Prospective Utility

This post is a critical comment on a recently UKSC decision, which conferred an unconventional interpretation to utility.

In, Human Genome Sciences v Eli Lilly, HGS were seeking protection for an isolated nucleic acid molecule comprising a polynucleotide sequence encoding a Neutrokine-á polypeptide. This was identifiable and isolatable. The subject matter of the patent application was a member of TNF ligand super family.  The fundamental defect to the HGS’ patent application was they were a bit of dark to identify precisely the purpose of protein composition. The applicant was sure that it has its own uses but failed to assert exactly what is the use or they were aware of the budding use of the invention but they were not entirely sure their predictions would prove to be correct.

Article 52 of the European Patent Convention (EPC) mandated the requirement of “Susceptible of Industrial Application” for patent eligibility. The requirement explained in the UK legislation as capable of industrial or agricultural (S.4 of the Patent Act 1977) application. This case deals with the interpretation of “Susceptible of Industrial Application” (Utility from now on) in terms of Biotechnology.

Their patent claims were silent about the industrial applicability. The inventors were in a dilemma as to the contemporary appliance of their invention. Protein structures interpreted to tackle diseases. To state precisely this protein structure came before the dieses being discovered. However, already identified members of TNF ligand family had shown incredible medicinal qualities. Nevertheless, current diseases did not demand the application of this invention. Future discovery of industrial applicability is a possibility. This created the whole problem to their application because “Capable of Industrial Application” means, invention must be capable of mass production and application in the market.

The court pointed out that research field is a wide market on which this invention has an industrial application. They also rejected the US cases postulated the interpretation for the same by saying that the standard of utility in US is too high. The court said that the invention of HGS is capable of industrial application because all the other members of the family showed excellent result and this invention may reveal its purpose in the near future. “The standard set by the Judge for susceptibility to industrial application was a more exacting one than that used by the Board. He was looking for a description that showed that a particular use for the product had actually been demonstrated, rather than that the product had plausibly been shown to be usable for the purposes of research work [Para. 151] and [Para. 154], which the Board must be taken to have regarded as an industrial activity in itself [pares. 155-156].”

The Implication of the Decision

This decision will facilitate the admission of speculative patent claims in the biotechnology field. Speculative claim means the specification will postulate certain capabilities of the invention based on the qualities and known functions of the previous similar class of invention. These specifications may or may not be true.

As and when one read “Capable of Industrial Application”, he\she would interpret it as a present application. However, this decision cast away the conventional interpretation. As of now the interpretation assumed is that “an invention can be patent even if it is showed that it can have a future industrial application provided the similar invention has proved that they has their own capabilities in the field”. This decision added the word “Prospective” to “Susceptible to Industrial Application”. To quote, "[A]ll known members of the TNF ligand family were expressed on T-cells and were able to co-stimulate T-cell proliferation, and therefore Neutrokine-α would be expected to have a similar function." 

Food laws and trade secret in India

Evolution of Trade secret dates back to the development of contractual law in common law. What is trade secret? Answer is simple in commercial activities the business people will acquire certain information, by way of research or experience or invention. He will not disclose the same to the public in order to boost his business venture and reap maximum benefit. A secret know only a few and unknown to public can considered as a trade secret or undisclosed information. Like all other IPs purpose of trade secret is to protect the entrepreneur from unfair completion. Perhaps food industry is the area where trade secret plays a crucial role. Inventions in recipes are not patentable hence inventors of food and beverages recipes tend to keep the same as a secret as an alternative to patent regime. Trade secret or confidential information is a kin to patent but have their differences. Trade secret is stronger than patent because the protection period is unlimited or it can be stated as the till it remains “secret”. Whereas patent is a 20 year protection granted to the inventor for disclosure of his invention. Hence patent even though no one can – before 20 years - use it remains in the public domain.  Trade secret is weaker than patent because as and when it is available to public it ceases to exist as trade secret. But patent grants an absolute protection of monopoly over a particular period. Remedies available to patent can be easily enforced because infringement can be effectively and materially controlled. But remedies available to infringement of Trade secret are more abstract because as and when it is available to public trade secret ceases to exist and once it is available to a single person no one can erase it from his brain – as of existing technologies – or compel him to forget. TRIPS Agreement (Trade related aspects of Intellectual property rights) recognizes the need and protection of undisclosed information. Article 39 of TRIPS agreement reads as follows

“1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices10 so long as such information:

a)      is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

b)      has commercial value because it is secret; and

c)      has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination 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.”

Another important factor is that in order to constitute trade secret it is necessary to show that the person concerned took necessary steps to protect it from reaching the public domain. To clarify further if “A” a natural\legal person has some information which he tends is secret must be kept secret and instead if he publishes the same in a blog and later in a suit or proceeding he cannot claim legal protection.

Trade secret as I noted above plays an important part in food and beverages industry. Perhaps one of the most guarded secrets in the world is coca-colas 4X formulae. If one reads the evolution of coca-cola and Pepsi co one might think that military secrets are kept under minimum protection. Laws governing the food and beverages plus the agencies constituted under it play a crucial role regarding the protection\disclosure of trade secret. Even though India does not have a consolidated comprehensive laws governing protection of undisclosed information bits and gist of the same is visible in various other legislation or its scattered. As far as food laws are concerned prevention of food adulteration Act of 1955 [PFA] plays the lead role. But in order to satisfy the need of time the government of India passed a comprehensive legislation named food safety and standards act 2006 though rules are not yet framed and passed or it is not yet implemented. As of now PFA governs the entire Indian food industry.

Confidential Information is cardinal to the food industry at the same time food laws prescribes for constant check on the commodities that are sold. How the concerned legislation does balances or controls the friction between trade secret and claim of consumers regarding the nature of food. It is an important aspect ever since India signed the TRIPS agreement. Further more consumers according to Consumer Protection Act have all the right to know about the food item he consumes. If one individual put up a claim “I doubt the contents of food item “A” of which’s contents are kept secret by its founder” is the founder is bound to reveal the ingredients or is the government is bound to reveal it? Article 39 of TRIPS agreement says that if the information which is kept secret I liable to be published if there is substantial public interest attached to it. It further complicates the problem. How do we determine public interest? What is the scope and ambit of the term? Public interest attached to food industry is more vital than any other establishment because it concerns public health.

Such claims are valid from one angle because the consumer has the right to know what he is consuming. But the food laws create viable demarcation between the consumers right to know what he is consuming. According to PFA the consumer is only entitled to know whether he is consuming a commodity which is hazardous or not. If one refine it, it can be stated that an entrepreneur can keep his information confidential so long as it is quality is proved before the eyes of law (excluding to possibility of revelation).  Only exception expressly or impliedly recognized by law as to trade secret is public interest. If there is an element of public interest is attached to the confidential information then it is liable to be revealed. Now let us examine the ways through which a consumer can amass necessary public interest.

According to PFA S 8 and 12 together provides the answer to what is the scope and ambit of public interest as far as food industry and confidential information. Section 8 provides for the appointment of public analyst in respective local areas the purpose of public analyst constituted under the legislation is to examine the sample of food items which are facing allegations as to it is adulterated. Section 12 bestows a right of the consumer to approach the public analyst to seek out his aid in determining the nature of the food article. If the report of the analyst is positive i.e. he finds out that the food is hazardous for consumption and its recipe is confidential information the consumer can approach the authorities to seek an order to reveal the ingredients and respective proportions in which it is added. If the report of analyst proclaims that it is not hazardous in nature then the consumer has no right to claim the revelation of confidential information. The PFA is silent with regard to confidential information in toto.  None of the provisions high light the intention of legislature as to the revelation of confidential information. But as I said earlier public interest constitute an exception to the protection of confidential information. PFA gives the consumers opportunity to amass enough public interest by complying with the procedure. It is safe to say that PFA indirectly address the situation in hand.

Coming years would see a integrated food law named Food Safety and Standards Act 2006 which will repeal (http://mofpi.nic.in/ContentPage.aspx?CategoryId=147) the following legislations.-

• The Prevention of Food Adulteration Act, 1954
• The Fruit Products Order, 1955
• The Meat Food Products Order, 1973
• The Vegetable Oil Products (Control) Order, 1947
• The Edible Oils Packaging (Regulation) Order, 1998
• The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967
• The Milk and Milk Products Order, 1992
• Essential Commodities Act, 1955 relating to food

As a temporary measure, the standards, safety requirements and other provisions of the repealed Acts and Orders and any rules and regulations made under them will continue to be in force until new rules and regulations are put in place under the Food Safety and Standards Act, 2006. This legislation is important piece of our discussion specifically section 16. Under the Act food authority a new regulatory body will be constituted to govern and implement the legislation. Section 16 postulates the duties and responsibilities of food authority.

“16. (1) It shall be the duty of the Food Authority to regulate and monitor the manufacture, processing, distribution, sale and import of food so as to ensure safe and wholesome food.

^[1] 16 (3) (g) take all such steps to ensure that the public, consumers, interested parties and all levels of panchayats receive rapid, reliable, objective and comprehensive information through appropriate methods and means;

^[1] 16 (6) The Food Authority shall not disclose or cause to be disclosed to third parties confidential information that it receives for which confidential treatment has been requested and has been acceded, except for information which must be made public if circumstances so require, in order to protect public health.”

As and when this legislation take over PFA confidential information with respect to food industry will attain a new meaning.

The consumer protection Act does not recognizes the consumer’s right to know the confidential information of the food articles.

The right to information Act [RTI] of 2005 is indirectly applicable in these kinds of situations. According to section 8 (1) (d) the individual cannot seek out confidential information. “Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information.” But at the same time it has to be noted that according to object of the Act information can only be seek out from a public office. So RTI cannot be directly applied to private bodies. Its application lime lights when the individual asks the information from food inspector and the analyst for confidential information.

These rights and applications are viewed from a consumer’s perspective. What is an employee’s right to disclose the trade secret if he is aware of the hazardous material in food items? Will he be inclined with non-disclosure agreement?