Patent owners in India that want to enforce their rights in the courts have to deal with a series of obstacles – and pharmaceutical patents involve extra hurdles. Speakers at a panel discussion on litigation in the life sciences at Managing IP's inaugural IP & Innovation Forum in New Delhi in March explained that the number one problem for all patent owners is delays.
R Parthasarathy, partner of Lakshmi Kumaran & Sridharan, said that, in the case of patents covering the latest technology products, the phrase "justice delayed is justice denied" is particularly relevant.
In India, while the situation is slowly improving, trials still focus on the application for an interim injunction, with the full trial dragging on for many years or being abandoned.
As an example, Parthasrathy used the case of TVS v Bajaj Auto – a dispute between two motorcycle manufacturers over technology relating to twin spark plugs. TVS launched the case in August 2007. The dispute over the interim injunction went to the Supreme Court, which ruled in September 2009 that there should be an expedited full trial heard on a day-to-day basis with no adjournment. The Court stated that the case should be concluded by November 30 2009 and was hailed by some as the beginning of a new era of faster patent litigation in India. As of February 28, the day of the India IP & Innovation Forum, the trial had not yet started.
The problem is not restricted to IP lawsuits – India's judicial system lacks resources and delays are endemic. Parthasarthy said that, although disputes over the patented technology are particularly urgent, it is difficult for courts to justify allocating large amounts of judicial time to hearing these cases and ignoring others that have languished in the courts for years.
To improve the system, Parthasarathy said that more judges need to be recruited to ensure that, over the course of a trial, the judge does not need to be replaced, which leads to further delays. Judges are often under such time pressure that they can't attend the recording of evidence.
Glenmark gives its advice
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Aravind Chinchure, Reliance Industries |
At the same session, Taranpreet Lamba, general manager, intellectual property management at Glenmark Pharmaceuticals, explained to the audience some of the other difficulties faced by plaintiffs in litigation in India, with a particular focus on the life sciences.
Patent litigation cases have increased from only 7 in 2006 to 29 in 2011. In addition to delays, Lamba said other problems for plaintiffs include that the importance of IP protection is not appreciated by enforcement authorities and that there is no specialist IP court.
Patent owners are also likely to be frustrated by the fact that there is no culture of deterrent damages yet in India. Political interference and corruption can also cause problems, as can the lack of an effective mechanism to protect IP rights at Customs.
Life sciences companies also have to take into account India's notorious Section 3(d), the absence of a linkage mechanism between the IP Office and the Office of the Drug Controller General of India, which gives regulatory approval for new drugs. The Supreme Court confirmed this in upholding the rejection of Bayer's application for an interim injunction against Indian generic company Cipla in December 2010.
This means that domestic generic companies are free to launch a new medicine that is covered by a patent owned by an innovator company. The two companies then fight it out in India's scerotic court system.
In addition, India does not have a system of data exclusivity and has a compulsory licensing scheme that could become a serious threat to innovator companies. The first application for a compulsory licence is now being heard by the Controller General for Patents, Trade Marks and Designs. Natco filed the application for the patent covering German pharma company Bayer's anti-cancer drug Nexavar.
On the positive side Lamba highlighted the objectivity of the judiciary in India and the fact that the courts are free to take into account court judgments in other common law jurisdictions when writing their judgments.
But the main factor to consider when thinking about patent litigation in India, said Lamba, is the same as elsewhere in the world: money. "The biggest risk is the hole that litigation burns in your pocket," he said.
Multiplying oppositions
On the prosecution side, meanwhile, practitioners explained the issues with India's complex system. Concern focused on two main problems – having to deal with multiple oppositions and the inadequacies of the Intellectual Property Appellate Board (IPAB), which deals with appeals from decisions by the Controller of Patents.
India's patent system is unique in allowing both pre- and post-grant opposition to applications. Pre-grant oppositions can be filed after publication but before grant by any person and no fee is charged. Post-grant oppositions can be filed within a year of publication of the grant and cost only Rs1,500 to Rs6,000 ($30 to $120).
Ritushka Negi, a partner of Remfry & Sagar, said that this system is open to abuse, particularly by NGOs coordinating with each other to file repeated pre-grant oppositions to pharmaceutical patents, and then filing post-grant oppositions using the same grounds.
"There is potential to misuse this particular tool. One has to be extremely careful when there are frivolous oppositions," said Aravind Chinchure, assistant vice president for innovations at Reliance Industries.
Of the four participants in the panel, Chinchure was the only one to advocate keeping both forms of opposition, stating that India needs to have "a mechanism to prevent the grant of a frivolous or bad patent".
Negi recommended that the government should replace pre-grant opposition with a system of third-party observation similar to that available at the EPO.
What to do with the IPAB?
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Rahul Vartak, Nycomed Pharma |
The EPO also served as an example when the panel began to discuss the IPAB. Rahul Vartak, associate director – intellectual property at Nycomed Pharma, highlighted the lack of resources available to hear appeals over patent validity in India.
He pointed out that at the EPO 27 technical boards, each with two technical members and one legal member, hear cases while at the USPTO the Board of Patent Appeals and Interferences has more than 100 administrative judges that hear cases related to their specific technical expertise. The USPTO is now looking to expand that number.
In contrast, the IPAB has only one technical member and two legal members. The technical member has to either have 10 years' experience as a patent attorney or have held the post of controller of patents for four to five years.
The Board also lacks a permanent location and has instead to travel between India's main cities, often having trouble finding premises to hear cases.
These resource issues mean that of the 223 cases the IPAB has received since 2007 it had only decided 48 as of May last year.
"Everyone who is a stakeholder in the IPAB has to do something about it," said Vartak, adding that the backlog is going to increase rapidly unless the IPAB is given more resources.
The IPAB has also come under scrutiny for its decision to revoke 12 patents belonging to German wind turbine manufacturer Enercon.
In January last year a group of academics filed a writ petition questioning the constitutionality of the IPAB, arguing that it is under the control of the Department for Industrial Property and Promotion and does not appoint members of sufficient technical or judicial expertise.
The India IP & Innovation Forum took place on February 28 at the Regency Hyatt in New Delhi and was attended by over 250 in-house lawyers and business leaders.
