CIPLA’s plea for revocation of Novartis Patents for Onbrez may face major set back by the Government

As reported in TOI, the Indian Government has found very little merit in Cipla’s plea for waiver and cancellation of Patent rights for chronic obstructive pulmonary disease (COPD) drug over which Novartis has exclusive rights. We have reported on Cipla’s plea here.

Background:

Cipla, previously approached the Department of Industrial Policy and Promotion (DIPP) to exercise its statutory powers under Section 66 and Section 92 (3) to revoke Indian Patents IN222346, IN230049, IN210047, IN230312 and IN214320 granted to Novartis AG for the drug Indacaterol and is currently selling under the brand name Onbrez. The said drug is one of the preferred medications for COPD.

The relevant sections 66 and 92 of the Indian Patents Act are as follows:

  1. Revocation under section 66:

Section 66 states “Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked”.

  1. Special provision for compulsory licences on notifications by Central Government

Section 92 (3) states Notwithstanding anything contained in sub-section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub-section (1) that it is necessary in—

(i) a circumstance of national emergency; or

(ii) a circumstance of extreme urgency; or

(iii) a case of public non-commercial use,

which may arise or is required, as the case may be, including public health crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 in relation to that application for grant of licence under this section:

 Provided that the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of section 87.”

Cipla’s Contention in the Representation:

  • Cipla argued that the causes of COPD are several and the sheer magnitude of the disease as per the publicly available data which is sufficient for the Central Government to invoke the provisions of Section 92 and to treat it as an “epidemic” or a “public health crisis”. Such exercise of power in the present case would be in consonance with the avowed purpose for which Section 92 has been enacted.
  • Cipla also contended that Novartis has been granted these patents since 2008-09 but has chosen not to manufacture the same in India. However, Novartis merely imports a negligible quantity of these products manufactured in Switzerland through its licensee Lupin Pharma as per its own data filed before the Patent office. As submitted by Novartis in IPO in Form 27, the import for the year 2013 is a meagre 53,844 units which do not satisfy even 4,500 patients annually which is a shortage is more than 99.97 percent.
  • Further Cipla contended that cost of the drug is also very high for a patient in India. The estimated cost of the drug Indacaterol as imported and sold by Lupin Limited, under the trademark Onbrez is about Rs.2000/- per month per patient. On the contrary, the proposed drug of Cipla under name UNIBREZ would be costing approximately Rs. 400 per month.

 It is pertinent to note that Section 66 has been invoked only on two occasions earlier. Firstly it was invoked for the case of a process patent granted to Agracetus, an American company for genetically engineered cotton cell lines. The said patent was revoked by the Central Government in the year 1994 keeping in mind public interest and the fact that genetically engineered cotton, being a product of concern for the national economy, particularly for agriculturists, ought not to be the subject matter of a patent monopoly. Secondly in 2012, a patent granted to Avesthagan Limited for a “synergistic ayurvedic/ functional food bioactive composition” i.e. the composition consisting of Jamun, Lavangpatti and Chandan to be used for treatment of Diabetes. In light of the public interest in using traditional knowledge for curing and treating Diabetes, the said patent was also revoked under Section 66 of the Act. However pertinently, both the patents were revoked due to cloud over patentable subject matter.

It would be prejudiced to comment on the fate of the matter at this stage. However as per TOI the Govt. may turn down the plea of Cipla for revocation of Novartis patent.

About the Author: Mr Sitanshu Singh, Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: sitanshu@khuranaandkhurana.com

Xiaomi Injunction: Yet another injunction given too soon?

In CS(OS)  3775/2014, as we understand from multiple sources, Xiaomi has been injuncted from manufacturing its line of smart phones for it has been prima-facie found to be infringing on certain standard essential patents of Ericsson. Although the order is not uploaded as yet, we understand that the patents used against Xiaomi, by Ericsson, are the same essential patents on which Ericsson had also earlier filed an infringement suit against Micromax, not too long back ago. The question being examined is if it was actually necessary to issue the order ex-parte or whether a short date could have been given to Xiaomi to be served the plaint and summoned for the hearing. Also, we surely would expect Xiaomi to file an appeal to vacate the order quite soon.

                We also understand from sources (such as Spicy IP) that the ex-parte order injuncts Xiaomi from selling, advertising, manufacturing or importing devices that infringe the SEPs in question. The judge also directed the Customs officials to stop the imports under the IPR Rules, 2007. Moreover, local commissioners have been appointed to visit Xiaomi officers to ensure the implementation of these orders. There are presumed to be around eight valid Ericsson declared standard patents in context, based on which interim injunction/Custom enforcement/IPR enforcement rules were also issued against Micromax. During the appeal in the Micromax case as well, it was argued by the counsel appearing for the appellant that there is no presumption in favour of a patent holder on the strength of a patent being registered, and had also urged that normally the rule of law is not to grant injunction when issues pertaining to violation of patents arises for consideration before the Courts for the reason damages would be a good measure. We earnestly believe the same to a very strong argument keeping in context that damages/accounting of profits can always be retrospectively granted/ordered to be paid for, and moreover to a company as huge as Ericsson, how can the loss be irreparable, as the same can always be regained even if the defendant is given an opportunity to present its arguments. Furthermore, even in the Micromax case (CS(OS) 442/2013)), if just within a span of around 10 days, an initial licensing arrangement could be agreed to between the parties (Ericsson and Micromax) through an initial royalty rate of 1.25% of sale price for GSM phones, 1.75% of sale price for GPRS + GSM phones, 2% of sale price for EDGE + GPRS + GSM phones, and 2% for WCDMA/HSPA, couldn’t the same have been taken as a precedent and Xiaomi been ordered to start paying the same royalty instead of simply granting a blanket injunction against the company, which makes it even harder to impose on the existing set of products/devices out there in the market, and making it a hazy picture even for the current distributors/vendors/suppliers. In fact, in the same case (CS(OS) 442/2013)), a recent order on 12’th Nov 2014 further revised/lowered the royalty rates, which would be applicable retrospectively from the date of the suit, wherein the rates have now come down to .8% for GSM and GPRS and GSM devices, and around 1% for other devices. Furthermore, in the same very case, in the order of 14’th Oct 2014, the plaintiff (Ericsson) agreed to produce six agreements with different operators  containing the terms and conditions, in a sealed cover, which according to them are somewhat similarly placed as the current Defendant company. The question in context that comes in mind is then why couldn’t a similar arrangement been asked for, having already had such a strong precedent, wherein the same plaintiff (Ericsson) could have been asked to submit agreements/arrangements with few other similar Indian parties, and then an initial royalty rate could have been imposed on Xiaomi till the next hearing.

                Having seen a growing number of ex-parte interim injunctions being issued by the High Courts, it gives visibility to a disturbed atmosphere where no opportunity whatsoever is being given to the Defendant to make an argument and try to arrive at a settlement, and instead a strong push back is created against the Defendant that makes it much harder for them to file an appeal, get the interim vacated, and in the meanwhile, although for a short period, comply with the harsh interim orders, which may have a long term impact on its hard-built reputation/sales, all especially in cases where the only injury to the plaintiff is monetary in nature and not actual products/services/customers being disturbed. We earnestly hope that the Micromax case could have been taken as a strong precedent and anticipating an appeal, a higher royalty rate could have been imposed.

About the Author: Mr Paras Khurana, Patent Associate at Khurana and Khurana, Advocates and IP Attorneys and can be reached at: paras@khuranaandkhurana.com

OMNIBUS CLAIMS

Omnibus is a Latin word meaning ‘For all, for everyone’. The dictionary defines omnibus as ‘A printed anthology of the works of one author or of writings on related subjects’. The key discussion in this article will be pertaining to omnibus claims as relevant to a Patent application, their significance, scope and current status of allowance of omnibus claims with respect to different geographical regions.

Patent claims are the most integral part of a patent application, precisely claiming the aspects of the process/ product/ technology that the inventor claims to be novel. These precise claims are described in the detailed description in terms of their functionality, advantages and novelty as compared to the prior art based on the Patent subject under discussion. Claims provide the basis for extent of protection conferred in a patent application and are therefore the most important part of the application forming the basis for examination/patent prosecution and litigation proceedings. The two basic types of claims are independent claims and dependent claims. Claims further can be defined as Jepson claim, Markush claim, Means-plus-function claim, Product-by-process claim, Swiss-type claim and Omnibus claim based on the structure.

An omnibus claim is a claim which refers to the description and/or drawings as the subject matter of the claim.  Omnibus claims limit the claim scope to only what the applicant actually disclosed.  Despite of this however, there have been cases where the omnibus claim was the only claim left at the end of validity challenges and sometimes the sole remaining claim upon which to base an infringement action. Therefore for patent applications that are not very strong, omnibus claims can play an integral role to serve the purpose of filing the patent application and forms the sole basis of protection of claimed novelty. A key difference between omnibus claims and independent/dependent claims is that while non-omnibus claims draw boundaries of what is being claimed as the novelty and dependent features of novelty, omnibus claims expand those boundaries to include the parts of the invention mentioned in the specification and drawings but not expressly mentioned in the claims. This is why an omnibus claim is usually added as the last claim in order to include the drawings and description within the scope of the claims and ensuring that no aspect of the invention has been missed out. Hence, inclusion of omnibus claims is recommended in jurisdictions where applicable, for the sake of protecting whatever is disclosed in the drawings and specification apart from the claim.

Omnibus claims can be narrowly or broadly drafted based on the patent application and scope of coverage, and can also include both narrow and broad omnibus claims. The narrow omnibus claims are intentionally limited in scope, and examples thereof are the following:

            An article as claimed in Claim 1, substantially as herein described and illustrated.

            A method/process as claimed in Claim 10, substantially as herein described and illustrated.

            A compound as claimed in Claim 1, substantially as herein described and illustrated.

            Use of a compound in the manufacture of a medicament substantially as herein described and illustrated.

            A substance or composition for use in a method of treatment as claimed in Claim 1, substantially as herein described and illustrated.

These narrow omnibus claims should be construed as being limited to each and every feature which could possibly be relied upon to distinguish the invention over prior art.  They are intended as a last ditch attempt to obtain a valid claim which will be infringed by a competitor exploiting the preferred version or versions of the invention, as described and illustrated with reference to the Examples and/or drawings. In the worst situation a narrow omnibus claim could end up as the only valid claim after a successful attack  on  the  validity of the other claims in a patent, e.g. in defence of an infringement action by the patentee.  Indeed, in the case of Frank & Hirsch (Proprietary) Limited v Rodi & Wienenberger Aktiengesellschaft, 1959 BP 24 TPD, it was the narrow omnibus claim in the patent in question, which was held to be both valid and infringed.

Few examples of broad omnibus claims are the following:

            A new article, substantially as herein described.

            A new building method, substantially as herein described.

            A new compound, substantially as herein described.

            A new use of a compound, substantially as herein described.

A substance or composition for a new use in a method of treatment, substantially as herein described.

            A new process for preparing a compound, substantially as herein described.

Where a patent application includes several independent conventional (i.e. non-omnibus) claims which cover several different aspects of the invention, a single broad omnibus claim such as the following may be drafted:

            A new article, building method, or building system, substantially as herein described.

            A new compound, pharmaceutical composition, preparation process, or use in the manufacture of a medicament, substantially as herein described.

Considering the above we can conclude that use of omnibus claims can be a huge advantage and a very useful tool while drafting a patent application in order to provide maximum protection. However omnibus claims can also be misused to claim more than true intended novelty as prescribed by the inventor. For this very reason world-wide use of omnibus claims is mixed.  Currently, New Zealand, South Africa and the United Kingdom permit omnibus claims.  The United States, South Korea, China, Israel, Australia and India do not permit omnibus claims.  The use of omnibus claims in Canada and under the European Patent Convention is strictly limited.

About the Author: Mr Ankur Sehgal, Patent Associate at Khurana and Khurana, Advocates and IP Attorneys and can be reached at: ankur@khuranaandkhurana.com

Business Method Patents

During the recent visit of Indian Prime Minister to USA, one of the issues that figured prominently in talk agenda was IP related issues. American business community especially those from pharmaceutical industry had been lobbying with their government to pressurize India to bring Indian Patent Act and its provisions in aligned with global systems so that their investments can be legally protected.As of late India has been looking for increased investment both in infrastructure projects and technology they chose the Indian Prime Minister’s visit as a way to get their concerns addressed.

With above backdrop, it is natural to look for areas in IP domain where Indian Patent Act and its provisions deviate from those of other countries. One issue on which Indian Patent Act differs from many others especially USA is non-patentability of Business Method Patents in Indian Patent Act.

Summarized below is the information related to Business Method Patents and policy and practices adopted by different countries in this respect.

Overview:
Business Method Patents is one of the most amazing topics in the patent industry though in India according to the Indian patent Act and Rules these are not patentable. A business method may be defined as “a method of operating any aspect of an economic enterprise”.First of all let us have a look at some basic points related to Business Method Patents and how these Patents help in improving/growing business for both independent inventors and major corporations.

Business Method Patents are a class of Patents which disclose and claim new methods of doing business and include new types of e-commerce, insurance, tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the appropriateness of patenting business methods. Every company has its own strategy and goals and accordingly evolves an approach to achieve them. The approach may involve method of marketing their product, method of giving importance and weight age to their client, method of carrying out business transactions including financial transactions and other such related aspects. Companies invest huge amounts of their resources to innovate and develop new and unique systems. These companies would like to ensure that their innovative methods and approach is be protected. Business Method Patents can be one way of protecting such systems.Hence Business Method Patents help inventors or companies to prevent or stop their competitors or other firms from making use of their unique ideas and work.

A cutting-edge issue in regard to business-method patents is whether they are patent-ineligible because they are not “technological,” regardless of whether they meet the other criteria of patent-eligibility and patentability.

History :

For many years, the USPTO took the position that “methods of doing business” were not patentable. However, with emergence in the 1980 and 1990s of patent applications on internet or computer enabled methods of doing commerce, USPTO found that it was no longer practical to determine if a particular computer implemented invention was a technological invention or a business invention. Consequently they took the position that examiners would not have to determine if a claimed invention was a method of doing business or not. They would determine patentability based on the same statutory requirements as any other invention. The allowance of patents on computer implemented methods for doing business was challenged in the 1998. The court affirmed the position of the USPTO and rejected the theory that a “method of doing business” was excluded subject matter.The USPTO continued to require, however, that business method inventions must apply, involve, use or advance the “technological arts” in order to be patentable. This was based on an unpublished decision of the U.S. Board of Patent Appeals and Interferences. However, this requirement could be met by merely requiring that the invention be carried out on a computer.

In October 2005 the USPTO’s own administrative judges overturned this position in a majority decision of the board in Ex Parte Lundgren, Appeal No. 2003-2088 (BPAI 2005). The board ruled that the “technological arts” requirement could not be sustained as no such requirement existed in law.

In light of Ex Parte Lundgren, the USPTO issued interim guidelines for patent examiners to determine if a given claimed invention meets the statutory requirements of being a process, manufacture, composition of matter or machine. These guidelines asserted that a process, including a process for doing business, must produce a concrete, useful and tangible result in order to be patentable. It does not matter if the process is within the traditional technological arts or not. A price for a financial product, for example, is considered to be a concrete, useful and tangible result.

There have been further US supreme court rulings on the subject and as on date, litmus test for patent eligibility of business processes is: first, processes that transform an article from one state or thing to another are patent-eligible regardless of whether their use requires a machine. Processes involving transformation of abstract financial data,are probably patent-ineligible. Second, processes that do not make patent-eligible transformations are patent-eligible only if they are claimed to be carried out with a “particular machine.

First Business Method Patent was filed in Japan by a software company. United State was the second country to get Business Method Patent in patentable criteria. Since then number of Business Method Patentshave been filledandgranted. This indicates the confidence and success which the business companies have in Business Method Patents. [Source: Wikipedia]

CLASSIFICATION

Business Method Patents have also been part of international discussions and the same have been included in WIPO agreement.  According to international classification done by WIPO Business Method Patents are divided into a number of classes which basically fall in G06Q class and are defined as :

“DATA PROCESSING SYSTEMS OR METHODS, SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORY OR FORECASTING PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORY OR FORECASTING PURPOSES, NOT OTHERWISE PROVIDED FOR”

Business Method Patents in different countries:

  • Business Method Patents in USA:

USA is one of those countries in which large amount of business Method Patents have been filed during last 20 years and many big companies invest large amounts of money and other resources for planning new ideas for doing business which lead to the development in Business.

  • Business Method Patents in Europe:

According to European Patent Convention Article 52 which deals about patentable invention, 52(2c) talks that any “schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;” are not Patentable.

  • Business Method Patents in Japan:

In Japan Business Method are well known and comes under the patentable subject matter. However, patents are not issued solely for business methods and the business method must invariably contain a technical aspect that is both tangible and real for patents to be awarded.

  • Business Method Patents in India:

According to Indian patent act section 3, which deals with inventions which are considered not patentable, any “mathematical method or business method or a computer program or algorithms are not patentable”. However, they are patentable if a new method solves a “technical” problem and an apparatus/system is developed from it.

Opinion:

Allowing business methods to be patented or incorporating Business Method Patents into Indian Patent Act could allow investors to have more confidence in our system and thus encourage them to increase their investment in our infrastructure and other projects.

The importance and value of patenting a business method can be illustrated by the case of Netflix, a leading internet subscription services company that was awarded a patent for its computer-implemented approach for renting movies and TV shows to customers in 2003. In 2006, Netflix filed a patent infringement suit against their primary competitor, Blockbuster. The case was later settled out of court.

In my opinion Indian patent authority should add Business Method Patents into its patentable category as it will lead to improved business ethics and at the same time will motivate more and more companies from abroad to invest in India. Also it helps companies who invest large amount of resources for growth of the company by way of unique business ideas, to secure themselves and stop competitors from using their ideas/work.

About the Author: Mr Paras Khurana, Patent Associate at Khurana & Khurana and can be reached at: paras@khuranaandkhurana.com

Trademark Row over “Khadi”

As per recent news in The Times of India the  Indian government is bracing itself for a trademark battle against German Company’s “Khadi Naturprodukte” over the handspun fabric that was made a centre piece of India’s freedom struggle by Mahatma Gandhi.   The government has made objections to the use of Khadi as a trademark for selling a range of Indian-origin products, including shampoos, soaps and oils in the European markets and which can be purchased online too.

            Traditionally Khadi is known as handspun and hand woven cloth.  During the period of freedom struggle Mahatma Gandhi started Swadeshi Movement. Khadi was spun from indigenous cotton for making clothes, which were known as khaddar or khadi. Khadi not only gave clothes to the poor masses but also gave them self reliance and ideology for life. Britishers suffered heavy losses when Indians started using Khadi instead of imported expensive clothes and thus khadi made significant contribution in Indian freedom struggle. Undoubtedly Khadi is traditionally Indian and is more than just cloth.

            The Government’s attempt to promote Khadi is facing some trademark hurdles as this brand is registered abroad, in countries such as Germany, Spain and Hungary. It looks similar to the case of Haldi, Basmati rice and Neem where traditional Indian intellectual properties have been registered in the west. Khadi is the latest instance of infringement of intellectual property rights.

The German firm says on its website that “Khadi” is a unique brand for the European market and only exclusively available with us.” Products listed on its website include shampoos, soaps and oils which overlap with what KVIC sells under a similar brand, but the current list doesn’t include fabric.

There is pending application for granting status of ‘geographical indication’ or GI on Khadi to India. This refers to products that are specific to a particular place, such as Darjeeling tea. A few months ago, the Intellectual Property Rights (IPR) Attorneys Association sought a GI tag for Khadi products on behalf of all Indian producers. The application is still pending and if the attempt succeeds, all trademarks granted to khadi for the fabric would get cancelled.

 The department of industrial policy and promotion (DIPP) has suggested KVIC to get international trademark under the Madrid Protocol. A trademark would be a proof of authenticity and will also provide legal protection. Shri BH Anil Kumar, joint secretary in the MSME ministry said “There will be more value added consumables so that khadi does not remain a synonym for a fabric, but connotes a lifestyle”.

“We will put all our force and strength to try and ensure that this trademark is cancelled,” a DIPP official said.

            In order to prevent further infringement of IP in Indian traditional herbs and agricultural produce or in other words to prevent “bio-piracy”, the government of India has formed a Traditional Knowledge Digital Library (TKDL) in order to provide information on traditional knowledge existing in the country.

Finally it seems that Khadi may get its dues, if the KVIC efforts are successful. “Khadi” is not just a “Trademark” but it is an icon of National pride, a symbol of economic independence and a means of employment to thousands people especially in villages where livelihood depends on “Khadi”. Hence it needs to be protected at against IP Infringements.

About the Author: Ms. Pallavi Sharma, Trademark Attorney at Khurana and Khurana, Advocates and IP Attorneys and can be reached at : pallavi@khuranaandkhurana.com

High Court grants interim injunction against online retailer from using L’oreal Trademark

Recently, Delhi High Court passed an interim injunction against an online retailer restraining them from using the name of L’oreal to sell or supply any goods on any website or in any other manner having regard to the L’oreal’s plea alleging counterfeit products having its trademark were being sold/ traded by the online retailer Brandworld through the shopping website Shopclues.com.

L’oreal has filed suit for permanent injunction restraining defendants, on account of infringement, passing off and rendition of accounts against the defendants. Plaintiffs Loreal established in France claimed that they are using the mark “L’oreal” since 1910. It has also been submitted by the counsel for the Plaintiffs that the mark “L’oreal” is registered in major countries of the world and thus has built up a globally valuable trade mark. Hence the plaintiff claimed that they have acquired immense goodwill and reputation by using the said trade mark.

As a matter of fact, Plaintiff observed that certain counterfeit products are being sold by the defendants through online selling under their trademark. Plaintiffs submitted that the alleged goods were purchased and sent for verification and it was revealed that they are counterfeit ones. Thus Plaintiffs prayed for exparte ad interim injunction against the defendants.

Justice G. S. Sistani after perusing the plaint and hearing the Plaintiffs counsel granted ex parte ad interim injunction against defendants restraining ‘defendants, their  directors, principal officers, partners, agents, representatives, distributors, assigns, stockists from using,  manufacturing, marketing, purveying, supplying, selling, soliciting,  exporting, displaying, advertising on the online market place through the  website http://www.ShopClues.com, or any other mode with respect to the impugned  trade mark L’OREAL and L’OREAL formative trade mark’ till next date. Summons issued to the defendants through all possible modes.

The Hon’ble High court also stated that on perusing the facts, the balance of convenience is in favor of Plaintiffs and it is the fit case wherein if the interim injunction is not granted then Plaintiffs will suffer from irreparable loss.

Thus it will be interesting to note the Court’s final verdict in this case in view of the incredible growth of online selling where the sellers are listed by the online website provider to sell their goods to the buyers at discounted prices, which is a growing concern for the manufacturers which making it mandatory for them to be more vigilant on the list of sellers dealing with their goods in order to avoid distortion of prices and preventing dealing of counterfeit products under their mark.

About the Author: Mr. Abhijeet Deshmukh, Trademark Attorney at Khurana and Khurana,  Advocates and IP Attorneys  and can be reached at: Abhijeet@khuranaandkhurana.com

Cipla Files Representation with Govt. Seeking Revocation of Novartis’ Patents

It has been recently reported in Economic times that Cipla has filed representation with the government (Department of Industrial Policy & Promotion) seeking revocation of five patents of Novartis on indacaterol, a respiratory drug for the treatment of chronic obstructive pulmonary disease (COPD) and marketed as Onbrez by Novartis. The central government, under section 66 of the Indian Patent Act, has the power to revoke patent in public interest, after giving patentee an opportunity to be heard.

According to section 66,

“Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.”

Cipla has launched its generic version of indacaterol and alleged that Novartis held patents on indacaterol since 2008-09 without manufacturing in India and importing only in negligible amounts, as a result of which there is an urgent and unmet need to provide this drug to patients at affordable prices. According to Cipla, it has potential to manufacture adequate quantities of the drug to make available in the country.  Cipla’s launched generic version of indaceterol is reported to be 1/5th of the price of Novartis’ Onbrez.

This is the first time that an Indian generic company has asked the government to revoke patents on the ground of public interest under section 66. Otherwise, the revocation has always been sought on grounds under section 64 (for example obviousness, anticipation, insufficient disclosure, violation of section 8, 3d etc.), whether an Indian company has filed a revocation petition or a counter claim in an infringement suit. However, public health and drug price play significant role in deciding a patent’s fate in India especially in context of Compulsory Licensing of patent as it happened in Natco’s case. Even in Roche v. Cipla, public health and pricing issues were considered by the India courts, although the decision at the High Court was based on merits of the case and not in public interest.

It is highly expected that Novartis will take a legal course to challenge Cipla’s launch. Novartis has been very active to protect patents for its one of the blockbuster anti-diabetic drugs vildaglipton in India. Novartis has sought, just a few months ago, quia timet interim injunctions against several Indian generic companies including Glenmark generics, Bajaj healthcare, Cadila healthcare, Alembic pharmaceuticals against alleged patent infringement of vildaglipton even before they actually launched their generic versions and after they obtained marketing approvals from DCGI.

Thus Novartis will most likely file patent infringement suits seeking interim/permanent injunctions restraining Cipla from manufacturing and selling generic version of indacaterol in India.

On another note, Cipla could also have applied to obtain a compulsory license to manufacture and sell indacaterol before launching the drug. All three grounds of granting compulsory license under section 84(1) viz. reasonable requirements of public not being met, drug non-affordability and non-working of patent in India could have been proved by Cipla. According to Cipla, Novartis declared import of meagre 53,844 units for the year 2013 which do not satisfy even 4500 patients annually where there are more than 1.5 crore patients in need of the drug. Cipla also urged the government to consider COPD as an epidemic worthy of being qualified as a “public health crisis” as it claims 50 lakh lives annually in India, which is more than the toll from HIV-AIDS, malaria, cancer and tuberculosis.

Till now, we are not aware of any case in India wherein the government has revoked the patent in public interest under section 66. The outcome of government opinion to revoke said patents is thus eagerly awaited. This would act as precedent for all similar future cases. And if the government decides to revoke the patent under this section, the ongoing conflict between multinational innovator companies and Indian generic companies is going to intensify. Innovator companies criticize that India has weak patent laws not in compliance with international standards, whereas Indian government takes a stand that its patent laws are in compliance with TRIPs standards and are designed to meet the objectives of drug availability, affordability and accessibility.

 About the Author: Meenakshi Khurana, Partner at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: meenakshi@khuranaandkhurana.com

PATENTS IN THE FIELD OF OUTER SPACE

An Indian space craft successfully entered Mars’ orbit, marking it as the first interplanetary mission for the country making India in the processof being the first Asian nation to reach the Red Planet— and the first nation in the world to successfully reach Mars on its first attempt.This post is devoted to raise awareness about the patent laws related to outer space.

Introduction

As we all know patentsare granted by state or national governments to inventors.Patents are territorial and are only enforced within the jurisdiction of the granting government. For example, holder of a U.S. patent may only be able to enforce the patent against someone who is using, making, sellingor importing the patented invention within the United States. Hence, the owner of the invention must file a separate patent application in countries of his interest, i.e where he wishes to obtain exclusive rights to his invention.

Above limitation in implementing rights granted by patents raises a pertinent question while discussing patents in space domain  -whose territory is space?

Laws pertaining to outer space

In this context it will be worthwhile to examine laws concerning outer space.

Space law can be described as an area of the laws governing activities in outer space that are applicable to national and international law. International lawyers have been unable to agree on a uniform definition of the term “outer space”, although most lawyers agree that outer space generally begins at the lowest altitude above sea level at which objects can orbit the Earth, approximately 100 km (60 mi).

Outer Space Treaty

The Outer Space Treaty, formally known as the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Moon and Other Celestial Bodies. It is a treaty that forms the basis of international space law. The treaty was opened for signature in the USA, the UK, and the Soviet Union on 27 January 1967, and entered into force on 10 October 1967. 102 countries are parties to the treaty, as of May 2013, while another 27 have signed the treaty but have not completed ratification.

Responsibility for Activities in Space

Article VI of the Outer Space Treaty deals with international responsibility, stating that “the activities of non-governmental entities in outer space, including the Moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty” and that States Parties shall bear international responsibility for national space activities whether carried out by governmental or non-governmental entities.

Sovereignty in Outer Space

On 20 December 1961, the United Nation passed a resolution 1721 as follows;

(a) International law, including the charter of the United Nations, applies to outer space and celestial bodies,

(b) outer space and celestial bodies are free for exploration and use by all States in conformity with international law and are not subject to national appropriation.

Article II of the Outer space Treaty states “outer space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means”. Hence outer space is not subject to sovereignty of any state. It is regarded as a “Res Communis”, that is it is a public domain or public property.No one nation may claim ownership of outer space or any celestial body. So, outer space is not owned or controlled by anyone and it is available for anyone to use for any purpose. This does not mean that States that areexploring and using outer space cannot exercise any degree of authority.

As far as an object launched into outer space is concerned, in accordance with Article VIII of the Outer Space Treaty, the State on whose registry such an object is carried shall retain jurisdiction and control over that object, and over any personnel thereof.

Importance of IPR in Space Regime

Space technology has been for a long time one of the most advanced technical areas, and outer space activities are, in fact, the fruit of intellectual creations, it is only in recent years that intellectual property in the field of space activitiesis raised.

The reason is that:

  • Space activities are increasingly now shifting from being state owned to private and commercial activities
  • An increasing number of space activities are operated under international cooperation schemes, which depend on a simple, uniform and reliable international legal framework

Intellectual property protection is critical to fostering innovation in space research and exploration. Without protection, inventors would not reap the full benefits of their inventions and would in turn focus less on research and development.

Case Study: International Space Station (ISS)

The International Space Station (ISS) is a space station, or a habitable artificial satellite, in low Earth orbit. It is a modular structure whose first component was launched in 1998.

As the International Space Station nears completion, the issue of Space-related Intellectual Property Rights (SIPRs) is becoming increasingly important. The partners in this adventure, the USA, Russia, Japan, Canada and the Member States of European Space Agency (ESA), are working together to establish a legal framework to define the rights and obligations of each of the partner states, as well as their jurisdiction and control over their ISS elements.

Experiments to be carried out on the ISS cover human physiology, biology, biotechnology, medicine, biology, science and technology. The pharmaceutical sector in particular has been identified as an area that will benefit from experiments carried out on the ISS.

These factors raise the question of which laws apply to such experiments? For instance, if a scientist/astronaut invents a medical treatment while on board the ISS, which patent law can be used to protect it? Also, can the use of patented inventions be protected in outer space?

The complexity of the legal regime concerning IPRs for the ISS lies in the fact that the ISS consists of different modules provided by different partners. Different IP laws from different ISS Partners can coexist; as each partner registers their flight elements and retains jurisdiction, control and ownership over them.

In order to protect the exclusive rights of inventors, intergovernmental agreement on the ISS was signed on 29 September 1988 by the United States of America, Japan, Canada and ten other member states.

Article 21 of the International Space Station Intergovernmental Agreement (IGA) recognises the jurisdiction of each partner’s courts and allows for national laws to be applied in the modules belonging to the partners. This means that the different IP laws of each partner have to coexist, that is in the event an invention occurs on the Space Station, ownershipof invention will be determined by the ownership and registry of the Station’s element in which the invention has taken place.

For instance, if an invention is realised in a USA space element the USA Patent Act will be applicable as the invention is deemed to have occurred on US territory or for example, an invention made on a Japanese Element will be deemed to have occurred in Japan.

An invention created by an enterprise astronaut on ISS will be patented in the nation that has jurisdiction over the module where the invention took place, not the nation of the inventor.

105 of 35 U.S.C. (Inventions in Outer Space)

The USA is the only country that has enacted an explicit provision related to inventions in outer space.

The USA Patent Act (re. 35 U.S.C.§ 105(2003)) states that any invention made, used or sold in outer space on board a spacecraft that is under the jurisdiction or control of the USA is considered to be made, used or sold on US territory, except where an international agreement has been concluded that states otherwise.

Apart from the USA, however, only Germany modified its patent law prior to the signing of an Intergovernmental Agreement (IGA) on the ISS, to ensure that its patent law can be applied to inventions created on board an ESA registered module.

Apart from these two countries, the national patent laws of no other country contain provisions that would make national patent law applicable on board a spacecraft.

Space Legislation in India

India, like most other countries, has no provisions related to space legislation.

India is a party to all international space treaties, which form the main body of international space law. India has also played a significant role to adopt legal principles by the U.N. General Assembly Resolutions, which provide for the application of international law and promotion of international cooperation and understanding in space activities.

Thus it is for the Parliament of India to take the starting step in the direction of enacting a law for India for the purpose of the effective regulation of various aspects of India’s space policy. Because of recent national and global developments, active involvement of the private sector in country’s space programme, commercialisation of space activities and the agreements made nationally and globally with various agencies, governments, international and intergovernmental organisations, there is a huge need of space laws in India.

The second most important reason for a space law in India is that having successfully demonstrated their implicational capabilitiesnow the Indian space activities have become vastly diversified and have come to stay. Hence to facilitate inter-departmental coordination it is important to make legal norm related to space inventions.

Thirdly, there is a need to clarify applicable legal norms and rules relating to both public laws and private law aspects of space activities, as demonstrated by the experience of developed countries like USA and Germany.

Fourthly commercialisation of the space products is establishing and a vast space activities and space market where India plans to and has already begun to sell its space products.

Therefore, there is need for India to enact a National Space Legislation as soon as possible.

Conclusion

Space provides sufficient opportunities for many joint venture programmes for various innovative applications towards the cause of human kind. A harmonized system of IPR regime for the outer space is needed. The harmonized system should take into account the interests of developing countries and promote moral and ethical usage of Outer Space for the benefit of the entire humanity.

About the Author: Ms Harsha Rohatgi, Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: harsha@khuranaandkhurana.com

Practice of Patent Asserting Entities: Boon or Bane: Global Innovations

Introduction

Patent troll relates to a person or company that enforces its patents against one or more alleged infringers in an opportunistic and unduly aggressive manner, often with no intention to manufacture or market the patented invention. Various terms such as patent trolls, patent monetization companies, or patent assertion entities are used for such entities; however, irrespective of term used, it solely talks about companies that conduct very little research to create new ideas and produces no products. Instead, they hold patents in which they were not involved at any level: ranging from designing, manufacturing or process associated with that patent. Their main aim is to sue similar patent holder firms or to extract license payments under the threat of lawsuits or actual litigation to enforce their demands.

A more polite and neutral name used for them is “Non-Practicing Entities” (NPE’s). Non-practicing entities include legitimate institutions such as start-ups, technology transfer agencies, universities, research organizations inter alia.

Modus Operandi of patent trolls

Patent trolls usually gather together large portfolios of patents, which they purchase from companies that are going out of business, from firms that have developed technology that they don’t intend to pursue on a particular technology, or from individuals who are lacking funds to develop their inventions or ideas. Further, the trolls look for successful products that use the technology covered by their patents and demand a licensing fee. Because patent suits are expensive to defend, the target company is most often willing to settle out of court.

Trolls accumulate patents related to a target company. By purchasing many patents focused on one area, they are able to bring up so many occasions of possible infringement which further makes it harder and more expensive for the target company to defend the suit. They also sue multiple defendants so that the legal cost per defendant is reduced but makes for a large overall potential payback.

On the other hand, as a matter of practice, lawyers are paid on a contingency basis – they are only paid if they win the case. That reduces the cost further of the  trolls. On the other hand cost for the accused infringer is sky-high and if they try to fight the case, there is no quick way to end the litigation and achieve success in the litigation.

The patent trolls may also claim a share in total revenue from the product although patents may cover only a small aspect of the technology. The award can amount to millions for a successful product.

From various sources, it is believed that 97 percent of infringement suits in U.S. are settled before trial rather than risk judgement irrespective of the merits of the case and also the cost of patent litigation (bringing or defending a patent lawsuit is expensive, with legal costs and lawyers’ fees reaching into the millions of dollars) works to patent trolls advantage, too. Further adding to the list of advantages for trolls, if a defendant company loses a suit, it may be liable for treble damages in a case of wilful infringement.

The result is a situation where the accused infringer faces so much of a burden of fighting the court case that it becomes appealing to pay some lesser amount to make the litigation go away.

Patent Trolling in India

The practice of patent trolling was prevalent and practiced in India in the Information Technology and Communications sector till 2005 prior to passage and enactment of the Patents (Amendment) Act, 2005 after which there was steep decline in trolling activities.  The reason for this decline is nothing but the inclusion in the 2005 Act of a list of non-patentable subject matter which includes Software domain which is considered to be most significant domain involved in patent trolling among others, imposition of stringent deadlines for pre-grant opposition, introduction of post-grant opposition, as well as the introduction of a variety of other provisions such as compulsory licensing.

Pertinently patent law in India do not aims to prohibit the existence of patent trolls but threatens its existence.  For instance, Indian patent law makes it mandatory that a (granted) patent be worked or used in India. However otherwise, if a patent is not used in the territory of India within a period of 3 years from the grant of patent, compulsory licensing might be invoked.  Also, the Indian Patents Act makes it mandatory to file statement of working of a patent at the end of each financial year. And if the patent holders fail to file such a statement, he may be liable for a fine and/or imprisonment.  Hence in India, patent trolling does not pose any major threat to any entity seeking opportunity to enter the Indian market in view of the amendments to the laws which fairly controls the patent troll activity in India.

Conclusion:

While patent trolls are a major threat in many countries they are not a viable option to operate in India In view of provisions incorporated in Indian Patent Laws vide Patents (Amendment) Act, 2005.  It can be observed that while the other countries are plagued with patent troll activities, the Indian system strived fairly to control the problem of patent trolls.  May be US and other developed countries need to take a leaf out of Indian Patent Laws to curb the menace of patent trolls instead of criticising IPR regime.

About the Author: Mr Sitanshu Singh, Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: sitanshu@khuranaandkhurana.com

Emcure’s Notice of Motion succeeds against Corona Remedies: Bombay High Court

In the recent decision of Bombay High Court in the case of Emcure Pharmaceuticals v Corona Remedies, the Hon’ble court decided on the issue of deceptive similarity, acquiescence and balance of Convenience in favor of Emcure Pharmaceuticals.

Facts of the case:

The plaintiff’s trademarks ‘OROFER’ and ‘OROFER XT’ are registered as word marks since 1996 with the trade mark registry in class 5 in relation to medicinal and pharmaceuticals preparations for iron  deficiency, anaemia, methylcobalmin deficiency, folic acid deficiency, zinc deficiency and so forth.

On, 10 January 2006 the plaintiff became aware of the advertisement of the defendant’s trade mark ‘COROFER’ in the Trade mark Journal 1371. However on 17th December 2007, Plaintiff sent Cease and Desist notice to the Defendant through their attorneys. Thereafter the Defendant’s registration was opposed by the plaintiff on 20th December 2007 claiming inter alia prior and original adopter of the mark ‘OROFER’ in class 5 and due to prolonged and extensive use, the mark exclusively connotes to the plaintiff only and would cause confusion and deception among potentials if used by any other entity.

The plaintiff also sent second Cease and Desist notice to defendants on 26th June 2009. Moreover on dt. 7th September 2013 filed infringement suit against the defendants. The Plaintiff also filed the notice of motion for interim relief injuncting the defendants from using the impugned trademark in any manner thereof.

Issues Involved:

  1. Whether the defendant’s mark is deceptively similar to the Plaintiff’s mark?

  1. Whether the fact that other marks exists with the word “FER” is determinative, in that the use of this word or abbreviation by the Defendant cannot be said to constitute an infringement of the Plaintiff ’s marks?

  1. Whether it constitutes a valid defense if it be shown that Plaintiff is not the first user of the impugned mark?

  1. Whether Plaintiff’s claim stands defeated if the alleged delay is proved? And if the knowledge of the Plaintiff regarding the Defendant’s use is shown, hasnot the Plaintiff acquiesced in the Defendant’s use of its rival marks? Whether S. 33 is limited to a later registered trade mark?

Issue 1:

The court held that the true test is to juxtapose the two marks and then analyze the likely effect on the mind of a person of average intelligence and imperfect recollection. In the present case the entire mark of the plaintiff is incorporated in the defendant’s mark which makes it deceptively similar to the plaintiff’s mark. Thus there is no difference between the plaintiff’s mark and the defendant’s mark except for the addition of the preceding letter ‘C’.  The court also relied on the case of Boots Company PLC v. Registrar of Trade Marks & Anr. Wherin it was held CROFEN to be deceptively similar to BRUFEN. Thus the court held that the Defendant’s mark is confusingly and deceptively similar to the Plaintiff’s mark.

Issue 2:

The court held that the fact is inconsequential that there exists other mark with the term FER in them. Moreover in view of the fact that the defendant itself has sought for the registration of the mark with the term FER, defendants cannot claim lack of distinctiveness.

Issue 3:

The defendants claim that the markl ‘OROFER’ is already used by one Advent Laboratories Patna who is prior user since 1983 and the mark is registered on 24th September 1985. The plaintiff however denied the contention and claimed that the mark was filed on proposed to be used basis and there is no evidence of its actual use. Moreover Section 28(3) and Section 12 provides for co existence of the marks on the register where both the proprietors do not have exclusive rights over each other, however as against third party each of them has full rights against the third party. The court held that in the present case the defendant is the third party and not the concurrent user.

Issue 4:

The court held that mere delay in filing the suit in no way defeat the rights of the registered proprietor and which is not firmly settled by various case laws. (Relied Medley Pharmaceuticals Ltd. v Twilight Mecantiles Ltd. & Anr) Moreover it is also settled principle that in law question of acquiescence arises where the proprietor being aware of the rights and the infringement of the mark but fail to sue without a positive act of encouragement. And this is not the defence available to the infringer.

The court held in reference to acquiescence that “Acquiescence is a species of estoppel, a rule in equity and a rule of evidence.  Essential  to the acquiescence  doctrine  is  that  it  is  accompanied  by  an encouragement  or an inducement:  he who possesses a legal  right must have encouraged the alleged violator of that right in acting to the latter’s detriment, confident in the knowledge that the former is not asserting his rights against the violator. Acquiescence is not mere negligence or oversight. There must be the abandonment of the right to exclusivity”.

The court on the question of delay, acquiescence and honesty of adoption, relied on Cadila Pharmaceuticals Ltd. v Sami Khatib and Hindustan Pencils and Schering Corporation and held that even if it is assumed that the defendant’s adoption was honest, the defendant had the means to discover the plaintiff’s mark and particularly in view of the fact of plaintiff’ opposition to the defendant’s mark, the continued use of the mark by the defendant was at its peril. Moreover the onus of proving the honest and concurrent user lies with the defendant and the defendant fails to prove the same. However the defendant also fails to produce the sales figure. Hence question of acquiescence did not arise. (Relied on Win Medicare v. Somacare Laboratories Ltd)

The defendant further claimed that the S. 33 also applies to the unregistered mark whereas the court rejected the argument and held that the “S. 33 operates in a well defined and circumscribed set of circumstances. It cannot possible oust every other plea of acquiescence”.

About the Author: Mr. Abhijeet Deshmukh, Trade Mark Attorney, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: Abhijeet@khuranaandkhurana.com

Follow

Get every new post delivered to your Inbox.

Join 239 other followers