The Patent Litigation Law Review: India

Overview

The Modi government has signalled that it recognises the importance of intellectual property2 and expediting litigation3 in India's growth map for the coming years.

With this in mind, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 (the Commercial Courts Act) has been introduced to speed up commercial litigation in the country. All patent disputes are covered by this statute.

The hierarchy of courts in India is as follows:

  1. one Supreme Court – India's Supreme Court is the highest court in the country;
  2. 24 High Courts – the Supreme Court is followed by High Courts in this hierarchy. India's 28 states have 24 High Courts – some states have a common High Court; and
  3. over 500 district courts – each High Court exercises superintendence over district courts.

As far as patent litigation is concerned, practically speaking, there is a threefold court structure.

i Courts of first instance

A district court is the lowest court before which a patent infringement suit can be filed.

If a patent infringement lawsuit is filed before a district court and the defendant counterclaims for invalidity, then the suit is transferred to the High Court.

Only five High Courts can entertain lawsuits in the first instance. This is commonly referred to as 'original jurisdiction'. Most patent litigation is filed before High Courts, especially before the Delhi High Court, which exercises 'original jurisdiction'.

After the Commercial Courts Act, not all district courts can entertain 'commercial' lawsuits under the Commercial Courts Act. Under this Act, commercial suits can be filed only before courts designated as 'commercial courts' or before a High Court division designated as a 'commercial division'.

Where a High Court has a commercial division, no district court will be designated as a commercial court. For instance, in the state of Delhi, all commercial litigation is filed before the commercial division of the Delhi High Court.

All patent suits filed before the enactment of the Commercial Courts Act have been or are being transferred to the commercial court or commercial division that has jurisdiction in each case.

ii Courts of first appeal

The Commercial Courts Act has reduced the kind of interlocutory orders that can be appealed. This is expected to speed up patent litigation in India.

An appeal from a district court order goes to a single judge of the High Court. An appeal from a High Court single judge's order goes to a two-judge bench of the High Court, called a division bench.

iii Appeals to the Supreme Court

Broadly speaking, appeals to the Supreme Court of India in patent matters are filed under the Supreme Court's discretionary power.

The Supreme Court is most likely to hear appeals that involve substantive questions of law.

The past few years have seen a surge in pharmaceutical patents and standard essential patents' litigation in India. The decisions in Roche v. Cipla4 and Merck v. Glenmark5 bolstered the position of pharma patent owners in India. Ericsson and Philip's trailblazing records in standard essential patents litigation in India have encouraged many right holders to litigate in India.

Types of patent

The Indian Patents Act, 1970, recognises product and process patents. The Act allows the applicants to file provisional applications that are followed by non-provisional applications, convention applications under the Paris Convention, national phase application pursuant to Patent Cooperation Treaty (PCT) international application designating India, divisional application and patent of addition application. The patent of addition applications are the applications that are filed to provide protection to the improvements or modification in the already filed or granted patent.

The Patent Rules 2003 were amended in 2016. The amended rules came into force on 16 May 2016. Some of the important changes that have been implemented by the amended rules are:

  1. Withdrawal of fee paid for requesting substantive examination. The applicants can now withdraw the application by filing a request any time before the application is referred to the examiner. Said request shall be deemed to have not been filed.
  2. Time for placing the application in order under Section 21 has been reduced from 12 months to six months. Said period is extendible by three months on request.
  3. Provision for taking adjournment of hearing has been introduced.
  4. It is now possible to do hearings through video conferencing or telephonically.
  5. The process for expedited examination has been incorporated in Rule 24C, which provides for expedited examination of applications in certain cases. These are:
    • where India has been indicated as the competent International Searching Authority or elected as an International Preliminary Examination Authority in the corresponding international application; or
    • the applicant is a startup.
  6. A definition of startups has been introduced.

The Patent Rules, 2003 were again amended in Patents (Amendment) Rules, 2017. The amended rules came into force on 1 May 2017. Said amendment rules substituted the definition of startup in sub-rule (fb) under rule 2 of the Patents Rules, 2003. As per the new definition, 'Startup' means:

(a) an entity in India recognised as a startup by the competent authority under Startup India initiative.
(b) in case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation registration as per Startup India Initiative and submitting declaration to that effect.
Explanation: In calculating the turnover, reference rates of foreign currency of Reserve Bank of India shall prevail.

The Patent rules 2003 were again amended in 2019, by the Patents (Amendment) Rules, 2019, which came into force on17 September 2019. In the said rules, rule 24 C was amended to include the following beneficiaries who can avail the facility of expedited examination.

(b) that the applicant is a startup; or
(c) that the applicant is a small entity; or
(d) that if the applicant is a natural person or in the case of joint applicants, all the applicants are natural persons, then the applicant or at least one of the applicants is a female; or
(e) that the applicant is a department of the Government; or
(f) that the applicant is an institution established by a Central, Provincial or State Act, which is owned or controlled by the Government; or
(g) that the applicant is a Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); or
(h) that the applicant is an institution wholly or substantially financed by the Government;
Explanation:- For the purpose of this clause, the term 'substantially financed' shall have the same meaning as in the Explanation to sub-section (1) of section 14 of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971(56 of 1971); or
(i) that the application pertains to a sector which is notified by the Central Government on the basis of a request from the head of a department of the Central Government.:
Provided that public comments are invited before any such notification; or
(j) that the applicant is eligible under an arrangement for processing a patent application pursuant to an agreement between Indian Patent Office and a foreign Patent Office.
Explanation:- The patentability of patent applications filed under clause (j) above will be in accordance with the relevant provisions of the Act.

The patent applications are ordinarily published within 18 months of the date of filing or date of priority, whichever is earlier. After publication, once a request for examination of a patent application is filed in the prescribed form and within the prescribed period, the application, specification and other related documents are referred by the Controller of Patents (Controller) to an examiner for making a report on several aspects including the following:

  1. whether the application and the specification and other documents are in accordance with the Patents Act;
  2. whether there is any lawful objection to the grant; and
  3. results of the investigation for anticipation by any previous publication and prior claim.

The examiner shall make the above report within three months from the date of reference and the Controller shall ordinarily dispose of the report within one month of receipt, and issue a first statement of objections within one month from disposal of the report. An application may be put in order within six months from the date of the statement of objections.

The term of a patent is 20 years from the date of filing of the application. For international applications under the PCT, the term is 20 years from the international filing date under the PCT.

The Indian patent statutes provide both pre-grant and post-grant opposition proceedings. The pre-grant opposition can be filed under Section 25(1) of the Act, any time before the examination of the application or during the prosecution of the application. The Delhi High Court in one of the orders6 has held pre-grant opposition as 'examination-in-aid'. The post grant proceedings are filed within one year from the date of publication of the grant of patent in the Official Journal.

Procedure in patent enforcement and invalidity actions

The patent litigation landscape is changing rapidly with the advent of the Commercial Courts Act. For instance, this Act provides a non-extendable deadline for filing a statement of defence (called a 'written statement'). This deadline is 120 days from the date of service and after a period of 120 days, the right to file a written statement is, as per the statute, forfeited. This deadline applies to the defendant in a patent infringement lawsuit as well as the defendant in a counterclaim, which is usually the plaintiff in the lawsuit. Therefore, it is extremely important to comply with procedural deadlines.

In the pre-Commercial Courts Act regime, a defendant's delay in filing a written statement was usually condoned in the interest of justice. It was therefore not even advisable to strongly oppose condonation of delay applications because such opposition would only lead to further delay in the lawsuit.

Other important changes introduced by this Act are the introduction of 'case management hearings', 'summary judgments' and a real 'costs' regime.

For anyone litigating or proposing to litigate an intellectual property lawsuit in India, it may be worthwhile to go through the 22 pages of the Commercial Courts Act.

Other practical considerations in patent infringement and invalidity proceedings are as follows:

  1. obtaining certified copies of patent documents from the Indian patent office because documents available on the patent office website may not be updated;
  2. identifying an authorised signatory;
  3. identifying an independent expert and other witnesses; and
  4. certification for internet printouts.

As explained above, a patent infringement lawsuit can be brought before a commercial court or a commercial division of a High Court. If a patent infringement suit is filed before a district court, then it will be transferred to a High Court if the defendant counterclaims for invalidity of the suit patent.

The usual practice for most defendants in patent infringement lawsuits is to counterclaim for invalidity. An interim injunction may become difficult to obtain if the defendant raises a credible challenge to the validity of the patent in suit. Having said that, a counterclaim may sometimes be filed only to emphasise, sometimes wrongly, the seriousness of the challenge to the validity of the patent.

Before the Enercon decision7 of the Supreme Court clarified the law, a defendant could not only counterclaim for invalidity in a patent infringement suit filed against it, but could also initiate revocation proceedings against the same patent before the Intellectual Property Appellate Board. The Intellectual Property Appellate Board is a specialised board that hears appeals against orders of the intellectual property offices, including the patent office. This board should have at least one technical member, among others, for hearing patent appeals. The board is currently functional until at least end December 2020, which is when the current chairman is designated to retire.

In 2014, the Supreme Court in the Enercon case clarified that only the first filed action between a counterclaim and a revocation will survive. Further, once a lawsuit is filed against a defendant, it can challenge validity of the patent only by way of a counterclaim.

The proceedings before the High Court are usually faster than the proceedings before the Intellectual Property Appellate Board (IPAB) and are more effective because High Courts, as a matter of practice and without exception, permit cross examination of the defendant's witness on a myriad of issues including issues of invalidity raised by the defendant. This allows the plaintiff a far more robust opportunity to prove patent infringement and to defend the validity of its patent.

A patentee or its exclusive licensee can file a lawsuit for patent infringement. The limitation period is three years from the date of cause of action. If the cause of action is a patent infringement lawsuit, the limitation period begins when the patentee or its agent first gains knowledge of the infringement. A fresh cause of action arises each time a patent is infringed. Therefore, patent infringement lawsuits are usually premised on a continuing cause of action.

A defendant in a patent lawsuit can file a counterclaim in the suit to challenge the validity of the patent in suit. Revocation proceedings before the IPAB can be initiated by any interested person. The term 'any interested' person has been interpreted by courts to include:

[A] person who has a direct, present and tangible interest with a patent, and the grant of the patent adversely affects his above rights. A person interested would include any individual who desires to make independent use of either the invention itself (which has been patented), or desires to exploit the process (which has been patented) in his individual production activity. Therefore, the term 'any person interested' is not static.8

A revocation proceeding may be filed against a patent any time after the grant of the patent.

A patent may also be challenged by an interested person by way of a post-grant opposition under Section 25(2) of the Patents Act 1970, before the Patent Office. However, a post-grant opposition can be only filed after grant of a patent but before the expiry of one year from the date of publication of grant of a patent.

Key differences between post-grant opposition and revocation proceedings include the narrower scope of inquiry in a post-grant opposition, and the limited period in which a post-grant opposition can be filed.

The usual procedure in a patent infringement lawsuit and a counterclaim for nullity is as follows:

  1. Step 1 – Filing of the lawsuit and admission of the lawsuit. Once the lawsuit is admitted, summons to the defendant are issued by the court.
  2. Step 2 – Defendant enters appearance before the court and written pleadings are filed in court. The defendant may also file a counterclaim, in which case the plaintiff files its defence in the counterclaim.
  3. Step 3 – This is a procedural step called 'admission and denial' of documents. Parties may also seek discovery of documents.
  4. Step 4 – Issues in controversy are framed by the judge to narrow the controversy and the parties are sent to trial. In most patent cases, at least before the Delhi High Court, local commissioners (officers specially appointed by the court) record evidence.
  5. Step 5 – Trial includes examination in chief, cross examination and re-examination, if any, of witnesses. A patent infringement trial is governed by the Indian Evidence Act 1872.
  6. Step 6 – Final arguments before the judge.

A party to a lawsuit can also request for the appointment of a local commissioner to preserve the proof of infringement.

The procedure in revocation and post-grant opposition proceedings is more relaxed. Usually, the parties file pleadings and documents, and file evidence in the form of affidavits after which the matter is put up for final arguments. These proceedings do not involve several steps explained above, including steps 3 and 4. In appropriate cases, cross-examination of witnesses may be permitted by the IPAB.

The Patent Office and the IPAB usually accept internet printouts without further proof. However, for other documents such as brochures and receipts, they may require parties to produce originals.

In a suit for patent infringement, every ground on which a patent may be revoked is available as a ground for defence. However, for a declaration of nullity of the patent in suit, a defendant will have to file a counterclaim.

After the enactment of the Commercial Courts Act, the lifespan of a patent infringement lawsuit has reduced to about 18 months. The timeline of proceedings before the Patent Office and the IPAB is harder to predict, but a ballpark assessment would be in the range of two to four years.

Interim reliefs in patent infringement proceedings range from interim injunctions to maintaining accounts by the defendant. Broadly, the following interim reliefs are usually granted in patent infringement proceedings:

  1. Interim injunctions – courts are more likely to grant interim injunctions in cases where the defendant is yet to commercially launch. It is rare for courts to direct the plaintiff to make a security deposit while granting an interim injunction in the plaintiff's favour.
  2. Interim royalty arrangements – in standard essential patents litigation, this has become the go-to remedy. Interim royalty arrangements of several kinds, including where the plaintiff receives royalty subject to its furnishing a bank guarantee for the royalty it receives, have been passed by courts in India. Another version of this remedy is where the defendant does not actually make any royalty payments to the plaintiff but furnishes a bank guarantee for the royalty due.
  3. Maintaining accounts – courts also direct defendants to maintain accounts of their profit from the alleged infringing activities.
  4. Appointment of local commissioners – courts may appoint a local commissioner to visit the defendant's premises to preserve evidence of infringement. Such orders are usually passed in cases where the plaintiff can demonstrate to the judge that the defendant is likely to destroy evidence relevant to the proceedings.

The Patents Act empowers the recipient of groundless threats of patent infringement to move the court for a declaration that the threats are in fact groundless, and for an injunction against the continuance of such threats, and damages. However, this provision has not witnessed much litigation.

To the best of our knowledge, the Competition Commission of India has entertained complaints against one patentee in three cases involving standard essential patents. The director general's investigation report is awaited in these cases.

Substantive law

i Infringement

Under Section 48 of the Patents Act, the following acts constitute patent infringement:

  1. for a product patent, an unauthorised act of making, using, selling, offering for sale, exporting or importing for those purposes may constitute infringement of the patent; and
  2. for a process patent, an unauthorised act of using that process, or using, offering for sale, selling or exporting, importing for those purposes, a product directly obtained from the patented process may constitute infringement of the patent.

Indian courts recognise quia timet actions; namely, where there is a real and imminent apprehension of infringement. Courts have found preparatory acts such as listing of a patented molecule on the defendant's website, applications filed by defendant for obtaining a manufacturing approval for the patented product as real and imminent apprehension of infringement.

The decision of a two-judge bench of the Delhi High Court in the Roche v. Cipla9 dispute has laid down rules for claim interpretation in patent infringement lawsuits. A few key rules are reproduced below:

  1. the broad structure of a set of claims is an inverted pyramid, with the broadest at the top and the narrowest at the bottom;
  2. claims are a single sentence defining an invention or an inventive concept;
  3. different claims define different embodiments of the same inventive concept;
  4. where claims are 'dependent', it incorporates by reference 'everything in the parent claim, and adds some further statement, limitations or restrictions';
  5. at the beginning of an infringement action, courts in the United States conduct a 'Markman hearing' to define the scope of the claim or to throw light on certain ambiguous terms used in the claim. This is not technically done in India, but functionally most judges will resort to a similar exercise in trying to understand the scope and meaning of the claim, including its terms; and
  6. a claim includes its preamble, transition phrase and body. The transition term may be open-ended or closed.

Another important principle of claim construction was set by the Supreme Court in the Novartis case,10 where it held that coverage equals disclosure in the following terms:

The dichotomy that is sought to be drawn between coverage or claim on the one hand and disclosure or enablement or teaching on the other hand, seems to strike at the very root of the rationale of the law of patent . . . To say that the coverage in a patent might go much beyond the disclosure thus seem to negate the fundamental rule underlying the grant of patents.

In Farbewerke Hoechst v. Unichem Labs,11 the Bombay High Court held that:

[I]n an infringement action, the main function of the court is to construe the claims which are alleged to have been infringed, without reference to the body of the specification, and to refer to the body of the specification only if there is any ambiguity or difficulty in the construction of the claims in question.

ii Invalidity and other defences

Bases for challenging patent validity

A patent may be revoked on the grounds under Section 64 of the Patents Act. These include the following:

  1. athe invention was claimed in the complete specification of an earlier granted patent in India;
  2. bthe patent was granted to a person not entitled under the Patents Act;
  3. the patent was wrongfully obtained in contravention of the applicant of revocation;
  4. the subject of any claim is not an invention. Section 3 of the Patents Act defines what are not inventions under the Patents Act and includes subject matter such as computer programs per se, inventions contrary to natural laws, invention contrary to public order and morality, mere discovery of a new form of a known substance without enhanced efficacy, methods of agriculture or horticulture, plants and animals, traditional knowledge, etc;
  5. the invention is anticipated;
  6. the invention is obvious;
  7. the invention is not useful;
  8. there is insufficient disclosure;
  9. claims are not clearly defined or are not supported by the specification;
  10. the patent was obtained on false suggestion or representation;
  11. the subject matter is not patentable under the Patents Act;
  12. the invention was secretly used in India prior to priority date; and
  13. failure to comply with Section 8, in other words, failure to disclose or disclosure of false information for corresponding foreign applications.

Every ground under which a patent may be revoked under Section 64 is available as a ground for defence in a patent infringement lawsuit.

Other defences to patent infringement

The Patents Act recognises, inter alia, the following additional defences to patent infringement:

  1. use for the purpose merely of experiment or research including the imparting of instructions to pupils;
  2. making, constructing, using, selling or exporting, importing a patented invention solely for uses reasonably related to the development and submission of information required under any law in India, or a foreign country, that regulates the manufacture, construction, use, sale or import of any product. This is known as the Bolar exemption and is provided under Section 107A of the Patents Act. If the defendant takes the defence of Section 107A, then the defendant has to comply with the order dated 22 April 2019 passed by the Hon'ble Delhi High Court in Bayer Corporation v. Union of India (LPA 359 of 2017) and Bayer Intellectual Property GmbH & Anr. v. Alembic Pharmaceuticals (RFA(OS) COMM 6 of 2017).;
  3. importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product.

Further, Section 140 of the Patents Act prescribes conditions that are unlawful in a patent licence. These include conditions such as an exclusive grant back, prevention of challenges to the validity of a patent, and coercive package licensing.

Final remedies for infringement

A court trying a patent infringement suit may grant the following remedies:

  1. a permanent injunction restraining future infringement, subject to such terms as the court may deem fit;
  2. at the option of the plaintiff, damages or an account of the defendant's profits; and
  3. litigation costs.

The damages granted by the court may include compensatory, exemplary as well as punitive damages. The Delhi High Court in the case of Koninklijke Philips NV & Anr v. Amazestore & Ors, CS(COMM) 737 of 2016, decision dated 22 April 2019, introduced the concept of aggravated damages. Aggravated damages are connected to the mala fide conduct of a defendant and are granted over and above the assessment of compensatory damages. Aggravated damages may also be awarded to the plaintiff in patent infringement suits in appropriate cases.

The court may also order delivery up, seizure, forfeiture or destruction of the infringing goods as well as materials and implements, the predominant use of which is the creation of the infringing goods.

In the Merck v. Glenmark case,12 the Delhi High Court granted a permanent injunction restraining the defendant from manufacturing the infringing drug and from otherwise infringing the plaintiff's patent. The trial in this case was conducted on an expedited basis within a period of three months under specific orders of the Supreme Court. In the Roche v. Cipla case, the appellate court found that the defendant had infringed the patent and that the patent was valid. Because three months were left in the life of the patent when the decision was rendered, the court chose not to grant an injunction and instead ordered the defendant to render an account of the profits.

Other types of patent proceeding

i Proceedings for declaration of non-infringement

Under Indian law, a party may file a suit for declaration that its activities with respect to a product or process do not infringe a patent. For invoking this provision, the plaintiff must first attempt to obtain a written acknowledgment from the patentee to the effect that the plaintiff's activities do infringe the patentee's patent. Only if the patentee refuses or neglects to provide such an acknowledgement can the plaintiff approach the court seeking such a declaration. While seeking such an acknowledgment, the plaintiff must give full particulars of its product or process in question.

Notably, while seeking such a declaration, the plaintiff is not entitled to call the validity of the patent into question.

ii Proceedings for restraining issuance of groundless threats regarding institution of legal proceedings

A recipient of a threat of legal proceedings for infringement of a patent can file a suit for seeking the following reliefs:

  1. a declaration to the effect that the threats are unjustifiable;
  2. an injunction against the continuance of the threats; and
  3. damages, if any, for damage that he or she has sustained.

These threats may be in the form of circulars, advertisements, letters or publications, but a mere notification of the existence of a patent will not constitute a threat for institution of legal proceedings.

iii Proceedings for issuance of compulsory licence

The Indian Patents Act provides for compulsory licences that are granted by the Controller. A party may seek a compulsory licence, after three years of the grant of a patent, on any of the following grounds:

  1. the reasonable requirements of the public with respect to the patented invention have not been met;
  2. the patented invention has not been worked in the country; and
  3. the patented invention is not available to the public at a reasonably affordable price.

Prior to applying for a compulsory licence, the applicant must first seek a licence from the patentee, and only if reasonable efforts to obtain a licence fail can the applicant approach the Controller for a compulsory licence.

In 2012, the Controller granted India's first post-Agreement on Trade-Related Aspects of Intellectual Property Rights compulsory licence to Natco Pharma Ltd, with respect to Bayer's patented drug Sorafenib.13

iv Customs

The Intellectual Property Rights (Imported Goods) Enforcement Rules 2007 allow patentees to have their patents recorded with the customs authorities so that authorities may suspend release of and eventually confiscate infringing goods. Recognising that the determination of patent infringement issues can be complex, the High Court of Delhi in Ericsson v. Union of India14 directed that the customs authorities would not ordinarily seize or suspend release of goods in patent cases, and would exercise these powers with extreme caution, unless the rights of the parties have been previously determined by the order of a competent court. However, in straightforward cases, where no complex issues of patent infringement or invalidity are involved, the customs authorities may proceed to suspend the release of the goods even in the absence of a court order.

Appeal

If the first instance, patent infringement proceedings are instituted before the district court, an inter-court appeal by the unsuccessful party lies before the High Court; whereas, if the first-instance patent infringement proceedings are instituted before the High Court, an intra-court appeal lies before a larger bench of the High Court. An appeal against the order of the High Court lies to the Supreme Court.

Appeals can only be filed against orders that form part of a list of appealable orders. Not every order passed by the court of first instance is appealable. This list typically includes orders affecting the substantive rights of the parties, such as those granting or refusing injunctions.

First appeal against a final decision post-trial is available as a matter of right and permission to appeal is not required. While provisions for obtaining a certificate from the High Court for appealing to the Supreme Court exist, in practice, most appeals to the Supreme Court require leave to appeal to be granted by the Supreme Court for admission of the appeal.

Fresh evidence may be introduced at the appellate stage only after obtaining specific permission of the court.

First appellate courts usually consider both legal and factual issues. However, where the lower court has exercised its discretion in deciding an application for grant of an injunction, the appellate court will ordinarily not interfere in the exercise of discretion unless such exercise is perverse, capricious or arbitrary.

Under the new commercial courts regime, an appeal is to be decided within a period of six months of the date of filing of the appeal.

The year in review

The past year has seen a lot of activity in the High Courts and Tribunals relating to patent litigation.

i Easai Co Ltd & Anr v. Satish Reddy & Anr15

In a suit for patent infringement, where the defendants were infringing the plaintiffs' patent for Lorcaserin or any of its pharmaceutically acceptable salts including Lorcaserin Hydrochloride and Lorcaserin Hydrochloride Hemihydrate, the Hon'ble Delhi High Court granted an interim injunction in favour of the plaintiff. The decision is noteworthy for the following reasons:

  1. The Hon'ble Court shed light on the ambit of a basic/genus and a species patent. The court held that species and basic patents can both co-exist and the mere application or grant of a species patent that is an improvement patent would not take the subject matter of the species patent out of the ambit of the basic patent.16
  2. The court held that non-working of a patent particularly in the pharmaceutical field cannot have a bearing on the patentee's right under Section 48 of the Patents Act.17
  3. The Hon'ble Court laid down the concept of 'clearing the way'. Specifically, the court held that the defendants had not 'cleared the way' (i.e., the defendants chose to seek marketing approval for the drug without invoking invalidity proceedings when they knew litigation was bound to happen).18

ii Pharmacyclics LLC v. Union of India19

In another noteworthy case, the Hon'ble Delhi Court adjudicated upon the issue as to whether after a party has completed its pleadings in a post-grant opposition along with evidence, can any party file further evidence or rely on further documents.20 Accordingly, the court laid down the following guidelines with respect to post-grant oppositions:

  1. the opponent and the patentee have adequate freedom to file their initial pleadings and evidence by relying upon all the documents and expert testimonies that they wish to;
  2. the opponent's rejoinder in a post-grant opposition proceeding ought to be strictly confined to the patentee's evidence;
  3. once an Opposition Board is constituted, and material is transmitted to the board, further evidence is not permissible;
  4. the filing of further evidence under Rule 60 of the Patent Rules, 2003 is permitted only in exceptional cases, with leave/direction of the Controller. The filing can only be done prior to hearing fixed in Rule 62. Once a notice of hearing is given, no further evidence is permissible21; and
  5. Rule 62(4) of the Patent Rules, 2003 relates only to publications and not any private document. Under this Rule, in exceptional cases, publications that have not been placed inadvertently or not in the party's knowledge can be served upon the opposite side five days prior to the hearing. When the said publication is served, the date, time of publication along with the relevant portions of the publication must be highlighted so that the party can deal with the publication at the time of the hearing. Moreover, as these publications would be served after the Opposition Board has been formed, a member of the Opposition Board should be present at the time of the hearing.22

Additionally, observing on the nature of the post-grant oppositions, the Hon'ble Court also observed that once the Opposition Board forms an opinion, it is advisable for the Controller to fix a hearing expeditiously in the proceeding.23 Accordingly, the Hon'ble Court stated that the Opposition Board give its recommendation within three months of the opponents' rejoinder and the hearing be fixed three months thereafter.

The rationale of the court to lay down the procedure is to eliminate the element of surprise so that the parties know the case that they have to meet and no party should have an unfair advantage over the other.

iii Bayer Corporation v. Union of India24

The Division Bench of Delhi High Court on 22 April 2019 decided two appeals filed by Bayer Intellectual Property Gmbh25 (hereinafter 'Bayer') dealing with the issue of the interpretation of Section 107A of the Patents Act: the Bolar exemption provision of the Indian Patents Act.

The appeals were filed by Bayer against the decision of the single judge in a writ petition, WP(C) No. 1971/2014 filed by Bayer against Natco Pharma Ltd (hereinafter 'Natco'). One of the major issues dealt in this case was whether an authorised person can export the patented drug under Section 107A, taking advantage under Bolar provision. The Bolar provision (under Section 107A) in the Indian Patent Act provides that the generic manufacturers can prepare for obtaining regulatory approvals and can therefore be ready with approvals for launch of a patented product as soon as the patent expires. The bench upheld the single bench's interpretation to include export within the ambit of Section 107A. The bench held that sale, use, construction of patented products in terms of Section 107A of the Act for purposes both within the country and abroad is authorised and legal.

The court held that the term 'export' is used in different contexts in Sections 84, 90 and 92A. The court also observed that the scope of sale cannot be narrowed down to sale in India only. The court further held that an unregulated export of patented invention can be troublesome to the patent owner and can result in exploitation of the rights of the patentee. However, it also held that the volume of the patented product and its use for research and development of information cannot be prescribed in one norm.

Finally, the court held that whether the use of the patented invention was reasonably related to elements covered under Section 107A, required a case to case analysis and no bright line could be laid down as to what acts qualified as reasonably related. Moreover, the Hon'ble Court laid down a list of factors that could be considered for the inquiry and adjudication of cases, seeking the exemption under Section 107A.26

iv Ferid Allani v. Union of India27 and Allani Ferid v. Assistant Controller of Patents and Designs

In a landmark decision, the Hon'ble Delhi High Court clarified the law relating to software patents by interpreting Section 3(k) of the Patents Act, the patent eligibility provision which relates to computer programs.

Tracing the legislative intent from the Report of the Joint Committee on the Patents (Second Amendment) Bill, 1999 (the amendment which introduced Section 3(k)), the Hon'ble Court held that computer programs 'per se' were excluded from patents. The words 'per se' was incorporated to ensure that genuine inventions that are developed based on computer programs are not rejected patents.28

Moreover, the court held that in the present times, when so many inventions related to artificial intelligence and block-chain technologies were based on computer programs, it would be regressive to consider that all inventions related to computers are not eligible for patents.29

The court concluded by saying that as long as an invention demonstrated 'technical effect' or 'technical contribution', the bar under Section 3(k) would not apply and it would be patent eligible subject matter though it will have to satisfy the holy trinity of patentability (i.e., novelty, inventive step and utility).30,31

The Delhi High Court remanded the matter back to the Patent Office for adjudication on merits on the patent application in light of the aforesaid principles. The patent office rejected the patent application in February 2020 and the patent applicant preferred an appeal before the IPAB.

By its decision dated 20 July 2020, the Intellectual Property Appellate Board in Allani Ferid v. Assistant Controller of Patents and Designs, OA/17/2020/PT/DEL, reversed the decision of the patent office and proceeded to grant the patent.

Specifically, the IPAB held that the invention was not barred under Section 3(k) of the Patents Act. Interpreting the contours of 'technical effect', the IPAB provided an illustrative list of factors that could be used to show 'technical effect' and consequently establish that an invention is patent eligible. These factors were:

  1. higher speed;
  2. reduced hard-disk access time;
  3. more economical use of memory;
  4. more efficient data compression techniques;
  5. improved user interface;
  6. better control of robotic arm; and
  7. improved reception or transmission of a radio signal.

As the present invention fell under at least the following indicators of technical effect (i.e., higher speed, more economic use of memory and a more efficient data base strategy), the IPAB held that the present invention is patentable.

This is a landmark decision in the field of computer related inventions and provides sufficient guidance for the future.

v Monsanto Technology LLC v. Nuziveedu Seeds Ltd32

The Supreme Court in Monsanto set aside a Delhi High Court Division Bench judgment after holding that 'summary adjudication of technically complex suits' such as patent infringement suits, which necessarily require expert evidence to be led, is 'neither desirable or permissible under the law'.

The Division Bench of the Delhi High Court held that Monsanto's patent for an artificial gene construct was ineligible subject matter under Section 3(j) of the Patents Act. The Division Bench interpreted the patent claims relating to an artificial gene construct (inserted into a plant to eventually develop a plant with insect resistance) as a 'plant, seed, part of a plant and an essentially biological process', each of which qualified as ineligible subject matter for a patent under Section 3(j) of the Patent Act.

Setting aside the order, the Supreme Court restored the patent and held that the 'suit involved mixed questions of law and facts' that could only be examined on the basis of evidence and thus sent back the suit to the lower court for trial, keeping all questions of fact and law open. Further, the Supreme Court restored the interim order of the trial court till the determination of the suit. The interim order of the trial court had found the patent prima facie valid and, with respect to the contractual disputes between the parties, had set up an interim arrangement between the parties to the dispute.

Outlook

The enactment of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, along with the recent legal developments outlined above, reveals the following:

  1. The Hon'ble Courts have introduced the concept of 'clear the way'. In the context of patent law infringement, the same places a burden on the defendants that they must exercise their due diligence and display their bona fides if they intend to use the subject matter covered by a patent. If a particular defendant fails to 'clear the way', then the said factor may shift the balance of convenience in favour of the plaintiff and may enable the grant of an interim injunction against the defendant.
  2. The nature and timelines that ought to be followed in post-grant oppositions have bene clarified and courts have also provided guidelines for the same. The Pharmacyclic decision will impact the functioning of the Patent Office and it is hoped that it will only expedite the process of concluding post-grant proceedings, which at times, get unnecessarily delayed.
  3. There is now clarity on the interpretation of Section 107A of the Patents Act, and the Hon'ble Courts by laying down the factors for adjudication of cases falling under this provision, have greatly enabled future patent litigation disputes. If the defendants seek to take the defence under Section 107A for their activities, there are clear guidelines laid down and stipulations that they have to adhere to. This lack of ambiguity would ensure that Section 107A, as a defence provision, is not misused.
  4. In a path breaking development, the Hon'ble Delhi Court and the IPAB have settled the interpretation of Section 3(k) of the Act. The definition of 'technical effect' and the contours of what qualifies as 'technical effect' would go a long way in enabling filing of computer related inventions in India.
  5. While the concept of summary judgment, as introduced by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, has been invoked by Courts in IPR disputes, in cases where the court forms an opinion that the 'plaintiff or defendant has no real prospect of succeeding or defending the suit', the Supreme Court has introduced a necessary check to this practice. The Supreme Court in the Monsanto case by expressly stating that 'summary adjudication of technically complex suit' such as patent infringement suits, which necessarily require expert evidence to be led is 'neither desirable or permissible under the law' has emphasised the importance of evidence in complex suits.

The legal developments of the past year alone have a holistic impact as they impact patent prosecution, patent opposition, grant of interim injunctions, clarify the defence sought to be taken by defendants in lawsuits and highlight the importance of evidence in technically complex patent disputes. Each of these changes are in favour of patent owners. All of the above clearly shows that the landscape and outlook for patent litigation is positive and favourable for patent owners in India.

Footnotes

Footnotes

1 Pravin Anand is the managing partner, Vidisha Garg is a partner and Vibhav Mithal is a managing associate at Anand and Anand.

2 For instance, see 'India committed to protect Intellectual Property Rights: PM Modi', 13 November 2015, https://timesofindia.indiatimes.com/india/India-committed-to-protect-Intellectual-Property-Rights-PM-Modi/articleshow/49761700.cms.

3 'Judicial reform PM Modi's priority in 2017, ideas sought to reduce case pendency', 25 January 2017, www.newindianexpress.com/nation/2017/jan/24/judicial-reform-pm-modis-priority-in-2017-
ideas-sought-to-reduce-case-pendency-1563098--1.html.

4 (2015) 225 DLT 391 (DB).

5 (2015) 223 DLT 454.

6 67(2010)DLT459.

7 (2014) 15 SCC 360.

8 id. at Paragraph 21.

9 See footnote 4.

10 (2013) 6 SCC 1.

11 AIR 1969 Bom 255.

12 See footnote 5.

13 Order dated 9 March 2012 in CLA No. 1 of 2012, available at http://www.gnaipr.com/CaseLaws/Controller%20Order%20-%2012032012.pdf.

14 Judgment dated 13 July 2012 in LPA 1104 of 2011.

15 CS(COMM) 1169 of 2018. Decision dated 6 May 2019 before the Delhi High Court. Also reported as 2019 (79) PTC 568 (Del.).

16 id. at 50.9.

17 Easai Co Ltd & Anr v. Satish Reddy & Anr, 2019 (79) PTC 568 (Del.) at Paragraph 50.11.

18 Easai Co Ltd & Anr v. Satish Reddy & Anr, 2019 (79) PTC 568 (Del.) at Paragraph 51.

19 WP(C) 12105/19, decision dated 20th November, 2019 before the Delhi High Court. Pharmacyclics LLC had filed a Writ Petition before the Hon'ble Delhi High Court challenging the order dated 6 November 2019 of the Joint Controller of Patents and Designs, by which, the Controller had rejected Pharmacyclics' petition and had taken on record the additional documents along with evidence filed by the Opponent (Laurus Lab Pvt Ltd) at a belated stage. The proceedings before the Controller related to post-grant opposition proceedings initiated against Pharmacyclics' patent.

20 id. at Paragraph 28.

21 id. at Paragraphs 26, 31, 34 read with 39.

22 id. at Paragraphs 32, 33 and 39.

23 id. at Paragraph 31.

24 Bayer Corporation & Anr v. Union of India & Ors, 2019 (78) PTC Del 521 (Del)(DB).

25 Bayer Corporation v. Union of India (WP (C) 1971 of 2014) and Bayer Intellectual property GMBH v. Alembic Pharmaceuticals Ltd (CS (COMM) No. 1592/2016); 2019 (78) PTC 521 (Del); Division Bench.

26 id. at Paragraphs 108 to 111.

27 WP(C) 7 of 2014, decision dated 12 December 2019 before the Delhi High Court.

28 id. at Paragraph 10.

29 ibid.

30 id. at Paragraph 11.

31 id. at Paragraph 6.

32 Civil Appeal Nos. 4616 and 4617 of 2018, decision dated 8 January 2019, before the Supreme Court of India.

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