RECENT DEVELOPMENT AND IMPORTANT DECISIONS IN INDIAN PATENT LAW ASIAN PATENT ATTORNEYS ASSOCIATION 63 rd Council Meeting Penang, Malaysia 8 th to 11 th November, 2014 EMERGING IP RIGHTS Country Report, India By D. Calab Gabriel 1
EMERGING CASE LAW IN PATENTS Some of the important cases in Indian patent law that emerged through the last one year are summarized below: 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. The IPAB looked into the scope of Section 7(2) of the Indian Patents Act, 1970, which required an applicant, other than the true and first inventor, to establish proof of the right to file a patent application. A proof of right document is either in the form of an endorsement by the true and first inventors, assigning their rights in the invention to the applicant or any other supporting document, such as an assignment deed transferring the rights in the invention to the applicant. Section 7(2) expressly provides that, Where the application is made by virtue of an assignment of the right to apply for a patent for the invention, there shall be furnished with the application, or within such period as may be prescribed after the filing of the application, proof of the right to make the application. A proof of rights document has to be filed within a period of 6 months from the date of filing of the Indian application or at any time thereafter with an appropriate petition for condoning the delay. 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. 2
2) Dr. Aloys Wobben and Ors. vs. Yogesh Mehra and Ors. (Supreme Court, 2014) An appeal against an order of the Division Bench of the High Court was filed before the Supreme Court of India which had held that prosecution of proceedings for revocation of patents instituted before the Intellectual Property Appellate Board ( IPAB ) can proceed simultaneously with counter claim proceedings for revocation of the very same patents in the suits for infringement. In other words, concurrent proceedings in patent matters could proceed unimpeded. The first appellant, Dr. Aloys Wobben, is an eminent scientist who has got nearly 2700 patents to his credit for inventions in the field of wind turbine generators and energy convertors. He has been engaged in the manufacture of wind turbines under the name Enercon GmbH. The second appellant, Wobben Properties GmbH, holds the rights in the patents and designs of Dr. Wobben in India by virtue of an assignment. The three respondents in the case were Yogesh Mehra, Ajay Mehra (being the directors of the joint venture of Dr. Wobben for its business in India) and Enercon India Pvt. Ltd., (being the joint venture entity in India). In 2008, after an association of 14 years with the respondents, Dr. Wobben terminated all the license arrangements in respect of the intellectual property rights granted to Enercon India. Thereafter, disputes arose between the parties because the respondents continued to use the appellants intellectual property rights. It emerges that the respondents filed 23 revocation petitions against Dr. Wobben s patents under Section 64(1) of the Patents Act before the IPAB. These petitions were not filed on the same day. As a counterblast to these revocation petitions, Dr. Wobben filed a total of 10 patent infringement suits on various dates before the Delhi High Court. The respondents in turn filed counterclaims in some of these suits. Troubled by these numerous proceedings, Dr. Wobben approached the High Court first and then the Supreme Court. As seen from the section, it provides for revocation of a patent either by way of a petition before the IPAB or by way of a counter-claim in a suit for infringement of the patent before a High Court. Applying the principle of res sub-judice, the Court held that the remedies available under Section 64 of the Indian Patents Act were not conjunctive because the word or used therein separating the different remedies, would disentitle a party to avail of both the remedies, for the same purpose, simultaneously. Further, since the Section starts with the words, Subject to the provisions contained in this Act, the said Section is subservient to other provisions of the Act. Hence, even a post-grant opposition proceeding initiated under Section 25(2) of the Patents Act will bar a person from filing a revocation petition under Section 64(1) or filing a counterclaim in an infringement suit. In particular, the judgment laid down the following rules: 3
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. 3) 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. 215758 that was granted to Bayer Corporation ( Bayer ) in 2008. The drug, sold by Bayer under the brand name Nexavar, was launched in India in 2008. 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 Patent Office to Natco. In a recent order, the Bombay High Court agreed with IPAB decision and held 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. 4) Section 8 requirements Section 8 imposes an ongoing duty upon patentees to keep the Patent Office informed of any developments on corresponding foreign applications covering same or substantially same invention, including name of country, application number, refusals, abandonment, grants and patent numbers, until the Indian application proceeds to grant or refusal. Section 8 also places a duty on an Applicant to provide details relating to novelty and inventive step and copies of accepted/granted claims on the corresponding foreign applications when required to do so by the Controller. In 2009, the Delhi High Court, in the case of Chemtura vs. Union of India in fact refused grant of interim injunction since failure to comply with requirements of Section 8 was considered to be a serious issue affecting the validity of the patent. The Hon ble Court was of the view that the duty under Section 8 cannot be ignored since it flows from a statutory provision. 4
In the latest development on this issue, the Delhi High Court ruled in a suit for infringement of a plaintiff s essential patent by the defendant [Koninklijke Philips Electronics N.V. v. Maj. (Retd) Sukesh Behl & Anr]. The defendant had filed a counter-claim which challenged the validity of the essential patent. Relying on the judgment passed in Chemtura case, the defendant contended that the suit patent should be revoked on grounds of non-compliance with Section 8. The defendant relied on a letter addressed to the Controller of Patents by the plaintiff which stated that some information regarding pending foreign applications had been inadvertently missed. Differing from the Chemtura case above, the Court stated that it could not be said that the plaintiff had willfully suppressed information as there was no admission by the plaintiff to this effect. However, it would have to be seen if the matter not disclosed was material to the grant of patent. Case law in this area continues to develop. 5) Emerging patent litigation 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 technology from Nokia. The suit was for the infringement of one of such acquired patents (Indian Patent number 243980), 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 5
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. 6) Interim injunctions granted in several pharmaceutical patent cases We also witnessed High Courts granting interim injunctions in pharmaceutical patent matters. Novartis patent suits in Vildagliptin In a move to enforce its Indian Patent No. 212815 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 09.12.1999 as a mail box application claiming priority from US Patent Application No. 09/209,068 dated 10.12.1998. 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. 6
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. 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 would 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. 7) 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 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 7
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 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. 8) Restoration of Patent Mumbai High Court The Bombay High Court (Teijin Limited v. Union of India, February 2014) restored a patent that had ceased due to procedural lapses on the part of the Patent Office. Teijin, the patentee, filed a constitutional writ to restore its patent that was annulled by the Patent Office for failure to pay renewal annuities. Teijin claimed that it had paid the annuity due for the 3rd to 9th year; however, the patent number in the request had an error and upon noticing the same, it had immediately 8
addressed a letter to the Patent Office seeking to correct the same. The payments for the 10th and 11th year annuities were also made well in advance of the deadline and the same were accepted by the Patent Office. However, when the 12th year annuity became due, Teijin was shocked to learn that the Patent Office records reflected its patent to have ceased in 2009 itself, apparently due to non-payment of the 11th year annuity. In the writ, Teijin claimed that the Patent Office violated the principles of natural justice by cancelling its registered patent without intimation or granting a hearing. In defence, the Patent Office argued that it never received the letter sent by Teijin s patent agent to rectify the error. After hearing the parties, the Court opined that the Patent Office had indeed faltered in not keeping its records in order, even when it accepted the annuities paid by Teijin for the 3rd to 11th year. It noted that the Patent Office neither intimated the patentee regarding the discrepancy in the patent number in its records, nor did it accord the fees paid by Teijin to restore the patent in question. Based on the fee receipts produced by Teijin, it was held that Teijin had paid all annuities due for renewal of its patent within the prescribed time period and that it was the Patent Office which had failed to rectify the register or promptly intimate Teijin to rectify any errors. The Patent Office was, therefore, directed to restore the patent. 9) Nitto Denko Corp v. Union of India A civil writ petition was filed by Nitto Denko Corporation, questioning the delay in the issuance of FER and seeking directions regarding timeline of issuance of first examination report (FER) and expediting patent prosecution. The Delhi high court issued an order directing the Indian patent office to file an affidavit indicating the state of affairs in the patents office regarding issuance of FER and to disclose the year wise pendency of patent matters. Upon the court s direction, a committee has been constituted to look into expediting examination of patent applications, recruitment of examiners, compensatory measures for applicants whose examination is delayed etc. CONCLUSION: I conclude that the above report is a mere collection of major highlights of a very interesting year for emerging IP in India. We can say that IP in India, specially the patent law is not only developing into an interesting area, India is taking major strides to build an effective IP environment in the country. D. Calab Gabriel (Mr.) Secretary APAA (Indian Group) 9