Jun 16, 2011 | IPR & Business
Contracts are used to regulate and legitimize essentially all business transactions. They are, of course, appropriate instruments in contexts other than standard buy-sell and employment agreements. Any situation involving a reciprocal exchange of promises will almost always need the use of a formal, written contract. This is certainly relevant when significant intellectual property (IP) is under consideration. Contracts must be employed by companies with valuable IP to ensure that their internal employees and any external vendors or consultants who have access to their IP information act responsibly, regardless of the timing or duration of that access. Furthermore, corporations must clearly indicate to employees who are involved in or responsible for IP development who possesses the proprietary rights.
The symbiotic link between IP and contract law is examined in this article. The intellectual property bargain, or the delicate balance that purportedly exists in present intellectual property law, cannot simply be viewed as a matter of property law laws stating a balance. A major characteristic of intellectual property dispersed in the open market has always been the connection between intellectual property and contract norms, and that interaction is central to whatever balance has been established. It is pointless to focus exclusively on the statutory provisions of copyright, patent, or trademark laws when discussing a current balance in the property rights sector. Intellectual property contracts deal with a wide variety of rights that can be assigned, licensed to any other person or organization. It is necessary to grasp and incorporate the fact that the policy approach has always assumed that property rights are frequently transferred, waived, or released. The clauses adopted in such contracts, on the other hand, must be designed with extreme prudence and care.
Finally, firms can impose IP protection through a variety of contracts, including confidentiality and non-disclosure agreements, non-compete agreements, and property or assignment agreements, among others. Regardless matter which contract is best for the situation, any IP-related contract must include the following provisions:
These are important factors in an intellectual property contract that should be considered while designing these agreements:
- Confidentiality
To safeguard the owner, a confidentiality clause is required. Because there has been a significant increase in technological knowledge, further security measures must be taken to secure the work, and hence a secrecy provision prohibits the binds from disclosing the creation’s integrity. Patents, copyright, and trademarks are instances of intellectual property that have been published and are thus publicly accessible. They are, however, frequently used in conjunction with other confidential know-how to generate commercial outcomes – and such sensitive know-how must be kept confidential.
Contractually requiring tight confidentiality is perhaps the most important part of any IP arrangement. Companies must be exceedingly proactive, take extraordinary security precautions, and remain watchful to potential intrusions or data misappropriation as technological innovation thrives and competition grows. Undoubtedly, despite a company’s investment in the most advanced security measures, essential IP can be exposed purposefully or inadvertently owing to human frailties.
As a result, a robust contract that explicitly imposes an obligation to maintain secrecy, as well as serious repercussions for failure to comply, will dissuade irresponsible and/or malevolent action. Employees who are aware of the potential consequences of disclosing a company’s information are significantly more likely to take the necessary safeguards and follow any IP-related security policy.
Confidential Information Access
Conditions for access to know-how and confidential information by parties’ employees, consultants, or representatives must be stated in order to safeguard confidentiality in a realistic manner. Standards for guaranteeing the security of secret information might also be stated.
- Ownership of Intellectual Property Used or Created Over the Duration of the Relationship
The contract must state clearly who will be the owner of the intellectual property that is being used or constantly developed throughout the duration of relationship. Even if the connection is later terminated, the ownership status of the intellectual property should be clearly stated. This is a common dispute in which an employee chooses to leave his job after the creation is completed and wishes to take the creation with him on the assumption that it was developed by him. However, the fact that it was made while he was employed does not give him the right to own it, which must be expressly stated in every contract.
Disputes over Intellectual Property often emerge when an individual resigns from the employment at the organization severs a relationship with external associates. Employees and consultants who contribute to the creation and development of IP may believe they have the right to take it with them when they depart. Even if this is acceptable to a corporation, it must be determined from the beginning to avoid costly misconceptions. In most circumstances, a business expects to keep ownership of whatever IP it develops. To avoid misunderstanding, this proprietary intent must be made abundantly explicit in any relevant contract.
A contract must unambiguously indicate who individuals are authorized to access the IP, when they may access it, and for how long they will have access, in addition to declaring explicitly which party will retain property rights over the IP. In some situations, a non-compete agreement may prevent an employee from working in a related area for a period of time after leaving a company. However, the extent and length of any such agreement are limited, and a former employee may presume that he or she can still refer to IP information that was created with their participation. Even if a corporation grants such access to current or former employees, the manner in which such access is granted must be specified in a contract. Companies may, for instance, aim to make sure that information is accessed through a secure server or a tightly managed data repository. The requirements for access to IP within a corporation must be clearly specified.
- Indemnification
IP indemnification on IP representations and warranties, can be used to hold a seller liable for violations of IP representations and warranties. These aren’t the only types of breaches that might trigger indemnity in a contract, but in contracts where IP may not be the main emphasis, the IP-related indemnification clauses can get neglected during negotiations, which can lead to dispute later if a claim occurs.
In discussions about IP indemnity, the scope and duration of indemnification should be addressed. The seller will aim to reduce the amount of time it can be held liable for indemnification, while the purchaser will seek a longer survival period. The seller will also wish to try to limit its indemnity liability, though this can be challenging. If there are restrictions in place for breaches of general representations, the seller may seek comparable caps for IP breaches, but the acquirer is more likely to push for a larger cap. Acquirers may also try to have specific matters exempted from the cap (i.e., fraud claims, intentional breach). Control of claim defense is another area where IP indemnification is being negotiated. The seller may want to demand control considering he or she will be more compelled to resolve the claim if the acquirer has control and simply forwards the invoices to the seller.
In the event of an IP license, which may be a stand-alone agreement or a component of a larger agreement, indemnification terms may oblige the licensor to extend its IP protection to the licensee if and when a third-party IP dispute arises. It is critical for the indemnitor to understand what it is committing to indemnify, regardless of the type of IP matters that may be indemnified.
- Recourse
A contract must clearly out the consequences of any breach of the agreement in order to have the bite it requires. It will not adequate to utilize vague descriptions including such fines or litigation. It must be apparent to the person who will be signing the agreement that the company takes the security of its intellectual property very critically and will aggressively pursue any and all legal remedies available. In the unfortunate event where valuable IP is misappropriated, there should be no ambiguity regarding the next course of action.
- Intellectual Property Documentation and Records
Sophisticated contracts may include a system for recording and documenting the intellectual property developed throughout the course of the relationship (e.g., by creating specialized lists) so that it can be identified. This allows for improved future valuation of intellectual property and enhances the potential to monetize such property through full or partial assignment, depending on the interests of the parties.
- Termination/ Breach of Contract
Contracts must explicitly specify the consequences of breaching the contract. Because a vague definition of such termination/cancellation/penalty clauses might lead to years-long tedious legal battles, an ironclad contract with respect to penalty clauses is required. There should be no ambiguity.
Author: Vinita Gaud, Pravin Gandhi College of Law
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May 26, 2011 | IPR & Business
An over- simplification of licensing is monetizing the intellectual property of your invention by allowing third parties such as companies to in-license the intellectual property for various purposes that involve manufacturing, marketing and selling. A patent, trademark, copyright, trade secret, a tech algorithm, or techniques or procedures or know-how are all examples of intellectual property. Subject to the provisions of the licensing agreement, when an invention is given for licensing to a licensee, the organization is empowered with the ability to manufacture; market and sell the invention. The process of Licensing of the technology is completed upon execution of Technology License Agreement (TLA) between the Licensor and licensee whilst the inventor is given royalties by the licensee as a consideration for the said agreement.
It is of paramount importance that the terms and conditions of License Agreement are explicitly agreed by both parties and is in a written form.
Why license an innovation to a company?
The fundamental reason that inventors license their patents for royalties is so that they can focus exclusively on attempting to create rather than managing to manufacture, monetize, or distribute each of their inventions. Inventors can create intellectual property and then license the rights to another company to bring the product to market through a patent license agreement. For many innovators who may not have the resources to bring their invention to market on their own, this serves as a viable option.
Licensing inventions for royalties can also help inventors access new markets and expand the reach of the invented product. If an inventor intends to expand into a market where he has limited experience or in an industry across the borders or want to endorse a licensee who has similar products in the market and where the invention could be optimally used in, the inventors decide to license their patent.
Structure of a License Agreement
Licensee: Selecting an appropriate licensee to meet the requirements is one of the first crucial steps in licensing an intellectual property for royalties.
Scope: The scope of the license is determined by the licensor (inventor) which clarifies specifications of the intellectual property. The questions involved are whether the licensee is allowed to access the IP rights as a whole, or will the licensee only be allowed to use the patent for a precise task, for instance, manufacturing or distribution worldwide or in specific jurisdiction. The valid duration of such intellectual property license along with restrictions on geographical locations and various markets is important to be negotiated.
There are no specific requirements of the license to either be exclusive or non-exclusive. It solely depends upon choice of the parties. The license may contain a prohibition on the parties competing in the jurisdictions in which they operate; the contents of the contract will factor in the determination.
In order to receive protection against similar inventions or otherwise, a patent must be compulsorily registered or filed for priority protection, and the patent license must be in writing and registered under section 68 of the Patents Act 1970.
Validity of License Agreements
A license agreement, as previously said, should be in writing with all pertinent terms fully outlined. Would just a term-sheet, to the contrary, suffice as a legitimate license agreement? PVR Pictures Limited vs. Studio 18[1], the Delhi High Court delved at this issue. The parties had agreed in this matter to enter into a term-sheet agreement (TSA) under which PVR would be the exclusive licensee for distribution rights in respect of selected cinematic pictures for which written agreements would be executed. PVR accused Studio 18 for infringement, claiming that by refusing to enter into an agreement with PVR on the film, Studio 18 was infringing on PVR’s rights. PVR asked for ad interim relief against the defendant. The issue was whether PVR is Studio 18’s licensee for the film Short Kut, and if so, whether it is entitled to an ad-interim injunction. The courts held that the TSA does not signify a license agreement because the parties did not intend for the TSA to become a binding contract and a license as defined by the Copyright Act; and because PVR failed to develop any legal right or copyright for the grounds of suit, PVR cannot seek specific performance or an ad interim injunction.
Hence, the license terms must not only be in writing but should also be in the form of a binding definitive document for a valid License Agreement.
Terms of a License Agreement
A license agreement must be extensively drafted to provide for specific details of the rights and the limitations imposed on the licensee in the exercise of such right. The definition of licensed property, the geographical features for which licenses are granted, the right given to the licensee to further sublicense the property, clauses regarding revocation of the license, royalty or consideration for the grant of license, dispute resolution, cessation, all of which are inherent areas of the agreement.
To ensure that the licensee cannot claim that the IP has been transferred to it, the license agreement must be carefully drafted, and certain license constraints must be included. There have been certain cases where the licensor has executed an exclusive license and the licensee claims that the IP has been assigned. Indian courts have looked at the essence of the contract, notably the royalty payment clauses, to assess whether a transfer should be interpreted as an assignment or an exclusive license in a number of cases.
In Deshmukh and Co. (Publishers) Pvt. Ltd. vs. Avinash Vishnu Khandekar and Ors[2], the Court looked at the difference between assignment and licensing of Copyright. It was iterated that the essence of a document, not the manner of words used, must be considered when determining whether it is an assignment or just provides a license. The question usually arises in the context of whether the right in question has been partially assigned or licensed exclusively; the distinction is subtle but significant.
The copyright is not conveyed if the consideration is in the form of royalties or a portion of profits rather than a direct payment. It would be a publishing and selling license. In this situation, the payment of royalty rather than substantial money intended to be a sale, stands against partial assignment.
Consequently, the licensing provisions must unambiguously declare that it is a license (whether exclusive or non-exclusive) and clarify the contractual terms. More significantly, the royalty payment clause should be formulated carefully that it does not imply that any direct payment is made in exchange for Intellectual property assignment.
Improvements, enhancements, and revisions to IP are the responsibility of the IP owner.
Licensee can design and develop an enhancement to an existing technology or a component that improves the technology’s use or functionality. The new innovation could be the result of modifying the licensed IP to make any improvements, or it could be the outcome of an innovation related to the use of the licensed IP. These improvements signify advancement in the licensed technological field that improves the initial IP’s usage, functionality, efficiency, productivity, or other attributes. A license agreement must indicate what designates an improvement, and the ownership of such improvement and all property created as a result of it.
Mandated registration of License Agreement
When a license agreement is intended to be performed, the issue of whether the registration of the agreement is mandatory arises. If required by law, what are the consequences of non-registration? The Patents Act, the Trademarks Act, and the Designs Act all require license agreements to be registered, although the Copyright Act does not. The Indian Stamp Act, 1899 (the “Indian Stamp Act”) governs the transfer of intellectual property rights in the form of licenses, assignments, and sales, among other things.
Quantification of Royalty
As previously mentioned, when an inventor licenses his invention to a third party, the two parties engage into a license agreement in which the licensee acquires the patent rights and the licensor receives a fixed sum of money each time the product is sold.
The royalty is a fixed sum paid to the licensor or inventor as consideration, and the licensing royalty rate is a percentage of the net or gross profit selected to constitute the royalty. The quantification of royalties may heavily depend on the negotiations between the parties and merchantability of the invention. The Licensor may be in violation of The Competition Act, 2002 (the “Competition Act”) if it attempts to set extortionate prices as a result of its dominating market position. The test of accuracy of the royalty is reasonability.
The accuracy of the royalty base would determine the reasonableness of a royalty. The royalties is calculated on an individual basis. The Competition Commission of India (“CCI”) has adjudged on numerous cases regarding royalty rates assessment. It has been iterated that offering different licensing prices to different users for the same technology is in violation of FRAND requirements. Further, the CCI determined that Ericsson imposed unjustified royalties because no alternative technology for its patents 2G, 3G, and 4G standards was available.[3]
Even-though, licensing an invention comes with certain limitations and risks, the license agreement allows parties to expand the inventions to various jurisdictions and markets which aligns with the primary visions of licensor and reach larger targeted audience.
Author: Vinita R. Gaud, Pravin Gandhi College of Law
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[1] PVR Pictures Limited vs. Studio 18 2009 SCC OnLine Del 1878
[2] Deshmukh and Co. (Publishers) Pvt. Ltd. Vs. Avinash Vishnu Khandekar and Ors 2006 (2) BomCR 321
[3] Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India, 2016 SCC OnLine Del 1951
May 16, 2011 | Copyright
Copyright is a legal term used with respect to the rights that an author has over his work like literary, dramatic, or artistic work, etc. In India, the law related to copyright is governed under the Copyright Act, 1957 (the Act). Section 14 of the Copyright Act 1957 states, “Copyright means the exclusive right to do or authorize the doing of certain acts in respect of works such as literary, dramatic, musical, artistic, cinematography, sound recording, to do acts of reproduction of the work, issuing copies of the work, and to perform the work or communicate the work to the public.”
All subject matters protected by copyright are called “works”. Such works are mentioned under Section 13 of the act, as below:
Original Literary work
Example: Works such as books, magazines, articles, journals, etc.
Dramatic work
Example: Composition, choreography, drama, poems, etc.
Musical work
Example: Work which consists of music, its graphical notations, and combinations; its composition.
Artistic work
Example: Paintings, Sculpting’s, graphics, etc.
Cinematographic films
Example: Movies, or any other work with audio and visual effects.
Sound recordings
Example: Person Playing a song or musical instrument.
Rights of Copyright Owner
The creator of the original work is considered as “the author” of the work, under the act, the author is considered the first owner of the work. To prevent others from using the original work, the author possesses certain rights such as, to claim compensation for the infringement of his work. There are two types of rights that an author usually possesses, such as:
Economic rights
- The right to reproduce,
- The right to make adaptations of the work,
- The right to distribute,
- The right to perform the work publicly,
- The right to broadcast the work,
- The right to rent the work.
Under the Copyright Act, 1957, Section 14 enumerates these rights for the subject matters of copyright;
- In case of literary, dramatic, or musical work which exclusive of computer program [Section 14(a)]
The exclusive rights include the right to do:
- Reproduction of the work in any material form which includes electronic form,
- To issue copies of the work to the public which are not already in circulation,
- To perform or communicate the work to the public,
- To make a cinematographic film or sound recording in respect of the above-mentioned works,
- To translate such work,
- To make adaptations of such work,
- to do, about a translation or an adaptation of the work, any of the acts specified concerning the work in sub-clauses (i) to (vi).
- In the case of Computer Programmes [Section 14(b)]
In addition to the above exclusive rights, mentioned under section 14 (a), additional rights include the right to sell, commercially rent or offer to sell or commercially rent the program.
The rights of the author under section 14 (c) include the right:
- To reproduce the work in any material form including electronic form. This includes work depicted in two or three dimensions,
- Includes the right to communicate the work to the public,
- Includes the right to issue copies of the work to the public,
- Includes the right, to include the work in any cinematographic film,
- Includes the right to make adaptations of the work.
The rights of the author under section 14 (d) include the right:
- To make copies of the film or a photographic image of the forming part,
- Storing of it in any medium by electronic or other means,
- To sell or commercially rent the work,
- To communicate the work to the public.
The rights of the author under section 14 (e) include the right:
- To make any other sound recording embodying the original work and storing it in any medium,
- To sell or commercially rent the recording,
- To communicate the recording to the public.
Moral Rights
They are special rights of the author and are independent of the author’s economic rights. Even after the transfer of the economic right, the author still has his moral rights, such as:
It is the right that instills the right to assert the authorship of the work and prevent others from claiming authorship of the work.
Through this right, the author can object to any distortion, modification, or mutilation of his work.
Copyright Infringement
Copyright Infringement is the utilization or production of a material, which is copyrighted without the permission of the copyright holder. In other words, copyright infringement is the breach of rights that are granted exclusively to the owner of the copyrighted material.
Section 51 of the Copyright Act 1957 defines infringement. It deems that the copyright in a work is infringed if:
- When any person, without a license granted by the owner or registrar of copyright under this act or contravenes the conditions of a license granted or of any conditions imposed by an authority which is competent under this act:
- Does anything, which under this act, only the owner is allowed to do or has the exclusive right to do, or
- Permits for profit, communication of the work to the public where such communication would amount to infringement unless he is not aware and had reasonable ground to believe that such communication to the public would not amount to infringement.
When any person,
- Makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or
- Distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright, or
- By way of trade exhibits in public, or
- Imports into India (provided that, this sub-clause shall not apply for import of one copy of any work for the private and domestic use of the importer),
Any infringing copies of the work.
In the case of K R Venugopala Sarma v. Sangu Ganesan, it was held that “one picture can be said to be a copy of another picture only if a substantial part of the former picture finds a place in the reproduction and the copy must suggest that it is the appellant’s picture”.
In another case, Wadia Movie Tone Pvt Ltd v. Vishal Bharadwaj the Character in the Film Rangoon, “Janbaaz Julie” was claimed as substantial copying of the character “Fearless Nadia” in the Film “Hunterwali” (1930). The court held the defendants guilty of infringement and ordered Rs. 2 Crore as a Bank Guarantee.
Fair use/Fair Dealing Doctrine
Fair use is a legal doctrine that permits a person to make use of any work to maintain the originality and sanctity of the work.
In congruence with the copyright laws of the UK, India has adopted the concept of Fair Dealing. The same is referred to as fair use in the US copyright Laws.
The meaning of fair dealing depends on different facts and circumstances of the case. In India, the court determines the applicability of the doctrine based on the nature, facts, and circumstances of the case. The doctrine has been usually determined keeping in mind the economic impact that the usage of copyrighted work has on the owner. In cases where the impact has not been significant, the act can constitute fair dealing. The nature of fair dealing depends on four factors:
If the work was used for reviewing, commenting, criticizing, etc, then the doctrine is applicable.
The characteristics of the work, the content of the work is also important in determining the applicability of the doctrine.
The quality and quantity of the work are important in determining the applicability of the doctrine.
- Effect of the work on the original work
The effect the copied work has on the original work, i.e., to what extent can the original work be harmed, is also important in determining the applicability of the doctrine.
Fair dealing has been covered under Section 52 of the Copyright Act, 1957. This section allows the defense of fair dealing for certain purposes, such as:
Fair dealing with any work, not being a computer programme for the purposes of-
- Private and personal use, including research;
- Criticism or review, whether of that or any other work;
- The reporting of current affairs, including reporting of lectures delivered in public.
The transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public;
- The reproduction of a work for the purpose of judicial proceeding or for the purpose of a report of a judicial proceeding;
- The reading or recitation in public of reasonable extracts from a published literary or dramatic work;
- The reproduction of any work in a certified copy or supplied in accordance with any law for the time being in force;
- The reproduction of any work-
- By a teacher or a pupil in the course of instruction; or
- As a part of the questions to be answered in an examination; or
- In answers to such questions;
The performance of a literary, dramatic, or musical work by an amateur club or society, if the performance is given to a non-paying audience, or for a benefit or a religious institution.
In addition, the court also relies on precedents along with the facts and circumstances of the case to determine the applicability of the doctrine.
Some cases related to fair dealing;
In this case, the Court considered that a parody did not constitute an infringement of copyright as long as it has not been misused or misappropriated.
In this case, it was held that since the defendant’s book was not criticism or review, none of the exceptions under Section 52 could be attracted and that the defendant’s actions amounted to copyright infringement.
In this case, the court held that, “To constitute a fair dealing there must be no intention on the part of the alleged infringer, to compete with the copyright holder of the work and to derive profits from such competition and also, the motive of the alleged infringer in dealing with the work must not be improper.”
Through Fair use, the accused can defend their work against infringement claims for the purposes covered under the Copyright Act, 1957. In India, this concept has managed to provide an exhaustive list of exceptions to the claim of infringement under Section 52 of the act. The ambit of this concept is mostly based on interpretations. Many cases, as observed have had decisions made with due regards to the facts and circumstances of the case in hand.
Author: Amulya Bhat, Symbiosis Law School, Hyderabad
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May 14, 2011 | Indian Patents Act 1970, IPR & Business, Patent
Biosimilars can be perceived as a category of biological product that have been sanctioned and approved by due regulatory authorities in consonance with the fact that these products are highly alike and akin to a biological product that has been approved on a prior basis. This previously approved biological product is known as the biological reference product.
In distinct contrast to the chemically synthesised generic versions of drugs, biosimilars are sanctioned in accordance with the standards of the pharmaceutical standards, effectiveness, efficacy and safety that are in common parlance applied to all biological medicines.
Biosimilars and Generic Medicines- An underlying dissimilarity
A Biosimilar cannot be perceived as a generic biological medicine, in due accordance with the process of manufacture of a Biosimilar. This means that the variability that occurs naturally and the complex process of manufacturing biological medicines does not facilitate the process of exact replication of molecular microheterogeneity.
Biosimilars are seen to be very similar to the reference product that they are manufactured in comparison to, but have certain minute differences in terms of the purity and potency.
An Anatomization of Biosimilars- Legal and Regulatory Framework in India
India refers to Biosimilars as “similar biologics” and has paved its way into the biosimilar industry with the first launch of “similar biologic” for the disease hepatitis B. India has about 95 biosimilars that are duly approved by the regulatory authority.
In India, the Central Drugs Standard Control Organization is the national authority and the regulatory body that has introduced new guidelines for biosimilars that became effective from the 15th of August, 2016. The previous guidelines that were in existence with regards to biosimilars were the “Draft Guidelines on Similar Biologics: Regulatory Requirements for Marketing Authorization in India” which was effective from 2012.[i]
The 2012 guidelines seek to address the pre and post-marketing regulatory requirements body which is also known as the comparability exercise. These guidelines direct and address the requirements related to the manufacturing process and quality control.[ii]
India follows the pattern of “sequential approach” with regards to biosimilar products. The guidelines that were released in 2016 focus on the aspect of Post Marketing. The major vital difference underlined between the 2012 and 2016 guidelines is the Reference product. If the reference product cannot be marketed in India, it could be licensed and marketed in any ICH Country (International Council for Harmonization).
Apart from the guidelines as enforced by the Central Drugs Standard Control Organization, biosimilars are also synchronised and balanced by the Drugs and Cosmetics Act, 1940, the Drugs and Cosmetics Rules, 1945, Recombinant DNA Safety, 1990 and the Guidelines and Handbook for Institutional Biosafety Committee, 2011.
Market Authorization for the sale of these biosimilars in India is authorised by the Department of Biotechnology via the Review Committee on Genetic Manipulation. There are three stages that act as a precursor to the marketing authorization of these biosimilars- pre-clinical, clinical and post-clinical trials.
- The Pre-Clinical Trial process includes information on the biological reference product, and the corresponding information on the biosimilar. This trial phase also includes the submission of details with regards to the downstream process development like that of fermentation, considerations of molecular biology and other quality based considerations.
- The Clinical Phase consists of information in consonance to the pharmacokinetic, pharmacodynamics, immunogenicity and other efficacy studies.
- The Post- Clinical Trial process includes the studies carried out on the marketing of the biosimilar, drug safety and reporting of any adverse reactions to the drug.
These trial phases and processes are exhibited in the strict and stringent manner in India. In the case of Roche Products (India) Private Limited v. Drugs Controller General of India[iii], Roche had filed a case against two other pharmaceutical companies in lieu of non-adherence to the guidelines applicable and grossly misrepresenting the generic drugs as biosimilars. The court enforced a restraining order on the pharmaceutical companies.
Patent Protection of Biosimilars in India
It is of immense necessity to conform to the regulations set out for the production and trial process to duly attain the right of marketing the biosimilar in India. The process of patenting biosimilars is subject to the criteria that are applicable to patentable items like that of novelty, involving an inventive step and industrial application of the biosimilar. The nature of biosimilars mandates it to be close in efficacy and nature to the biological reference product.
Therefore, these biologic medicines and biosimilars are subject to and governed by Section 3 of the Patents Act. Any biological product that are not naturally occurring and are synthetically developed by human beings could be patented, but if it contains a living organism that occurs in nature then it would fall under Section 3(c)[iv] which rules out the patentability of a scientific discovery or conception of abstract theories.
Section 3(d)[v] of the Patents Act, lays down the following for which patent protection is prohibited-
- The sole discovery of any new forms of a known substance if it does not increase the effectiveness and efficacy of the substance at hand.
- The discovery of any new property of a substance that has already been discovered.
Albeit, a few boundaries for deciphering improved viability for drugs have risen up out of court choices, as far as biopharmaceuticals (especially biosimilar innovations) the subtleties stay obscure.
Trends Observable
Albeit Indian organizations are known for delivering conventional and generic biological drugs, many organizations are presently moving into the worldwide biosimilars market. As per the Associated Chambers of Commerce of India’s 2017 Report, biosimilars sum to $2.2 billion of the $32 billion Indian market – and is required to accomplish a development pace of around 30% build yearly development. A phenomenal illustration of the organization of worldwide drug firms in concurrence with an Indian drug organization can be discovered when Swiss-based Roche went into a concurrence with Emcure for Herceptin, a biosimilar utilized for human epidermal development factor and in instances of positive metastatic bosom and gastric disease. The medication was subsequently promoted by Emcure in India under the brand name ‘Biceltis’. In another model, Mylan, a worldwide monster with an enormous generics portfolio, gone into association with Bangalore-based biopharmaceutical organization, Biocon. Trastuzumab, a biosimilar made by the joint endeavors of both the organizations to lessen febrile neutropenia during chemotherapy, was supported by the US Food and Drug Administration in 2018 and was the first biosimilar created by an Indian organization to be endorsed in the United States.
In spite of the fruitful turn of events and showcasing of some biosimilars by Indian companies, innovative work in this space will face difficulties with regards to the improvement biologics and biosimilars. As opposed to generics – which are comparative instead of indistinguishable from the marked medication – biosimilars are substantially more mind boggling and costly to produce. In furtherance, as opposed to the generics business, biosimilars are likewise dependent upon rigid clinical courses of events obviously characterizing administrative methodology for enormous scope, complete clinical projects setting up the security and viability for treatment of demonstrated problems. The oddity of the biologic and biosimilar improvement measure makes it hard for new organizations to enter this space. Considering an illustration of other drug organizations in India, Dr Reddy’s Laboratories, Cipla, Lupin and Aurobindo are additionally producing biosimilars, some of which are endorsed for promoting. It is normal that more Indian drug organizations will have the capacities and assets to create biosimilar items. As need be, steady and clear administrative and authoritative rules are at present expected by the business.
Conclusion and Way Ahead
In layman’s context, pharmaceutical products and biosimilars are a combination of effort and time from the conception of idea to the process of commercialisation and require rigorous endeavours with regards to research and development. There has been a rampant and a pronounced switch in the pharmaceutical industry of India to that of biopharmaceutical products. It has been seen that regardless of the extra time and exertion needed for advancement and foundation for research work, just as the patching up of consolidations and extensions, it is expanding to address the issues of the biologics.
Author: Haritha Dhinakaran, Symbiosis Law School, Pune
[i] Government of India, Department of Biotechnology, Central Drugs Standard Control Organization. Guidelines on Similar Biologics: Regulatory Requirements for Marketing Authorization in India; 2012.
[ii] Government of India, Department of Biotechnology, Central Drugs Standard Control Organization. Guidelines on Similar Biologics: Regulatory Requirements for Marketing Authorization in India; 2016.
[iii] Roche Products (India) Pvt. Ltd. and Others v. Drugs Controller General of India and Others, 2014 SCC OnLine Del 7682.
[iv]The Patents Act, 1970, Section 3(c)
[v] The Patents Act, 1970, Section 3(d)
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Jan 27, 2011 | Contracts, General
The companies act defines a “company” under section 2(20) of the companies act of 2013 as an association of persons registered under the Companies Act 1956 in a partial manner) act 1956 or Companies Act 2013. In layman language, a company is defined as an association of persons or a conglomeration of persons who work towards a common objective. A company is a legal artificial person which possess the capability of being sued and to sue for any omission or commission of an act. The Companies Act of 2013 defined the constituents of a company in the case of Solomon versus A Solomon & Co[1], the court defines a company and its validity if the company is duly incorporated, it is an independent identity with its duties, rights and liabilities appropriate to itself.
However, it becomes essential for a company to engage in a variety of contracts to maintain its legal solidarity. On the other hand it becomes mandatory for employees to engage in the contracts to display allegiance and conformity with their company. Various legal agreements are signed and sanctions to minimize the risk of any legal liability. For a contract to be valid, the requisites given under the Indian Contract Act 1872 under section 2(e) of an offer, acceptance, free consent, promise, consideration, enforceability shall be fulfilled.
- Memorandum of Understanding- MOU
A company requires to have its MOU with its partners and the partnership firm, mentioning the profits, losses, shares and dividends to determine limited legal partnership (LLP) or limited legal company (LLC). A memorandum of understanding is to ensure the involvement of every person in the assignment and making sure what the roles, duties and liabilities of each partner, employer and employee are stated clearly.
- Non-Disclosure Agreement (NDA) & Confidentiality Agreement
For any company, it becomes a sine qua non to ensure that the employees, clients, associates, consultants, vendors and other members of the company enter into NDA agreements at various stages to maintain confidentiality of the information shared. Main purpose of NDA is to maintain the privacy, confidential information and sensitive information of the company which is required to be shared with others at various times.
- Employees Contract and Offer Letter
An employers agreement or employers contract is an agreement between the employer and the employee to document terms and conditions agreed between the parties. A breach on the part of a party by any action, omission or commission might result in a breach of contract.
Other working conditions such as wage, time and stocks, remunerations, appraisals, salary, etcetera are mentioned in the employment agreement. A Non- compete clause and non-solicitation clause is also engaged between employer and employees to prohibit joint ventures with other companies and to prevent poaching clients of other companies.
- Service Agreement of Directors
The Directors’ service agreement resembles an employment agreement & it states the basic formalities and duties of the directors of the company when it comes to maintaining their company’s environment and health conditions. There are a few basic duties that the director of each company is obligated to perform towards its employers. This Agreement mentions the responsibility, duties, pay scale and liability- arrangements of the directors once the service is completed or rendered.
The EPFO (Employees Provident Fund Organization) makes it necessary for any organization or company that employs 20 or more employees who are registered under the Employees Provident Fund Act and Miscellaneous Provisions Act of 1952.
The EPFO is prevailing with three schemes, namely- The Employees Provident Fund Scheme, 1952 (EPF), the Employees Pension Scheme, 1995 (EPS) and the Employee Deposit Linked Insurance Scheme, 1976 (EDIL). If a company has more than 20 people, then as an employer one has to substantially keep a track under which scheme a company or employer can fall.
Moreover, ESI scheme is a social security scheme designed to protect employees (against disability, sickness, maternity or death) working in the organized sector by providing medical care and/or compensation to the insured and/or family members of the insured.
The Industrial Dispute Act, 1947 states the method and system (re-employment of end specialists, end arrangement, manager commitments, concept of conservation, etc.) to be taken after the end of representative administrations (conservation). Conservation implies disciplinary activity within the shape of end as discipline and such workers being ended are entitled to compensation as expressed within the Act.
Any damage, illness or accident arising out of the course of work must be compensated for beneath the Workmen’s Emolument Act, 1923. This Act for the most part applies to people being eviscerated or murdered in work within the railroad, fabricating, development, mines, ranches, etc. (or any perilous work).
Break even with Remuneration Equal compensation for all representatives independent of sexual orientation is represented by the Rise to Compensation Act, 1976. It is the obligation of the boss to forbid segregation in enrollment, arrangement, examinations, advancement, compensation, etc. This Act commands that each boss keeps up an enlist of representative subtle elements and documents.
Conclusion
These agreements are not exhaustive and there are several other agreements and contracts that a company might engage into as per the circumstances and requirements.
Author: Anushka Seemendra, ICFAI University, Dehradun.
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[1] [1896] UKHL 1
