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PHARMACEUTICAL PATENT ENFORCEMENT IN INDIA: SOME THOUGHTS
FOR REFORM
Shamnad Basheer and Prakruthi Gowda
I INTRODUCTION/SUMMARY
Since the advent of a pharmaceutical patent regime in 2005, the number of patent litigations
in India has witnessed a sharp spike. However, courts are still grappling with the correct
standards for the grant (or non grant) of an injunction or a restraining order. We consider
some of these cases with a view to evolving policy suggestions that cater appropriately to
the specific milieu of India.
Given the relative immaturity of Indian courts in handling patent cases, our main suggestion
is that the relief of temporary injunction be done away with in complex patent cases, where
the defendant mounts a credible challenge to the validity of the patent. In other words, we
recommend that in a vast majority of patent disputes, courts do away with the interim
phase and move directly to the trial stage; a suggestion that interestingly is coming to be
already implemented by the Supreme Court.1
Though specific to India, our suggestions could prove useful for a number of other countries
(particularly developing countries) that are new to patent cases. Our specific focus will be
on pharmaceutical patent cases.
Many of our policy suggestions depend on the “institutional” competence of various bodies
hat play their respective roles in the patent registration and enforcement drama. t
olicy recommendations below: We highlight some of these p
1 A Division Bench of the Supreme Court in the case of Bajaj Auto Limited vs TVS Motor Company Limited, MANU/SC/1632/2009, was of the opinion that instead of a decision at the interlocutory state, the suit itself should be disposed of finally at an early date. The case will be dealt with in detail in subsequently in the article.
i) In a suit seeking alleging patent infringement, the court ought not to grant any
interim injunction in cases where the defendant presents a “credible” challenge
to either the validity of the patent or to the factum of infringement. Rather, the
matter ought to go to the trial for a final decision on the merits. This suggestion
stems from our assumption (based largely on anecdotal evidence at this stage)
that in most IP cases, the interim stage decision seals the fate of the dispute.2 Any
wrong decision at this stage has colossal consequences, making it imperative that
courts try and get the right result at the interim stage. However, in a complicated
patent dispute, it is virtually impossible to make the right assessment within the
short window normally available during an interim phase. Particularly so when
Indian courts are relatively inexperienced with patent disputes, increasing the
likelihood of wrong decisions at the interim stage; a fact borne out by the Roche
vs Cipla case discussed later in this paper. We therefore recommend that Indian
courts short‐circuit the interim phase and move directly to the trial stage.
ii) A logical corollary of the above proposition is that if the defendant presents an
inherently untenable defence by either mounting a frivolous challenge to the
validity or claiming non infringement without giving adequate reasons, the court
ought to hold in favour of the plaintiff i.e. that a “prima facie case” has been
established. This situation will however be the rare exception than the norm.
iii) Even in rare cases where a court is able to arrive at a quick prima facie view of the
merits in favour of the plaintiff, there is no automatic grant of an injunction.
Rather, courts must insist that other factors weigh in favour of the plaintiff too i.e.
irreparable injury, balance of convenience and public interest (although this has
not yet been articulated as a separate factor, we argue that it ought to).
iv) In much the same vein as the above point, we argue that the other factors that form
part of the “interim injunction” matrix ought to be taken more seriously. Thus for
example, the test of “irreparable injury” ought to be vigorously applied. We argue
that if a loss can be monetised, no injunction ought to be granted. In fact, in many
cases, the court could simply look to this issue, and dispose of the matter. As IP
2 The Supreme Court has opined that with respect to suits relating to patents, trademarks and copyrights, litigation is mainly about the temporary injunction and there is most often no final decision in these cases. See Shree Vardhman Rice & Gen Mills v. Amar Singh Chawalwala & Bajaj Auto Ltd v. TVS Motor Company Ltd.
begins to be valued more and more (cite), this “irreparable injury” limb will
begin weighing in favour of the defendant. Effectively we will move towards a
udicial compulsory licensing mechanism. j
v) Under Indian Patent Law, there are extensive provisions for oppositions (pre and
post grant)3 before the patent office and revocation proceedings before the
Intellectual Property Appellate Board.4 We propose that if a patent has been
subjected to opposition or revocation proceeding and comes away unscathed,
courts ought to defer to agency expertise whilst determining the validity of the
patent . However the extent of such deferral would depend upon whether the
specific patent office or appellate body finding is a question of fact, one of law or
something in between that we prefer to label as a “fact based opinion”. In so far as
a question of “fact” is concerned, we propose that regular administrative law
principles be followed, where a court may reassess such finding only when there
is a material error on the face of the record. The same logic ought to apply to a
fact based opinion, as they are often intrinsically linked with a question of “fact”.
However, where the issue is one purely of “law”, a court ought to review this
issue denovo.
i) Since the above suggestion calling for a direct move to the “trial” stage in most patent
cases would cause considerable delays and harm the interim rights of a patentee,
we advocate that the trial be expedited. In this regard lessons can be learnt from
the streamlined procedure for the Patents Court and the Patents County Court
introduced in the United Kingdom in 2003.
vi) Since the proposal to expedite IP trials is likely to put more pressure on regular
courts hearing such matters, we propose the creation of an IP specific court in
to do this might to be to formalise the existing informal India. One way
3 See Section 25 (1) & (2) of the Patents Act, 1970. The Section allows opposition proceedings before the Controller of Patents prior to the grant of the patent and after the grant of the patent before the expiry of one year from the grant of the patent. 4 See Section 64 of the Patents Act. A revocation petition can be filed before the Intellectual Property Appellate Board for revocation of the patent.
arrangements where IP specific benches are formed from existing judges at some
of the High courts in the metro cities of India. Alternatively, the jurisdiction of the
IPAB (India’s specialised IP tribunal) could be expanded out to include
infringements as well. However, the current institutional competence of the IPAB
leaves much to be desired. In order to help with more infusion of quality
personnel that can help adjudicate IP disputes, one might take after the UK,
where practitioners with no interest in the case are called on to become ad‐hoc
judges to decide specific IP matters. We also propose that academics with no
interest in the matter could be part time judges. But these aspects might require
constitutional amendments.
vii) Since the above proposals involving a direct movement to trial stage would cause
delays to the detriment of the patentee, we argue that the existence or non‐
existence of the balance of convenience ought to be determined from the date on
which the plaintiff first sought the injunction. Else the defendant will be more
likely to win on this count, given that he/she has invested money and other
resources into producing the allegedly infringing IP good.
viii) If the court decides that the defendants’ challenge is legitimate and not frivolous
and that the matter ought to proceed to trial in accordance with our suggestions
above, it ought to compel the defendant to keep accounts of all of its sales. This
way, when the court finally rules in favour of the plaintiff after the trial, damages
suffered by the plaintiff in the interim can be made good. Similarly, if the court
decides to grant a temporary injunction in favour of the plaintiff, it ought to ask
the plaintiff to post bond.
ix) “Public interest” ought to be a factor forming part of the interim injunction matrix.
However, it should be a standalone ground and not couched as a balance of
convenience standard. Further, this ground must be subjected to more analytical
rigour and not a catch‐all category which is subject to the personal whims and
fancies of judges.
x) We advocate that in a pharmaceutical case, there be no “patent linkage” where the
drug controller is forced to enforce private patent rights. The drug controller is
not institutionally equipped to decide such issues, However, in cases where the
patent is a strong one that has withstood stood an opposition., patentees ought to
be provided with an opportunity to prevent the entry into the market of a
generic. To this extent, the drug controller ought to make publicly available all
applications by generic companies for drug approval. This enables patentees to
o to court in qua timet actions in appropriate cases. g
ASSESSING THE INDIAN STANDARD: A MORE THAN A “PRIMA FACIE” VIEW
As noted earlier, the first pre‐requisite to be satisfied for the grant of a temporary injunction
is the establishment of a “prima facie” case. Over the years, this test has led to differing
interpretations. UK courts first insisted that this test meant that on a relative assessment of
the evidence before the courts, the court was to be satisfied that the plaintiff had a better
chance of winning. Indeed, this test was articulated best in the Roche case, where Lord
Diplock stated in his speech “To justify the grant of such a remedy the plaintiff must satisfy the
court, first, that there is a strong prima facie case that he will be entitled to a final order
restraining the defendant from doing what he is threatening to do…”5.
The case thus advocated examining the strength of the party’s case. And yet, hardly five
months later, in American Cynamid, Lord Diplock himself6 appeared to do a volte face by
rejecting this approach and suggesting that one need not necessarily assess the relative
merits of the case at the interim stage, but a mere triable issue ought to suffice. In short,
Lord Diplock suggested that that the “prima facie” limb would be satisfied, if the plaintiff
shows the existence of a “triable issue.7 A triable issue was one which is not merely
rivolous or vexatious. f
Justice Laddie, in Series 5 Software v. Clarke,8 attempts to reconcile these two allegedly
different positions by suggesting that Lord Diplock was only against a strict rule based
approach that suggested that one had to undertake a relative assessment of the merits at
the interim stage in all cases. Laddie argues that if one were to read the decision carefully,
5 F. Hoffman La Roche & Co. v. Secretary of State for Trade and Industry, [1974] 3 W.L.R. 104 6 Notably, Lord Cross of Chelsea was another Judge common to the two cases. 7 American Cynamid, supra. 8 Series 5 Software v. Clarke, [1996] 1 All ER 853.
Diplock did leave open the possibility that one could assess relative merits, when the
evidence was easier to assess, such as in straightforward cases of copyright infringement.
Further, Justice Diplock left open the possibility of assessing the relative strengths of the
parties, when the balance of convenience/hardships was almost equally poised and one
ould not state with conviction as to who would suffer more. c
We appreciate the underlying sentiment in Justice Diplock’s approach that in many complex
cases, it is often difficult to assess the relative strengths of parties’ contentions during the
small interim window. Any attempt to do so would risk a delay in adjudication, thereby
thwarting the very purpose of granting an interim injunction speedily in order to preserve
the rights of a patentee.9 However, we flip his logic around to argue that when it is difficult
to determine the dispute at hand through a relative assessment, the matter ought to go
straight to trial.10 Particularly so in a country like India, where there is much to be said for
the current “patent sophistication of the court and where the interim stage itself is dragged
on endlessly. Rather than shortening this window by risking an unsound decision from
inexperienced courts, we find it may be better to let the matter move to trial. And to have
he trial itself expedited. t
Any move to lower the prima facie assessment standard in accordance with justice Diplock’s
sentiment in Cyanamid could have disastrous consequences for India, where the trial itself
takes a long time and the interim decision seals the fate of the dispute for all practical
purposes.11 Imagine a pharmaceutical patent case, where an interim injunction is granted
following Diplock’s “triable standard” issue, but the patent is found invalid after trial, Not
only does the alleged generic “infringer” suffer colossal losses, but this ruling also harms
hundreds of thousands of potential patients who might have been able to only afford the
generic company’s drug or who may have been forced to purchase Roche’s more expensive
s have resisted the temptation to bite this “lower” standard. drug. Naturally, India court
9 Justice Diplocks sentiment may have had something to do with the fact that before him was a small patentee being unfairly prejudiced by the might of a global giant that was wantonly infringing its patent: fn: a realistic interpretation of the law) 10 further in the Indian contex 11 The decision in Transmission Corporation, supra, suggests that IP matters may well have to be dealt with differently from other temporary injunction matters, precisely for this reason. Indeed, this would mean that IP matters in India squarely fall within the N.W.L. exception carved out by Lord Diplock himself. Incidentally, Lord Denning favoured a greater examination of the substantive merits of the parties’ case. He noted in pertinent part that since 99% of cases of interlocutory injunctions were settled at the stage of injunction itself, it was critical to come as close to the truth as possible. See Fellowes v. Fisher, [1976] Q.B. 122, 141
However, whilst refusing to accept a lower threshold for prima facie, they have
paradoxically, in the same breath, also expressed allegiance to the Cyanamid standard.
Some decisions have of course, taken the sophisticated Laddie route in attempting to nuance
he Diplock decision. t
Among the leading Indian cases on the point is Wander v. Antox.12 There, the Supreme Court
stated, “the prayer for grant of an interlocutory injunction is at a stage when the existence of
the legal right asserted by the plaintiff and its alleged violation are both contested and
uncertain and remain uncertain till they are established at the trial on evidence. The court, at
this stage, acts on certain well settled principles of administration of this form of interlocutory
remedy which is both temporary and discretionary.”13 The Court then moved on straightaway
to assess irreparable injury and balance of convenience. It is arguable that this suggests that
the Court was inclined to take an approach against an investigation of the merits. However,
the court in this case actually goes on to determine that a prima facie case was not
established by the plaintiff (to confirm). In Dalpat Kumar v. Prahlad,14 however, the Court
used the term ‘prima facie’ but then went on to say that what has to be seen is the
“probability” of the plaintiff succeeding at the final hearing; the judges noted that grant of
injunction is subject to the court satisfying that “…. there is a serious disputed question to be
tried in the suit and that an act, on the facts before the court, there is probability of his being
entitled to the relief asked for by the plaintiff/defendant.”15 This indicates that the Court
was in fact not averse to looking at the relative strengths of the parties’ cases – had it been
so averse, there would not have been an occasion to look at the probability of a party’s final
uccess.s 16
This latter approach was confirmed by the Court in Colgate Palmolive v. Hindustan Lever.17 It
was noted now, “lately the 'triable issue concept' as introduced by Lord Diplock in Cyanamid's
much too rigid and wide even conceptually.” Further, the Court case has been thought to be
12 Wander Ltd. v. Antox India Pvt. Ltd, 1990 Supp (1) SCC 727. 13 This paragraph has been quoted in later judgments. See for instance, Gujarat Bottling Co. Ltd. v. Coca Cola Co., AIR 1995 SC 2372. 14 Dalpat Kumar v. Prahlad Singh, AIR 1993 SC 276. 15 Para 4, Dalpat Kumar v. Prahlad Singh, AIR 1993 SC 276. 16 This attitude is also seen in Power Control v. Sumeet, (1994) 2 SCC 448. There, it was held that the Court should exercise its discretion in granting temporary injunctions “only in strong cases”. 17 Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., AIR 1999 SC 3105.
specifically approved of Justice Laddie’s understanding of the Cynamid principles. .18
However other cases have not been this articulate and it is not clear whether the courts
were, whilst expressing allegiance to the precedential value of Cyanamid, following Cynamid
trictly, or Justice Laddie’s maverick understanding of the Cynamid principles.s 19
The Supreme Court (Justice Katju and Justice Ganguly) has now proposed in TVS vs Bajaj
that we deviate from existing standards in that there be no “interim” phase at all—therefore
nvestigating the proper standard for “prima facie” becomes practically redundant. i
TVS v Bajaj
A suit was filed by Bajaj Auto Ltd. (the second largest automobile manufacturer in India)
before a Single Judge of the Madras High Court alleging infringement of its Patent No.
195904 by TVS Motor Company Ltd. (the third largest automobile manufacturer in India)
under Section 10820 of the Indian Patents Act. The technology patented by Bajaj Auto is
popularly known as the “DTS‐i Technology”. TVS Auto has also filed an application for
revocation of Patent No. 195904 before the Indian Patents Appellate Board under Section
6421 of the Patents Act. Pending the suit, Bajaj Auto Ltd. prayed for an order of temporary
injunction before the single Judge of the Madras High Court to restrain TVS Motor Company
from infringing Bajaj Auto’s patent. The Single Judge granted the injunction which was
subsequently disallowed by a Division Bench of the same High Court. Bajaj Auto Ltd.
of the Division Bench. A Division Bench of the Supreme Court appealed against this order 18 See particularly, Dychem v. Cadbury, (2000) 5 SCC 573, holding that “in trade mark matters, it is now necessary to go into the question of ‘comparable strength’ of the cases of either party, apart from balance of convenience..”; Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., AIR 2001 SC 1952. Later cases, which may again throw some doubt on the correct position in India, include Transmission Corporation of AP Ltd. v. Lanco Kondapalli Power Pvt. Ltd., (2006) 1 SCC 540; and M. Gurudas v. Rasaranjan, AIR 2006 SC 3275. 19 For a more detailed survey of the Indian case-law, see: Ashutosh Kumar, Patent Protection through Interim Injunctions 20 (2) NATIONAL LAW SCHOOL OF INDIA REVIEW 220. 20 Section 108: Reliefs in suits for infringement:
(1) The reliefs which a court may grant in any suit for infringement include an injunction (subject to such terms, if any, as the court thinks fit) and, at the option of the plaintiff either damages or an account of profits.
(2) The court may also order that the goods which are found to be infringing and materials and implement, the predominant use of which is in creation of infringing goods shall be seized, forfeited or destroyed, as the court deems fit under the circumstances of the case without payment of any compensation.
21 Section 64 of the Indian Patents Act provides for revocation of patents by the Appellate Board or on a counterclaim in a suit for infringement of the patent by the High Court on grounds mentioned in the Section.
deciding the appeal upheld the order of the Division Bench disallowing the injunction
against TVS Motor Company.
Factual Background:
Patent No. 195904 relates to the use of twin spark plugs for efficient combustion of lean air
fuel mixture in a small bore ranging from 45 mm to 70 mm internal combustion engine
working on four stroke principle with twin spark plug configuration and two valves. The
motor bike launched by TVS Motors Company, ‘FLAME’ is powered by a lean burn internal
combustion engine of bore size 54.5 mm with a twin spark plug configuration and three
alves. v
US Patent No. 4534322 dated 13.08.1985 or the US Honda Patent also employs twin spark
plugs and three valves but does not specify the diameter of the bore. There is also a
complete specification No. 678‐2001 dated 17.07.2001 of a Japanese Corporation claiming a
four stroke engine with plurality of ignition plugs exposed to the same combustion chamber
stating that it can be applied widely to any engine (without any restriction to the size of the
bore). TVS Motor Company has alleged that the US Honda Patent and the Japanese patent
constitute prior art with respect to Patent No. 195904. TVS Motor Company also claims that
the engine used in its motorcycle is the result of a Technical Collaboration Agreements with
AVL, Austria. AVL holds Patent No. 196636 with respect to its three valve, twin plug engine
with a small bore diameter. Bajaj Auto however claims that its patent is an improvement
over the Honda Patent and the Japanese specification as its patent specifically deals with an
engine of small bore diameter. Bajaj Auto also alleged that the third valve in TVS’ engine was
merely of ornamental value.
Order of the Single Judge of the Madras High Court
The provisional specification of the Bajaj patent was plug centric and was subsequently
amended to a valve centric specification in the complete specification. The order holds that
this amounts merely to giving more construction. The technical reasoning of the court,
which lead to the above conclusion, raise questions with respect to the appropriateness of a
judicial body (lacking experts in the technical field) deciding patentability based on
echnical aspects of the invention. t
The order failed to consider patent No. 196636 (granted to AVL) which has been licensed by
TVS Motors. The judge has failed to consult any expert or a person skilled in the art and has
arrived at the conclusion based on the economic significance and the economic success of
the Bajaj DTS‐i technology and the conduct of TVS Motors. The order also lacks consistency
in approach and restricts itself to quoting from judgments and fails to explain the
applicability of the ratio of the judgment to the present fact situation.
Order of the Division Bench of the Madras High Court
The Division Bench prima facie upholds the validity of the Bajaj patent. And after noting the
differences between the Bajaj patent and the internal combustion engine of the TVS
motorcycle, the court notes that there is no prima facie infringement. The order notes that
the TVS engine has three valves, whereby the two intake valves provide for combined air
fuel mixture of swirl and tumble action, the third valve being an exhaust valve. The judges
thus note the significance of the third valve in the TVS engine and differentiate it from the
Bajaj patent with two valves. The order notes the significance of Patent No. 196636 held by
AVL and licensed by TVS Motors and upholds its prima facie validity. The judges have
engaged in extensive technical reasoning to arrive at the aforesaid prima facie conclusions.
The only aspect that the reasoning lacks is expert testimony.
Order of the Supreme Court
Justice Markandey Katju begins by expressing his unhappiness at the fact that the original
matter had been pending before the single judge in the Madras High Court since December
2007 and not even a written statement22 had been filed till date. This demonstrated that
parties to litigation in patent infringement cases give more importance to the decision at the
nterim stage than the final outcome of the case. i
The court then noted the case of Shree Vardhman Rice & Gen Mills v. Amar Singh Chawalwala,
where it was ruled that:
“Without going into the merits of the controversy, we are of the opinion that the matters
relating to trademarks, copyrights and patents should be finally decided very expeditiously
by the Trial Court instead of merely granting or refusing to grant injunction. Experience
ademarks, copyrights and patents, litigation is mainly fought shows that in matters of tr
22 Footnote explaining that written statement is filed in early stages of litigation.
between the parties about the temporary injunction and that goes on for years and years
nd the result is that the suit is hardly decided finally. This is not proper.” a 23
The court made a reference to Proviso (a) to Order XVII Rule 1(2)24 of the Civil Procedure
Code and pointed out that it should be strictly complied with by all the Courts while dealing
with matters relating to trademarks, copyright and patents. Without mincing words, the
court said that the hearing of suits with respect to the above mentioned matters should
proceed on a day to day basis and that the final judgment should normally be given within
four months from the date of filing of the suit. The judgment directs all courts and tribunals
o follow the order to expedite proceedings punctually and faithfully. t
The Delhi High Court in a recent judgment sought to follow the guidelines laid down in the
TVS v Bajaj judgment. In Glaverbel v Dave Rose (cite), the single judge noted that owing to
the limited term of the patent, delays in trial would cause prejudice to the plaintiff. The
instant case relates to infringement of patent on ‘a mirror with no copper layer’. The parties
were directed to seek appropriate directions for the appointment of a local commissioner25
or the expedition of the trial. f
We take issue with the Supreme Court’s categorical proposition that there must be no prima
facie evaluation or interim injunction in any IP case. Our view would be that such a position
ought to be adopted only when the matter is complex and it is near impossible to make a
meaningful determination of the relative merits of the case at the interim stage. Therefore,
in matters such as software piracy etc, where there is evidence of literal copying by the
defendant, there is no reason why the court cannot take a quick prima facie view of the
merits of the case and grant a temporary injunction in favour of the plaintiff.
Similarly, in patent cases where it is a clear that the defence mounted does not appear a
credible one, there is no reason why an interim injunction should not be granted. An
illustration in this regard is the grant of injunction by a single judge of the Delhi High Court
Appliances Limited.in Strix Limited vs. Maharaja
26 The plaintiff is a British company with a
23 Para of Order in Mills case and quoted in Bajaj order. 24 CPC and Proviso (a) to Order XVII Rule 1(2) 25 The Civil Procedure Code provides for the appointment of Commissions for local investigations to elucidate any matter in dispute or for ascertaining the market value of any property or the amount of profits or damages. 26 MANU/DE/2174/2009.
patent on “Liquid Heating Vessels”. The principal claim of the patent relates to thermally
responsive sensors arranged in thermal contact with the base of the container. This enables
the kettle to automatically switch off on reaching a particular temperature. There is no need
for the container to be filled with liquid to enable the working of the sensors. The defendant,
an Indian company has been importing kettles containing the alleged impugned heating
element form China. The defendant claimed that they were importing the kettle bona fide
from China and added that the patent lacked novelty and was obvious owing to a European
patent. The court noted that the essential difference between the European patent and the
plaintiff’s patent was that the European patent’s temperature control device functioned by
sensing the temperature of the liquid and worked to prevent the overheating of the liquid.
The defendant was also unable to demonstrate that its Chinese supplier held a valid patent.
The single judge thus noted that a credible challenge had not been posed to the validity of
he patent and the injunction was granted. t
The non grant of an injunction in such cases might also militate against TRIPS, an aspect that
we discuss in detail towards the end of this paper. We also argue that where the patent has
already been subjected to an opposition and come away unscathed, the courts must confer
some deference to this “expert” ruling and find in favour of a “prima facie” case in
appropriate cases. However, as to whether or not an interim injunction would be granted
would depend on the other two factors that ought to be taken into account at the temporary
injunction phase, namely “whether the plaintiff was likely to suffer an irreparable injury in
the absence of a temporary injunction” and “whether or not the “balance of convenience” lay
in favour of the plaintiff.
Further, the judge appears overtly optimistic in ordering that the CPC be followed to the hilt
and the trial be concluded within 4 months. As one of the leading IP counsels from Delhi
observed, this is but a laughable proposition. In order to make for a more realistic policy
utcome in this regard, we advocate the cause of specialized IP courts. o
Institutional Competence of Indian Courts with Respect to Patent Cases:
The Supreme Court’s removal of the interim phase and its focus on “trials” must also be seen
in the light of the fact that Indian courts are only beginning to come to terms with
complicated pharma patent cases27 and it is rather unreasonable to expect quality decisions
at this early stage. In fact, pushing Indian courts to take sensible decisions at the interim
tage is sub‐optimal, as illustrated amply by the Roche vs Cipla case, discussed below: s
Roche vs Cipla
Roche, OSI and Pfizer had filed a suit against Cipla before the Delhi High Court (Original
Jurisdiction) claiming that “Erlocip”, a generic anti cancer drug by Cipla corresponding to
Roche's originator drug, “Tarceva” violates OSI’s Indian patent (IN196774) (hereafter '774
patent).28 29 Both drugs are based on “Erlotinib Hydrocloride”, a compound now known to
exist in several polymorphic forms. In the trial Court, the Single Judge,30 Justice Ravindra
Bhat declined to grant a temporary injunction on the ground of “public interest”; holding
that the lower priced generic version of Cipla would enable “more access” to this life saving
drug in India.31
Although Cipla challenged the validity of OSI’s patent in this suit and even claimed non‐
infringement, the trial Judge found that the plaintiff’s had established a prima facie case of
infringement. Nonetheless, the Judge curiously noted that Cipla had raised a “credible
challenge” to the patent.
At the appellate level, although the bench endorsed the “public interest” leg of Justice Bhat,
ct it focussed more on the “non infringement” aspe
Wh rile uling in favour of Cipla, the court noted:
i) that Cipla’s product does not infringe the Roche patent
ii) that even if it did, there was a serious doubt cast on the validity of the patent
iii) that even if the above two issues were to be held in favour of Roche, the injunction
e, owing to the “public interest” factor. would not still issu
27 Till date, there have been only 531 patent cases, with the earliest one in our study (data collected from Manupatra) dated 1879 and the latest one on 15th Dec 09. 28 While OSI was the patentee, the marketing rights were with Pfizer and Roche. 29 Hoffman La-Roche v. Cipla Ltd., MANU/DE/0381/2009. 30 In the Delhi High Court as well in several High Courts in India, cases are first heard by a Single Judge. An appeal may be preferred from this decision to a Division Bench of two Judges. Decisions may further be appealed to the Supreme Court of India, if special leave to appeal is granted by the Supreme Court. cite 31 The trial Court decision has been reported as Hoffman La-Roche v. Cipla Ltd., 148 (2008) DLT 598: MANU/DE/0517/2008 (hereinafter referred to as “Division Bench” or “Appellate Court” order).
This section explores the decision in the Roche/Cipla case, and highlights the various flaws
in judicial reasoning in the case; flaws that are likely to have stemmed from the relative
inexperience of Indian courts in dealing with sophisticated patent disputes. Unfortunately,
the Supreme Court of India refused to admit the matter, and in the process lost out on a
great opportunity to clarify the law relating to interim injunctions.
We discuss anomalies in the courts reasoning to highlight the relative inadequacy of the
courts reasoning. And to also point to a larger institutional problem involving the relative
inexperience of Indian courts with patent cases and the consequent inability to assess the
relative merits of a patent case in the short window that is normally available during an
nterim proceeding. i
II. NONINFRINGEMENT
In Roche/Cipla, the Division Bench held that since the plaintiffs had not established
infringement of its '774 patent, there was no “prima facie” case in favour of Roche. In view
of this, Roche’s application for an interim injunction was dismissed. Since this was really the
ratio of the case, we begin our analysis by focussing mainly on this "non‐infringement"
aspect.32
A The Relevant Patents
The patent in question in the suit was granted on 6 July 2007.33 A later patent application
claiming a specific polymorph B of Erlotinib hydrochloride was filed in India (hereafter the
'507 application) in 2002.34 This application was rejected in December 2008 after an
opposition filed by Cipla, primarily on the grounds of Section 3(d) of the Patent Act, 1970.
Cipla argued that the '774 patent only disclosed Erlotinib Hydrochloride, existing as
application claims Polymorph B alone. The Tarceva tablet Polymorphs A+B. The '507
32 At this juncture, it will be pertinent to note that the Court also ruled that the patent in issue faced a credible challenge of invalidity and was therefore vulnerable. Additionally, it was held in the case that “public interest” dictated that no injunction ought to be granted. However, since the public interest aspect is more in the nature of “obiter dicta”, it will not be dealt with in this paper.We intend to tackle the outstanding issues in a future paper. 33 This was listed as Application Number: 537/DEL/1996. The corresponding US patent is US 5747498 ('498), granted in 1998. There is some dispute as to whether the patent ought to have been granted in Feb 23, 2007. The patent office found the patent to be in order for grant; but then appears to have delayed the matter extensively before issuing a certificate. In the course of this delay, an opposition was filed by Natco and decided in favour of Roche. 34 IN/PCT/2002/00507/DEL. This corresponds with US patent 6900221 (the '221 patent).
corresponds to polymorph B alone, since this polymorph is much more stable and capable
of being made into tablet form (solid form oral dosage).
The judge found in favour of Cipla, holding that Tarceva really corresponded to Polymorph
B, which was the subject matter of '507, an application that was ultimately rejected.
Therefore there was no infringement of the '774 patent. The judge then went on to hold that
Roche ought to have disclosed the '507 application to the patent office whilst prosecuting
the '774 patent.35 Had this been disclosed, the judge opined that the '774 patent may not
have been likely to be granted at all.36 Further, Roche ought to have disclosed the details of
the ‘507 application to the court during the current infringement proceedings. The court
opined that had this been disclosed, the limitations of the ‘774 would have been clear and
Cipla’s product would not have been likely to infringe ‘774. Owing to this suppression of
details of the above details, the appellate Court suggests that Roche may have committed
raud and goes on to impose costs of Rs 5 lakhs on Roche. f
B Whither Claim Construction?
The fact that the reasoning of the Court is weak is evident from the fact that in a matter
involving complex issues of claim construction and validity, the judge does not refer to the
claim in issue even once.
It has been regarded as well established in the law pertaining to claim construction that
when a claim is expressed in clear language, that language cannot be cut down by reference
to the rest of the specification.37 It appears well‐settled that “if the claims have a plain
meaning in themselves, then advantage cannot be taken of the language used in the body of
ing different…”the specification to make them mean someth
The first claim of the '774 patent reads as:
38
"A novel [6,7bis(2methoxyethoxy)quinazolin4yl](3ethynylphenyl) amine
hydrochloride compound of the formula A."
35 Since India did not grant product patents before 2005, the later application (‘507) filed in 2002 was being prosecuted around the same time as the earlier application filed in 1998. 36 See paras 38-40 of the Division Bench order. 37 Thorley et. Al., Terrell on the Law of Patents (2000) 130. 38 Electric and Musical Industries v. Lissen, [1939] 56 RPC 23 (per Lord Porter).
On a literal reading of this claim, it would appear to cover the compound “Erlotinib
Hydrochloride”. This compound may exist in several polymorphic forms, but any such forms
are likely to be subsumed within this patent.39 Therefore even assuming that Cipla's drug
relies on only one particular polymorphic form of the Erlotinib Hydrochloride compound
(Form B), a correct application of the principles of claim construction would have indicated
that the drug would still infringe the main compound patent. This is because of the fact that
Cipla could not have reached such a polymorphic form without in some way infringing the
main patent covering Erlotinib Hydrocholride.
Therefore, it ought not to matter that the drug “Tarceva” (and Cipla's generic version) was
primarily based on the Polymorph B version (as elucidated in the later '507 application).
Making Tarceva or a generic equivalent thereof will necessarily infringe the parent '774
patent.
Of course, one might argue that the claim covering all polymorphs is not sufficiently
disclosed and therefore ought to be struck down or limited. But that is an issue of invalidity
that ought to be tackled separately.40 At least on the issue of whether Cipla infringes the
claim, as it stands currently, it appears that the Court’s decision is incorrect.
To reiterate, In order to obtain an interim injunction from an Indian Court, a plaintiff has to
esta lisb h the following:41
i) A prima facie case against the defendant
s not granted, the plaintiff would face irreparable damages ii) That if an injunction i
39 See generally: Linear Technology v. ITC, U.S. Court of Appeals for the Federal Circuit (judgment dated 21 May 2009 (examples should not be used to narrow the scope of claims – “…even when only one embodiment is disclosed, claims generally should not be narrowed to cover only the disclosed embodiments or examples in the specification…”). On a parity of reasoning, the first claim of the ‘774 would have been sufficient to cover any polymorphic forms of Erlotinib Hydrochloride. 40 In fact the defendant does make such an assertion in its counterclaim, stating, “The present impugned patent fails to disclose that the compound of claim 1 of the impugned patent is actually a mixture of polymorphs, which is useless for pharmaceutical use. The patentee has intently and capriciously withheld material information that is important for practicing the alleged invention disclosed in the impugned patent. Therefore, the defendant states that the specification of the impugned patent does not sufficiently describe the invention, particularly with regard to compound of claim 1 of the impugned patent. The impugned patent is therefore liable to be rejected on this ground alone.” However, this is not considered by the court. See paragraph 5.2 of the Defendant’s counter-claim; para 20 of the Division Bench order. 41 This is generally the typical case across several jurisdictions. See: Colgate Palmolive, MANU/SC/0494/1999; American Cynamid v. Ethicon, [1975] 1 All ER 504. But in the US and some countries, public interest is articulated as a separate consideration.
i) That the balance of convenience is in favour of the plaintiff, as opposed to the
defendant
Normally any challenge to the validity of a patent at the stage of an interim injunction
application ought to fall within the first category above: the existence or otherwise of a
prima facie case in favour of the patentee. Particularly in the context of patent disputes, a
prima facie assessment can be split up into two parts:
i) The first part relates to a prima facie assessment of the validity of the patent. Under
this head, any substantial and credible attack against the validity of the patent
may lead to an inference that the plaintiff has failed to establish a prima facie
case.
ii) The second part relates to a prima facie assessment of infringement. In other words,
are the patent claims likely to encompass the allegedly infringing product?
As noted earlier, the Court in Roche vs Cipla and in Bajaj found against the plaintiffs on the
second “prima facie” limb. It was held that Roche was unable to demonstrate that Cipla’s
product (Erlocip) fell within the scope of its ‘774 patent. The Court could have disposed of
the case on this ground alone. However, it went on hold that even assuming the plaintiffs
had established a prima facie case of infringement, it still faced a "credible" patent challenge
from Cipla.
Unfortunately, the court does not rule on whether or not this credible challenge to patent
validity would translate to a finding that the plaintiffs’ had failed in establishing a "prima
facie" case.42 If the defendant mounts a serious, well substantiated and credible threat to a
patent validity and is likely to succeed on this count, ought not the court to have logically
concluded that the plaintiff fails to establish the existence of a prima facie case in its favour?
This line of enquiry of course begs the question: on a relative assessment of the merits of
the defendant’s challenge and the plaintiffs rebuttal, was the defendant likely to succeed?
Unfortunately, the court does not address this issue and some of its propositions and
suspect for want of adequate reasoning. We argue that such findings on this count are
42 The Division Bench only stated, without offering a detailed explanation, in para 43 of its order, “Therefore, this Court holds that to the extent that the defendant has raised a serious doubt whether the plaintiffs in fact hold a patent for the product sold in the tablet form as Tarceva, the plaintiffs must be held not to have been able to cross the first hurdle of showing that they have a prima facie case in their favour for grant of an order restraining the defendant from marketing Erlocip.”
inadequate reasoning may have stemmed out of the relative inexperience of the court with
patent cases and an inability to appropriately assess the merits or otherwise of the case
uring the short window that is available at the interim stage. d
B Inventive Step Test
Cipla also attacked the patent on the ground that it was not “inventive”. It was contended
that the patented molecule was structurally similar to an embodiment that was disclosed as
example 50 in an earlier patent application (EP ‘226) (hereafter “earlier embodiment”).
Cipla argued that both the earlier embodiment and the claimed invention were Quinazoline
derivatives. In order to get from one to the other, all that was required was a substitution of
the methyl group at the theta position with an ethynyl group. And that this would have been
obvious to a person skilled in the art.
oche disagreed with this on two counts: R
i) The skilled person would not have been likely to use the previous embodiment (example
51 of EP ‘226) as the starting point. Rather, he/she was more likely to begin with Gefatinib,
a commercially successful embodiment disclosed in EP ‘226. If Gefatinib were used as the
starting point, it would not have been obvious to substitute in the way that Roche did in
order to arrive at the ‘774 invention. In order to get from Gefitinib to Erlotinib, it is not
sufficient to simply substitute a methyl group by an ethynyl group. In Gefitinib, the 6‐
position of the quinazoline ring is substituted with 3‐morpholinopropoxy and the 7‐position
with methoxy and the aniline ring is substituted with fluorine and chlorine. However, in
Erlotinib the 6‐and 7‐positions of the quinazoline ring are substituted with 2‐methoxy‐
ethoxy groups and the aniline ring is substituted with an ethynyl radical. Changing the base
quinazoline structure (present in Gefatinib) to arrive at Erlotinib would not have been
bvious to a person skilled in the art. o
ii) Even if the skilled person in the art was motivated to start with the earlier embodiment
(example 51 of EP ‘226), substituting the methyl group for ethynyl at the theta position
would not have been “obvious”. The plaintiffs argued that the motivation would have been
to modify the 6 or 7‐positions, but not the third position at the aniline ring. Even assuming
the skilled person would have been motivated to consider substitution at the third position
of the aniline ring, the choice would have been a halogen and not an ethynyl group. In the
ords of the plaintiff: w
…even if a person of ordinary skill attempted to modify Example 51 of EP ‘226, the
motivation would be to modify 6 or 7 positions not the third…
Even if such person was motivated to change the substitution in the third position
the choice would be a halogen such a chlorine and fluorine and not ethynyl.
During the pre‐grant opposition proceedings, the Controller of Patents found in favour of
OSI on this count. However, the Delhi High Court concluded differently and questioned the
veracity of the patent office decision.
Importantly, the defendant’s argued (and the Court appears to accept) that the Assistant
Controller of Patents and Designs, NR Meena, had conflated novelty and non‐obviousness.
And his findings were merely with respect to novelty and not with respect to obviousness. A
close examination of the Assistant Controller’s decision would suggest otherwise. In the
ertinent part, he had stated: p
…sometimes the modification in the prior art technologies which appear to be
minor may bring great revolutions in the world which could never be predicted
by the society of intellectuals. A substitution of group alkynl at metha position
of phenyl moiety of known basic compound [i.e. (substituted phenyl amino)
quinazolines derivative] has brought revolution in the treatment of NSCLC and
Pancreatic Cancer and proved its efficacy as compared to the drugs available in
he prior art. t
None of the prior art citations, therefore are able to establish any motivational
factors to the person skilled in the art by looking into the prior art citations and
also their appears no possibility of prediction of such a great improvement in
the properties of the invented new derivative compounds.
First, the above statements deal with inventive step and not anticipation as the defendants
contended. Secondly, although the Controller’s language and articulation leave much to be
desired, he comes very close to encapsulating a well‐known non‐obviousness test. It is
important to note in this context that Indian courts have not yet ruled on a definitive non‐
obviousness test in the context of pharmaceutical inventions, leaving the patent office free
o use any plausible aids that it can to determine inventive step. t
Under the patent laws of the US and the EPO, structural similarities between a
pharmaceutical substance that is sought to be patented and an earlier known substance
trigger off a presumption of prima facie obviousness. However, this presumption can be
dislodged if the patent applicant demonstrates that the applied for substance exhibits
unexpected or surprising results”. “ 43
The Assistant Controller appears to suggest that although there might have been structural
similarities between the prior art and the claimed invention, the invention yielded
or surprising results”. “unexpected
However, the key failing of the Controller is in not reasoning out his conclusions adequately.
In what way were the results offered by the Erlotinib unexpected or surprising? The Court
may have rightly pointed to an inadequacy in the reasoning deployed by the Assistant
ontroller. The paradox is that it did no better. C
Rather than offering convincing reasons for its conclusions that the claims are somehow
suspect, the court merely reproduces the defendants’ arguments in this regard and casts
r’s decision. Had the court considered the issue carefully, it aspersions on the Controlle
43 For a recent application of the US standard, see Takeda v Alphapharm, 480 F.3d 1348 (Fed. Cir. 2007), where the Court relied on two of its earlier decisions: In re Dillon, 919 F.2d 688, 692 (Fed. Cir. 1990), which held that “structural similarity between claimed and prior art subject matter, proved by combining references or otherwise, where the prior art gives reason or motivation to make the claimed compositions, creates a prima facie case of obviousness...” and In re Deuel, (51 F.3d 1552, 1558 (Fed. Cir. 1995), where the court held that “A known compound may suggest its homolog, analog, or isomer because such compounds “often have similar properties and therefore chemists of ordinary skill would ordinarily contemplate making them to try to obtain compounds with improved properties.” Later decisions are in accordance with the analysis in Takeda. See for instance: Proctor & Gamble v. Teva Pharmaceuticals, 2008-1404,-1405,-1406, U.S. Court of Appeals for the Federal Circuit (judgment dated13 May 2009). In Richardson-Vicks v. Upjohn, 122 F.3d. 1476, it was clarified that obviousness is an issue of law to be decided based on the underlying facts. The legal determination would, we suggest later in this paper, be open to a de novo review by the Court, while findings of fact must be given at least some deference.
would have appreciated that the Controller did a prior art comparison with Gefatinib, while
assessing the inventiveness of Erlotinib Hydrochloride. However, the defendants used
example 50 in the EP ‘221 application as the reference point for comparison. The reference
“prior” art is critical to a non‐ obvious assessment and the court appears to have glossed
over this aspect. It ought to have stated explicitly as to what it considered to be the
reference prior art. As stated above, the plaintiffs argued that the skilled person would not
have been motivated to start with EP ‘221 (example 50). Rather the motivation would have
been to start with Gefatinib, which is the commercially successful embodiment of EP ‘221.
The plaintiffs go on to state that even assuming that the example 50 was used as the
reference point for comparison, the nature of modification of example 50 to yield the
arceva molecule would not have been obvious. T
In light of this, the Division Bench seems to suffer from the same defect that it appeared to
accuse the patent office of – insufficient reasoning. One could argue that this insufficient
reasoning may have stemmed from its inability to assess the validity of a patent and the
existence or otherwise of infringement in a meaningful manner at the prima facie stage.
And it is thus that we propose that in complex patent disputes, where a defendant mounts a
credible argument in terms of non‐infringement or invalidity or both, the matter ought to
proceed to trial without the farce of having to go through an interim stage, where the “prima
acie” worth of the case is assessed. f
Deference to Patent Office Decisions: Law vs Fact
It would be logical to posit that some level of deference ought to be accorded by courts to
patent office decisions, particularly in temporary injunction proceedings. If this were not
the case, the outcome would be an inefficient regime which would entail an unnecessary
duplication of arguments and resources. As two leading scholars in this field put it, “If some
initial decisionmaker has made a decision about an issue, and if there is reason to believe that
the decision is probably right, a presumption works to avoid wasteful reconsideration. This
might in the aggregate reduce accuracy; but the point is that the first decision is sufficiently
good that the odds of improving it are small and thus the costs of a second look are
unwarranted.”44
This line of reasoning is consistent with the principles of general administrative law
followed in India, where administrative decisions are accorded some level of deference. Also
relevant is the fact that Indian courts have accepted the applicability of administrative law
o patent law and other intellectual property decisions.t 45
Administrative law inevitably lends itself to the conclusion that Courts should show some
eference to decisions of administrative agencies.d 46
Given the adversarial nature of the opposition process and the range of substantive grounds
of non patentability that can be agitated, it is likely that the patent office would have made a
relatively robust assessment.47 Some argue that given the predisposition of the patent office
in favour of grant, there ought to be no such deference. However, were one to examine the
statistics pertaining to oppositions, one would notice that there are a fair amount of patent
rejections as well. For instance, in a set of 31 pre‐grant decisions obtained from the patent
office website, there were 21 rejections. Clearly, there is no material to conclude that the
atent office is biased in favour of granting patents.p 48
We argue that given that the patent office in deciding an opposition case sits as a quasi‐
udicial body, its decisions ought to be accorded some deference. j
44 Lemley and Lichtman, Rethinking Patent Law’s Presumption of Validity (2007) 60 STANFORD LAW REV. 45. The use of the term ‘presumption’ here should not be confused with the presumption of validity. The point is made in relation to the presumption that the decision of the lower authority is correct – in other words, deference. 45 For a recent decision indicating the application of administrative law principles in patent litigation, see: Indian Network for People Living with HIV/AIDS v. Union of India, 2009 (1) CTC 32 (Mad). See also, for the proposition that administrative law principles apply in intellectual property related litigation: Whirlpool Corporation v. Registrar of Trademarks, MANU/SC/0664/1998; Bhikhubhai Vithalbhai Patel and Ors. v. State of Gujarat, MANU/SC/7399/2008. On the general controversy relating to the application of administrative law principles to patent law, see: Stuart Benjamin and Arti Rai, Who’s afraid of the APA? What the patent system can learn from administrative law (2007) 95 GEORGETOWN L.J. 269; Arti Rai, Allocating Power over Fact-Finding in the Patent System (2004) 19 BERKELEY TECH. L.J. 906; Kali Murray, First Things, First: A Principled approach to Patent Administrative Law (2008) 42 J. MARSHALL L.R. 29. Also see: Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984); Dickinson v. Zurko, 527 U.S. 150. 46 See generally: Wade and Forsyth, Administrative Law (2000). 47 See Lemley and Lichtman, supra. 48 These statistics are available on file with the authors.
The question therefore is not so much as to whether a court ought to defer to a ruling by an
administrative authority such as the patent office, but as to the quantum of deference to be
accorded. In order to decide what this optimal quantum ought to look like, one has to split
up the finding of the patent office into questions of law, questions of fact and questions of
fact based opinions”. We explain these three categories and the level of deference below: “
The administrative and quasi judicial agencies involved in pre and post grant oppositions in
India are the patent office and the Intellectual Property Appellate Board (henceforth IPAB).
Section 2549 of the Patents Act provides for the filing of pre and post grant oppositions
against a published patent or a granted patent respectively before the Controller. Section
6450 provides for revocation of the patent by the Intellectual Property Appellate Board
IPAB). (
Extensive array of grounds are available for the purpose of pre and post grant opposition
before the Controller and the IPAB. We propose to classify decisions rendered on these
grounds into decisions rendered on question of fact, fact based opinion and question of law.
A Court should open up a question of fact and a fact based opinion only if there is a material
error on the face of the record.51 However questions of law can be reviewed de novo.52
Therefore, factual conclusions that emerge in the course of assessing patentability must not
be disturbed, unless there is an error apparent on the face of the record. At the same time,
ourts should be open to reviewing questions of law de novo. C
The following table classifies the grounds for pre and post grant opposition before the
der Section 25 into ques ased opinion. Controller available un
QUE T
tions of fact and fact b
FAC B IONS IONS OF FACT T ASED OPN
1. Non satisfaction of requirements 1. Assessing Obviousness: Section
49 Section 25: 50 Section 64: 51 This is in accordance with relatively settled administrative law principles. See: M.P. Jain, Principles of Administrative Law (2007). 52 For a general idea of the distinction between questions of law and questions of fact, particularly in patent cases involving complicated claims, see: Michael Muerer and Katherine Strandburg, Patent Carrots and Sticks: A Model of Nonobviousness 12 (2) LEWIS AND CLARK LAW REVIEW 547, 565-569.
under S.8: S.25(1)(h) & S.25(2)(h)
2. Non filing of convention application
within 12 months: S.25(1)(i) &
S.25(2)(i).
3. Failure to mention the source or
geographical origin of biological
material: S.25(1)(j) & S.25(2)(j).
25(1)(e) & 25(2)(e)
2. Not an invention under section 3(d):
whether the enhancement in efficacy
s “significant” or not? i
On questions of fact, typically, a reviewing Court must look only at the reasonableness of the
finding. If reasonable, the decision should not be reconsidered merely because the
reviewing Court might have come to a different conclusion.53 Thus, “The degree of deference
given to a particular trial court claim construction should depend on the nature of the claims,
the technology, and the underlying factual findings. The more factdominated the claim
construction is, the more deferential the review should be; the more lawdominated the
onstruction is, the more independent the review should be.”c 54
It therefore follows that patent office decisions of questions of law should be open to de
ovo review, and should not be entitled to any deference. n
In short, any question of fact decided by a patent office after an adversarial opposition
process ought not to be re‐examined by a court at the interim injunction stage, unless there
is a material error on the face of the record. Such an error could be the fact that a vital piece
of prior art information was not considered at all by the office. Similarly, if the patent office
rgument advanced before it or has not reasoned out its has not considered any a
53 This point has been re-affirmed in Shri Sitaram Sugar v. Union of India, AIR 1990 SC 1277, while laying down different standards of deference on questions of law and questions of fact. 54 Laura Mulendore, Patent Claim Construction: A Sliding-scale standard of review (2008) 28 REVIEW OF LITIGATION 241. The question of claim construction is essentially a matter of law. See: Dennis Crouch, Deference to ITC Claim Construction Decisions? 19 May 2009, PATENTLY O (arguing for a Skidmore level of deference – see Skidmore v. Swift, 323 U.S. 134).
findings/conclusions, the said findings/conclusions can be reopened by a court while
ssessing the prima facieness or otherwise of the case. a
We propose that fact based opinions should be accrued the same level of deference as
decisions on questions of fact. Fact based opinions are opinions that are formulated by the
administrative agency after an extensive factual inquiry. An effective illustration can be
provided in terms of an obviousness inquiry. The inquiry involves the ascertainment of the
scope and content of prior art, and the ascertainment of a person ordinarily skilled in the art
and eventually the determination as to whether the invention would be obvious to the
person skilled in the art. A decision based on these determinations would not be a finding
purely on the question of fact or of law but essentially a reasoned opinion on the basis of
factual inquiry. Quoting from the judgment of the US Federal Circuit in PerfectWeb
Technologies v. Infousa, “While an analysis of obviousness under patent law always depends
on evidence ......it may also include recourse to logic, judgment, and common sense available
to the person of ordinary skill that do not necessarily require explication in any reference or
xpert opinion.” e
Questions of law would involve the interpretation of the relevant Sections of the Act.
Illustrations in this regard would be the decision rendered by the Madras High Court in the
Novartis judgment and the Bombay High Court in Glochem v. Cadila healthcare. Both the
judgments involved the interpretation of Section 3(d). Given our stand on deference to
patent office decisions, how do we support a de novo review over findings of law? The
answer lies in the fact that the working of the patent office and its composition grants the
patent office and patent controllers expertise insofar as technical or factual issues are
concerned – not to questions of law as such. The insistence on deference insofar as
questions of fact are concerned is premised on the internal agency scrutiny of those
questions of fact. Insofar as questions of law are concerned, the composition and working of
the patent office does not indicate that there will be the same detailed scrutiny as to issues
of law. Expertise in technical issues does not translate into expertise over legal questions.
Indeed many of the patent examiners and controllers do not possess law degrees.55 They
55 Interview with Mr, Kurian.
are not even tested on the patent agent examination. In the ultimate analysis, adjudicating
on questions of law is essentially a judicial function, and the ‘expertise’ in this case lies with
the Court itself. Intrinsic judicial functions must be finally vested with a judicial body; not
with a technical expert.56 Questions of law must therefore always be open to review by a
judicial body.57 It will thus be noted that the reasons which justify deference to agency
determinations of questions of fact are absent in relation to questions of law. Illustratively,
it has been held that on questions of law, a reviewing Court can determine the correctness
of the decision on its own independent judgment.
The upshot of the above discussion is this: if the patent office decision is poorly reasoned, it
is more susceptible to being opened up by a court. However, if well reasoned, then at least
on the fact and fact based opinion, , deference will be given. Therefore it is in the interests of
patentee to obtain an extremely well reasoned order from the patent office. a
If the patent office decision is questioned on “legal issues”, the courts ought to review the
issue de novo, unless the legal standard is a settled one and has been correctly applied by
the patent office. The corollary of course is that where the legal standard is uncertain, the
courts must use the occasion to spend time fleshing out this standard, even though it be at
the prima facie stage.58 However, this assessment of the legal standard does not require any
ini trial or extended period of time for evaluation as is the case with an issue of fact. m
Avoiding “Institutional” Confusion by mandating “Oppositions”
Notwithstanding the above categories and the need for some level of deference outlined
ost grant opposition still remains open, then courts must avoid therein, if the window for a p
56 Tata Cellular v. Union of India, 1994 (6) SCC 651 where illegality is expressly stated to be a ground of judicial review. R (on the application of Pro-Life Alliance) v. BBC, [2003] 2 All E.R. 977 (“That is a question of law and must therefore be decided by the courts”). 57 Support for this assertion may be drawn from across jurisdictions. See: Union of India v. R. Gandhi, (2007) 4 SCC 341; Hinds v. The Queen, (1977) A.C. 195; Liyanage v. The Queen (1967) 1 A.C. 259, 287-288 (holding that all judicial power must necessarily vest in judicial bodies); Independent Jamaica Council for Human Rights (1998) Ltd. v. Syringa Marshall – Burnett (2005) 2 W.L.R. 923 (holding that the proposition ‘judicial powers such as those pertaining to legal interpretation must be vested in the judiciary); State of Mauritious v. Khoyratty, (2007) 1 A.C. 80. See also: Indira Nehru Gandhi v. Raj Narain, 1975 (Supp) SCC 1, 44-45. In Union of India v. Delhi High Court Bar Association, (2002) 4 SCC 275, the Supreme Court of India observed that no individual has a right that his disputes should be settled only by the Court. This observation – seen in the light of the facts of the case – pertains to disputes which are essentially technical or factual in nature. The observation of the Court cannot be stretched to mean that deference should be accorded to a technical body’s interpretation of questions of law. 58 This is justified on principles of administrative law. See supra.
ruling on the matter and direct the defendant to file a post grant opposition. Illustratively, as
with the Roche/Cipla case, where Roche sues for a temporary injunction and Cipla
challenges the validity of the patent, the Court must direct that the matter go to trial.
However, Cipla must be directed to file a post grant opposition and the trial must commence
only after the post grant opposition has been decided. Here again, the court could direct the
patent office to decide the post grant expeditiously.59 Given that a post grant opposition
board may be in a better position (both in terms of time and expertise) to consider the
various sophisticated patent issues, this may be more optimal than a court proceeding with
the matter. Further, this process also avoids any conflicting decisions on validity that issue
rom the patent office and the court around the same time, causing confusion for the patent. f
Unfortunately, though prudent, this route was not adopted by the courts in the Roche/Cipla
atter. m
Similarly, in the Bajaj vs TVS matter, the court ought to have stayed the trial till such time as
the “validity” issue had been decided by the IPAB. By way of background, TVS had, apart
from contending that it did not infringe Bajaj’s patent, also filed a “revocation” petition
before the IPAB contending that Bajaj’s patent was invalid. Although the Supreme Court
rightly ordered that the lower courts proceed with a speedy trial rather than wasting time
adjudicating the issue at the “interim” stage, it omitted to consider the potential
ramifications of having a trial court finding in favour of patent validity and the IPAB
invalidating or vice versa. This institutional confusion could have been avoided by an order
hat stayed the trial till such time as the IPAB finished deciding the validity issue. t
Presumption of Validity
A number of Indian decisions assume that the determination of the first limb of the 3 factor
temporary injunction test (whether a prima facie exists or not) hinges around the
presumption of validity principle. In other words, some decisions appear to suggest that
since the Patent Act bars any sort of presumption of validity in favour of a granted patent,
the plaintiff has to always prove afresh that his invention meets with the patentability
prima facie hurdle. Some decisions even go to the extent of criteria in order to clear the
59 In fact it did this in the Valcyte litigation.
suggesting that the lack of a presumption would mean that the moment a defendant raises
an invalidity defence, no matter how strong or weak the case is, the court will find in favour
f the lack of a prima facie case. o
When stated in absolute terms, the above principle is legally untenable, for the following
easons. r
1. Section 13 (4) states as below:
The examination and investigations required under section 12 and this section shall not be
deemed in any way to warrant the validity of any patent, and no liability shall be incurred
by the Central Government or any officer thereof by reason of, or in connection with, any such
examination or investigation or any report or other proceedings consequent thereon.
emphasis by authors) (
From the above, it is clear that Section 13 (4) does not bar a presumption of validity
entirely. The Section only suggests that there is no warranty that the patent is a valid one.
This understanding of the Section is justified by the Indian statutory framework in general.
For instance, Section 64 (which enables the invalidation of a patent at any time after its
grant on certain grounds) would suggest that there is no statutory guarantee that an issued
patent is a valid one. However, this is quite a different proposition than the suggestion that
there can be no presumption of validity as well. A presumption is nothing more than a
matter of burden of proof—where it operates to shield a plaintiff from a weak claim of
invalidity. However, when a strong claim is mounted, the plaintiff has to rebut it. If the
plaintiff fails to do so, the presumption in its favour disappears; and the Court is likely to
find in favour of the defendant.60
Further, the denial of a statutory right to a guarantee of patent validity ought to be seen in
the context of the latter part of section 13(4) which states that “no liability shall be incurred
by the Central Government or any officer thereof by reason of, or in connection with, any such
60 This is true even in the United States, where a strong presumption exists. Lemley and Lichtman, supra. Also see: Circle Film v. Canadian Broadcasting, [2959] SCR 602 (holding that the presumption of validity disappears when a credible challenge is mounted). This aspect is discussed is greater detail later in this paper.
examination or investigation or any report or other proceedings consequent thereon.”
In other words, the principle of a lack of warranty of validity is expressed only with a view
to shielding patent office officials from liability.
In short, section 13 (4) does not bar the court from presuming validity. However, this does
not automatically mean that a court is to presume that every granted patent is valid. And
indeed to do so, it must have statutory support; the patents act as currently worded does
not offer a statutory right to a presumption of validity in favour of the patentee. However,
the court does have discretion to adopt such presumption in fit cases. Certain cases appear
have missed this approach. to
In Biswanath Prasad v. Hindustan Metal, for instance, the Supreme Court of India observed
as below:61
It is noteworthy that the grant and sealing of the patent, or the decision
rendered by the Controller in the case of opposition, does not guarantee the
validity of the patent, which can be challenged before the High Court on
various grounds in revocation or infringement proceedings. It is pertinent to
note that this position, viz. the validity of a patent is not guaranteed by the
grant, is now expressly provided in Section 13 of the Patents Act, 1970. In the
light of this principle, Mr. Mehta's argument that there is a presumption in
avour of the validity of the patent, cannot be accepted.
f
The holding of the Court on this point appears to be incorrect and must be reconsidered. At
the very least, the last portion of this statement must be understood as being confined to the
facts of that case – nothing in the Section mandates that there can never by any presumption
of validity. On the facts of the case before it, the Supreme Court decided not to presume
validity. It is submitted that the decision ought not to be interpreted as saying that there can
never be any presumption of validity. Insofar as the decision presents an opportunity for
raising such an argument, it ought to be reconsidered on a correct interpretation of Section
tions of a High Court that “the legislature minced no words in 13(4). Similarly, the observa
61 Biswanath Prasad v. Hindustan Metal, (1979) 2 SCC 511; Para 39.
clarifying its intendment that no presumption of validity would attach to a patent granted by
the Controller under the Act” proceed on a misunderstanding of the Section.62 What the
Legislature did do was that it did not warrant the validity of the patent. It did not however
say or imply that there can never be a presumption in favour of the validity of the patent.
Whether to draw a presumption or not was a matter left to the discretion of the Court. Thus,
to hold that Section 13 always precludes Courts from drawing out a presumption would be a
mistaken position of law. This position derives some authority from Dhanpat Seth v. Neel
Kamal Plastics,63 where another High Court observed that the Indian position on grant of
temporary injunctions in patent cases must be stricter that the Cynamid question, as the
statutory framework allows for a presumption of validity. Reference was made in this
connection to Section 13(4).64
2. Even assuming that section 13(4) forecloses the possibility of invoking a presumption of
validity in favour of the patentee, it does not bar such presumption when the patent has
been opposed and has been subjected to adversarial proceedings in this regard. Section 13
4) notes in pertinent part that: (
“The examination and investigations required under section 12 and this section shall not be
eemed in any way to warrant the validity of any patent…” d
The above wordings suggest that section 13 (4) would only apply to investigations under
section 12. If a patent has been subjected to an opposition under section 25 (as is the case
ith Roche’s ‘774 patent), then one might argue that section 13 (4) does not apply at all. w
To conclude, our scheme of deference outlined above, where patents subjected to
oppositions are conferred with a certain level of presumption of validity appears compatible
with section 13 (4).
62 See: Surendra Lal Mahendra v. Jain Glazers, ILR 1981 Del 257. 63 Dhanpat Seth v. Neel Kamal Plastics, 2006 (33) PTC 330 (Punjab and Haryana). 64 The decision cannot be taken to mean that there is automatically a presumption of validity; it can, however, be taken as authority for our argument here that the differential deference scheme we propose would not be contrary to the principles and/or language of Section 13 of the Indian Act. See: Zakir Thomas, IP Case Law Developments, 14 JOURNAL OF INTELLECTUAL PROPERTY RIGHTS 247 (May 2009).
Limitations of the Presumption/Deference Theory:
However, the existence of some deference or presumption does not render the plaintiffs
patent completely foolproof. Rather, it only has the effect of doing away with the plaintiff’s
initial burden of proof to establish validity.65 Once a credible challenge is made, the
presumption of validity has – to that extent – been rebutted. And it is in such cases that we
rgue that the matter ought to proceed to trial. a
Only when there is no credible challenge will the presumption be sufficient to establish a
prima facie case.66 In other words, a patent is presumed to be valid on a motion for
preliminary injunction and “unless the alleged infringer undertakes to challenge the validity
with evidence, the patentee need do nothing to establish its rights under the patent.”67 Where
the challenger fails to identify any persuasive evidence of invalidity, the presumption of
validity would operate to satisfy the plaintiff’s prima facie burden.68
Infringement Analysis
The Roche vs Cipla illustrated the perils of having an inexperienced court decide a
complicated patent dispute in a short interim window. In particular, we highlighted the fact
that the Court failed to even look at the claim in issue. This lapse caused it to incorrectly
reach the conclusion that there was no prima facie evidence of infringement. As we have
pproach would be to engage in a process of claim construction. argued earlier, the correct a
65 As seen in the discussion earlier, the application of a statutory presumption in such cases is debatable. Our analysis indicates that even if such a presumption does attach, the argument solely on the basis of that presumption is not entirely sound. See also, Lemley and Lichtman, supra. 66 Among the important issues which this raises is the level of deference which Courts must give to patent office determinations. That aspect is analysed later in this paper. For an idea of the application of the prima facie standard in interim injunction matters across jurisdictions, see: Laurence Petit and Christian le Stanc, “Sanctions for Patent Infringement in France: Injunctive Relief and Damages”, (2002) 24 (7) EIPR 353, 353-354 ; Giovani Casucci, The Enforcement of Patent Rights in Italy (2000) 31 (6) INTERNATIONAL REVIEW OF INTELLECTUAL PROPERTY AND COMPETITION LAW 692; Circle Film v. Canadian Broadcasting, [2959] SCR 602 (holding that the presumption of validity disappears when a credible challenge is mounted); Jeffrey Berryman et al., Remedies: Cases and Materials (2006) 875; Swathi Sukumar and Tusha Malhotra, Judges guide Patent Holders (2009) 28 (5) INTERNATIONAL FINANCIAL LAW REVIEW 88. Also see: Altana Pharma v. Teva, 2008-1039 (judgment dated 14 May, 2009), where the Federal Circuit has taken the view that if a substantial issue of invalidity is established, then a plaintiff has not been able to show the existence of prima facie case. Thus, it appears settled that where a credible challenge is raised, raliance on the presumption of validity will not do the plaintiff much good in an interim injunction proceeding. 67 New England Braiding v. Chesterton, 970 F.2d. 878. 68 Canon Computer v. Nu-Kote International, 134 F.3d. 1085
If this is done, the infringement analysis in the case (at least at a prima facie level) appears
straightforward. However, let us assume that we are faced with a case where the claim is
more difficult to construe, thereby making the issue of determining infringement difficult.
Here again, as with cases involving invalidity attacks of patents that have not gone through
oppositions, we recommend (on a parity of our reasoning thus far) that an abridged trial, as
outlined below, be undertaken to determine the scope of the claim and whether the
allegedly infringing product falls within the scope of such claims.
Abridged Trial:
Since our proposal advocates the abolishing of the interim injunction phase and the
movement to the trial phase, it is critical that we also think through ways in which the
ormal delays occasioned by “trials” in India are significantly reduced. n
We therefore propose the following abridged trial format:
i) Both the plaintiff and the defendant must be able to present expert testimony of
one witness (preferably in written affidavit form)
ii) Both parties must have the occasion to challenge the expert testimony belonging
to each others witness.
iii) The Court must appoint an independent expert of its own to assess the relative
weight of both submissions (on the technicalities) as well to produce its own
independent assessment of the alleged invention, when compared with the
prior art.
The United Kingdom adopted the streamlined procedure for patent cases in 2003 on the
same lines as France and Germany. The streamlined procedure provided in the Patents
Guidelines, can be resorted to if the parties have agreed to be governed by the procedure.
The court can also resort to a streamlined procedure on the application of one of the parties
or of its own accord if it deems it appropriate. The procedure requires all factual and expert
evidence to be in writing, dispenses with the requirement to give disclosure of documents
and does not direct for experiments to be conducted. The court permits cross examination
only on limited issues. The court also retains the discretion to vary the procedure on a case
to case basis if it deems appropriate. The streamlined procedure was initially envisaged for
simple patent cases. Its effective application to even complicated patent disputes can be
seen in Research in Motion UK v. Inpro Licensing SARL. Several pharmaceutical cases have
lso been decided by resorting to the streamlined procedure in the United Kingdom. a
We argue that the whole process proposed by the article can be completed in a year, if a
Court desires.69 Procedurally, holding abridged trials (in the sense described above –
presenting expert testimony, and being able to present counter‐evidence as to the expert
testimony)70 is not barred under Indian law.71 The Code of Civil Procedure, 1908 does
permit such abridged trials. Further, the powers under Section 30 of the Code would
indicate that it is possible to have a mini‐trial where documents are required to be produced
and facts are proved by affidavit. Both parties can at the very least file affidavits outlining
their respective positions.
Balance of Convenience:
Since the above process is likely to take more time than an ordinary temporary injunction in
other IP cases, one might argue that the delay might favour the defendant. This can be
balanced out by ensuring that courts assess the merits of the case as on the date of the
infringement. Hence, the balance of convenience shall be judged with respect to the date of
69 This 6 month period comports anyway with the average time taken by courts to grant or not grant a temporary injunction in a patent case. 70 And it appears that this is now the case under UK procedure as well following the Wolff reforms. The Cynamid debate may well no more be as relevant in that jurisdiction following the changes introduced to civil procedure law. See generally for a discussion of the reforms: I.R. Scott, Re-Assessing American Cyanamid 21 CJQ 190 (2002). 71 But see: A.P. Agarwalla v. T. Prasad, AIR 2001 SC 2367, suggesting that holding mini-trials is inappropriate. It must be noted that in the very same case, after its observations as to the inappropriateness of a mini-trial, the Supreme Court also looked at whether the High Court had “correctly appreciated” the matter, going into some of the documentary evidence involved. It is submitted that this observation pertained to the facts of the particular case; there is no legal bar on holding a mini-trial in a case where the facts warrant the same. Indeed, the Supreme Court decision has been interpreted be a later High Court decision as laying down the ratio that “at the stage of temporary injunction, it would not be appropriate to hold a mini-trial. But at the same time, it cannot be disputed that it is necessary to have all the facts on record to understand the controversy between the parties.” This can only mean that there can be no mini-trial in the sense of calling as many witnesses as the parties’ desire; or examining all the evidence in brief. But, surely, there can be no objection to hearing expert testimony by affidavit, and going through documentary evidence. See: Poysha Power Generation v. Doctor Morepen, 2006 (32) PTC 643 (Del) (holding that even at this stage, the facts must be brought on record as far as possible). There can be no final ‘finding’ – surely, that is not the same as saying that there can be absolutely no examination of the merits. As such, it is submitted that the “mini-trial” which is considered “inappropriate” by the Supreme Court is a mini-trial where one of the many issues in the case is actually decided. That is not the sense in which we use the term here. The mini-trial we contemplate does not require the Court to make any final determination whatsoever. In any event, the nature of the case being contemplated here – a case where no opposition has been filed, and judicial review is at its most stringent – would mean that this limited category is an “appropriate one for holding a mini-trial.
filing of the suit and not as on the date of decision. Else the delay might inure in favour of
the defendant. Therefore the onus is on defendants to ensure that the case is completed in a
timely manner. And the defendant is at risk if it invests more money in production etc while
he suit is pending.t
72
IV. CONCLUSION
Interim Injunctions or restraining orders are important instruments in the enforcement
arsenal of an IP owner. These powerful instruments could also, if granted wrongly, cause
colossal losses to competitors and consumers. Working through the rulings in two big ticket
patent cases, we argue that in the Indian “patent” context, it may be far more optimal to
dispense with “interim injunctions” in some cases and move directly to the trial stage.
Although this approach has been endorsed by the Supreme Court, we take issue with the
broad manner in which they apply this proposition to all IP cases, including those such as
software and music piracy where it is relatively much easier to assess the existence of a
rima facie case in favour of the plaintiff. p
We also proceed to consider the need for speedy trials, specialised courts and more
importantly, for deference to be given in appropriate cases to patent office decisions. A lot of
our analysis and policy recommendations turn around the institutional competence of the
various bodies involved with IP grant and enforcement in India, namely the patent office,
the IPAB (Intellectual Property Appellate Board), the courts, the customs authorities etc.
72 It goes without saying that in an injunction matter, the plaintiff would in any case be motivated to speed up the process.