By Pravin Anand and Archana Shanker
Intellectual Property cases in India have witnessed an exponential growth in the last 10 years with the increase in infringement actions before the High Courts and the plethora of decisions rendered by the Intellectual Property Appellate Board (IPAB), especially with respect to pharmaceutical patents. These decisions have ramifications for patients in India and around the world, and it is becoming increasingly clear that a top-down reform of the entire system is necessary. To protect the intellectual property of innovators and ensure the latest life-saving medicines are able to reach the Indian patients, India’s patent system must begin to reflect established international norms. Indeed, the rapid increase in cases where patents are revoked, denied or otherwise infringed upon sets a dangerous precedent that could effectively bar new pharmaceuticals from being approved in India, as innovators become increasingly wary that their intellectual property could simply be expropriated without proper compensation.
However, just as each nation must take its own culture, values and norms into consideration when crafting laws and regulations, India’s patent system must remain fundamentally Indian. The challenge for the Indian government will lie in creating a system that rewards innovation and risk, that also remains in sync with long-established international precedents and laws. The degree to which the Government of India can accomplish this delicate balancing act will in large part determine not only the future of innovation in India, but also how quickly our patients will have access to new ground-breaking medicines.
India must recognize that denying or revoking patents or mandating compulsory licenses to grow the profits of its generic pharmaceutical companies is not a recipe for the long-term health and welfare of its citizens. This paper gives readers an overview of the relatively brief history of evolving Indian patent law, especially with respect to pharmaceuticals, and outlines the many inconsistencies that appear to be at odds with both Indian and international precedents. The authors also point out several areas that should give innovating companies wishing to enter the Indian markets some glimmers of hope, as the state of Indian patent law remains in flux and there is still much opportunity for positive reforms. It is our hope that the reader will gain better knowledge of the myriad complexities of Indian patent laws in the pharmaceutical and other arenas, and come away with the understanding that many of the cases presented here are not as nearly as cut-and-dry as the Government of India would have foreign observers believe.
A BRIEF HISTORY OF INDIAN PATENT LAW
While the Supreme Court in 1978 in Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries held that under section 13(4) of the Indian Patents Act there is no presumption of validity of a patent, the Intellectual Property Appellate Board (IPAB) in Patel Brothers vs. Tara Chand Bank interpreted Section 13(4) to mean that the said provision of law is to provide immunity to the officers of the Patent Office in relation to any proceedings before the Patent Office. Even as of today, despite the Indian Patents Act having undergone a series of revisions in relation to the examination and opposition procedure, the courts in India still follow the Supreme Court interpretation of Section 13(4). This does not appear to be a sound law and is certainly not in consonance with the laws of most other nations.
On the positive side, the Bishwanath case had relied heavily on Halsbury’s Laws of England and other English cases for determining “Obviousness” and laid down a sound test. In contrast, the IPAB would later comment on the Obviousness test stating that neither the English nor American law applied to the Indian Patents Act.
Little was it known that when the Legislature introduced pharmaceutical product patents in the 2005, it would bring in its wake a burst of litigation. While the seeds for the constitution of an invalidity board (IPAB) were sown by the Patent (Amendment) Act of 2002, it was not envisioned at that time that there will be a flood of invalidity actions that would come up before the IPAB, a roving tribunal mainly seated in the city of Chennai.
Section 64 of the Indian Patents Act provides for revocation of a patent before the IPAB or in a counterclaim for revocation in an infringement action before the High Court. Recently, the Division Bench of the Delhi High Court, in the Enercon case, interpreted the invalidity provision contained in section 64 to give the IPAB and the concerned high court a simultaneous jurisdiction despite the reliefs being identical. An appeal is currently being heard before the Supreme Court on whether both remedies can be availed for the same relief and the outcome is awaited.
After the 1960’s, there has been only one case before the Indian courts, namely, Roche vs. Cipla before the Delhi High Court, that has extensively discussed the issues of patentability and infringement after a complete trial. The IPAB on the other hand since its inception has decided nearly 50 revocations and 30 appeals covering a gamut of fields, primarily focusing in the fields of pharmaceuticals (including biotechnology) and wind energy. There was a whopping rise in revocation petitions of 30% in 2012 and nearly 43% in 2011 while pronouncing nearly 140 decisions in the last 6 years.
INCONSISTENCIES WITH ESTABLISHED INTERNATIONAL NORMS
Some of the decisions of the Indian Courts and Tribunals that have significantly changed the patent jurisprudence in India in complete contrast with other countries include the following:
a. In the Novartis case, the Supreme Court diluted the well-acknowledged distinction between “Coverage” and “Disclosure” for the purpose of anticipation and infringement, thereby affecting an applicant’s ability to formulate broader claims than the invention itself. In this case, the patent owner had claimed that a salt was covered by a basic patent and the court then deemed that it was disclosed therein.
b. The IPAB attributed special skills to the person skilled in the art and held that for the purpose of obviousness, this hypothetical construct is not a dullard and has a creative imagination to whom the patent would be addressed. For insufficiency, however, this person is a person with average skill and does not have sufficient capability to work the patented invention based on the disclosure made in the patent specification. This is in complete contrast to the laws of other countries which say that the person is the same for both insufficiency (enablement) and obviousness and that the hypothetical person lacks creative imagination. The tribunal specifically referred to US law on this point and observed that the Indian law was different.
c. The IPAB, in invalidation proceedings, analyzed the elements of a claim not as a whole but taking only those elements after transition terms like “comprising” and comparing them with the prior art, both for the purpose of anticipation and obviousness. In this way, the IPAB would examine the post-transition elements and make a determination whether those features exist in prior art or not and end up nullifying almost every invention. This led to a new concept for anticipation which the IPAB evolved called “partial anticipation” which is contrary to the “all the elements rule”.
d. On amendment, the IPAB seems to have developed jurisprudence totally contrary to the intent and provisions of the Indian Patents Act. While, the Act empowers the courts and IPAB to grant reliefs in respect of any valid claim in infringement proceedings or to that extent even allow amendments once the High Court or the IPAB has made an invalidation determination, the IPAB in a large number of cases has disallowed amendments on the ground of “delay”. This is against the grain of sections 58 and 59 of the Act and defeats the express language of the said section which permits amendments even when there is an invalidity finding. An amendment to narrow the claim and remove the objection on Obviousness was disallowed if the claims were obvious. In other words, a mistake cannot be corrected if there was a mistake!
e. Besides disallowing amendments, the IPAB revoked patents and all claims of the patent if the parent claim was held as being invalid. This is contrary to the provisions, in particular Section 114 of the Indian Patents Act which contemplates relief on valid claims despite some claims being held invalid.
f. The IPAB, in a number of cases, held that the test of obviousness is different than the one in USA and UK and would not specify what the test is. The IPAB in several invalidation cases held that unlike the law in other countries, where for the purpose of obviousness, the hypothetical construct is a person of ordinary skill in the art, in India, the standard for obviousness is higher as this hypothetical construct is not an “ordinary” person. The result is that almost any invention could be held to be obvious.
g. For secondary inventions (i.e. salts, ethers, esters, polymorphs etc.), applying the Novartis Supreme Court findings, for pharmaceutical patents, the provisions of section 3(d) were added as a fourth element to novelty, utility and non-obviousness. The Supreme Court held that the Indian test for patentability particularly for pharmaceutical patents has a higher threshold.
h. In some cases, the IPAB went to hold that even where there was no evidence in support of obviousness, an applicant seeking revocation could still succeed. This would be considered shocking in most jurisdictions.
i. When looking at cases of other jurisdictions, there is a clear tendency to ignore those which are favorable to the patentee but to certainly adopt those which have gone against the patentee.
j. In infringement actions, expert evidence plays a crucial role in demystifying the science for the judges and there is therefore very heavy reliance on the same. On average, there are one or two experts on each side in a patent case and in most cases involving foreign companies, experts come from overseas. Their evidence is filed on affidavits and they are then cross examined. If the trial has been expedited, the cross examination takes place before a retired judge and is therefore rapid and convenient. If a witness cannot visit India, a video conference is permissible to record his evidence. Before the IPAB, in contrast, although there is a provision for cross examination of experts, the IPAB does not encourage or entertain cross examination and therefore ends up interpreting affidavits of experts (which may say opposite things) based on its own views or on arguments of counsel.
k. Almost all cases where patents have been revoked are those where the hindsight principle has been completely ignored and obviousness is tested by the first impression formed by the judge rather than seeing the problem through the eyes of a person of ordinary skill in the art. Simply because an applicant could explain the invention and the IPAB could understand the invention seems to be the basis for holding the subject matter to be obvious.
l. Objective factors, such as commercial success, number of countries in which patents have been granted, long-felt need etc. have been ignored as the IPAB has concentrated on subjective factors alone. In a subjective determination, the attitude or perspective of the hearing officer becomes all important and any “bias” (a pro-generic or pro-innovator) towards any side would be reflected in the decision. It is obvious that the more subjective a test, the greater the need for reliance on the evidence of unbiased experts as the determination of obviousness, without such evidence, can get totally arbitrary.
m. One of the biggest flaws is the interpretation given in a series of cases in relation to section 8 which specifies the disclosure requirement under the Indian law. This provision was intended to facilitate the examination at a time when there was no internet. However, today the information is freely available to the examiners. In ORA No. 8/2010/PT/KOL in M/s Patel Brothers Vs. Tara Chand Bank, the IPAB recognized that the Controller and Examiner at the Indian patent office have adequate infrastructure such as the Indian patent database since 1912 and all other patent databases of other countries such as EP, WIPO, USPTO, JPO, TK, DL and other patent database which includes non-patent literature that can be searched to determine as to whether an invention claimed in any claim of the complete specification is entitled to patent protection as being novel and non-obvious. Despite such finding, the IPAB by giving Section 8 a super strict interpretation has put upon the applicant an impossible task to comply with that has resulted in a trap door for most patent owners. The mandate of Section 8 has been upheld rather strictly by the IPAB in several matters recently, such as VRC Continental vs. Uniroyal Co. Inc. and Ors., Tata Chemicals Ltd. v. Hindustan Unilever Ltd , Sugen Inc & other vs. Controller General of Patents and Mylan vs. Pfizer OSI and Ors. In contrast, the High Court in Roche vs. Cipla said that a section 8 violation still leaves the court with discretion whether to invalidate the patent or not, but the IPAB decided to ignore this and held that a section 8 violation leaves IPAB with no choice but to annul the patent.
SILVER LININGS AND OPPORTUNITIES FOR REFORM
Despite the aforesaid trends, there are several indicators which demonstrate that the law is really in a state of flux and may yet yield positive reforms on the side of innovators. For example:
- The Pfizer cases relating to Sunitinib and the BMS cases relating to Dasatinib have successfully upheld the right of the innovator to keep infringers out of the market via the grant of interim injunctions.
- A large number of ex parte injunctions have been granted in the nature of status quo orders when generic companies have applied for manufacturing or marketing approval before the drug regulatory authorities and before the product is launched.
- In Roche vs. Cipla, the plaintiff lost on infringement due to a claim construction that limited the claim to a mixture of polymorphs as against the defendant’s single polymorph despite being a new chemical entity claim. But on the positive side, the Court upheld the patent.
- In the Glaxo Lapatinib case, the IPAB upheld the patent for the basic compound although it annulled the patent for its ditosylate salt and held that in an obviousness analysis, the challenger of a patent cannot do a “hip-hopping” over prior arts unless the “Hopscotch –outline” of the invention was before the person skilled in the art.
- In several other cases such as Philips VCD and DVD cases, interim orders have been passed for the deposit of royalties to protect the interest of the plaintiffs.
- Patent trials have been expedited on a fast track to be disposed of within a year or so.
- There is a high expectation that there would be damage awards when more patent cases are finally decided as the damage jurisprudence has developed to about 150 orders of the Delhi High Court from 2005 to 2013 in trade mark and copyright cases.
While there have been a few bright spots in India’s evolving patent laws, the trend against foreign innovators in favor of domestic companies (who did not contribute at all to the underlying intellectual property) cannot be ignored and remains a cause for concern. Most patent owners are simply looking for an unbiased hearing, be it before the tribunal or the court as a positive attitude on intellectual property can play a crucial role in the final outcome of a subjective determination of the obviousness standard. With this, the focus of capacity building would not be so much to enhance knowledge but to create amongst hearing officers a healthy respect for intellectual property and a familiarity with the challenges for an innovator. It is indeed disturbing that when there is no drug for a disease, one would pay anything for a cure but once a drug is invented the value for it suddenly disappears.
This, in a nutshell, is the state of the present Indian law with literally hundreds of cases being contested before the High Courts of Delhi, Bombay, Calcutta and Madras. The lion’s share of these cases are before the Delhi High Court and revocations before the IPAB.
On 20th of September 2013, the Madras High Court set aside 12 orders of the IPAB (which had cancelled 12 patents in the Wind Energy Field) on the ground that the IPAB had not decided whether the revocations were validly instituted. This order demonstrates that the IPAB orders referred to above are “stage one” and writs/appeals may be filed before higher courts. The law is therefore in a state of flux and the principles will shape up over the next few years. While there remains hope that recent trends may be reversed in favor of innovators who undertook great risks to bring new and revolutionary new products to market (regardless of whether they are foreign or domestic), much work remains to be done to educate all levels of the Government of India on the enormous value and potential of intellectual property. Until then, we are bound to experience the vicissitudes of litigation.
ABOUT THE AUTHORS
Pravin Anand - Managing Partner, Anand and Anand
Pravin Anand, managing partner of the Firm, completed his law studies in New Delhi in 1979 and since then has been practicing as an advocate and a patent and trademark attorney.
He has been a counsel in several landmark IP cases involving the first Anton Piller Order (HMV cases); the first Mareva Injunction Order (Philips case); the first Norwich Pharmacal Order (Hollywood Cigarettes case); Moral rights of Artists (Jatin Dascase); Recognition for Pro-Bono work for rural innovators at the grass root level' (National Innovation Foundation Award-Govt. of India); India's first framing case (TATA diamonds case); First order under the Hague Convention (AstraZeneca case) and the most recent big ticket Patent litigation cases filed against Novartis, Pfizer and Roche.
He is the chairman of the IPR promotion advisory committee (IPAC) constituted by the government of India, and IT committee set up by FICCI. He is the past president of the Asian Patent Attorneys Association (APAA India) and was director on the board of INTA from 2006 to 2008. He is currently President of both AIPPI and FICPI (Indian group). He has appeared as an expert witness before parliamentary committees to give evidence on amendments to trademark, patent and copyright laws.
He is a co-author of the two volumes of Halsbury's Laws of India on Intellectual Property and serves on the editorial board of several international IP journals. Author of India chapter in Copyright Throughout the World-WEST (ThomsonReuters).
He has spoken extensively at various forums including WIPO, AIPPI, INTA, LES, IBA, LAW ASIA and the UN Conference on LDCs in the Digital World.
The prominent awards and accolades accorded to Mr. Anand recently include - Best of Best 2012- (Legal Media Group Expert Guide); ILO Client Choice Award-India, 2012; IAM Patents 1000 Gold Ranked Lawyer, WTR1000. Mr. Anand features as a "Highly Recommended Leading Lawyer" in intellectual property - Chambers and Partners 2013.
Archana Shanker - Senior Partner, Anand and Anand
Archana Shanker is a senior partner at Anand and Anand and heads the firm's patent practice. A graduate of the faculty of law at Delhi University, North Campus, she went on to complete her postgraduate diploma in bioinformatics and pharmaceutical regulatory affairs. She is an active contributing member of various international bodies, such as the Asian Patent Attorneys Association (APAA), Association Internationale pour la Protection de la Propriété Intellectuelle (AIPPI) and the Federation Internationale des Conseils en Propriete Industrielle (FICPI).
Archana's comprehensive repertoire enables her not only to represent clients in contentious matters in the pharmaceutical industry, but also to advise on protection and prosecution across a number of business sectors including bioinformatics, pharmaceuticals, biotechnology and chemicals, not only limited to India but also in USA, Europe, Japan and other key jurisdictions.
Her unique and innovative approach has led to her clients winning important claims of significant commercial value in the area of software, mechanics and electronics. She is leading the firm's efforts in nascent legislation of geographical indications and plant variety.
Archana handles complex patent litigation issues before various judicial and quasi-judicial forums in India, such as the High Court and IPAB, and has been involved in advising her clients on patent strategies and regulatory affairs.
The client mandates has repeatedly favored her as a counsel of choice. Her practice blends the legal acumen with the business know how of this complex area of practice.
She is a regular speaker/panelist at various national and international forums; author of articles in various publications such as Managing Intellectual Property, Asia IP Magazine, IAM Magazine and Getting the Deal through - Patents, She also features on the editorial panel of LSIPR and her articles are regularly published at various leading industry focused specialized journals.
Her contributions in the field of patents earned her international recognition and she was named a leading lawyer in the year 2013 by Asia Law Leading Lawyers. Recently, Ms. Shanker was acknowledged as a highly recommended leading lawyer in the intellectual practice by Chambers and Partners (Asia-Pacific)2013.