ASIAN PATENT ATTORNEYS ASSOCIATION
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1 ASIAN PATENT ATTORNEYS ASSOCIATION 63 rd Council Meeting Penang, Malaysia Patent Committee Report: INDIA Hari Subramaniam & Calab Gabriel 1
2 India: Patents 2014 There have been several changes in statutory law and in regulations since we last presented our report in Hanoi in The past one year has again seen several judicial pronouncements by various High Courts and by the Intellectual Property Appellate Board (IPAB) that have resulted in significant changes in practice due to interpretation and clarification of existing statutory provisions. The IPAB and the High Courts of New Delhi, Mumbai and Chennai have been active in patent law interpretation on both procedural and substantive issues. These decisions have resulted in certainty in some areas of practice and caused a bit of concern in respect of the others. Some of these decisions are discussed below: I Legislative Update 1) Patent Rules amended Effective February 28, 2014, the new Patents (Amendment) Rules 2014 have come into force. The new Rules primarily consist of revision in the existing fee structure across all actions. A brief summary of the Rules is as follows: A new category of applicant, namely, small entity and a new Form applicable thereto have been introduced. For the purposes of the amendment, small entity shall be interpreted as per the Micro, Small and Medium Enterprises (MSME) Development Act, As per the current definitions, an MSME, in the case of an enterprise engaged in the manufacture or production of goods would be an enterprise where the investment in plant and machinery does not exceed INR 10 crores (approximately, USD 163,600) and in the case of an enterprise engaged in providing or rendering of services would be an enterprise where the investment in equipment does not exceed INR 5 crores (approximately USD 2
3 81,700). To support the claim to a small entity, the applicant is required to produce documentary proof accordingly. Some monetary concessions have been provided to applicants who fall under the category of small and medium size enterprises. The amendments have also led to a revised official fee schedule with a general substantial increase in fees. In an attempt to encourage applicants to use the electronic filing mode available on the Patent Office website, the amendment has introduced a 10% additional surcharge on manual mode of submitting documents under each activity, thereby making paper filing of documents a bit costlier than the electronic filing mode. II Recent development at the Patent Office 1) Indian Patent Office starts functioning as International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) On September 8, 2014, a new building with state of art facility was inaugurated for the functioning of the Indian Patent Office as International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) under the Patent Cooperation Treaty (PCT). Work has already started on this front and India has marked its name among the other ISA/IPEA recognized under the PCT. 2) Guidelines for examination of patent applications With a view to streamline the examination of patent applications and to give critical guidance to examiners for examining applications from various technical domains, the Patent Office has initiated issuance of guidelines for examiners. Till now, such guidelines have been issued and made public for Biotechnology related inventions as well as Traditional Knowledge and Biological Materials. In the last year, draft guidelines have been made available for examination of Computer Related Inventions (CRI) and Pharmaceutical 3
4 inventions. Stakeholder meetings have been held and the final versions will be issued shortly. III Patent Practice change based on case law 1) Proof of right mandatory for all patent applicants In an order passed in the matter of NTT DoCoMo Inc. Vs. The Controller of Patents & Design, the Intellectual Property Appellate Board (IPAB) has held that in cases where a patent applicant is not the true and first inventor of the invention, it is mandatory to file a proof of right while applying for the patent. This ruling is applicable to all patent applications, irrespective of whether they are being filed in India as Convention applications or as PCT National Phase applications. A notification issued by the Controller General of Patents in 2004 had waived the requirement to submit such proof in cases where the patent applicant was the same in the priority country and in India. Relying on this notification, the applicant in this case did not submit the proof of right document as it was the applicant in the convention country and in India. The IPAB, however, rejected this contention and held that since the law was clear in this respect, a proof of right must be furnished by applicant, irrespective of the application being filed through the Convention or the PCT National Phase route in India. In effect, the IPAB s order nullified the 2004 notification. The order is, however, silent as to whether this requirement is applicable only to cases which are currently pending or even those cases which have been granted in the last decade without the proof of right document on record. The IPAB appears to have overlooked the fact that proof of the right does not have to be only an assignment. Priority document as well as declaration of inventorship which are filed only when convention priority is claimed also may constitute valid proof of the right. IV Judicial pronouncements 1) The Supreme Court has held that a person cannot keep attacking a patent 4
5 In Dr. Aloys Wobben and Ors. vs. Yogesh Mehra and Ors. (Supreme Court, 2014), the Supreme Court of India has passed a landmark judgment retraining a person from taking multiple shots at a patent. In particular, the judgment laid down the following rules: If prior to the infringement suit, a defendant has filed revocation under Section 64(1) before the IPAB, then the defendant would be disentitled to file a counter claim; If the defendant counter claims for revocation in a suit, he cannot thereafter file revocation under Section 64(1) before the IPAB; and If any interested person has filed a post-grant opposition under Section 25(2), he is barred from filing revocation before the IPAB under Section 64(1) or filing a counter claim as a defendant in an infringement suit. 2) Mumbai High Court upholds compulsory license to NATCO In 2012, the Indian Patent Office granted a compulsory license in favour of Hyderabad based Natco Pharma Limited ( Natco ) for the anti-cancer drug, Sorafenib Tosylate, used for palliative treatment of liver and renal cancer. The drug is claimed by an Indian patent, being no that was granted to Bayer Corporation ( Bayer ) in The drug, sold by Bayer under the brand name Nexavar, was launched in India in Bayer appealed the Controller s order at the IPAB. IPAB ruled in favour of Natco, reaffirming the conclusion arrived at by the Controller General. The IPAB however clarified that import per se would qualify as working the patent within the scope of the Patents Act. However, the Patentee will be required to give reasons as to why the drug cannot be manufactured locally. Bayer had appealed before the Bombay High Court against the IPAB order which upheld the Compulsory License for Nexavar issued by the Indian 5
6 Patent Office to Natco. In a recent order, the Bombay High Court upheld the IPAB decision that the grant of compulsory licenses is to be considered on a case to case basis. Further, importation is considered as working so long as the patentee can justify the same. 3) Patent law emerging in telecom sector In a recent appeal [XU Dejun & Others vs. Vringo Infrastructure, Inc. & Another] concerning a CDMA technology patent, a Division Bench of the Delhi High Court, reversed the trend of setting interim arrangements in the form of royalty rates in favour of a plaintiff, where the plaintiff alleges infringement of Standard Essential Patents (SEPs) and claims FRAND (fair, reasonable and non-discriminatory) negotiations. Recognizing the time sensitivity of patent litigation matters, the Court, inter alia, ordered an expedited trial of the suit. In the early part of 2013, in the Ericsson vs. Micromax series of cases, the Delhi High Court had ordered Micromax to pay interim royalty to Ericsson during the pendency of the suit based on Ericsson s contention that Micromax had infringed its SEPs on 2G, 3G, EDGE and AMR technologies and claimed royalty on FRAND terms. In the backdrop of the above order, in November 2013, Vringo Inc. (along with its wholly owned subsidiary Vringo Infrastructure Inc.), a US based patent holding company, obtained an ex parte ad interim injunction order from the Delhi High Court in a suit for patent infringement against the Chinese telecom equipment giant, ZTE Corporation. Vide an order dated November 8, 2013, ZTE was restrained from manufacturing, assembling, importing, selling or offering for sale or advertising their products (telephone instruments, mobile handsets, tablets, handheld devices, dongles etc.) or any other similar devices that include the 3G technology CDMA2000 technology which may be covered by the said patent of Vringo Inc. Before the Single Judge of the Delhi High Court, Vringo had claimed that it acquired a patent portfolio including SEPs in the field of CDMA 6
7 technology from Nokia. The suit was for the infringement of one of such acquired patents (Indian Patent number ), claimed to be an SEP in the field of CDMA technology. Vringo alleged that since ZTE Corporation was manufacturing various CDMA2000 compliant products (such as mobile phones, tablets, dongles and other infrastructure equipment), it would necessarily require to use the technology which was the subject matter of the suit patent. Accordingly, Vringo alleged that ZTE could not import, sell or market the said products in India without obtaining a license from Vringo on FRAND terms. The Single Judge granted an ex parte interim order in favour of Vringo. Aggrieved by the said order, ZTE filed an appeal before a Division Bench of Delhi High Court. ZTE, inter alia, claimed non-infringement and contended that Vringo, being a non-practising entity (NPE) has not worked the patent in India. Vringo Infrastructure has sued ZTE globally in what appears to be an attempt to force ZTE to agree to FRAND licensing terms. ZTE took the categorical plea that FRAND licensing should be preceded by proof of validity of patent being established and the issue of infringement being held against ZTE. Relying on the view taken in the Ericsson v. Micromax orders, Vringo argued that ZTE be directed to first pay royalty on per product basis till the pendency of the suit. After consideration of the arguments of both the parties, the Court passed a consent order vacating the ex parte interim injunction, without fixing any royalty rates in favour of Vringo. Further, the Court declined to follow the precedent set in Ericson v. Micromax series of cases. The case is still in progress. 5) Interim injunctions granted in several pharmaceutical patent cases We also witnessed a trend of the High Court towards granting interim injunctions in pharmaceutical patent matters. 7
8 Novartis patent suits in Vildagliptin In a move to enforce its Indian Patent No for Type 2 Diabetes Mellitus (Type2DM) compound Vildagliptin, Novartis initiated a series of suits as quia timet action before the Delhi High Court against various pharmaceutical companies. The said patent was filed as a national phase application in India from PCT International Application No. PCT/EP99/09708 dated as a mail box application claiming priority from US Patent Application No. 09/209,068 dated Said patent was granted by the Indian Patent Office on 17/12/2007. Novartis is marketing Vildagliptin in India as two separate pharmaceutical products. While one contains Vildagliptin only as the Active Pharmaceutical Ingredient (API) under the brand name GALVUS, the other comprises Vildagliptin and Metformin Hydrochloride sold under the brand name GALVUSMET. Vildagliptin is believed to be the first gliptin developed, second being Sitagliptin (marketed by Merck under the brand name JANUVIA). Novartis had applied under Right to Information Act, 2005 (RTI) seeking information from the relevant State Drug Controlling authority regarding grant of permission to manufacture, sell and market Vildagliptin and Metformin Hydrochloride pharmaceutical products to entities in India. Based on the reply received from the respective State Drug Controlling authority, Novartis initiated infringement suits before the Delhi High Court against the entities who had been granted permission to manufacture and sell Vildagliptin and/or Metformin Hydrochloride pharmaceutical products. In all, Novartis has initiated quia timet action by way of infringement suit filed before Delhi High Court against 7 pharmaceutical companies namely Zee Laboratories Ltd., Wockhardt Ltd., Biocon Limited, Alembic Pharmaceuticals Ltd., Cadila Healthcare Ltd., Glenmark Generics Ltd. and Bajaj Healthcare Ltd. 8
9 Novartis main contention was that, since the Defendants had been granted the permission to manufacture Vildagliptin pharmaceutical products it was established that the Defendants intent to launch such product which will constitute infringement of the suit patent. Further, Novartis stated that as per their knowledge the Defendants have not yet launched their products in the market. Considering the arguments made on both sides, the High Court in the above suits favoured injunctions in favour of Novartis in some of the suits while passing restraining orders in others. 6) Positive news for bio-nutraceuticals In a well-reasoned order [Kibow Biotech Inc. vs. La Renon Healthcare Pvt. Ltd.] in November 2013, the IPAB set aside presumptions made about India s position on pharma/biopharma patents post the Supreme Court decision on Novartis s anticancer drug, Glivec. The IPAB upheld a product patent relating to a dietary supplement comprising a probiotic composition that reduced the need for kidney patients to undergo dialysis. The product patent entitled, Compositions for Augmenting Kidney Function was registered in the name of Kibow Biotech Inc., a US-based pharmaceutical company, which manufactured this product under the brand name Renadyl. The patent application was filed on March 28, 2006, for a probiotic composition for augmenting kidney function by removing toxic nitrogenous metabolic byproducts and inhibiting the overgrowth of undesirable bacteria in the gastrointestinal tract. The original patent application contained 20 claims, covering both product claims as well as method claims. However, when the patent was granted on September 29, 2009, these were eventually amended to 10 claims covering the composition, and the method claims were deleted as they were not permitted under Indian Patent law. In 2012, a revocation petition was filed against this patent by La Renon Healthcare Pvt Ltd., ( La Renon ) a Gujarat based Indian company, which sold a similar product in the market 9
10 under the brand Cudo. In 2011, the Madras High Court had dismissed a suit by Kibow Biotech against La Renon for infringement of its patents, including the patent under discussion here. The revocation petition claimed that the invention was not patentable under Indian law and raised grounds of obviousness and lack of inventive step. Though La Renon, had filed several documents in support of the ground of obviousness, the IPAB noted that 33 of such documents, were unsupported by any pleadings or grounds. As for the remaining prior art documents, the IPAB noted that none of the documents taught, either alone or in a combination, the specific limitations claimed by Kibow Biotech in its patent. While rejecting the ground of obviousness, the IPAB noted that mere speculation of a hypothesis was not enough to defeat the claimed invention on the ground of obviousness. The IPAB also rejected La Renon s argument that the composition claimed by Kibow Biotech was a mere admixture and therefore, did not qualify as patentable subject matter. It held that the disclosure in the specification of the patent went against La Renon s contention and that the claimed composition was indeed a synergistic composition having unexpected benefits and was not a mere admixture. Lastly, La Renon alleged false suggestion and misrepresentation in obtaining the patent, stating that the composition as claimed could not be administered to patients with renal problem because the various ingredients of the composition, such as, protein and fat soluble vitamins A, D, E and K would over-stress the kidney by increasing nitrogenous waste in the body. Kibow Biotech countered that the composition of the impugned patent did not claim to treat kidney disorder but acted in the intestine on the unfiltered waste and toxins present in blood, thereby enhancing the functions performed by the kidney during normal conditions. The IPAB agreed with Kibow Biotech that augmenting kidney function was not the same as augmenting the kidney functioning per se. It was, therefore, held that the petitioner had deliberately 10
11 misconstrued the scope and ambit of the invention. Based on the above analysis, the IPAB dismissed the revocation petition and imposed costs of INR 20,000 (approximately USD 320) on the petitioner, La Renon Healthcare Pvt. Ltd. This order passed by the IPAB is one of the few orders on cases involving biotech based products in India and has indeed been received very well by innovator companies in India and abroad. According to news reports, following the positive order from the IPAB, Kibow Biotech Inc. is all geared up to enter India s fast-growing dietary supplement market with its various proprietary products, including Renadyl. CONCLUSION While the statutory provisions have more or less remained the same, interpretation by both the IPAB and the Courts have been relatively progressive and liberal over the past year. 11
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