Patent Act amendments - impact on biotechnology patenting

The Patents (Amended) Act 2011 contains many new provisions and enhancements that will be directly beneficial for the local biotechnology industry.

This is very much in line with phase II of Malaysia’s National Biotechnology Policy announced by then Prime Minister, Tun Abdullah Badawi, in 2005. In phase II (2011 to 2015), emphasis is placed on the development of human capital for the discovery and development of new drugs based on natural resources—protection of IP arising from such development is essential.

A new provision has now been proposed that allows the government to grant rights for the manufacture, export and import of generic drugs without the prior consent of patent owners. This is an expansion to the existing provisions for generic drugs in the act (e.g. compulsory licence) and is as provided for under the Doha Declaration (paragraphs 1(a) and 2(a) of the TRIPS agreement) of which Malaysia is a party.

When implemented, this provision potentially allows for the import of generics during a national emergency, and in circumstances of extreme urgency, also the manufacture and/or export of generics from Malaysia to any foreign country in the interest of public health.

Clarifying provisions to the existing Limitation of Rights of patent owners have also been proposed. Section 37(1A) of the act currently provides for a Bolar-type exemption with regards to acts done in relation to the drug development and submission of information for regulatory approvals. It has now been proposed to expand Section 37 to include further provisions exempting all acts done in the private sphere (non-commercial acts) as well as acts done for experimental purposes (e.g. research and development).

Provisions to exempt from infringement the agricultural use of plants (including plant propagating material) or animals (including breeding stock or other animal reproductive material) by farmers have been proposed. ‘Agriculture’ has also been included in the new definition of industrial applicability (amended Section 16), i.e. an invention will be considered industrially applicable if it can be made and/or used in any kind of industry, including agriculture.

Patent term extensions similar to those provided by the US Patent and Trademarks Office have now been provided for in the proposed Patent (Amended) Act 2011. When implemented, this will allow for an extension of the patent term by up to two years, for any delays in prosecution on the part of the Malaysian Intellectual Property Office that cause the pendency period (between filing date and date of grant) of a patent application to exceed four years.

The extension term will exclude any delays on the part of the applicant. Examples of acts construed as delays on the part of the applicant under new Section 35C of the act include applications for deferment for requesting substantive examination (and/or providing information and documents in respect of a substantive examination request), requests for extension of time, application for reinstatement to enter national phase (failure to meet 30-month deadline), voluntary amendments or voluntary divisional applications.

Specific provisions to define biotechnological inventions, biological material, modified biological material, essentially biological processes, microbiological processes, micro-organisms and modified micro-organisms have been proposed in the amended act, in line with those set out in the European Patent Convention and European Union Directive on Biotechnological Inventions.

It is hoped that the above amendments signal Malaysia’s long-awaited accession to the Budapest Treaty, which has been pending since the year 2006. The treaty concerns the deposition of biological materials (including micro-organisms) with International Depository Authorities (IDA) in order to meet the enabling disclosure requirement of patenting.

Insufficiency of disclosure is one of the possible grounds for invalidation of a Malaysian patent. Generally, it is impossible to sufficiently disclose an invention either directed at or requiring the use of biological materials merely by way of written description. This is addressed by depositing a sample of the material(s) with an IDA. All parties to the treaty recognise a deposit made in any IDA, which will be treated as sufficient for patent purposes in all member states.

Although not compulsory, it will be beneficial for Malaysia to form an IDA, as this will greatly reduce patent filing costs for local inventors. Presently, it is necessary for local inventors to deposit biological materials with foreign IDAs at high cost. Dialogue between the government and local research institutes and universities on the formation of an IDA started in June 2007.

Selection of an existing facility hosted at a local research institute or university for ratification as an IDA by the World Intellectual Property Organization (WIPO) is expected in the near future.

On the whole, the proposed amendment to the Patents Act is a positive move by the government to enhance the local IP regime and it is hoped that the provisions outlined above will prove to be a growth catalyst for Malaysia’s biotechnology industry.