The Tribunals Reforms Bill, 2021, passed by the Rajya Sabha

Bill to abolish 9 appellate tribunals, including the Intellectual Property Appellate Board (IPAB), The Tribunals Reforms Bill, 2021, has been passed by the Rajya Sabha on 9th August 2021. The bill was approved by Lok Sabha on August 3.

All patent appeals, revocations etc which were filed before the IPAB, would now have to be filed before the Delhi, Bombay, Madras or Calcutta High Court depending on the jurisdiction.

The Delhi High Court has already established an Intellectual property division (IPD), to deal with IP cases, including the new appeals/revocations. In fact, the first appeal filed by Anand and Anand Advocates, before the Intellectual property division of the Delhi High Court (DHC) has been admitted by the Court.

Benefit of Section 107A extended to SMS Pharmaceuticals

The Delhi High Court, allowed an application of the Defendant, SMS Pharmaceuticals, under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908 (CPC), seeking modification of the ex-parte ad interim order, dated 21st October, 2020 passed by the Court.  

Merck Sharp and Dohme Corporation (“the plaintiff”) has, by a suit, sought injunction against infringement, by the defendant, of the plaintiff’s Indian Patent No. 209816 (“IN’816”), whereby the plaintiff’s invention, is Sitagliptin.  In said suit an ex-parte ad interim injunction order was passed.  The defendant in said application under Order XXXIX Rule 4 of the CPC prayed for being extended the benefit of Section 107A of the Patents Act, and sought permission to export the drug, Sitagliptin for research and development purpose

The Plaintiff assert that::-

  • If the interim order dated October 21, 2020 was to be vacated/modified, the Defendant would resume its infringing activities and may soon even launch their infringing product in the domestic market.
  • Once the drug is permitted to be exported, it is impossible for the plaintiff to verify or investigate whether it is ultimately being used for research and development or is being commercially exploited.
  • Even if the foreign entity, to whom the defendant proposes to sell Sitagliptin, were to engage in commercial exploitation thereof, and, consequently, to infringe the plaintiff’s patent, the plaintiff would have no remedy against such foreign entity.
  • Exports of Sitagliptin by the defendant have been continuing since 2016, much before the patent is slated to expire in 2022. Almost 800 kg have been so exported. Such transactions could not be treated as being aimed at research and development.

In its defense the Defendant asserts that:-

  • A joint venture was executed between the defendant and some foreign companies, for development and manufacturing of certain products, so that they could be launched in the market after patent terms expired.
  • This, is after obtaining due permissions from Governmental and Drug Control Authorities and within the parameters of patent laws.
  • No manufacture or production of these drugs for commercial purpose was undertaken, the sole intent being to launch them in generic form at affordable price after the patents
  • Section 107A of the Patents Act, along with the judgment of this Court in Bayer Corporation v. U.O.I. , clearly hold that the activities of the defendant (export for research) were permissible, as the defendant was only engaged in sale and export of Sitagliptin Hydrochloride for the purposes of research and development.
  • The exports being sought to be effected are not to companies of dubious lineage, but to well-established entities engaged in research and development, located in Spain and Switzerland.
  • The fact that the quantities of Sitagliptin Hydrochloride exported by her client in the past are much less than the quantities permitted to be exported by the Drug Control Authorities, clearly indicating that the exports were not for commercial exploitation.
  • Exports, in any lesser quantities, would be commercially impractical, given the cost of shipment.
  • There is no requirement, either in Section 107A or in the judgment of this Court in Bayer Corporation v UOI, that exports for research and development purposes should only be to sister concerns.

The Court allowed the application of the defendants but with certain conditions and in summary held that:: –

  • Jurisprudentially, a right conferred by a statute cannot be denied by a Court, save and except on considerations which emanate from the statute itself, or from any judicial precedents dealing with the issue.
  • It is not permissible for a Court to withhold, from a litigant, the magnanimity which a statute extends, merely on the ground of an apprehension of possible misuse, unless such apprehension is manifestly credible and real.
  • It is clear that Section 107A neither prohibits export of the patented invention, so long as such export is to an entity engaged in research and development or for research and development purposes, nor requires there to exist any relationship between the applicant seeking the benefit of the provision and the foreign importer, to whom the API may be exported.
  • The Bayer Judgement of the  Division Bench, as well as the learned Single Judge, that have been referred have categorically upheld the right, conferred by Section 107A of the Patents Act, as inviolable. Even while so holding, the Division Bench in Bayer Corporation vs UOI does require the Court, concerned with a prayer for export of a patented product for research purposes, under Section 107A, to be sensitised regarding the bona fides of the request and the circumstances of the case before it.
  • The present application of the defendant, I am unable to find any such cogent material on the basis of which the grant, to the defendant, of the benefit of Section 107A of the Patents Act can be denied.
  • Though, Plaintiff, has drawn attention to instances in which similar permissions were granted by the Court and were misused, he, with his customary fairness, accepts that none of these instances relates to the present defendant.
  • The mere fact that, in certain cases, the liberty granted by the Court may have been unfairly exploited, cannot, quite obviously, be a basis for the Court to deny, wholesale, such liberty when sought.
  • Courts must, therefore, aim at expanding, rather than constricting, the width and amplitude of the Bolar exception, which is actuated by laudable public purpose.
  • For all these reasons, the defendant’s prayer, for being extended the benefit of Section 107A of the Patents Act, deserves to be allowed. The defendant is permitted, therefore, to export the API Sitagliptin to Chemo and Verben, as prayed.
  • For this purpose, the defendant shall, however, file, before such export, an affidavit, before this Court, setting out the quantities of Sitagliptin/Sitagliptin Hydrochloride being cleared and exported by the defendant. The affidavit shall also contain an undertaking that the exports are intended only for the purposes of research and development by the foreign buyers Chemo and Verben.
  • The affidavit shall also undertake to comply with all the safeguards contained in the judgement of the Division Bench in Bayer Corporation vs. UOI.

DB refuses interim relief to AstraZeneca

The division bench (DB) of the Delhi High Court has refused 9 appeals of AstraZeneca which were filed against the orders/judgments denying interim relief, in Patent infringement suits instituted by the appellants/plaintiffs, AstraZeneca AB, Sweden and AstraZeneca Pharma India Ltd.

The challenge in the nine appeals was to two orders/judgments; both the orders/judgments were pronounced within a span of 16 days. The first order of 2nd November 2020 deals with interim relief in the first set of suits filed by AstraZeneca  for permanent injunction restraining the respondent(s)/defendant(s) therein from manufacturing, selling or otherwise dealing in any manner whatsoever, the product comprising the compound ‘Dapagliflozin'(hereinafter referred to as “DAPA”) which was the subject matter of Indian Patent No.205147 (hereinafter for convenience referred to as ‘IN 147’) and Indian Patent No.235625. The second order of 18th November 2020 deals with second set of suits that were filed subsequently, after lapsing of the validity of IN 147, to restrain the respondent(s)/defendant(s) therein from manufacturing, selling or otherwise dealing in any manner whatsoever, the product comprising the compound DAPA, amounting to infringement of IN 625.

Some facts recorded in the impugned order/judgment dated 2nd November, 2020 are reproduced below for understanding of the background of the case:-

  • that both, IN 147 and IN 625 were granted to Bristol Myers Squibb Company, which vide Assignment Deed dated 1st February, 2014, assigned the rights therein to the appellant/plaintiff AstraZeneca AB, Sweden, which stood registered as the patent holder qua the said patents;
  • that DAPA, being the subject matter of the two patents, is used worldwide, to treat people suffering from type-II diabetes mellitus;
  • that IN 147 is the genus patent and IN 625 is the species patent;
  • that IN 147 is a Markush structure i.e. a patent covering a group of compounds, which disclosed the possibility of individual permutations and combinations running into several million structurally diverse compounds;
  • that IN 147, bearing a Markush structure, covered DAPA, though did not disclose the same;
  • that on further research and development, DAPA was invented;
  • that the dates of grant and expiry of IN 147 are 15th March, 2007 and 2nd October, 2020;
  • that the dates of grant and expiry of IN 625 are 9th July, 2009 and 15th May, 2023;
  • the drug manufactured by the appellants/plaintiffs from the said new invention of DAPA got approval only in the year 2020;
  • that Sun Pharma Laboratories Limited and Abbott Healthcare Private Limited are the distributors of the appellants/plaintiffs and sell the said drug;
  • that the appellants/plaintiffs have been granted patent for DAPA, in approximately 70 countries;
  • that DAPA, in India, had neither been subjected to any pre-grant or post-grant opposition, nor any revocation proceedings with respect to DAPA filed prior to the year 2020;
  • that in the year 2020, the respondent(s)/defendant(s) started infringing IN 147 and IN 625 and some of the respondent(s)/defendant(s) also initiated post-grant opposition, revocation proceedings or counter-claims against IN 625;
  • that since DAPA was first synthesized in 2001 i.e. after 12th August, 1999, being the priority date of IN 147, the question of DAPA being disclosed in IN 147 did not arise;
  • that Markush formulae are well recognised under the Indian Patent Law;
  • that merely because a particular compound falls within the scope or periphery of a particular claim, does not amount to the said compound being disclosed with specificity;
  • that a single product may cover thousands of patents; example was given of a mobile phone, covered by multiple patents;
  • that the invention claimed in IN 147 is different from the invention claimed in IN 625;
  • that IN 147 claims a class of compounds of the Markush structure;
  • that IN 625 has only one specific molecule i.e. DAPA;
  • that it thus cannot be said that DAPA was claimed in IN 147;
  • that DAPA is not obvious from IN 147;
  • moreover, IN 147 was published under Section 11A of the Patents Act, 1970, only on 18th March, 2005 i.e. after the priority date of IN 625 of 20th May, 2002; there could thus be no question, of a person of ordinary skill in the art, from a reading of IN 147, being able to arrive at DAPA;
  • that in the United States of America (USA/US) also, there was no publication of the patent corresponding to IN 147 prior to the filing of the patent corresponding to IN 625;
  • that DAPA is not obvious from IN 147 because IN 147 has a million possibilities; any attempt to reach DAPA from the Markush structure of IN 147 is nothing but an attempt to take recourse to hindsight, which is discouraged under Patent Law;
  • that there is no indication in IN 147, as to which parameters are critical or even which direction if taken out of the many choices available, would lead to DAPA;
  • that had DAPA been obvious from IN 147, it would have been developed by someone else, prior to IN 625 or prior to the appellants/plaintiffs obtaining approval of the drug in the year 2020;
  • that DAPA is a man made drug, used not only for treating type-II diabetes but also approved in the year 2020 for treating hypertensive heart failure;
  •  that IN 625 is in the 18th year of its life-cycle and is an old and established patent and thus carries with it presumption of its validity;
  •  that IN 625 was subjected to examination in the Indian Patent Office, between the years 2002 and 2009;
  • that the proceedings initiated for the first time in the year 2020, for revocation of IN 625, are mala fide and a counterblast to the infringement actions undertaken by the

appellants/plaintiffs;

The division bench dismissed the appeals and maintained the impugned orders refusing the interim injunction, while doing so, the court made the following observations:-

  • As per the division bench as the plaintiff claimed the action of the respondent(s)/defendant(s) of manufacturing medicines having DAPA as their ingredient to be an infringement of both IN 147 and IN 625, the appellants/plaintiffs are deemed to have admitted DAPA to be the invention subject matter of both, IN 147 and IN 625. Without DAPA being disclosed in IN 147, there could be no patent with respect to DAPA in IN 147 and which was being infringed by the respondent(s)/defendant(s) by manufacturing drugs/medicines with DAPA as ingredient.
  • As per the Court, a single formulation as DAPA, is incapable of protection under two separate patents having separate validity period. The appellants/plaintiffs, in their pleadings, are not found to have pleaded the difference, save for pleading that DAPA was discovered by further research. From the field of the invention subject matter of the two patents being verbatim same, at this stage, it also appears that there is no enhancement of the known efficacy, within the meaning of Section 3(d) of the Act, between the product subject matter of IN 147 and the product subject matter of IN 625.
  • The court also noted that there is complete identity, without any difference whatsoever, between the field of invention as set out in the two patents i.e. IN 147 and IN 625. For IN 625 to be with respect to a ‘new product’ involving an inventive step i.e. a feature involving a technical advance as compared to existing knowledge including of IN 147 or having economic significance and which was not anticipated by earlier publication or use including of IN 147, to say the least, the court expected the description of the field of invention in IN 625 to describe the technical advancement and / or the difference in efficacy, from that in IN 147.
  • The court also noted that the example given by the counsel for the appellants/plaintiffs, of a telephone instrument comprising of several patents, is not apposite. A telephone instrument, though perceived by the consumer thereof as one product, comprises of several components, each of which is also a product in itself and capable of independent patent. However, DAPA is disclosed to be a single compound and cannot have more than one patent
  • The Court also noted that at least at this stage they are unable to, in the face of the pleadings of the appellants/plaintiffs themselves, to find any difference between IN 147 and IN 625. The appellants/plaintiffs themselves are found to be pleading DAPA to have been disclosed generally in IN 147 and specifically in IN 625. In the face of the said pleading, no case injuncting the respondent(s)/defendant(s) during the pendency of the suits is made out.
  • To hold, that an inventor, merely on the basis of his work, research, discovery and prior art, but which has not yielded any product capable of commercial exploitation, is entitled, by obtaining patent thereof, to restrain others from researching in the same field, would in our view, not be conducive to research and development and would also be violative of the fundamental duties of the citizens of this country, enshrined in Article 51A of the Constitution of India, to develop the scientific temper and a spirit of inquiry.
  • The Court  also took the prima facie view, that once the appellants/plaintiffs, before the USPTO applied for and agreed to the validity period of US patent equivalent of IN 625 ending on the same day as the validity period of the US patent equivalent to IN 147, the appellants/plaintiffs, in this country are not entitled to claim different periods of validity of the two patents.

Review of the Intellectual Property Rights Regime in India by the standing committee on commerce

Department related parliamentary standing committee on commerce published its 161st report on Review of the Intellectual Property Rights Regime in India. The Department in the Report, observed and analysed the overall scenario of IPR regime in India and its contribution in promoting innovation and entrepreneurship in the country. The Report also examines the challenges in strengthening IPR regime, the related procedural and substantive constraints, legal aspects and other issues such as low awareness of IPR, counterfeiting and piracy, IP Financing, IPRs in agriculture and pharmaceutical sector, etc. The main observations and recommendations of the committee relating to IPR and particularly to Patents are provided below:-

  1. The Committee is of the opinion that a review of IPR policy should be undertaken. The re-assessment of the policy is imperative in the wake of new and emerging trends in spheres of innovation and research which requires concrete mechanisms to protect them as IPRs. The review also acquires salience to identify the existing challenges in the implementation of the policy and the corrective measures that need to be taken for its effective execution. The Committee, therefore, recommends the Department to undertake a holistic review of IPR policy at the earliest.
  2. It recommends that the State Governments should actively participate in evolving policies that focus on sensitizing people on significance of IPRs, encouraging innovation in educational institutions and establishing State level Innovation Councils, enforcement of IPR laws and curbing IP crimes.
  3. The Committee notes the significance of IPRs in increasing Foreign Direct Investment (FDI) of countries, mainly of the developing nations, wherein a 1 per cent improvement in protection of trademark, patent and copyright increases FDI by 3.8, 2.8 and 6.8 per cent respectively.
  4. The Committee notes that it is a matter of concern that less filing and grants of patents in India is co-related to a microscopic spending on Research and Development activities which is a meager 0.7 per cent of India’s GDP. The Committee recommends the Government to emphasize upon increasing the spending on Research and Development (R&D) activities by allocating specific funds on R&D in each Department/Ministry.
  5. The Committee recommends that an exclusive apex level Institution for IPR Development should be established in the country which would enable a multi-disciplinary approach in analyzing and harnessing the full potential of IPRs for economic and social growth.
  6. The Committee is of the view that labelling of products with ‘patent pending’ would acknowledge their credibility and authenticity hence yielding marketing benefits to the patentees. The marking of products as ‘patent pending’ would empower the patentee by acting as a deterrent to IP crimes of unauthorized copying or counterfeiting of products and avoiding unnecessary infringements. The Committee, therefore, recommends the Department to explore avenues in incorporating the practice of marking products with ‘patent pending’ in India to ensure maximum benefits to inventors or patentees.
  7. The Committee notes with concern that a major share of 64 per cent of the patents filed in India are by non-resident or foreign entities wherein the patents filed by domestic entities occupies a portion of only 36 per cent. The Committee recommends that a holistic approach should be taken by the Department for disseminating awareness amongst MSMEs, small businessmen, traditional artisans and craftsmen located in remote areas and providing them insights about creation, ownership and protection of their IPRs.
  8. The Committee desires that a detailed note on the functioning of IP Chairs being established in Universities in India may be furnished by the Department.
  9. The Committee recommends the following interventions need to be taken by the Department for building greater awareness about IPRs:-

(i) IPR Facilitation Centers should be established in Tier-I, Tier-II and remote regions of the country with a focus on enhancing the awareness of MSMEs, small businessmen and traders;

(ii) The training programmes and workshops being organized by the Department (especially for MSMEs, small tradesmen, local artisans) should be oriented towards inculcating scientific temperament and knowledge about identification of novelty in their products and protection of such novelties as IPRs;

(iii) MSMEs registering for IPRs in foreign countries, where they have the potential to expand their trading base, should be encouraged and given assistance thereby making them globally competitive;

(iv) IP courses and curriculum should be introduced in schools, colleges, management schools and IPR trainings, workshops and conferences should be organized for students along with professors and teachers; and

(v) The Committee further notes that print and visual media plays a crucial role in creating awareness regarding IPR. The Committee recommends that interactive workshops for journalists may be organized to make them aware of the need for protecting IPR

  1. The Committee acknowledges that IP crimes including counterfeiting and piracy are the rising threats to IPRs which should be regulated and deftly handled by taking appropriate measures. It recommends the Department to stress upon capacity building of enforcement agencies on IP laws including strengthening of IPR cells in State police forces. It further urges the Department to ensure on-ground implementation of stringent IP legislations with a stronger Inter-Departmental collaboration on IP crimes for curbing such offences in an effective manner. It recommends the Department to consider establishing a Central Coordination Body on IP Enforcement for undertaking coordinative efforts by involving various Ministries, Departments, and Governmental agencies in enforcement and adjudication of IP laws to check IP crimes in the country
  2. The Committee expects promptness from the Department in determining the existing vacancies and undertaking efforts to recruit and appoint officials in IP offices within a reasonable timeframe. The Department must ensure that officials are qualified and trained. It, therefore, recommends the Department to expedite procedures for filling up vacancies against the sanctioned strength of officials in order to facilitate the larger cause of dispensing IPR claims.
  3. The Committee recommends that a separate category of rights for AI and AI related inventions and solutions should be created for their protection as IPRs. It further recommends that the Department should make efforts in reviewing the existing legislations of The Patents Act, 1970 and Copyright Act, 1957 to incorporate the emerging technologies of AI and AI related inventions in their ambit. The Committee recommends the Department that the approach in linking the mathematical methods or algorithms to a tangible technical device or a practical application should be adopted in India for facilitating their patents as being done in E.U. and U.S.
  4. The Committee desires that the abolition of a prominent appellate body of IPAB under the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 should be reconsidered in wake of its pivotal role in adjudication of IPR appeals and cases. The overall scrapping of IPAB, which efficiently had been dealing with proceedings involving complex IPR issues, may create a void in appellate resolution of cases leading to their shift to Commercial or High Courts thereby increasing pendency of cases. The Committee also opines that inordinate delay in appointment of officials at higher level and the resultant pause in functioning of IPAB affected the optimal performance of IPAB.
  5. The Committee, therefore, recommends the Government that IPAB should be re-established, rather than being abolished and should be empowered and strengthened with more structural autonomy, infrastructural and administrative reforms, as well as ensuring timely appointment of officials and experienced manpower.
  6. The Committee notes with distress the absence of any Judicial Impact Assessment, or active consultations with stakeholders, being conducted by the Government prior to the abolishing of tribunals under the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021. It strongly recommends that the Government, before scrapping of significant tribunals through an ordinance, should undertake a Judicial Impact Assessment along with wide consultations with relevant stakeholders to ensure building a systemic perspective on abolishing an established system in the country.
  7. The Committee, recommends the Department to explore opportunities in establishing PPH with other nations which would be highly advantageous to India in expediting and processing of patent applications. The Committee, however, recommends that before venturing on PPH programs with other countries, impact assessment of the Japan PPH model may be made
  8. The Committee is of the opinion that deeply embedded traditional methods in financial sphere and the ignorance amongst business community to treat IP as an intangible financial resource at par with tangible assets like land or property are the major impediments in the growth of IP backed financing in India. In this regard, the Committee recommends that the Department should undertake committed measures in generating awareness and better understanding of IP financing, value and monetization of intangible assets in the country by inculcating management of IP portfolio of businesses, thereby enhancing its economic worth and making the business community aware of the compliances.
  9. The Committee also recommends that the Department, in close coordination with financial institutions/ stakeholders or banks, should encourage adaptation to non-traditional forms of collaterization and securitization by conducting trainings and workshops on scrutinizing and regulating IP financing and extending necessary support to business community. It also urges the Government to explore plausible ways to devise a uniform system of valuation of IP as an intangible asset in the country which would ensure a better evaluation of assets by financial institutions. A mechanism also needs to be put in place to recognize and appoint IP evaluators in the country. The Committee also recommends that Insurance sector may be involved in covering/ protecting against the rise of financial losses faced by an IP to minimize monetary risks by suitable amendments in Insurance Act
  10. It recommends the Department that such a specific law on IP Financing should be promulgated at the earliest which would provide a concrete framework and determine standards for the protection and promotion of IP backed financing in India.
  11. The committee noted that Section 3(b) of the Patents Act, 1970 prohibits patenting of technology, use or application at the sole discretion of the Controller if found by him to be ‘contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment’. Hence, the widely worded provision of Section 3 (b) is without any sufficient guidance or safeguards against arbitrary exercise of power by the Controller.
  12. The Committee recommends the Department that the Section 3(b) of Indian Patent Act, 1970 should be amended so that a provision of a safeguard mechanism is included against the arbitrary exercise of power by the Controller in declining patents. A check and balance mechanism should be inserted under the Act which would ensure granting of patents to socially useful inventions or innovations. It, however, recommends that the provision be amended to limit the exclusion to only those inventions which are barred under any law for the time being in force .
  1. For 3(c), The Committee recommends the Department to explore the feasibility of granting patents to non-living substances occurring in nature under the act and its subsequent impact on public interest.
  2. For 3(j), the Committee recommends that a thorough analysis should be conducted by the Department on approving the patents on plants and seeds favourable to agriculture sector of the country with a pre-condition of making Government of India as a participant in the patent. It recommends the Department to hold proper discussions and wide consultations with farmers groups/ associations and necessary stakeholders to examine the plausibility of allowing the patents on plants and seeds that yields benefits to the farmers. The Committee recommends the Department to examine the stringency of Section 122(2) and make necessary amendments to modify the stated provision of imprisonment of six months in case of furnishing false information.
  3. The Committee notes that the timeline of 4 years to file a request for examination by the patent applicant is too extensive and recommends the Department to shorten it to a reasonable time frame to avoid any unnecessary delay in examination and grants of patents.
  4. In India, once a due date has elapsed for filing request for examination report or a complete specification after a provisional one, there exist no remedy. The Committee opines that abandoning of patents, without allowing hearing or petition, may demoralize and discourage the patentees in the country to file patents. It recommends the Department that certain flexibility should be incorporated in the Act to make room for allowance of minor errors and lapses to prevent outright rejection of patents being filed. Hence, a revised petition with penalty or fee may be permitted under the Act for minor or bona fide mistakes that had been committed in the filed patents.
  5. The Committee is of the view that increase in patents in the country owing to technological advancements and innovation would lead to precipitous rise of IPR disputes and infringements posing a threat to the judicial system. It, therefore, recommends the Department that the provision of jurisdiction under Section 104 of the Patent Act should be amended to promote establishing of alternative dispute resolution mechanism in India such as arbitration, mediation, etc. for ensuring speedy justice to patentees in IPR litigations. The modification in the Act should also be followed by setting up of zonal IPR mediation or arbitration centers in districts with expertise in IPR matters.
  6. The Committee is of the opinion that India must not compromise on the patentability criteria under Section 3(d) since India as a sovereign nation has the flexibility to stipulate limitations on grants of patents in consistence with its prevailing socio-economic conditions. It emphasizes that being a developing country, the provision has secured India’s interests especially in the pharmaceutical sector against rampant secondary patenting by foreign pharmaceutical companies for increasing their profitability. Thus, it ensures the growth of generic drug makers and the access of public to affordable medicines. The Committee also observes the concerns flagged in the USTR Report pertaining to disqualification of incremental inventions under Indian Patents law and recommends to resolve the issue through bilateral dialogues with US. It also recommends that in order to avert any misinterpretation of the provision, the Department should examine the aspect on giving an expansive meaning to Section 3(d) for giving further clarity.
  1. The Committee is of the opinion that although a careful stance is needed to be adopted in issuance of Compulsory License on a patent, it could, however, be considered in case of production of medicines and vaccines for the treatment of Covid-19 since the pandemic has led to a national health emergency in India.
  2. The Committee notes that the provision of Form 27 is crucial as it seeks to ensure adequate working of a patented invention on a larger scale to cater to the demands of public at large. It recommends the Department to consider relaxing the requirement to furnish information under the form on a yearly basis to ease the compliance burden on universities, R&D institutions, startups and small enterprises. It further recommends the Department to take steps for ensuring that the recent amendments in Form 27 is implemented properly without affecting the spirit of patenting and public interest.
  3. The Committee envisages that absence of any proper mechanism for the documentation of traditional knowledge and inefficiency in executing Traditional Knowledge Digital Library (TKDL) has resulted into the neglect of traditional knowledge. It recommends the Government to address the structural issues in implementing a systematic mechanism of documentation and preservation of traditional knowledge in the country along with taking measures to strengthen TKDL as an effective database.
  1. Further, the Committee is of the opinion that the establishment of dedicated benches at High Courts for IP matters would ensure disposal of IPR disputes in a time bound and efficient manner. There also needs to be a panel of amicus curiae for assisting the courts in dealing with IPR matters.

Compulsory Licence Applications for Baricitinib

Natco and Bajaj Healthcare Pvt. Ltd. (BH) have filed for compulsory Licence (CL) applications for covid drug Baricitinib ( IN 270765). In the CL application both cite life threatening public health emergency which is currently prevailing in India due to the resurgence of the Covid-19 virus as the reason for gran of CL in addition to the high price of the drug.

The Applicant submits that there is an unmet need for Baricitinib both due to lack of supply as well as lack of affordability of even what is or has been supplied under the brand Olumiant by Eli Lilly The per tablet cost is INR 3230.00. For a 14-day treatment regimen the price works out to INR 45220.00 per patient.

Natco Pharma Ltd., has however formally withdrawn the application for Compulsory License as Eli Lilly and Company, the exclusive licensee of IN 270765 has entered into a royalty-free, limited, voluntary license agreement with Natco Pharma Ltd. in respect of baricitinib, covered and claimed under IN 270765, for COVID-19 use within the territory of India.

DHC grants injunction to FMC Corporation against Natco Pharma Ltd. and Best Crop Science LLP

The Delhi High Court (DHC) has recently granted an injunction  to FMC Corporation (“the plaintiff”), against the defendant Natco Pharma Ltd and Best Crop Science LLP (“the Defendants”).

The court has held that pending disposal of the suit, the defendant is restrained from manufacturing, using, selling, distributing, advertising, exporting, offering for sale or in any other manner, directly or indirectly, dealing in any product which infringes the subject matter of the product patent IN 201307 (IN’307), including the product Chlorantraniliprole (CTPR), claimed therein, and (ii) using, directly or indirectly, any of the process as claimed in IN 213332 (IN’332), for the manufacture of Chlorantraniliprole, or the claimed subject matter of IN 201307.

Background

The Markush structure, along with the necessary radicals to be substituted therein, the method of preparation and the actual and precise molecular structure and formula of CTPR, is specifically claimed in the suit patent IN’307. CTPR is, additionally, one of 148 compounds specifically exemplified in the suit patent.  No pre-grant or post-grant opposition, to IN’307, was filed by anyone, including the defendant. Counterparts of the suit patent had been granted in more than 40 countries, in all of which they continue to subsist till date, Colombia being the sole jurisdiction where the equivalent of the suit patent was invalidated. IN’332, which is the process patent. No pre-grant or post-grant opposition was filed in relation to IN’332. Moreover, the counterparts of IN’332 had been granted patents in over 40 countries, in none of which have they been revoked or invalidated.

IN 204978 (IN’978) contains a Markush formula, from which the compounds in Formula 1 of IN’307 are asserted to be a novel and inventive selection. The plaint acknowledges that CTPR falls within the scope of the numerous compounds, and is in the class of anthranilamides, included in the Markush formula, disclosed and claimed in the patent IN’978, but asserts, with equal emphasis, that CTPR is not specifically disclosed in IN’978 and that no person skilled in the art would be able to synthesise CTPR based on the claim and disclosure in IN’978.

Test results are also provided to compare the compounds claimed and disclosed in IN’307, with their closest counterparts disclosed in IN’978. These tests indicated superior insecticidal activity of the compounds disclosed in IN’307 visà-vis their closest counterpart

While granting an injunction, the court held that the Defendants failed to establish prima-facie invalidity of the granted claims, which is the main defence of the defendants.

Some important findings/observations made by the Court while coming to the above conclusion are discussed in brief below:-

Presumptive validity of a granted patent – Section 13(4)

The court held that there is an obvious etymological difference between a “guarantee of validity” and a “presumption of validity”. Grant of patent cannot, obviously, guarantee its validity; else, a granted patent would become immune from challenge. Thus, the challenge, posed by the defendant to the validity of the plaintiff’s patent need not be such as to demonstrate, conclusively, the invalidity thereof.

The court held that at the interim stage, it is sufficient if the defendant is able to make out a case of the suit patent being vulnerable to revocation under the Patents Act. This vulnerability has, however, to be demonstrated by way of a credible challenge. The onus would be on the defendant, therefore, to establish the credibility of the challenge raised by it. The challenge cannot be incredible, fanciful, or moonshine.

Genus /species argument

The defendants raised three contentions to support the submission that CTPR was disclosed by the genus patent, i.e., Claim 22 in IN’978.

  • that Section 11(2)(b) of the Patents Act creates a presumption of the existence of a disclosure in a patent to which the priority date has been assigned,

The court did not agree with the same and held that once the defendant accepts that Markush claims are patentable, it no longer remains open to the defendant to rely on Section 11(2)(b) to advance an argument that, as Claim 22 in IN’978 was patented, there must be a presumption of disclosure of CTPR therein. The Court agrees with the plaintiff’s assertion that Claim 22 in IN’978 claimed a Markush structure, which does not claim, teach or disclose CTPR, or the Markush structure claimed in Claim 1 of IN’307, even if CTPR may come within the coverage of Claim 22 in IN’978.

  • that the plaintiff had admitted, in the plaint, “coverage” of CTPR by the genus patent, and the Supreme Court, in Novartis AG v. U.O.I  has clearly held that there can be no dichotomy, or distinction, between “coverage” and “disclosure” in a patent; ergo, acknowledgement of coverage amounts to an acknowledgement of disclosure,

The court in this regard held that:-

  • According to the Supreme, any dichotomy, sought to be drawn between coverage or claim, and disclosure or enablement or teaching, in a patent, struck at the very root of the rationale of patent law. Obviously, the Supreme Court has disapproved, in no uncertain terms, of any dichotomy being sought to be drawn between coverage and disclosure. Having said that, etymologically, “dichotomy” is not the same as “distinction”. The Supreme Court has not held that coverage and disclosure are the same. Nor has it held that there is no distinction between coverage and disclosure. Choosing its words with precision, the Supreme Court has held that there is no “dichotomy” between “coverage” and disclosure”. “Dichotomy” is defined, in the Oxford Dictionary, as “a division or contrast between two things that are or are being represented as being opposed or entirely different”. In holding that there can be no dichotomy between coverage or claim, on the one hand, and disclosure or enablement or teaching, on the other, the Supreme Court has not, therefore, held that they are identical. Apparently, in fact, the Supreme Court has, in disapproving the existence of any “wide gap” between coverage and disclosure, clarified that it merely disapproved of any dichotomy between these concepts, and was not seeking to hold that the concepts were identical. Indeed, the judgement of the Supreme Court, read thus, would be in entire accord with the covenants of the Patents Act, which make repeated reference, in more than one provision, to “disclosure”. Clearly, the framers of the Patents Act did not envisage the “claim” or “coverage” of the claim, to be identical to “disclosure”. Nor, for that matter, has the Supreme Court so held.
  • The court also stated that in the present case, there is no claim, and no disclosure, by the plaintiff, of CTPR in the genus patent, i.e. Claim 22 of IN’978. Therefore, no question of any dichotomy between claim and disclosure, therefore, arises in the present case.
  • that, in fact, the preferred embodiments, forming part of the Complete Specification of Claim 22 in IN’978, when applied to the Markush structure claimed therein, “led to CTPR”.

The court in this regard held that:-

  • From a bare glance, it is apparent that the defendant has cherry picked the substitutions’, as well as the radicals for substitutions at the various places on 5-membered or 6-membered heteroaromatic rings, out of the multifarious choices provided in Claim 22 in IN’978, so as to arrive at CTPR, or the Markush structure in Claim 1 in IN’307. No explanation for selecting these particular substitutions, out of the several substitutions provided in the Markush claim in IN’978, is forthcoming in the pleadings. It is apparent that these substitutions have been carefully selected so as to arrive at the Markush structure claimed in Claim 1 in IN’307, or at CTPR
  • From the teachings in the genus patent, the person skilled in the art must be in a position to arrive, without unduly straining his imaginative and creative faculties, at the specie patent, in order for the specie patent to be invalidated on the ground of obviousness. The element of “directness” must be there. The choice which the person skilled in the art would make, by way of substitutions on the Markush moiety or otherwise, must be apparent from the teachings in the genus patent, in order for the specie patent to be treated as “obvious”
  • Prima facie, a person skilled in the art would not selectively choose the substitutions unless she, or he, is aware of the fact that, ultimately, CTPR is to be produced. No such effort having been made for all the years during which IN’978 remained valid, and the plaintiff being the first to synthesise CTPR from the Markush moiety claim then disclosed in Claim 22 in IN’978, it is not possible to accept that the embodiments provided in Claim 22 in IN’978 would “lead” a person skilled in the art to CTPR. No teaching, so as to enable such a person to synthesise CTPR can, therefore, be said, prima facie, to exist in the disclosure provided in Claim 22 in IN’978

Prior claiming – Section 64(1)(a)

The defendant in the present case, in asserting vulnerability of IN’307 as having been anticipated by prior claiming in Claim 22 of IN’978.

The court held that Section 64(1)(a) provides, as a ground for revoking a patent already granted, claiming, of the invention claimed in the claim of the said patent, in a valid claim of earlier priority date, contained in the complete specification of another patent granted in India. The statutory preconditions, for this clause to apply as a ground for alleging invalidation of the suit patent, are that

  • the invention claimed in the claim, under consideration, of the suit patent, was claimed in another valid claim,
  • said valid claim was of earlier priority date and
  • said valid claim was contained in the complete specification of another patent granted in India (for ease of reference, “the prior patent”).

The court also  held that CTPR is the “invention… claimed in Claim 1 of the complete specification” in IN’307, i.e. the suit patent. The “valid claim of earlier priority date” in the prior patent, for the purposes of Section 64(1)(a), is Claim 22 of IN’978. Section 64(1)(a) would, therefore, render the suit patent vulnerable if CTPR is, prima facie, claimed in Claim 22 of IN’978. AS CTPR is not claimed, or even disclosed, in Claim 22 of IN’978. Claim 22 of IN’978 claims a Markush moiety. It is possible to travel from said Markush moiety to Claim 1 in IN’307, or to CTPR, only by cherry picking select radicals out of the innumerable choices provided in the complete specifications accompanying Claim 22 of IN’978, for substitution on said Markush moiety.

Anticipation – Section 64(1)(e)

The court held that three circumstances are, contemplated, in Section 64(1)(e) as divesting the invention in the suit patent of novelty, viz.

  • public knowledge in India before the priority date of the claim in the suit patent,
  •  public usage in India before the priority date of the claim in the suit patent and
  • publication in India or elsewhere in any of the documents referred to in Section 13.

In order, therefore, for the defendant to be able to successfully allege that CTPR was published prior to priority date, the defendant would have to establish that CTPR was disclosed in cited patents.

However, the court held that the cited art leads the person skilled in the art to CTPR, as in the case of Claim 22 of IN’978, only when cherry picking selected substituents from the substituents suggested in the complete specifications of the cited art. The suit patent was therefore held to be prima facie novel.

The court also found the patent to be prima facie non-obvious and therefore granted an injunction against the defendants.

Intellectual Property Division to deal with IPR cases

The Delhi High Court in a press release has informed about the creation of an Intellectual Property Division (IPD) to deal with all matters related to intellectual property rights (IPR).

IPD creation is in view of the fact that the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 led to the abolition of various Boards/Appellate Tribunals (including Intellectual Property Appellate Board (IPAB)) which existed under different laws governing IPR. The creation of IPD in the Delhi High Court is a significant step which is in line with global practices in this regard and such IP Divisions or IP courts, which exclusively deal with IPR matters, already exist in UK, Japan, Malaysia, Thailand and China.

The decision was based on the recommendations of a committee which was created by Delhi High Court Chief Justice D N Patel and the panel comprises of Justice Prathiba M Singh and Justice Sanjeev Narula.

The office order issued by the Delhi High Court in this regard can be found here.

Government Proposes to Abolish IPAB

The Government of India introduced The Tribunals Reforms (Rationalisation and
Conditions of Service) Bill, 2021
in the Lok Sabha in February 2021. The Bill has been introduced with a view to streamline tribunals and proposes to abolish certain tribunals and
authorities and to provide a mechanism for filing appeals directly to the commercial court or
the High Court, as the case may be. The Bill proposes to abolish the Intellectual Property Appellate Board (IPAB) and if said Bill is passed, patents appeals and revocations which were previously adjudicated by the IPAB, will lie before the High Court.