Why litigation takes so long in India
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Why litigation takes so long in India

Patent owners in India that want to enforce their rights in the courts have to deal with a series of obstacles. 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 last week 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.

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.

The India IP & Innovation Forum took place on February 28 at the Regency Hyatt in New Delhi and was attended by over 200 in-house lawyers and business leaders.

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