.

Read More