As we welcome the New Year with new hopes and aspirations, we recap the ten vital stories and events from the Patent standpoint that were in conversation. Some of these events lead to acrimonious exchange at the diplomatic and policy level. At one stage the intense lobbying by US corporations lead to a question being raised “Is India’s IP environment deteriorating”. The courts in India had a number of Patent cases being hotly contested, not just pharma battles between the innovators and generic companies, but cases being also fought in telecom world on royalty terms for Standard Essential Patents (SEP). The various rulings of Courts and the Intellectual Property Appellate Board (IPAB) provided newer insights into the interpretation of the existing statutory provisions. While some decisions brought clarity & certainty in some areas of practice, some evoked apprehensions and concerns. Overall, never a dull moment!
10. Patent office rolls out online filing and significantly revises the fee structure: In the first quarter of the year, the Patent office introduced new set of rules, effective February 28, 2014, which brought revisions in the existing fee structure (with a substantial increase) across all actions and introduced a new entity-‘small’ for the purpose of calculation of fee. In order to discourage hard copy filings and promote online filings, the Patent office also introduced an additional surcharge of 10% for paper filings. The rationale for increase was raised and question on every one’s mind was if the extra revenue will be utilised in addressing backlog at the patent office.
In another significant development, the Indian Patent Office started functioning as International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) and has introduced a separate facility within the premises of Delhi Patent office on September 8, 2014.
9. India on US “priority watch list” and ‘no holds barred’ debate coupled with acrimonious exchange: India has been on the Special 301 “priority watch list” by the Office of United States Trade Representative (USTR) since the start of the process in 1989. In response to USTR’s Special 301 Out of Cycle Review (OCR) process for India inviting comments, the Government of India, pointed to the lack of any obligation to participate in such unilaterally held Special 301 process. The Indian government mentioned that the comprehensive IPR policy that was being developed to address IP issues. The government refused to participate in the unilateral process while opening the doors for a bi-lateral dialogue mechanism under the newly constituted ‘IP working group’ under the India-USA Trade Policy Forum. The timing of OCR also raised many eyebrows coming soon after Prime Minister Modi’s visit to USA and after a joint statement issued by President Obama and Prime Minister to resolve IP issues.
The out of cycle review concluded with no sanctions yet. A press release issued by USTR noted that India has made commitments to “institutionalize high-level engagement on IP issues, to pursue a specific work program and to deepen cooperation and information exchange with the United States on IP-related issues under the U.S.-India Trade Policy Forum.”
8. High Court scolds Patent office for growing pendency and backlog: In one of the writs brought against the patent office for the delay in processing/examination of patent applications and ever increasing backlog of pending patent applications, the Delhi High Court asked the office to devise effective strategy to maintain time bound processing of the applications. After considering the suggestions from a special committee constituted for the purpose, the Court directed the Government to:
- increase manpower in the Patent Office by implementing the scheme of Modernisation and Strengthening of Intellectual Property Offices (MSIPO) within the next 9 months;
- pump in more money (apart from Rs 300 crores sanctioned already) to train and recruit examiners;
- explore alternative means of recruitment through national level examinations;
- Implement the flexible complementing scheme to address and check high rate of attrition in the Patent Office.
Further, the Court directed the Government to constitute another committee to consider the following:
- If expedited examination is not considered feasible, whether waiver of maintenance fee for the delayed period or other measures could be considered in order to compensate the patentees for the time consumed in the examination process.
- As to whether the examination of patents applicants could be carried out of turn under the existing provisions of the Patents Act and if yes, how?
The Committee is expected to deliver its report by March 2015.
7. Patent office brings transparency in its functioning: In its attempt to bring transparency in the functioning and enable real time information sharing and retrieval, the Patent office launched a number of features on online search services for patents to make the search process easier and provide transparent results. These features include:
- “Stock and Flow” which has made work happening in the Patent Office public and shows stock and flow at different locations on a real time basis on the official website. Reports suggest that the Indian Patent Office is the first in the world to achieve such transparency.
- Dynamic Utility Facility in Patents: allows search of granted and published patents, status of patent, access to examination reports – all this information on a real time basis.
- Expired/ceased Patents- provide access to the Patents that have ceased to be in effect.
- Disposal of Patent Applications- provide reports for patents granted, refused and applications abandoned.
- Examination status (First Examination Reports)- provide information about month and year of ‘Request for Examination(RQ) being examined and ‘First Examination Reports (FERs) being issued.
- Dynamic FER view- this function displays the ‘First Examination Report (FER)’ dynamically. Reports can be accessed for a particular year and month, location wise, group-wise.
- Dynamic status of Patent Application – this function provides information on ‘Working of Patents’ and access to the information received from Patentee regarding working of Patented Invention.
6. Compulsory License (CL) continue to haunt pharmaceutical Industry: After having challenged the legality and validity of the compulsory license issued to domestic generic company, Natco, both at the IPAB and later at the Bombay High Court which dismissed the challenge by Bayer and chose not to interfere with the order passed by the IPAB, Bayer finally approached the Supreme Court with a Special Leave Petition (SLP). The Supreme Court too chose not to interfere in the matter and dismissed the SLP.
This has been a cause of concern for multi-national corporations and questions being raised if this will extend to other sector/industries such as electronics and clean energy. But it has been more than two years since the first CL was issued and no application has to date been filed in other areas. Only one CL application has reached a hearing, filed by BDR Pharmaceuticals seeking a CL for Bristol-Myers Squibb’s Sprycel (dasatinib), and it was rejected for not meeting the threshold required.
In particular, the patent office held that the ground that the patented drug in question was expensive was not sufficient to issue a CL and not in accordance with the provisions of the Indian Patents Act. The order also underlined that any party seeking a CL should first seek a ‘voluntary licence’ from the patentee and exhausts all other options before coming to the patent office.
5. Telecom wars brought FRAND and SEP debate into the mainstream media: With increasing number of actions brought by holders of standard essential patents (SEP) against manufacturers and marketers of electronic communication devices, the High Courts in India seem positively tilted in favour SEP owners and willing to grant ex-parte injunctions against such manufacturers for their refusal to discuss royalty terms or delay such discussions. The courts adopted the FRAND standards for determination of interim royalty payments as well. One of the heavily contested SEP case brought by Ericsson against Micromax has been put on fast track trial. It will be interesting to see if the 1% royalty as interim arrangement set by the court is sustained in its final outcome.
4. Round two of Pharmaceutical litigation advantage innovator companies: In a series of actions brought by several innovator pharmaceutical companies against domestic generic companies for the infringement of their patents, the High Courts passed ex parte interim injunctions, at the first hearing itself. In one of the matters, Novartis brought quia timet actions against several domestic companies for infringement of its patents on Vildagliptin and Metformin Hydrochloride products.
The action by Novartis was based on an enquiry made under the Right to Information Act (RTI), seeking information from the relevant State Drug Controlling authorities regarding grant of permission to manufacture, sell and market Vildagliptin and Metformin Hydrochloride products to entities in India. While Novartis acknowledged that the Defendants have not yet launched their products in the market it submitted that since the Defendants had sought and were granted the permission to manufacture Vildagliptin pharmaceutical products, it was established that the Defendants intend to launch such product and this will constitute infringement of their patent and therefore, injunctions (or restraining orders) were granted.
3. Controversial section 3 (d), addressed in new Guidelines on Patents on Pharmaceuticals: With a view to streamline the examining procedures at the patent office and harmonise the decisions (aid and guide the examiners) across different offices, the patent office has introduced a series of Guidelines for examining the patent applications in different technology domains. The draft guidelines in the past included applications on Biotechnology related inventions, Traditional Knowledge and Biological Materials and Computer Related Inventions (CRI). The office released the final version of guidelines for examining applications belonging to pharmaceuticals in November after several stakeholder meetings. Though the guidelines do not help much to guide the applicants/agents in addressing regular objections on non patentable subject matters, the guidelines provide information on essential data which could be incorporated into the patent application to avoid rejections under section 3 (d) and provides useful insight on claiming Markush structures and new derivatives.
2. Patent office takes strict view of Section 8 Compliance- High Court says take it easy: One of most talked about requirements of the Indian patent law, which was often touted as an unnecessary burden on patent applicants/patentees, required the applicant to disclose certain information to the patent office which could be material to the determination of patentability. This meant submitting regularly, the updated details and status of corresponding applications in all other countries; failure of which could result in revocation of the patent.
While the earlier judgments from both the patent office and appellate forums emphasised on the compliance of Section 8, holding that a patent could be revoked on this ground alone, a recent division bench judgment from the Delhi High Court has now raised the bar for revoking the patent on the ground holding that a patentee’s non-compliance with Section 8 will not lead to an automatic revocation of its patent unless such omission to disclose information under Section 8 was deliberate/intentional and the information was material to the determination of patentability.
1. One Patent, One Action and No Multiple Forums: Our top story this year is the Supreme Court’s much appreciated judgment on the use of various provisions of the statute in challenging and revoking a patent by an opponent/defendant in an infringement suit. The Supreme Court held that a person cannot keep attacking a patent by using various provisions of the law and 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 Patent infringement 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.