Chemtura’s Patent restored

The Bombay High Court’s division bench has set aside the order of the IPAB revoking Chemtura’s patent IN213608 and has directed the Controller of Patents to restore the patent on the e-register ( Order dated 19-06-2017 ).

IPAB had earlier revoked Chemtura’s Patent for non compliance of section 8 and lack of inventive step. Chemtura filed a writ against the decision in the Bombay High Court.

The facts of the case are as follows: –

  1. Uniroyal Chemical Company Inc. (the predecessor of Chemtura) filed a National Phase Patent Application being IN/PCT/2001/00752/MUM before Patent Office with respect to the invention titled ‘A Bearing Pad Assembly’
  2. IPO on 9th January, 2008 granted patent to Chemtura after examining the same
  3. Revocation Petition being ORA/14/2009/PT/MUM was filed before the Intellectual Property Appellant Tribunal (IPAB). Chemtura filed its counter Statement along with the Affidavit to the petition on 21st August, 2009
  4. On 27th August, 2009, the petitioner counsel sent a letter to IPAB seeking withdrawal of the revocation petition being ORA/14/2009/PT/MUM. On 12th October, 2009 the Registry on behalf of IPAB sent a letter calling upon petitioner to file a Miscellaneous Petition seeking withdrawal of the said revocation petition
  5. Thereafter on 7th October, 2010 a hearing on the said revocation petition came to be posted under the caption ‘FOR WITHDRWAL’. However, due to some administrative reasons the matter was adjourned to 1st June, 2011. On 1st June, 2011 the matter was again adjourned to 28th November, 2011.
  6. On 28th November, 2011 when the matter was posted for hearing the counsel for Petitioner submitted that he had oral instructions to argue the Revocation Petition being ORA/14/2009/PT/MUM and in light of the said submission IPAB directed the parties to argue the matter on merits
  7. On 26th May, 2012, Petitioner filed a Miscellaneous Petition seeking withdrawal of the said revocation petition and subsequently, on 11th June, 2012 amended and again filed another Miscellaneous Petition seeking unconditional withdrawal of ORA/14/2009/PT/MUM.

It was argued by Chemtura that the order revoking the patent was passed despite a Miscellaneous Petition being M.P No. 107 of 2012 filed by Party seeking revocation and is therefore not maintainable. It was also contended by Chemtura that once a revocation petition has been withdrawn the Vakalatnama executed in favor of the Advocate ceases and the application cannot be heard. The counsels of Chemtura also relied upon the decision of the Supreme Court in Shiv Prasad v. Durga Prasad [1975] 1 SCC 405] which observed that every applicant has the right to unconditionally withdraw his application and his unilateral act in that behalf is sufficient and that no order of the Court is necessary permitting him to withdraw the application. The Court may make a formal order disposing of the application as withdrawn but the withdrawal is not dependent on the order of the Court. The act of withdrawal is complete as soon as the applicant intimates to the Court that he withdraws the application.

The Bombay High Court applied the ratio in Shiv Prasad (Supra) that the application should have been treated as withdrawn as of that date i.e on 25th July, 2009 and if not, at least as on date of filing Miscellaneous Petition namely 11th June, 2012. Bombay High Court further held that the IPAB erred in proceeding with the hearing in the face of the said application for withdrawal. In the circumstances, the Bombay High Court quashed the impugned order of the IPAB dated 24th August, 2012. Patent No. 213608 has also been restored on the Register of patent.

Chemtura’s Patent restored

The Bombay High Court’s division bench has set aside the order of the IPAB revoking Chemtura’s patent IN213608 and has directed the Controller of Patents to restore the patent on the e-register.

IPAB had earlier revoked Chemtura’s Patent for non compliance of section 8 and lack of inventive step. Chemtura filed a writ against the decision in the Bombay High Court.

Stay tuned for details!

SC allows Cipla to withdraw its petition

The Supreme Court (SC) of India has allowed domestic drug manufacturer Cipla, which to withdraw its petition in respect of the patent dispute with Roche over the drug erlotinib hydrochloride.

The petition was filed by Cipla challenging the High Court’s order holding that it had infringed Roche’s patent. The two companies, Roche and Cipla, on May 30 however arrived at a settlement to close the patent dispute between them over the drug erlotinib hydrochloride. After the May 30 settlement, Cipla withdrew the Special Leave Petition (SLP) filed against the said High Court’s order.

Reasons beyond control necessary for condoning delay in submitting response to Examination report

The Indian Patent office while considering a petition filed by Cisco Technologies under rule 137 for condonation of delay in filing response to examination beyond the statutory period, refused to allow such delay as according to the controller all possible reasons as mentioned by the applicant’s agent such as lack of knowledge about the issuance of examination report or lapse on the part of the previous agent in providing true facts/ First Examination Report, are not the reasons sufficient enough to qualify the status of “beyond the control of applicant” as mentioned in section 21(1) of the Act.

The application was therefore considered to be deemed abandoned under section 21(1) as applicant has not refilled the documents within stipulated time period i.e. within 12 months from the date of issuance of first examination report.

The facts of the case are as follows:-

  • The application 2440/DELNP/2006 was filed on May 01, 2006 claiming priority of USA 10/702,167 dated November 05, 2003 through its agent Evalueserve.com Pvt Ltd.
  • Request for examination was made on October 18, 2006.
  • The First examination report were communicated dated July 29, 2010 to the applicant’s address for service on record.
  • After the issuance of FER, Form-13 was filed on June 22, 2011 to incorporate the change in address for service as applicant has transferred the responsibility to prosecute the matter to Mr. Dinesh Jotwani of M/s Aggarwal Associates.
  • The last date to put the application for grant was over on July 30, 2011 and official requirements were not complied.
  • Petition u/r 137 was filed by the applicant dated September 14, 2011 through patent Agent, for delay in filing the response of examination report read with section 81 of the Patent Act, 1970 within stipulated time i.e. 12 months from the date of issuance of first examination report.
  • Response to first objection report was filed on September 26, 2011.
  • Further Form -13 was filed on February 04, 2015 to incorporate the change in address for service as applicant has once again transferred the responsibility to prosecute the matter to M/s K & S Partners.  

To analyze the decision of the Controller it would be essential to read the following to section:-

  • Section 21(1) says ” An application for a patent shall be deemed to have been abandoned unless, within such period as may be prescribed, the applicant has complied with all the requirements imposed on him by or under this Act, whether in connection with the complete specification or otherwise in relation to the application from the date on which the first statement of objections to the application or complete specification or other documents related thereto is forwarded to the applicant by the Controller.” Explanation.-Where the application for a patent or any specification or, in the case of a convention application or an application filed under the Patent Cooperation Treaty designating India any document filed as part of the application has been returned to the applicant by the Controller in the course of the proceedings, the applicant shall not be deemed to have complied with such requirements unless and until he has re-filed it or the applicant proves to the satisfaction of the Controller that for the reasons beyond his control such document could not be re-filed.

The agents argued that the delay was unintentional as applicant was unaware of issuance of Examination report.

The argument that applicants were not informed about the issuance of first examination report was not considered sustainable as according to the controller:

  1. Status of every patent application is freely available on patent office website i.e. http://www.ipindia.nic.in.
  2. At the time of filing of Form-13 dated June 22, 2011, more than one month time was available to the applicants to meet the official requirements.
  3. Petition u/r 137 was filed on September 14, 2011 for condonation of delay in filing the response of examination report whereas response to first objection report was not filed along with the petition. The same was filed on September 26, 2011 delayed by further 12 days.

As per the controller the above clearly shows negligence in part of erstwhile patent agent. It is hard to believe that delay caused was unintentional. The term “unintentional “means where the agent of the applicant/ applicant itself was not aware about the issuance of first examination report and the deadline to comply with the requirements as raised in first examination report. The controller further held that it is negligence not only at the part of erstwhile patent agents but also at the part of applicant as well. If it is to be considered that it was the duty of previous agents to transfer all the previous proceedings to another authorised patent agent for processing instant patent application, then applicant is also duty bound to insure for smooth transfer of all related proceedings form one patent agent to other patent agent.

 

Rules for appointment of IPAB Chairman, Vice-Chairman, Technical Member

In exercise of the powers conferred by section 184 of the Finance Act, 2017 (7of 2017), the Central Government has notified the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 on 1st June 2017.

These rules apply to 19 Appellate Tribunal as provided in the schedule of the Rules. Included in this list is also the intellectual Property Appellate Board (IPAB).

The rules provide as follows:-

(1) A person shall not be qualified for appointment as Chairman, unless he, –

(a) is, or has been, or is qualified to be, a Judge of High Court; or

(b) has, for a period of not less than three years, held office as Vice- Chairperson of the Appellate Board.

(2) A person shall not be qualified for appointment as Vice-Chairman, unless he,—

(a) is, or has been, or is qualified to be, a Judge of High Court; or

(b) has, for at least two years, held the office of Judicial Member or a Technical Member, and has a degree in law with at least 12 years of practice at bar or 12 years’ experience in a State Judicial Service.

(3) A person shall not be qualified for appointment as Technical Member (Patent), unless he, –

(a) has, for at least five years, held the post or exercised the functions of the Controller under the Patents Act, 1970 (39 of 1970); or

(b) has, for at least ten years, functioned as a registered patent agent and possesses a degree in engineering or technology or a master’s degree in science from any University established under law for the time being in force.

The Rules also provide that the search and selection committee for the post of the Chairman, Vice-Chairman of the Appellate Board, include –

(i) Chief Justice of India or his nominee- chairperson;

(ii) Secretary to the Government of India, (Department of Industrial Policy and Promotion) -member;

(iii) Secretary to the Government of India to be nominated by the Central Government-member;

(iv) two experts, to be nominated by the Central Government- members.

 

Also, the search-cum-Selection Committee for the post of Technical Member (Patent) of the Appellate Board, include—

(i) a person to be nominated by the Central Government –chairperson;

(ii) Secretary to the Government of India, (Department of Industrial Promotion and Policy) -member;

(iii) Secretary to the Government of India to be nominated by the Central Government – member;

 (iv) two experts, to be nominated by the Central Government – members.

Non-compliant defendants face permanent injunction

DSM Sinochem Pharmaceuticals has been granted permanent injunction against Sinopharma Weiqida pharmaceuticals as the defendants failed to timely submit the defense (written statement) and pay the costs imposed by the Court.

The Plaintiffs DSM Sinochem Pharmaceuticals sued Sinopharma Weiqida pharmaceuticals for permanent injunction to restrain them from using , manufacturing , distributing, selling, offering for sale or dealing directly or indirectly in API Amoxixillin Trihydrate produced by a process that amounts to infringement of Indian Patent number 247301, or a formulation thereof.

The defendants did not file the written statement inspite of three opportunities and did not pay the costs imposed by the court. During a hearing on 16th May 2017, the counsel of the Defendants said that the written statement is ready, an advanced copy of which would be handed over to the counsel of the Plaintiffs and the cost imposed would be remitted in the course of the day.  The matter was listed for the next day, provided an additional cost of 50,000 is paid.

During the hearing on the next day, the Court observed that no written statement has been filed nor the cost imposed on the Defendants has been paid. Considering the same, the Court closed the rights of the Defendants to file a written statement. The Plaintiff’s in the absence of any challenge to its patent was considered to be entitled to a decree of permanent injunction in its favour.

DHC reinstates the agreement between Monsanto Inc and Nuziveedu Seeds

Justice R. K. Gauba of the Delhi high court (DHC) by an order dated 28th March 2017 ruled that Monsanto Technology LLC’s termination of its sub- licence agreement with Nuziveedu Seeds Ltd was illegal and arbitrary.

DHC has reinstated the agreement, however, the trait fee to be paid to the plaintiffs, for the use of the suit patent and trademarks have been directed by the Court, to be in accord with the prevalent local laws, as in force. The court also directed the agreement to be modified according to the format of the GM Technology Agreement Guidelines, 2016 issued by the government.

The facts of the case are as follows:-

  1. Suit for infringement and passing off was filed by Monsanto Technology LLC, Monsanto Holdings Private Limited and Mahyco Monsanto Biotech (India) Pvt. Ltd. impleading three defendants, namely Nuziveedu Seeds Limited, Prabhat Agri Biotech Limited and Pravardhan Seeds Private Ltd., on the groubds that the defendants were continuing to “market and sell” Genetically Modified Hybrid Cotton Planting Seeds inspite of termination of the sub-license agreements between the parties, alleging violation of their intellectual property rights covered by the registered patent (214436), and trademarks BOLLGARD and BOLLGARD II.

  1. The defendant submitted two counter claims. One counter claim prayed for a declaration that the sub-licensing agreements (of 2015) is “valid, binding and in force” and consequently, the defendants being entitled to “all the rights and benefits” thereunder. The other counter claim prayed for revocation of the plaintiffs‟ patent 214436.

  1. The Plaintiffs patent 214436 claims a method for producing a transgenic plant comprising incorporating into its genome a nucleic acid sequence comprising a plant functional promoter sequence operably linked to a first polynucleotide sequence encoding a plastid transit peptide, which is linked in frame to a second polynucleotide sequence encoding a Cry2Ab Bacillus thuringiensis ᴕ- endotoxin protein, wherein said plastid transit peptide functions to localize said ᴕ- endotoxin protein to a subcellular organelle or compartment” (claims 1 to 24) and a nucleic acid sequence comprising a promoter operably linked to a first polynucleotide sequence encoding a plastid transit peptide, which is linked in frame to a second polynucleotide sequence encoding a Cry2Ab Bacillus thuringiensis 8-endotoxin protein, wherein expression of said nucleic acid sequence by a plant cell produces a fusion protein comprising an amino-terminal plastid transit peptide covalently linked to said 5-endotoxin protein, and wherein said fusion protein functions to localize said 5-endotoxin protein to a subcellular organelle or compartment” (claims 25 to 27).

  1. The marks “BOLLGARD” and “BOLLGARD-II” having been registered, in India, under the Trademarks Act, 1999.

  1. Mahyco Monsanto Biotech (India) Pvt. Ltd. entered into sub-license agreements with defendants (2004), and under such sub-license agreements, the defendants received 50 grams of Transgenic Bt. Cotton seeds in consideration of Rupees Fifty Lakhs. The said sublicense agreement also contained an obligation on the defendants to pay a “trait value”.

  1. During the currency of the sub-license agreements of 2004, some dispute arose with regard to the “trait value” and the 2004 sub-license agreements were replaced by new sublicense agreements executed separately in favor of each of the three defendants (sub-license agreements of 2015).

  1. In the meantime, the Central Government in terms of Cotton Seeds Price (Control) Order, 2015, issued a notification via which the maximum selling price of Bt. Cotton Seeds packets were fixed. The MSP for BG I being Rs. 635 per packet, with zero trait value being payable, while the MSP for BG II version being Rs. 800 per packet inclusive of Rs.751 towards seed value and Rs. 49 on account of trait value.(The  intervention of the Central Government by above noted Cotton Seeds Price (Control) Order, 2015, was challenged and such challenges by and large being still sub-judice.)

  1. Licensing and Formats for GM Technology Agreement Guidelines, 2016, were also notified and published by the Government of India. These Guidelines primarily made to ensure non-discriminative licensing to encourage competition and availability of GM cotton seeds to cotton farmers at fair and reasonable prices.

  1. The defendants by their communication informed Mahyco Monsanto Biotech (India) Pvt. Ltd. that the trait value payable under the 2015 Sub-License Agreements stood statutorily modified and that Mahyco Monsanto Biotech (India) Pvt. Ltd. should charge the trait value. This request was turned down and this took the matter to the High Court of Judicature at Bombay.

  1. For the kharif 2015-16 season, Mahyco by further communications called upon the defendants to pay the trait value in terms of 2015 Sub-License Agreements, but such demand was not being complied with. Instead, by their similar communications, the first and second defendant requested the plaintiff to refund the trait fee statedly paid “in excess”, referring to the Government of India price control orders. This demand did not find favour with Mahyco and Plaintiffs alleging breach terminated the agreement. Hence the present suit.

Arguments and finding

 

  • Validity of suit patent:-

Validity of the suit patent was challenged under various provisions of the law like Section 3(f), 3(h) and (j), Section 8, Section 10 (4) and Section 59 (1) etc.

The court held that, whether or not the suit patent is liable to be revoked is a question which would need to be addressed at an appropriate stage only after pleadings in that regard are complete and evidence is adduced on issues thereby raised. No comments were made on such aspect of the dispute.

The court however made a prima-facie finding regarding patentability under section 3(j). The Court agreed with the submissions of the plaintiffs that Section 3(j) of the Patents Act, cannot deprive the patentee of due reward of human skill and ingenuity resulting in human intervention and innovations over and above what occurs in nature. Suit patent involve laboratory processes and are not naturally occurring substances which only are to be excluded from the purview of what is an invention by virtue of the provision contained in Section 3(j). These claims being products or processes of biotechnology are rightly entertained by the Indian Patent office.

  • Protected by the Plant Varieties Act

 It was also submitted by the defendants that impugned acts on the part of defendants are protected by the provisions of the Protection of Plant Varieties and Farmers Rights Act, 2001, by virtue of Section 92, overriding the Patents Act, 1970. The use of any variety as an initial source for the purpose of growing other varieties as is the activity undertaken by the defendants, the limited right of the person claiming ownership of the intellectual property right of such variety is to claim “benefit sharing” under Section 26.

The Court however did not agree with the Defendant and held that the invention which is the subject matter of suit patent is not same as development of a variety within the meaning of Plant Varieties Act. The right to use the genetic material is the subject matter of a patent granted and protected by the Patents Act, in general, and Section 48 thereof, in particular. Section 30 of the Plant Varieties Act is a provision meant only for “researchers” and not for entities such as defendants out to make commercial exploitation and further that it gives, at the most, right to use a “variety” to develop other varieties but not so as to confer the right to use DNA or genetic material.

The contentions of the defendants based on the provisions of the Plant Varieties Act or the import of possible remedy of “benefit sharing” available to the plaintiffs thereunder, or the question as to whether the same would be more efficacious, or extinguishes or erodes the rights conferred by Section 48 of the Patents Act, 1970 has however been left to be addressed at the time of final adjudication

  • Infringement:-

It was also contended that the fact that the defendants’ product comprises of components or genetic material conferring other traits in addition to the DNA construct or nucleotide sequences of the suit patent therefore there is no infringement. However this was considered to be irrelevant, as the presence of other components is immaterial so long as the patented invention is contained within the defendants’ product, this itself being sufficient to constitute infringement.

It was also argued by the Defendants that the claims are directed to a method performed in lab, the biological process adopted by the defendants however is essentially based on the other claims which though submitted with the application under PCT (Patent Corporation Treaty), were withdrawn, the same not being not patentable under section 3(j) and 3(h). The claims were therefore argued to be not infringed.

The court disagreed with the Defendants and accepted the argument of the Plaintiff that infringement by “use” of the patented invention in claims 25 to 27 stands made out because the defendants have admitted that their cotton varieties and hybrid exhibit Bt. trait which would have been triggered only on account of DNA construct or nucleotide sequence on claim nos.25 to 27. The use of the claimed construct was therefore held to be infringement. Court in this respect also relied upon the view taken by the Supreme Court of Canada in Percy Schmeiser vs. Monsanto, (2004) 1 SCR 902, wherein it was argued that ultimately what matters is whether the defendants are taking advantage (in whole or in part – directly or indirectly) of the technical contribution or patented invention of the plaintiffs.

  • Agreement

 The court held that the plaintiffs were duty bound to consider the request of the defendants as made by the communications beginning July 2015, for modification of the terms as to the rate of trait fee payable under the 2015 sub-license agreements for which the mechanism had been agreed upon in the agreement. Since the plaintiffs did not adhere to their obligation under the contract, the demand of payment under the contract terms being not lawful, it apparently being higher than the trait fee permitted by the law in force, the defendants could not have been found to be in default or to have breached their obligations. The termination of the sub-license agreements was therefore held to be prima facie illegal and arbitrary. The parties remain bound by their obligations under the terms and conditions of the 2015 Sub-License Agreements for the period(s) stipulated therein, or till the same are lawfully terminated.

The court also directed that the plaintiffs would be entitled to all the rights under the 2015 Sub License Agreements except as to the rate of trait value payable thereunder and the same has to be in accord with the prevalent local laws prescribed by Cotton Seeds Price (Control) Order, 2015 as indeed of the Licensing and Formats for GM Technology Agreement Guidelines, 2016, both promulgated by the Government of India.