The domestic pharma companies hoping to reintroduce the generic brands of Glivec with the changes in the Patent Act will have to think twice as Glivec may prove to be a patentable drug if the "enhancement of efficacy factor" can be proved by the innovator company.

The fine print of the amended Act has given space for the inclusion of any new form of a known substance if it results in the enhancement of the known efficacy. The companies which are planning to re-introduce the drug pending a favourable court verdict can to do so only after paying a royalty to the innovator.

According to patent attorneys, the Section 3(d) of the Act has been amended to read: "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 or the mere discovery of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least employs one new reactant". The experts feel that the use of the phrases "which does not result in the enhancement of the known efficacy" is ambiguous, too broad and potentially allows for new forms of existing substances to become patented. For example, "result in enhancement of efficacy" could be a minor amendment to an existing invention in order to get around the provision as it stands, they say.

The patent attorneys also point to the explanation supporting the above provision which says: "Salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy". Here again, the phrase "unless they differ significantly in properties with regard to efficacy" is a tricky addition as it creates ambiguity, potentially broadens the explanation in favour of the patentee, thus leading to excessive litigation, they explain. For example, certain properties are never known or are clear at the time of application in the claim so one would not know how they differ, thus leaving any recourse to opposition, which currently the amendment does not allow for, they say.

According to experts, the case of Glivec can also be seen in this light, as the major claim of the innovator company was the enhancement in efficacy.

In an analysis of the amendment, experts say that the definition of pharmaceutical substance is not linked to the provisions related to the exclusion for patents and, therefore, stands alone. "Furthermore, the inventive step requirement has been severely diluted. As a result, Section 3(d) allows 'evergreening'," they said.

The Bill permits generic manufacturers to continue producing generic version of new drugs which are in the mailbox. However, this only applies where the generic producer has made a significant investment provided they were producing and marketing the generic version prior to January 1, 2005. However, the generic companies are required to pay the patent holder a reasonable royalty. "The question of "significant investment" poses a threat of potential infringement suits as the generic producer would have to clearly show that it has made what would be considered a significant investment in producing and marketing the generic drugs. With respect to the 'reasonable royalty' it creates the problem of excessive demands from the patent holder and litigation. The reasonable royalty rate should have been fixed at a particular percentage, the norm being 4 per cent. For example in South Africa, GlaxoSmithKline requested a royalty of 40 per cent before the courts intervened," they said.