Monthly Archives: November 2012

Trade mark licensing in India

One of the drastic turnarounds caused by the introduction of the new Trade Marks Act, 1999, repealing the old Trade Marks Act, 1958 was broadening the definition of the phrase ‘permitted use’. In the new Act, the use of a registered Trade Mark is now permitted not only by the registered user, but also by a third person who is permitted to use the captioned registered Trade Mark with the consent of the registered user. A license agreement would be signed between the registered user and the third party.  The clauses would mainly include granting of rights, royalty payment, duties and obligations of both the parties, arbitration/mediation clauses, termination and its consequences, to name a few. This practice is called Licensing which is treated as a part and parcel of any business these days.

The Trademarks Act does not mention the term ‘License’ but the concept under the Act is mentioned as that of a ‘Registered User’.

The advantage of Licensing is that it widens the scope of the product that the Trade Mark covers and extends its growth in terms of value and reputation. It is a win-win situation for both the proprietor of the Trade Mark who has already established himself in the business arena (the licenser) and for the person who might be just a start-up company (licensee).

But the main flaw in licensing would be that the licensee may end up exploiting the Trade Mark more successfully and effectively than the licensor and may receive better returns. It would be a huge backlash on the licensor if he ends up losing his customers too. Also, there is a huge risk of unauthorized usage of the Trade Mark once it is licensed.

The main difference between patent licensing and Trade Mark licensing is that a patent holder can solely license his invention as a patent whereas under the Trade Mark law, a Trade Mark cannot be used solely for the purpose of licensing.

In Gujarat Bottling Co. v Coca-Cola Co. (1996) PTC 89, it was held that so far as a connection in the course of trade with the Trade Mark continues to exist between the goods and the proprietor of the mark, licensing of Trade Marks, registered or unregistered may be permitted.

When it comes to goodwill of the Trade Mark, it would always belong to the licensor since he is the original proprietor of the Trade Mark. The trade connection between the licensor and the goods of the Mark and the accruing goodwill attached to it, can be maintained by him (the licensor) by measures such as quality control. In the case of Barcamerica International USA Trust v. Tyfield Importers Inc., (289 F.3d 589 (9th Cir. 2002) the licensor failed to exercise quality adequate control over the licensee. This means that the licensor used the Trade Mark as a commodity without established a direct trade connection between the goods and himself. In such scenarios, the licensee may be able to challenge the rights of the licensor. In the above mentioned case, the Court held that uncontrolled or ‘naked’ licensing may result in the Trade Mark ceasing to function as a symbol of quality and controlled source whereby it may appear that the Trade Mark owner has abandoned the Mark and he may be stopped from asserting his rights to the Trade Mark.

When it comes to determining what exactly constitutes ‘quality control’, McCarthy in his book ‘Trademark and Unfair Competition’ has observed that under the understanding of the quality theory, the consumer assumes that products sold under the same trademark will be of equal quantity regardless of the actual physical source or producer of the goods. This means, as per the expectations of the potential consumer, the legal form of ownership and control of a Trade Mark should not affect the final produced goods or service. Hence, whatever be the form of quality control exercised by the registered proprietor over the use of the Mark by the registered user, the provision of the quality control and the expectations to provide the same, must be written in an agreement (which is between the licensor and the licensee) as one of the stipulated conditions.

Further, a plethora of judicial decisions have laid down certain findings on how to diligently conclude whether quality control has been exercised or not. Various factors such as an effective audit mechanism, training of personnel, right to inspection, financial and managerial controls, provisions of samples, and most importantly, the nature of the relationship between the licensor and licensee have been marked out.

However, the Act is unclear on several issues. In a case where the Registrar cancels the registration of a Trade Mark which has already been licensed, the licensee would bear the brunt of it too. This loophole can be avoided if the clauses in the License Agreement are drafted accordingly.

Coming to the difference between assignment and license, assignment essentially means selling the complete ownership of the Trade Mark, whereas licensing would merely mean renting of the Trade Mark.  In ordinary parlance, assignment is a form of permanent transfer, while license is a temporary transfer. Assignment can be made wholly or partly; license gives right for a specific period of time.  Assignments are not revocable in nature, while licenses can be revoked.

One would think that when it comes to regulation of Trade Mark license agreements and keep a check and control over them, competition law would play a major role in it. But Section 3(5) of the Competition Act excludes ‘licensing agreements’ with respect to IPRs from the purview of regulating anticompetitive agreements.  This exception is only with respect to IPRs because it is solely said to be a creative and innovative field.

It would mean that the provisions in the Act relevant to anti-competition agreements will not restrict the right of any person to impose such reasonable conditions as may be necessary for protecting his rights granted to him under any IPR statute. Although, licensing agreements that are unreasonable i.e. if they affect the prices, production and manufacture of goods adversely in the market, they are protected under the Competition Act. This stipulation deems to be very ambiguous since it would mean that agreements which are only appear unreasonable per se would be under scrutiny by the Competition Commission of India, and not all the agreements.

Instead of banking on competition law to provide legal recourse for Trade Mark licensing agreements, there is a need for certain amendments in the Trade Mark Law itself to first acknowledge the existence of a license and then elaborate on it deeply. Only then, can a Trade Mark be economically exploited for the betterment of the corporate society.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at:

Indian Patent Office (IPO) publishes guidelines for Indian patent applications relating to plant (herbal) compositions

The Controller General of Patents has issued guidelines for processing of patent applications relating to Traditional Knowledge (TK) and biological materials on November 08, 2012 which can be accessed here.

The guidelines have been issued in lieu of the fact that a number of the Indian Patent Applications relating to herbal (plant) compositions/extracts/alkaloids (and other biological resources from India) are being granted in India even though their corresponding Foreign applications in the jurisdictions (US/EP/JPO etc.) where the TKDL access have been provided are being rejected. Due to lack of any standard procedures, different Examiners/Controllers have been analysing the inventions from the patentability criteria differently.

Among the various points discussed in the guidelines, the assessment of novelty and inventive step are the most useful ones especially the inventive step determination, which even though the patent agents/attorneys know well sometimes that the composition is obvious, the Applicants still want to go ahead in filing. Thus these guidelines would provide great clarity not only to the Examiners/Controllers but also to inventors/Applicants.

The novelty determination for example is straight.  The claims on extracts/alkaloids/”isolation of active ingredients” will not be considered novel for a treatment of a disease when such extracts/alkaloids are already known in the art to be used in the treatment of said disease. There are some examples cited in the guidelines throwing clarity which can be read from there.

The inventive step determination is also described therein with various examples. One clear principle described is that a herbal composition comprising more than one plant parts/extracts with known-therapeutic effect for the treatment of disease wherein all these plants are known for treating the same disease would be considered obvious, even though such combinations of medicinal plants would be more effective than each of the medicinal plants when applied separately (additive effect).

Another principle described is that when a plant ingredient/extract/alkaloid is already known for the treatment of a disease, then it creates a presumption of obviousness that a combination product comprising this known active ingredient (with other plant extracts) would be effective for the treatment of same disease.

Another important guiding principle is on the claimed concentration ranges of the ingredients of the composition. The guidelines make this clear that discovering the optimum or workable ranges of plant ingredients by routine experimentation is not inventive. It is emphasised that although cited art may not specifically teach the claimed percentage ranges, however the amount of specific ingredient in a composition is clearly a result effective parameter that a person of ordinary skill in the art would routinely optimize. Therefore all the claims claiming,

“A pharmaceutical formulation comprising an extract of Pongamia pinnata in the range of 2 to 20%, an extract of Lawsonia alba in the range of 5 to 15%, an extract of Dhatura alba in the range of 2 to 20% and an extract of Cocos nucifera in the range of 20 to 60% for the treatment of chronic ulcer, diabetes ulcer and wounds” would be obvious if the plant parts are known in the art for treating the same diseases.

The guidelines however do not discuss certain other scenarios, such as, what if different plant part of the same plant is used in a composition as opposed to the plant part known in the prior art. For example, let’s say the claim is follows:

“A pharmaceutical formulation comprising an extract of root of X; an extract of  leaf of Y, and an extract of  stem of Z for treating a disease A”. Suppose it has been discussed in the literature that the different plant parts of same plant, say X, has different biological activities (due to different biological components). In that case is it obvious if the Applicant claims a composition comprising an extract of a different part of the plant from the plant part as disclosed in the prior art?

Another scenario not clarified in the guidelines is on the obviousness criterion of claiming a composition with different species of same genus. For example, a genus Phyllanthus has many species including P. acidus, P, emblica, P. Niruri and so on. Will it be obvious for a skilled person to arrive at a composition comprising one species of the same genus plant wherein the prior art discloses a different species of the same genus plant for the same disease further when the scientific literature proves that different species have different biological activities. There had been a prosecution case with us for example wherein we got a couple of scientific literature articles. Amongst them, some proved different biological activities of different plant parts of the same plant X and some others proved different biological activities of different species of the same genus plant Y. We argued in one of the office actions that since different plant part of X is used in the prior art and different species of Y is used in the prior art for treating the same disease, it would not be obvious to use different plant part and species and yet achieve better efficacy as the skilled person would not to motivated to use such different plant part and species. The patent was granted, of course, in addition of the number of other technical arguments including unexpected results and so on. Well, that’s a different story to tell.

Coming back to the guidelines, the same also discuss the formalities requirements in filing Form 1. The permission of National Biodiversity Authority (NBS) would be sought in a form of declaration in paragraph 9 (in) in the form of “the invention as disclosed in the specification uses the biological material from India and the necessary permission from the competent authority shall be submitted by me/us before the grant of patent to me/us”.

In the concluding statement, I believe that these guidelines will indeed be proven a useful means for the Examiners/Controllers and the Applicants alike for clarifying the obviousness criterion which at the moment is not being met properly at the Indian Patent Office due to lack of uniformity in examiners/controllers decisions as is evident from certain Indian granted patents. Protecting our therapeutic biological resources from monopolistic rights is indeed a duty of each and every one of us and we should contribute in any way we can, whether we are examiners, inventors or agents.

About the Author: Meenakshi Khurana, Patent Attorney, available at

Roche v Cipla: Part 2: Infringement

In continuation of the last piece over here, let’s now discuss the actual issue of infringement of IN ‘774 patent by Cipla crisply. My apologies for a long delay in writing this piece due to long travelling schedule and back-to-back heavy projects thereafter. Nevertheless, it is better to be late than never. Here it goes.

The claim 1 of IN’774 is read as:

1. A novel [6,7-bis(2-methoxyethoxy)quinazolin-4-yl]-(3-ethynylphenyl)amine hydrochloride compound of the formula A [structure]

The defendant raised several defences resisting the infringement of this claim. The defendant provided an X ray diffraction of Tarceva and concluded that the drug is actually the Polymorphic Form B and that the features of Polymorph B contained in Tarceva corresponds with the US patent 221.

Further the defendant argued that the tablet of Erlotinib Hydrochloride cannot be made by way of simply following IN’774 rather the patent US‘221 is relevant for the same purpose and this shows that there is further process of reaction of the compound of  IN’774 with that of other constituents in order to arrive at Polymorphic version. The suit patent compound is thus not automatically leading to Polymorphic version.

Roche then argued that Claim 1 of the suit patent is for the Erlotinib Hydrochloride per se, and not restricted to any particular Polymorphic form or mixture of any forms, nor claims any particular Polymorphic form and that the Active Pharmaceutical Ingredient in the Defendant‘s product Erlocip is also Erlotinib hydrochloride. Roche submitted that the defendant could not have arrived at Polymorph B form without crossing the stage of preparation of combination Polymorph A and B and therefore, the defendant product even if the same is a Polymorphic Form B of the molecule would still infringe IN‘ 774.

Cipla’s main point of argument was that the separate patent applications were filed in India (IN’507) and US (US’221) for Polymorph form B and Erlotinib Hydrochloride and that clear admissions have been made that IN’774 relates to Polymorph A+B and the second patent US‘221 and corresponding application in India IN’507 relates to Polymorph B of Erlotinib Hydrochloride. According to Cipla, if Roche filed a fresh patent on Polymorph B, they themselves believed that Polymorphic version is distinct from that of the main compound and when IN’507is rejected by the Indian Patent Office, they took a U-turn and argued that the somersault and are arguing that the second product is covered by the first patent.

The judge followed the purpotive rule of construction of the patent claim,

whether the patent claim subsumes the product or the process impugned is a matter to be examined from the standpoint as to whether the patentee could have reasonably included the said product or process in question which is he is impugning on the fair reading of the invention

According to the Judge there are some of the facts which should have been deposed by Plaintiff in order to show that there is an infringement done by the defendant by manufacturing the Polymorphic version B which is covered in the main compound. Some of those main facts are:

  • How many reactants or variants with which the main Erlotinib compound is reacted with in order to arrive at the Polymorphic Form B of?
  • Whether the properties and the characteristics of the main compound changes or varies after the said reactants or variants are reacted with or not. The plaintiff in order to show that there is an infringement should have deposed to the effect that the said properties and characteristics are not changed pursuant to the reaction.

However, the plaintiff had not been able to show as to what is the exact nature of the plaintiff and defendant products which are being sold in the market, further, whether the said products corresponds exactly with the claim of the suit patent is also not established, among other facts.

On the other hand, the defendant was able to show that the plaintiff’s suit compound is a combination of A and B and the compound needs to be converted or separated in order to arrive at the Polymorphic version B. Plaintiff argued that the plaintiffs‘ suit compound is not separated but converted, to which Judge remarked that,

Whether the said compound is covered or separated, the moot question is that there is something which is done besides the compound as contained in the suit patent in order to arrive at Polymorphic B. if the answer is in affirmative, I think, the onus is discharged”.

The issue is accordingly decided in favour of the defendant and the suit and the counter claim were dismissed.


Thus, in the Indian geography, after the patent on the main compound is obtained, firstly it is extremely difficult to get a subsequent selection patent on polymorph (or other forms) on ground of Section 3d and secondly and importantly the marketed drug based on polymorphic form would easily be prone to generic competition without infringement of the main patent.

About the Author: Meenakshi Khurana, Patent Attorney, available at