Monthly Archives: July 2010

The Bilski Battle Ends…still the war of Patenting Business Method is on…


Do you need one? I am sure by this time you would have read or heard about the Bilski case somewhere. Well it’s not too late to know about it. Petitioner filed a patent application that claims a Business method @ USPTO. The claim included a subject matter that explains how commodities buyers and sellers in the energy market can protect or hedge against the risk of price changes. The Patent examiner rejected the application on the grounds that the invention is not implemented in any specific apparatus and merely solves a mathematical problem. Subsequently, the BPAI agreed to the examiner’s rejection and affirmed the case. At this time, Bilski moved to Federal circuit to fight for his case. The En Banc court decided and affirmed the case. But the reason in the Judgment presented by the court to reject the patent application has turned every Professional in this field to look back to this case.


Federal Circuit: The Bilski case goes famous


In order to patent a claimed Process, the invention should produce a “Useful, Concrete & Tangible” result and so far, this was the standard test that all the US courts including Fed. Circuit was relying upon. Contrastingly, Federal circuit when hearing this Bilski case rejected to apply the “Useful, Concrete & Tangible” test for the claimed Invention. Instead of the above test, the court was relying on “Machine or Transformation” test. “Machine or Transformation” test allows a claimed process to be patented if the claimed process is tied to a machine, state or thing or if the process transforms a particular article into a different state or thing.

When this “Machine or Transformation” test applied to Bilski case, the claims failed to meet the test requirements.

Claim 1 of Bilski consists of the following steps:

“(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumers;

(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.”

The judgment affirmed the case and summarized that the “Machine or Transformation” test is the sole test for determining whether a claimed process is an eligible patent subject matter. This created a big chaos for the people in this field questioning the rigidity of the Federal circuit when deciding the process claims of the patent applications. No wonder, Bilski tried the apex court to fight for his case.

Bilski in Supreme Court:

On June 28, 2010, Justice Kennedy, Justice Stevens, Justice Breyer & Justice Scalia gave their judgments together. In the judgment, they affirmed the case by saying the particular process of the Bilski case is not eligible to be a patentable subject matter. But the Judges pointed out the rigidity of the Federal circuit decision for this case.  In particular, Justice Breyer while conferring the Justice Kennedy’s judgment further added by saying “Although the courts can use “Machine or Transformation” test for determining whether a claimed process under section 101, but the Federal circuit erred in saying the test as “exclusive test”.

The War Continues…

Post Bilski, still it is not clear whether All Business method patents can be patentable or not by applying either one of the tests. What about method patents from other Industries. Definitely, they can be relieved and atleast they can protect their claims by relying on either of the tests…until new landmark case roots from Federal circuit…

Author – Veera Raghavan Rajendran,

Patent Specialist, IIPRD.

The Author of the Blog can be reached:


Roche’s Struggle Over its Patents in India – Two suits, Two oppositions

The struggle between innovator pharmaceutical companies (mostly in the Western world) and developing world Generic companies has been lately played out in India and especially for the last 2-3 years in the form of litigations and oppositions. Here I would be discussing the specific case of Roche (a Swiss Pharma Company) showcasing its journey of wins and loses over its patents and the discussion over the emerging issues in India.

Roche and Wockhardt – Roche got its first product patent in India in 2006 (and in return India got its first pharma product patent since its amended patent regime came into being) for Hepatitis Drug Pegasys. (Pegylated interferon alfa-2a). Its first and forthcoming patents all were being attacked by Indian Generics (not to forget various NGOs) whether through series of oppositions filed or counter attacking to Roche’s suits of infringement. Its struggle over its patents started in 2007, when India’s first post grant opposition was filed by Wockhardt and a Mumbai based NGO for “IN198952” on Pegasys attacking its validity claiming it to be non-inventive and not satisfying Section 3d (the section which has become the most controversial sections of Indian Patent Act since Novartis attacked its constitutionality in the famous Novartis Gleevec Case, an appeal is still pending in the Supreme Court).  That was the time (and the only time) when Roche could taste success with its patent by defending it successfully. Interestingly, Assistant Controller T.V. Madhusudan (in March 2009) ruled against the recommendation of Opposition Board to revoke the patent and held the patent to be valid. Roche successfully cleared the “enhanced efficacy” test in the Section 3d of the Indian Patent Act (including the novelty and obviousness tests). Section 3d allows a novel derivative of a known compound only when such derivative shows enhancement in known efficacy of a known compound. The efficacy is defined as therapeutic efficacy as per Madras High Court decision in Novartis Gleevec Case. Well, Interferon is known compound and known efficacy is its antiviral and anti proliferative activity and the experimental results in the patent showed that there is indeed enhancement of therapeutic efficacy which resulted in Roche’s victory. The complete decision could be read here:

Roche and Cipla – After Roche’s successful stint at winning Pegasys’ patent in the opposition proceeding, it faced the first blow to its Patent Rights for Tarceva, an anti-cancer drug. Roche sued Cipla before Delhi High Court claiming that Cipla’s generic product Erlocip violates former’s Indian Patent IN196774 claiming “Erlotinib Hydrocloride”. The trial Judge held against Roche on the ground of “public interest”, rejecting Roche’s appeal to grant interim injunction restraining Cipla from selling generic version of Tarcev as Cipla’s drug costs about 1/3rd of Roche’s patented drug. Roche’s subsequent appeal to Division Bench also failed miserably when not only did the bench uphold the findings of Trial Judge but also imposed costs on Roche for suppression of material patent information about Roche’s later filed application in India (IN/PCT/2002/00507/DEL) which was specifically on Polymorph B of Erlotinib Hydrocloride (‘507 application was rejected in 2008 following the opposition filed by Cipla primarily on Section 3d. Cipla argued that Tarceva corresponds to Polymorphic Form B of active ingredient Erlotinib Hydrocloride (claimed in ‘774 patent) and that it is Form B which is more stable and suitable for solid oral dosage form than the compound disclosed in ‘774 patent comprising a mixture of Forms A and B. The interesting part was that the claims were not even construed during the trial even once. Roche’s subsequent appeal before the Supreme Court (SC) challenging the order passed by the division bench got dismissed on August 29, 2009. Key reason for the dismissal was the ongoing trial at the Delhi High Court and SC ordered the ongoing trial be expedited.

Roche and Natco – While Roche’s fight for Tarceva over Cipla’s Erlocip was still continuing at the Delhi High Court, Roche brought another suit of infringement against Natco Pharma for infringing the same Tarceva Patent (‘774 patent). The issues pertaining to:

– drug pricing and public interest (the price of Natco’s drug “Erlonat” is equally low),

– interim injunction rejection (in Roche v Cipla) as a precedent,

– Natco’s filing of Compulsory license for the same patent (Natco earlier filed for the pre grant opposition for the same patent attacking its validity and later seeking to get compulsory license to produce generic version of the drug and export to Nepal),

– the selection patent application ‘507 later filed in India specifically pertaining to Polymorph B and suppression of material patent information.

All these are core issues (some of them were being discussed in Cipla too) which are being argued in the ongoing trial. Natco argued and proved by showing X-ray diffraction data that Tarceva is actually Polymorph B form of the compound claimed in suit patent ‘774, and that the Form B is claimed in ‘507 and not in the patent of question thus there could be no question of infringement. The Court will be hearing the Roche v Natco matter on a daily basis from July 27, 2010 onwards.

Roche and Ranbaxy plus others Roche got another blow meanwhile (in April 2010) when it lost patent rights (IN207232) over its anti-viral drug Valcyte (Valgancyclovir Hydrochloride), following the post grant opposition filed by Ranbaxy, Cipla and four other parties including Pharma companies and Indian NGOs. Valcyte is L-valine ester prodrug of known anti-viral drug “Gancyclvoir”. The patent was rejected primarily on grounds of lack of inventive step over US patent US 4957924 which claims L- valine ester prodrug of structurally similar nucleoside analogue and an anti-viral drug “Acyclovir” with improved oral bioavailability and is marketed as a hydrochloride (HCl) salt of said L-valine ester as Valacyclvoir Hydrochloride. It was argued that a person skilled in the art would be motivated to follow the same route to improve the oral bioavailability of Gancyclovir by forming its L-Valine ester prodrug and forming HCl salt of said ester with reasonable expectation of success. As regarding Section 3d here, it was held that increase in oral bioavailability is not an increase in therapeutic efficacy as both prodrug and the original drug are same classes of anti viral drugs and achieve the same therapeutically. The complete decision could be read here.

Key issues emerged

  • Interpretation of the controversial Section 3d: The section 3d is under debate for quite some time now ever since the Novartis Gleevec case took off in India and its interpretation in the Madras High Court. The Court in the same case interpreted “efficacy” as “therapeutic efficacy” only and not in terms of enhancement in bioavailability or other pharmacological parameters. This ruling has been followed since then and the cases that follow and the cases we discussed above. The major issue revolving around is the lack of any quatifier for the term “efficacy” which makes the section open ended to be interpreted by courts at their own discretion.
  • There should be a detailed analysis on the claim construction in such cases. The claims were not construed in the Cipla Tarceva case. The Indian Judges seem to lack technical know-how in pharmaceutical sciences and the various complexities involved. Having more resources and training could go a long way!
  • Public Interest issue: In developing Countries like India, the issues like drug price and drug affordability make it unlikely that they will be able to resist pressure from their own citizens in favor of multinational drug companies like Roche. TRIPS intented to benefit both innovator and generic industries and both developed and developing nations , the balance seems to be little tilted towards the generic pharma world as pricing issue takes priority in most of the cases as discussed above
  • Setback for innovation and R &D: The developed (innovator) industry should formulate some strategy for designing around drug prices in developing countries so that rewards for millions of dollars spent on research and innovation do not get diluted.

It is to be seen now when Roche’s wait for the verdict of the ongoing trials would be over and how it would affect its future business and patenting scenario in India.

About the Author: Ms. Meenakshi Khurana, a Patent Specialist in Institute of Intellectual Property Research & Development (IIPRD) and can be reached:

Is Section 3(k) losing its significance?

It wasn’t long back when section 3(k) defined as “A mathematical or business method or a computer programme per se or algorithms are not patentable” was under heavy discussions as regards the standards based on which patentability of a computer implemented invention alias software invention would be examined.

A computer implemented invention was defined as any invention the performance of which involves the use of computer, computer network or other programmable apparatus, or an invention one or more features which are realized wholly or partially by means of a computer programme/ programmes. Computer programmes, on the other hand, were defined as a set of instructions for controlling a sequence of operations of a data processing system. It closely resembles a mathematical method. It may be expressed in various forms e.g., a series of verbal statements, a flowchart, an algorithm, or other coded form and maybe presented in a form suitable for direct entry into a particular computer, or may require transcription into a different format (computer language). It may merely be written on paper or recorded on some machine readable medium such as magnetic tape or disc or optically scanned record, or it maybe permanently recorded in a control store forming part of a computer.

The bar for examining such computer implemented inventions was set on the extent to which an invention demonstrates technical effect, which in turn being a hairy term, was further assessed based on whether the patent specification discloses to have a tangible output or a significant effect on the hardware/firmware. A hardware implementation performing a novel function therefore was not rendered patentable if the particular hardware system is known or is obvious irrespective of the function performed. In summary, “software per se” was differentiated from “software having technical effect” through its technical application in the industry. A claim directed to a technical process which process is carried out under the control of a programme (whether by means of hardware or software), cannot be regarded as relating to a computer programme as such. In such a case, a software specification relating to and claiming a method of predicting fluctuations in stock market, being purely based on a mental algorithm, would not be held patentable and a software for running an actuator on the other hand would be rendered patentable.

Finally to set the background for the actual status of 3(k) as a bar for examining patentability, Indian Patent office manual has been setting and/or quoting Patent Applications such as 558/DELNP/2005 which being a pure computer implemented software application, was denied a patent in India. The question being raised is whether 3(k) is being correctly applied in India in view of some recently granted Patents. We shall look at the same through some below mentioned case studies from across Hi-Tech domain:

Case Study 1: The Patent Application 8/CHENP/2005 is granted (Indian Patent No. 221272 filed by RGA Technology Partners). The granted patent relates to a method and system for evaluating insurability of an applicant for insurance based on an interactive questionnaire given a server by access of a database. The first Independent claim of the specification states:

A computerized method of evaluating insurability of an applicant for insurance from a carrier, said method comprising:

defining processing rules to determine which questions in a comprehensive set of application questions are to be presented to the applicant for collecting underwriting information from the applicant and to determine an order of presentation of the questions, said processing rules being based on underwriting rules associated with the carrier for rendering a decision on the insurability of the applicant from the underwriting information collected from the applicant;

assigning an engine variable to one or more of the questions in the comprehensive set of application questions for use in matching underwriting information previously obtained from the applicant to minimize redundant responses from the applicant;

presenting an interactive questionnaire via a browser operating on a client computer, said questionnaire including one or more base questions and one or more detail questions selected from the comprehensive set of questions according to the processing rules and the assigned engine variables, said detail questions each being related to at least one of the base questions for collecting further information related to the respective base question;
receiving at a server communications from the client computer including the responses to the questions presented to the applicant in the questionnaire, said server and said client computer being coupled to a data communication network; and

rendering a contemporaneous decision on the insurability of the applicant based on the questionnaire and the responses thereto from the applicant.

It is obvious from the very analysis of the specification, that the subject matter claims and pertains to a sequence of steps being implemented purely by a computer implemented software application. The specification does not claim any tangible output from the software and ultimately yields a suitability of application to get the insurance based on a set of questions from the server and answers given thereto by the Applicant.

It is furthermore important to note the view of the concerned subject matter by the EPO, which too, like India, applies the technical effect test for a computer implemented subject matter. According to the corresponding EPO Application No. EP 03 76 0294 having International Classification as G06F17/60, claims 1-40 pertain to a matter that is excluded from patentability under article 52(2) and (3) EPC and formulated to merely specify commonplace features related to a technological implementation of such matter to such an extent that a meaningful search is not possible. The search report also states that “Any problem which are addressed do not appear to require a technical but an administrative i.e. business solution.” The question therefore is if the Patent Office has loosened the bars for testing applications under 3(k) and granting application to reduce the backlogs or is it an indication of India slowly following the path of US Patent Law and approaching towards Bliski like contentions.

Case Study 2: The Patent Application No. 552/CHE/2004 is granted (Indian Patent No. 228947 filed by Samsung India Software Operations Pvt. Ltd). The granted patent relates to a method for anonymous instant messaging between an originating client and the recipient using an Instant Messaging (IM) server. The first Independent claim of the specification discloses:

A method for anonymous instant messaging between an originating client and the recipient using an Instant Messaging (IM) server, the method comprising the steps of:

a) receiving the request for hiding its actual user ID for anonymous message delivery from the originating client and confirming back to the message request;

b) creating or substituting a volatile ID for the actual ID of the originating client;

c) delivering the message to the recipient and obtaining the confirmation from the recipient;

d) receiving a subsequent reply from the recipient which makes use of the said volatile ID for communication and confirming back to the recipient client;

e) resolving the volatile ID with the actual user ID; and

f) delivering the reply from the said recipient to the originating client with the actual user ID and obtaining the confirmation from the originating client.

As can be observed, the invention pertains to three entities namely an originating client, a recipient, and a server all of which are operatively connected so as to enable sending of messages from the originating client to the recipient. The disclosure completely fails to discuss any subject matter pertaining to an impact on the hardware and/or firmware and also fails to demonstrate any technical effect on the hardware or produce a tangible output. The disclosure was restricted to a messaging mechanism which is well known in the art and purely an incremental improvement at the software level rather than at the network level. Therefore the concerned subject matter does not embody a technical process, which exists outside the computer.

The moot question therefore lies in:

  1. The precise basis on which Section 3(k) is being implemented and justification that can be given for demonstrating technical effect in such pure computer enabled implementation.
  2. Whether inclusion of a few hardware elements in the independent claim or merely enabling software objects to interact with hardware elements, the new test of bringing in substantiating arguments to make the subject matter patentable.
  3. Whether system claims are no longer suggested and preferred over method claims when it comes down to computer implemented inventions.
  4. Whether 3(k) is just for namesake!!!


1. iPairs (Indian Patent Information Retrieval System)

2. Europe Patent office website

About the Author: Mr. Tarun Khurana, Partner and Patent Attorney in Institute of Intellectual Property Research & Development (IIPRD) and can be reached:


IP Issues that concern generic pharma companies generally center on ANDA filing, Patent Litigation, Patent Outlicensing and Brand Acquisitions. It has been very rare for an Indian generic player to be involved into all the four aspects in a single case involving a common drug molecule. One such case with India headquartered Sun Pharma as the ANDA Filer and Key Litigator has been taken as the subject matter for the current study.

Sun Pharmaceuticals Ltd, a leading India-based global pharmaceutical company with interests in the cardiology, psychiatry, neurology, gastroenterology, diabetology and respiratory disease segments has been very active in building and enforcing an exhaustive patent portfolio. Sun has also been one of the early Indian players to take on with the Big Pharma on issues of ANDA Para IV and gaining exclusive marketing rights into US geographies.

Facts of the Case

As a part of its global business strategy Sun acquired US-based Caraco Pharmaceutical Laboratories in 1996. In March 2006, Caraco filed an Abbreviated New Drug Application (ANDA No. 78-219) with FDA seeking a generic approval for escitalopram oxalate in March 2006. Escitalopram is an antidepressant of the selective serotonin reuptake inhibitor (SSRI) class. It is indicated for adults with major depressive disorder, generalized anxiety disorder, social anxiety disorder, or panic disorder and was developed by Danish pharmaceutical firm Lundbeck. Forest Laboratories, which also co-developed the molecule with Lundbeck, was assigned the exclusive license to manufacture and market the escitalopram oxalate based commercial brand, Lexapro.


In reply to Caraco’s ANDA application, Lundbeck and Forest Labs jointly initiated a legal action against Caraco and on July 10, 2006 filed a patent infringement lawsuit at United States District Court Eastern District of Michigan alleging that Caraco’s ANDA products would infringe their patents covering escitalopram. The Orange Book lists three patents – US 6916941, US 7420069, and RE34712 – for escitalopram and Lundbeck’s and Forest’s assertion was that Caraco has to prove that its product would not infringe any of its 3 patents.

On February 20, 2007, Caraco filed a declaratory judgment action against Forest and Lundbeck seeking a declaration that Caraco’s ANDA Products will not infringe the ‘069 and the ‘941 patent.

Out-of-Court Settlement

Before the court could decide on the matter, the three companies reached a mutually agreed settlement in July 2009. The major provisions under this settlement were:

  • Sun Pharma would give a global license to Lundbeck for the former’s patent applications related to escitalopram in return to a one-time upfront payment and if the Sun’s technology is used in any marketed product by Lundbeck, a royalty on sales would also be paid to Sun.
  • Forest would provide licenses to Caraco for any patents related to Lexapro and with respect to the marketing of Caraco’s generic version of the product as of the date that any third party generic that has received final approval from the FDA enters the market other than an authorized generic or the first filer with Hatch-Waxman related exclusivity.
  • Caraco would take over the commercialization and sales of several products from Forest’s Inwood business. Caraco would pay Forest an undisclosed advance against royalties and royalties on net sales of these products.
  • Forest would reimburse Caraco for a portion of their costs related to this litigation.


The terms and conditions for the settlement clearly indicate that the innovator companies could foresee the impact that the litigation could have on their revenues and goodwill. It also signifies the growing clout of mid level generic players who are now getting into a position to dictate their terms and conditions and getting an upper hand during such settlements. In the current case, Sun Pharma, through its US Subsidiary, Caraco Pharma Lab, was not only able to avoid a huge litigation cost but, through licensing and commercializing clauses, made the most out of the situation.

Conclusively, IP Litigation can not be taken to separate from other Business related Strategy. As is established from the current case, a sound strategy during following up an ANDA litigation can bring benefits for the Company that might not be exactly from the IP realm but goes much beyond it to cover Product and Brand Acquisition.

Latest Developments

  • In October 2009, Caraco closed an asset purchase agreement with Forest Laboratories to acquire several products from Forest’s Inwood line of business.
  • Sun Pharma received a one-time receipt of US $20mn from Forest Lab as a part of the Lexapro settlement.

About the Author: Mr. Abhishek Sahay, a Senior Patent Consultant in Institute of Intellectual Property Research & Development (IIPRD) and can be reached: