The Patent Litigation Law Review: India
With this in mind, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 (the Commercial Courts Act) was introduced to speed up commercial litigation in the country. All patent disputes are covered by this statute.
The hierarchy of courts, from highest to lowest, in India is as follows:
- one Supreme Court – India's Supreme Court is the highest court in the country;
- 24 high courts – India's 28 states have 24 high courts, and some states have a common high court; and
- over 500 district courts – the high courts exercise superintendence over the district courts.
As far as patent litigation is concerned, practically speaking, there is a three-part 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, 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 the high courts, especially before the Delhi High Court, which exercises original jurisdiction.
According to the Commercial Courts Act, not all district courts can entertain commercial lawsuits: commercial suits can only be filed 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 a 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 Patents Act 1970 recognises product and process patents. It allows the applicants to file provisional applications that are followed by non-provisional applications, convention applications under the Paris Convention, national phase applications pursuant to Patent Cooperation Treaty (PCT) international applications designating India, divisional applications and patent of addition applications. Patent of addition applications are applications that are filed to provide protection to improvements or modifications in patent applications that have already been filed or patents that have been granted.
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 as follows.
- The fee paid for requesting substantive examination has been withdrawn. Applicants can now withdraw the application by filing a request any time before the application is referred to the examiner. The application shall be deemed to have not been filed if the request is accepted.
- The time for placing the application in order under Section 21 has been reduced from 12 months to six months, which is extendible by three months on request.
- A provision for taking adjournment of hearings has been introduced.
- It is now possible to do hearings through videoconference or telephone.
- The process for expedited examination has been incorporated in Rule 24C, which provides for expedited examination of applications in certain cases, as follows:
- 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 start-up.
- A definition of start-ups 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 and substituted the definition of start-up in Rule 2(fb) of the Patents Rules 2003. According to the new definition, 'start-up' 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 on 17 September 2019. In the Rules, Rule 24C was amended to include the following beneficiaries among those who can avail themselves 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.
Patent applications are usually 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 a report to be made on several aspects, including:
- whether the application and the specification and other documents are in accordance with the Patents Act;
- whether there is any lawful objection to the grant; and
- results of the investigation for anticipation by any previous publication and prior claim.
The examiner makes the above report within three months of the date of reference, and the Controller ordinarily disposes of the report within one month of receipt and issues a first statement of objections within one month of the disposal of the report. An application may be put in order within six months of 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 Patents Act, any time before the examination of the application or during the prosecution of the application. In one order, the Delhi High Court has held pre-grant opposition as 'examination-in-aid'.6 The post-grant proceedings are filed within one year of the date of publication of the grant of the patent in the Official Journal.
The central government revised the Patents Rules 2003 on 19 October 2020 in the Patents (Amendment) Rules 2020. The Rules have been amended particularly with regard to the requirements relating to working statements and Form 27.
The major change involves the filing of the statements of commercial workings once every financial year and not the calendar year, starting from the financial year commencing immediately after the financial year in which the patent was granted. The statements must be submitted within six months of the expiry of each financial year. (i.e., the due date is 31 September and not 31 March).
Further, Form 27 has also been revised and simplified. Now one form may be filed in respect of multiple patents, provided all of them are related patents, wherein the approximate revenue or value accrued from a particular patented invention cannot be derived separately from the approximate revenue or value accrued from related patents, and all such patents are granted to the same patentees. The revised Form 27 also does not require any statement from the patentee or licensee relating to public requirement of the patented invention or whether the same has been met adequately.
Procedure in patent enforcement and invalidity actions
The patent litigation landscape is changing rapidly with the advent of the Commercial Courts Act. For instance, the Act provides a non-extendable deadline for filing a statement of defence (a 'written statement'). This deadline is 120 days from the date of service. After 120 days, the right to file a written statement will be forfeited.
The deadline applies to defendants in patent infringement lawsuits as well as defendants in counterclaims, who are usually the plaintiffs 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 the 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:
- obtaining certified copies of patent documents from the Indian patent office because documents available on the patent office website may not be updated;
- identifying an authorised signatory;
- identifying an independent expert and other witnesses; and
- certification for internet printouts.
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, 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; however, 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 (IPAB). The IPAB is a specialised board that hears appeals against orders of the intellectual property offices, including the patent office.
In April 2021, the government passed the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance 2021, which abolished the IPAB and provided that all matters governed by the Board be transferred to the relevant high courts.
This Ordinance has now been replaced by the Tribunal Reforms Bill 2021 which is identical to the Ordinance. The Tribunal Reforms Bill 2021 has been passed by both houses of Parliament; therefore, the IPAB has now been abolished.
In view of this development, appeals against the orders of the intellectual property offices, including the patent office, now lie before the relevant high court. For example, an order issued by the patent office located in Delhi will fall before the Delhi High Court.
Any party seeking to challenge the validity of a patent may file a revocation petition before the relevant high court. The respective high courts will be taking cognisance of this development and will frame their respective rules to deal with the cases that are to be transferred to them. For instance, the Delhi High Court has already taken note of this development and has set up the Intellectual Property Division, which shall hear revocation petitions and rectification petitions filed by any parties, as well as any appeals against orders of the Controller of Patents.
The aforementioned highlights that there has been expeditious adoption of the change in law by the courts, and anticipating the transfer of cases from the former Tribunal – the IPAB – to the high courts, the courts are modifying their practice so that the manner of adjudication of intellectual property rights will not be impacted.
A patentee or its exclusive licensee can file a lawsuit for patent infringement. The limitation period is three years from the date of the 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 relevant high court 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
Revocation proceedings 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 only be filed after the grant of a patent but before one year has elapsed from the date of publication of the grant of a patent.
Key differences between post-grant opposition and revocation proceedings include the narrower scope of enquiry 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:
- Step 1 – lawsuit is filed and admitted. Once the lawsuit is admitted, summons to the defendant are issued by the court.
- 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.
- Step 3 – this is a procedural step called 'admission and denial' of documents. Parties may also seek discovery of documents.
- 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.
- Step 5 – trial includes examination in chief, cross examination and re-examination, if any, of witnesses. A patent infringement trial is governed by the Evidence Act 1872.
- Step 6 – final arguments are presented 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 the 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 high court usually accept internet printouts without further proof; however, for other documents (e.g., brochures and receipts), they may require the 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, the defendant must file a counterclaim.
After the enactment of the Commercial Courts Act, the duration of patent infringement lawsuits has reduced to about 18 months. The timeline of proceedings before the Patent Office is harder to predict but would approximately be in the range of two to four years.
Interim relief in patent infringement proceedings range from interim injunctions to maintaining accounts by the defendant. Broadly, the following types of interim relief are usually granted in patent infringement proceedings.
- Interim injunctions – the 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.
- 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 of a bank guarantee for the royalty it receives, have been passed by the courts. 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.
- Maintaining accounts – the courts also direct defendants to maintain accounts of their profit from the alleged infringing activities.
- Appointment of local commissioners – the courts may appoint a local commissioner to visit the defendant's premises to preserve evidence of infringement. The 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 those 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 those cases.
Under Section 48 of the Patents Act, the following acts may constitute patent infringement:
- for a product patent: an unauthorised act of making, using, selling, offering for sale, exporting or importing for those purposes; and
- for a process patent: an unauthorised act of using that process or using, offering for sale, selling or exporting, or importing for those purposes a product directly obtained from the patented process.
Indian courts recognise quia timet actions, namely where there is a real and imminent apprehension of infringement. Courts have found preparatory acts (e.g., listing of a patented molecule on the defendant's website and applications filed by the 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:
- the broad structure of a set of claims is an inverted pyramid, with the broadest at the top and the narrowest at the bottom;
- claims are a single sentence defining an invention or an inventive concept;
- different claims define different embodiments of the same inventive concept;
- where a claim is dependent, it incorporates by reference 'everything in the parent claim, and adds some further statement, limitations or restrictions';
- at the beginning of an infringement action, US courts 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
- 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, which include the following:
- the invention was claimed in the complete specification of an earlier granted patent in India;
- the patent was granted to a person not entitled under the Patents Act;
- the patent was wrongfully obtained in contravention of the applicant of revocation;
- 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, inventions 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 and traditional knowledge;
- the invention is anticipated;
- the invention is obvious;
- the invention is not useful;
- there is insufficient disclosure;
- claims are not clearly defined or are not supported by the specification;
- the patent was obtained on false suggestion or representation;
- the subject matter is not patentable under the Patents Act;
- the invention was secretly used in India prior to the priority date; and
- 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:
- use for the mere purpose of experimenting or research, including the imparting of instructions to pupils;
- making, constructing, using, selling or exporting, or 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 must comply with the order dated 22 April 2019 passed by the Hon'ble Delhi High Court in Bayer Corporation v. Union of India12 and Bayer Intellectual Property GmbH & Anr. v. Alembic Pharmaceuticals;13
- 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.
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:
- a permanent injunction restraining future infringement, subject to such terms as the court may deem fit;
- at the option of the plaintiff, damages or an account of the defendant's profits; and
- litigation costs.
The damages granted by the court may include compensatory, exemplary and punitive damages. The Delhi High Court in the case of Koninklijke Philips NV & Anr v. Amazestore & Ors14 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 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,15 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 proceedings
i Proceedings for declaration of non-infringement
Under Indian law, a party may file a suit for declaration that its activities in respect of a product or process do not infringe a patent. To invoke 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 the acknowledgement can the plaintiff approach the court seeking a declaration. While seeking the acknowledgment, the plaintiff must give full particulars of its product or process in question.
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 seeking the following types of relief:
- a declaration to the effect that the threats are unjustifiable;
- an injunction against the continuance of the threats; and
- 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 Patents Act provides for compulsory licences that are granted by the Controller. A party may seek a compulsory licence, three years after the grant of a patent, on any of the following grounds:
- the reasonable requirements of the public regarding the patented invention have not been met;
- the patented invention has not been worked in the country; and
- 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, in respect of Bayer's patented drug Sorafenib.16
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 India17 outlined that the customs authorities would not ordinarily seize or suspend release of goods in patent cases and would exercise those 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.
If the first instance patent infringement proceedings are instituted before the district court, an inter-court appeal by the unsuccessful party lies before the relevant high court. If the first instance patent infringement proceedings are instituted before a high court, an intra-court appeal lies before a larger bench of the high court. An appeal against the order of a 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 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 Novartis AG
In Novartis AG v. The Controller General of Patents, Designs and Trademarks & Ors.,18 Novartis's patent IN 276026 was revoked in a post-grant opposition, and an appeal was filed before the IPAB. The IPAB set aside the order and restored the patent to the register.
The Tribunal's decision is noteworthy for an invalidity analysis of a patent.
- The Tribunal held that a generic disclosure cannot defeat the novelty of a specific claim.19 Simply put, if there is a generic disclosure of an invention in a document, the document cannot be used to invalidate a specific claim for the purposes of novelty.
- The Tribunal held that patent term extension documents cannot be used to determine the novelty of a subsequent patent.20
- The Tribunal held that if a particular aspect was covered in a document but not disclosed in that document, the document cannot be considered for an invalidity analysis.21
ii FMC Corporation
In FMC Corporation & Anr. v. Natco Pharma Limited,22 the Delhi High Court addressed a trend that had started being adopted by potential patent infringers. Anticipating that a lawsuit for infringement would be filed for its activities, the patent infringer would file a suit for declaration of non-infringement in a forum of its choice. In response, the patentee would file a lawsuit for patent infringement, which would usually be in a different court.
In this scenario, the potential infringers would take the defence in the infringement suit that the plaintiff is engaging in forum shopping by choosing a forum of its choice to file the lawsuit for patent infringement. The endeavour would be to argue that the suit for patent infringement is not maintainable in view of a prior instituted suit for non-declaration of infringement.
In this dispute, rejecting the defendants' contention, the Court held that the concept of forum non conveniens was not applicable to civil suits.23 This finding was premised on the concept that a plaintiff of a filed lawsuit is the dominus litis, implying that it has the choice to choose its forum.
In view of the same, the Court held that despite proceedings that had been instituted by the defendants to declare non-infringement prior to the institution of the suit for patent infringement, the suit for patent infringement would continue; therefore, it put a necessary check to this practice.
Additionally, clarifying the procedural law in respect of intellectual property rights disputes, which have been recognised as commercial disputes by the Commercial Courts Act, the Court held that the Commercial Courts Act did not change the law in respect of how pleadings are to be amended. It clarified that although the Commercial Courts Act modified the procedure for intellectual property rights disputes, the legislature in its wisdom did not change the manner of amendment; therefore, the Court, rejecting the defendant's submissions, held that it did not need to delve into a greater degree of circumspection while analysing amendments.24
iii Dhaval Diyora
Addressing the issue of pre-grant oppositions holding up the grant of patents, the Bombay High Court in Dhaval Diyora v. Union of India & Ors.25 clarified the purpose of the pre-grant opposition procedure provided for in Section 25(1) of the Patents Act 1970.
The petitioner, had filed a pre-grant opposition before the Patent Office and, as the same had been rejected, approached the Bombay High Court challenging the decision. Acknowledging the overall background and facts of the case, along with examination of the pre-grant procedure in the Patents Act, the Bombay High Court gave the following key findings.
First, the Court held that the overall purpose of a pre-grant opposition was to assist the Controller,26 and while a party had the right to file a pre-grant opposition, the overall process should also look at the disposal of the proceedings before the Controller. In view of the same, it held that the petitioner had failed to file the pre-grant opposition from the date of publication.27 The Court thus indicated that the petitioner's pre-grant opposition was delayed. It also noted the Controller's submission that a pre-grant opposition should be filed within six months of the publication but did not rule on the same.
Second, clarifying the concept of locus standi for a pre-grant opposition, the Court held that as the purpose of the pre-grant opposition is to assist the Controller, the right to file a pre-grant opposition was provided to 'any person' so that such person may assist the Controller in reaching a decision. The Court held that this is a valuable right granted by the legislature and is not to be abused.28
Finally, acknowledging the practice of filing benami29 oppositions to throttle legitimate competition, the Court expressed disapproval of this practice and accordingly proceeded to impose cost on the petitioner.30 A factor that played a part in this finding was that the Court was not persuaded by the credentials of the petitioner in filing the pre-grant opposition, indicating that the Court was of the view that the person who files a pre-grant opposition must have some credibility to file the same.31
iv Pharmacyclics LLC
In Pharmacyclics LLC v. Controller General of Patents, Designs, Trademark and Geographical Indications & Ors.,32 the IPAB clarified the process of post-grant opposition. This ruling will be of great aid in the future. In this case, Pharmacyclic's patent had been revoked in a post grant opposition by the Controller, and this decision was set aside by the IPAB. The IPAB's findings were as follows.
Laying down the stage of filing of evidence in a post-grant opposition, the Tribunal held that whatever evidence a party seeks to file in a post-grant opposition must be filed prior to the date when a hearing is fixed by the Controller; therefore, if any evidence is filed after a date of hearing is fixed by the Controller, the same is not admissible under the Patents Act and Rules made thereunder.33
Highlighting the importance of the Opposition Board in the post-grant opposition process, the Tribunal held that it was mandatory for the Controller to take the recommendation of the Opposition Board into consideration, and if the Controller disagreed with the views, the reasoning should be provided in writing.
The Tribunal held that with the recommendation of an Opposition Board, the Controller is in a better position to decide a post-grant opposition, even though the recommendations are not binding on the Controller. Contextualising this finding in the larger context, the Tribunal held that if this process was not being followed, the whole process of having an Opposition Board is likely to lose its meaning.34
v Interdigital Technology Corporation
In Interdigital Technology Corporation & Ors. v. Xiaomi Corporation & Ors.,35 in a first of its kind order, the Delhi High Court, granted ad interim relief to the plaintiff in a patent infringement suit by staying the enforcement of an order passed by a court of foreign jurisdiction. The plaintiffs before the Delhi High Court had moved an application seeking to restrain the defendants from enforcing an order that had been passed by the Wuhan Intermediate People's Court (the Wuhan Court), dated 23 September 2020.36 The Wuhan Court had passed an anti-suit injunction order restraining the plaintiffs before the Delhi High Court from instituting and enforcing a suit for infringement before any fora.
The Delhi High Court held that, to the extent a defendant in a lawsuit seeks to restrain the plaintiff of a lawsuit, the courts can interfere if any decision passed by any fora, such as the Wuhan Court, resulted in substantial injustice to the rights of an Indian citizen in India.
In the above case, the Delhi High Court interfered by not permitting the defendant Xiaomi from enforcing the anti-suit injunction that was granted by the Wuhan Court against the plaintiff Interdigital; thus, allowing the plaintiff to continue its case filed before the Delhi High Court.37
The Delhi High Court further clarified that the order passed by it was a form of relief provided to the plaintiffs to restrain the enforcement of the anti-suit injunction passed by the Wuhan Court and accordingly indicated that the exact terminology used to describe the Court's order was irrelevant.38 Its observations were premised on the fact that a party who is entitled to file proceedings before an Indian court was also entitled to prosecute those proceedings.39
The Delhi High Court also agreed with Interdigital's contentions that the present suit did not interfere with the proceedings of the Wuhan Court40 and thereafter held that the principle of comity of courts was not being violated as the principle had no application where any order of the foreign court violated public policy in India,41 breached customary international law or resulted in manifest injustice.42
It also held that the Wuhan Court's order to restrain Interdigital from filing lawsuits before any courts in China or any other countries and regions, and compel the plaintiff to suspend or withdraw already initiated legal proceedings, would prima facie not be permissible.43 It stated that it was not open to any court to pass an order prohibiting a court in another country to exercise jurisdiction lawfully vested in it,44 and the pendency of proceedings before foreign jurisdictions would not prevent the Court from passing the present order.45
vi Ferid Allani and Allani Ferid
In a landmark decision in Ferid Allani v. Union of India, the Delhi High Court clarified the law relating to software patents by interpreting Section 3(k) of the Patents Act, the patent eligibility provision that 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 Court held that computer programs per se were excluded from patents. The words 'per se' were incorporated to ensure that genuine inventions that are developed based on computer programs are not rejected patents.
The Court held that in the present times, when so many inventions related to artificial intelligence and blockchain technologies are on computer programs, it would be regressive to consider that all inventions related to computers are not eligible for patents. It concluded by saying that as long as an invention demonstrated 'technical effect' or 'technical contribution', the prohibition under Section 3(k) would not apply, and it would be patent-eligible subject matter, although it will have to satisfy the holy trinity of patentability (i.e., novelty, inventive step and utility).
The Delhi High Court remanded the matter back to the Patent Office for adjudication on merits on the patent application in light of the aforementioned principles. The Patent Office rejected the patent application in February 2020, and the patent applicant submitted an appeal before the IPAB.
In Allani Ferid v. Assistant Controller of Patents and Designs,46 the IPAB reversed the decision of the Patent Office and proceeded to grant the patent. Specifically, it held that the invention was not prohibited 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 are:
- higher speed;
- reduced hard disk access time;
- more economic use of memory;
- more efficient data compression techniques;
- improved user interface;
- better control of robotic arm; and
- 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 database 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.
In AstraZeneca AB & Anr. v. Torrent Pharmaceuticals Ltd.47 (the Dapagliflozin disputes), the plaintiff, AstraZeneca, had instituted multiple suits against various infringers before the Delhi High Court. AstraZeneca alleged infringement of its genus patent IN' 205147 (IN'147) and species patent IN'235625 (IN'625), which covered the novel compound Dapagliflozin. This compound aids in the treatment of type 2 diabetes mellitus. The plaintiff sought a temporary injunction in those suits before the Delhi High Court.
The defendants in the lawsuits challenged the validity of the species patent IN'147 on the grounds of prior claiming in the genus patent (which had expired), obviousness and non-compliance with Section 8(1) and 8(2) of the Patents Act.
In an order dated 18 November 2020, the Court held that:
- the grant of patents for a Markush claim and a subsequent patent for a selection invention was legally permissible;
- on the aspect of IN'235625 being invalid for prior claim in view of the genus patent IN'205147, the Court compared the claims of both patents and observed that Dapagliflozin was not claimed or disclosed in IN'147, but only in IN'625; therefore, IN'625 was not vulnerable to challenge for prior claim under Section 64(1)(a);
- noting the distinction between coverage and disclosure, the Court held that the plaintiff's admissions that both IN'147 and IN'625 were worked through a single drug comprising Dapagliflozin did not amount to a deemed admission of disclosure of Dapagliflozin in IN'147;
- the Court further held that AstraZeneca had substantially complied with Section 8(1) of the Patents Act by informing the Indian Patent Office about the US patent corresponding to IN'625 at the time when IN'625 was being prosecuted and by clarifying that the US Patent was a continuation-in-part; and
- the Court held that IN'625 was vulnerable to challenge for obviousness as it held that it would be obvious for a person with ordinary skill in the art to substitute the methoxy group with the ethoxy group in example 12 of IN'147 and arrive at Dapagliflozin.
Further, regarding point (e), IN'625 was vulnerable to challenge owing to non-compliance with Section 8(2), as the patentee had not shared the examination reports and objections raised by the US Patent and Trademark Office to IN'625's corresponding US patent application, despite the Indian Patent Office specifically seeking the same.
The Court was of the view that the defendants had raised a credible challenge to IN'625 and, in accordance with the law, an interim injunction was declined for the plaintiff. Instead, the defendants were directed to file quarterly accounts of manufacture, sale and supply of the impugned products and file an annual audited statement of sales of the impugned product. The defendants were also directed to file a list of their assets along with their market value within a certain period.
By an independent decision dated 2 November 2020, the Delhi High Court, in a suit filed by the plaintiff for the same patents and the same compound but against different infringers, also denied interim relief to the plaintiff.
The plaintiff thereafter filed an appeal against the decisions dated 2 November 2020 and 18 November 2020 before the Delhi High Court, and the division bench of the Delhi High Court in its order dated 20 July 2021 affirmed the denial of the interim injunction.48 An appeal against the decision dated 20 July 2021 is pending before the Supreme Court.
viii Interdigital Technology Corporation and Interdigital VC Holdings
Interdigital Technology Corporation & Ors. v. Xiaomi Corporation & Ors.49 (see Section VIII.v) and Interdigital VC Holdings Inc & Ors. v. Xiaomi Corporation & Ors50 concern two lawsuits filed for patent infringement of standard essential patents. Interdigital filed an application seeking to form a confidentiality club for certain documents in the suit. In the application, it requested that two types of confidentiality club be formed: 'outer tier' and 'inner tier'.
The Court's adjudication focused on the members that may form part of the inner tier of the confidentiality club. The plaintiff, Interdigital, argued that the documents placed in the inner tier of the confidentiality club should be accessible only to advocates of both the parties and the experts appointed by them. Further, access to those documents could not be given to the representatives of the parties, such as in-house counsel. Simply put, it was hoped that a confidentiality club would be formed and that the documents placed in the inner tier confidentiality club would not be accessible to the Defendant's representatives.
The Court rejected Interdigital's request for the inner tier confidentiality club and held that it was not possible to exclude the client's representatives from being part of the confidentiality club. It clarified that if the plaintiff and the defendant on their own agree to create a confidentiality club that excluded the in-house representatives of the defendant, the Court would accept the formation of the confidentiality club. At the same time, the Court held that it could not impose upon the defendant a constitution of the confidentiality club that excluded the defendant's representatives. Finally, the Court allowed the creation of the outer tier confidentiality club that had the client's representatives.
The decision of the Court stating that the defendant's representatives must be included in such a confidentiality club has been challenged in appeal, and the decision is currently pending adjudication.
The evaluation of the recent legal developments outlined above illustrate the following trends.
The judicial decisions rendered in 2020 by different fora despite the covid-19 pandemic highlight that the regime of enforcement of intellectual property rights is robust. The majority of the decisions and recent legal developments covered in this chapter were passed through virtual courts by way of hearings that took place by videoconference. The diverse issues that the decisions touch upon highlight that intellectual property owner rights have been protected holistically during the pandemic.
The IPAB rendered some important decisions to protect the rights of intellectual property rights owners, which have far reaching ramifications. For instance, the Tribunal held that a generic disclosure cannot defeat the novelty of a subsequent patent. Further, if an aspect was covered but not disclosed in a document, the document cannot be used for invalidity analysis. Such findings are relevant for invalidity analyses and may also aid parties in court cases.
Clarifying the status of software patents further, the IPAB granted a patent for a computer-related invention, holding that the prohibition under Section 3(k) of the Patents Act 1970 did not apply. The decision of the IPAB provides that technical effect is critical to determine patent eligibility, and the analysis applied certain factors to show how the patent application involved demonstrated technical effect. The decision is instrumental and will aid applications seeking to file patents for computer-related inventions in India.
The decisions of the past year also touched upon the concept of pre-grant and post-grant oppositions. The courts clarified that the overall objective of pre-grant oppositions was to aid the Controller, and there cannot be too much of a delay in filing the same. The courts stated that the right of a pre-grant opposition cannot be abused and came down hard on a petitioner who, according to the court's view, was abusing the process. The court held that the opposition process cannot be used to throttle legitimate competition. The decision is instrumental as it clarified the value of the pre-grant opposition under the Patents Act 1970 and introduces a necessary check against the abuse of this provision
Regarding post-grant oppositions, the IPAB, clarifying the process, held that no evidence can be filed by either party once a hearing has been fixed by the Controller. The Tribunal also emphasised the importance of the Opposition Board and highlighted that it was mandatory for the Controller to seek the views of the Opposition Board, and if the Controller disagrees with those views, the same must be provided in writing. This decision also sets an important trend as it introduces an element of fair play and a check in the post-grant opposition process.
Addressing a trend where defendants, anticipating a lawsuit, file a lawsuit for non-declaration of infringement in one forum and then use that prior instituted suit to challenge the maintainability of the suit for infringement bought by a patentee, the courts clarified the scope and interpreted the procedural provisions in Indian law that apply in those scenarios. Simply put, the courts stated that a patentee is the dominus litis and has the choice of forum in respect of where to institute the infringement suit, and that the previously instituted suit by the defendant does not impact the maintainability of the infringement suit. This decision, albeit interpreting Indian procedural laws, is also noteworthy and sets an important trend to protect the rights of patent owners.
Finally, in a landmark decision on anti-anti suit injunction, the courts held that a patent infringement action filed in the Delhi High Court could continue and that an anti-suit injunction passed by a foreign court did not stop such action. The Delhi High Court held that it was not open to any court to pass an order prohibiting a court in another country to exercise jurisdiction that was lawfully vested in it and that pendency of proceedings before foreign jurisdictions will not inhibit the Court from passing orders. This decision is extremely significant as in patent disputes, it is possible that the parties involved in India may also be involved in litigation outside India. This decision holds that the mere fact of proceedings in foreign jurisdictions cannot be a basis to stop proceedings in India. It highlights that intellectual property rights owners shall be able to independently pursue their legitimate remedies in accordance with Indian law.
The legal developments of the past year alone are expected to have a holistic impact as they affect patent prosecution and patent pre-grant and post-grant opposition and, from a court enforcement perspective, introduce checks against activities of infringers, thereby bolstering the ability to protect patent rights. Each of those changes are in favour of patent owners. These legal developments show that the landscape and outlook for patent litigation is positive and favourable for patent owners in India.
1 Pravin Anand is the managing partner, Vidisha Garg is a partner and Vibhav Mithal is a managing associate at Anand and Anand.
2 'India committed to protect Intellectual Property Rights: PM Modi', The Times of India (13 November 2015).
3 Yatish Yadav, 'Judicial reform PM Modi's priority in 2017, ideas sought to reduce case pendency', The New Indian Express (24 January 2017).
4 (2015) 225 DLT 391 (DB).
5 (2015) 223 DLT 454.
7 (2014) 15 SCC 360.
8 id., Paragraph 21.
9 See footnote 4.
10 (2013) 6 SCC 1.
11 AIR 1969 Bom 255.
12 LPA 359 of 2017.
13 RFA(OS) COMM 6 of 2017.
14 CS(COMM) 737 of 2016, dated 22 April 2019.
15 See footnote 5.
16 Order dated 9 March 2012 in CLA No. 1 of 2012.
17 LPA 1104 of 2011, judgment dated 13 July 2012.
18 OA/20/2019/PT/DEL, decision dated 29 September 2020, passed by the Hon'ble Intellectual Property Appellate Board.
19 id., Paragraph 20.6.
20 id., Paragraph 21.21.
21 id., Paragraph 19.8.
22 CS(COMM) 611 of 2019, decision of the Delhi High Court, dated 15 July 2020.
23 id., Paragraph 43.
24 id., Paragraphs 18 and 19.
25 W.P.(L) No. 3718 of 2020, decision of the Bombay High Court, dated 5 November 2020.
26 id., Paragraph 31.
27 id., Paragraph 31.
28 id., Paragraph 33.
29 For the definition of benami, see Section 1(9) of the Benami Transaction (Prohibition) Amendment Act 2016, which states that 'A transaction or an arrangement where a property is transferred to or is held by a person, the consideration of such property has been provided, or paid by another person' is a benami transaction. Put another way, a benami opposition is one where it is difficult to identify who is the actual opponent of the patent. The person who has filed the opposition is only to support the activities of this unidentified person.
30 Supra note 134 at Paragraph 37.
31 id., Paragraph 36.
32 OA/46/2020/PT/DEL, decision of the Intellectual Property Appellate Board, dated 29 September 2020.
33 id., Paragraph 9.7.
34 id., Paragraph 9.12.
35 I.A. 8772/2020 of CS (COMM) 295/2020, decision dated 9 October 2020.
36 id., Paragraph 2.
37 id., Paragraph 41, read with Paragraph 43.
38 id., Paragraph 51.
39 id., Paragraph 44.
40 id., Paragraph 60(iii).
41 id., Paragraph 75.
42 id., Paragraph 66.5.
43 id., Paragraph 60(v).
44 id., Paragraph 76.
45 id., Paragraph 64.
46 OA/17/2020/PT/DEL, dated 20 July 2020.
47 CS(COMM) 323 of 2020, decision dated 18 November 2020, passed by the Delhi High Court.
48 See decision dated 20 July 2021 passed by the Delhi High Court in FAO(OS)(COMM) 139/2020, 140/2020, 155/2020, 156/2020, 157/2020, 158/2020, 159/2020 and 160/2020.
49 See footnote 35.
50 Decision dated 16 December 2020 passed by the Delhi High Court in CS(COMM) 296/2020.