Category Archives: Patent Litigation

Blogs in this Category would include all Patent Litigation’s across Technology Domains with focus on IIPRD’s analysis and key take away strategies from the Litigation.

Hetero’s Subsidiaries not infringing Roxane’s patent on PhosLo

In Roxane Laboratories, Inc. (hereinafter referred to be as “Roxane”) v. Camber Pharmaceuticals Inc., et al. (hereinafter referred to as “Camber”) decided by United States Court of Appeals for the Federal Circuit on November 17, 2016, Roxane had appealed against decision of district court in an infringement suit against Camber and Invagen Pharmaceuticals Inc (collectively referred to as “appellees”), both of which are subsidiaries of Hetero Drugs Ltd. (hereinafter referred to as “Hetero”). The infringement suit was in respect of US patent number 8563032 (hereinafter referred to be as “032” patent). This appeal was from  the  United  States  District  Court  for  the  District  of  New  Jersey  in  No.  2:14-cv-04042-SRC-CLW, Judge Stanley R. Chesler. In March, 2014 appellant i.e. Roxane had filed suit for infringement against the appellees in the district of Ohio. The case was later (in June 2014) transferred to state of New jersey on the basis of convenience of  the parties  and  witnesses  as  a  whole  and  the  balance  of public and private interests.

Appellees manufacture and  sell  calcium  acetate  products  in  elongated  size  00  (“size  00el”)  capsules which are same in diameter and but have a greater length and  a larger fill volume. Calcium acetate is used to treat patients suffering from end-stage kidney failure who have abnormally high serum phosphorous levels. When taken orally, calcium acetate binds to phosphorous in foods and prevents its absorption through the gastrointestinal tract.

Roxane filed a patent on 6 Dec, 2006, the ’032 patent, for a capsule formulation of calcium acetate granules. The ‘032 patent titled ‘Formulation and manufacturing process for calcium acetate capsules’ was asserted by Roxane. This patent has only one independent claim.

In July 2015, the district  court  in  New  Jersey  issued an order construing the claim limitation “size 00 or less.” In favor of appelles. The district court held that the ’032 patent does not clearly state that size 00 also includes family of size 00 including 00el.

Appellant not only challenged construction of claims by court of New Jersey but also challenged transfer of case from state of Ohio to the state of New Jersey.

Independent claim 1 has been reproduced below for the reference:

Claim 1:

A calcium acetate capsule formulation comprising flowable granules comprised of a pharmaceutically acceptable amount of calcium acetate along with other pharmaceutically acceptable adjuvants, wherein said granules are filled into and contained within a pharmaceutically acceptable capsule such that 667 mg of said calcium acetate on an anhydrous basis are present in said capsule that is size 00 or less.

Decision of the Federal Circuit on the transfer of case:

Federal circuit observed that district court had not abused the discretion while transferring the case from Ohio to New Jersey. Federal Circuit observed that district court has wide discretions on transferring the jurisdiction and in the current case, the transfer was well within the powers of the district court.

 Decision of the Federal Circuit on the construction of claim:

Roxane argued that the court made a mistake in interpreting claims as excluding size 00el capsules. According to Roxane, “size 00” refers to either non-elongated or elongated size 00. Roxane maintains that capsule “size” only designates capsule diameter, not length or volume. Hetero responded that court correctly construed “size 00” as designating a capsule of one specific size i.e., one specific diameter, length, and fill volume not a family of capsules and that the limitation “size 00 or less” thus excludes the larger elongated size 00 capsules from the scope of the claims and further the written description, examples and the prosecution history supports the fact that “size 00” refers to standard, non-elongated size 00 capsules as they clearly mention size 00 capsule containing 667 mg of calcium acetate, thus having particular fill capacity. Federal Circuit concluded that 032’ patent and its prosecution history clearly indicates that size 00 refers to standard, non-elongated capsules and Hetero manufacturing and selling calcium acetate size 00el capsules does not infringe Roxane’s patent for capsule formulation of calcium acetate granules.

Federal circuit thus not only rejected the Appellant’s arguments on the transfer of case but also affirmed the construction of the claims by the district court.

About the Author : Ms. Rashmi Goswami, intern at Khurana and Khurana, Advocates and IP Attorneys. In case of any queries, feel free to reach on swapnil@khuranaandkhurana.com.

Does Focusing on Single Embodiment Limits the Patent Specification?

This issue was handled by the United States Court of Appeals for the Federal Circuit in the SCRIPTPRO LLC, SCRIPTPRO USA, INC., Plaintiffs-Appellants v. INNOVATION ASSOCIATES, INC., Defendant-Appellee decided on August 15, 2016. This was an appeal from the United States District Court for the District of Kansas in No. 2:06-cv-02468-CM, Judge Carlos Murguia. United States District Court for the District of Kansas had granted summary judgment that claims 1, 2, 4, and 8 (“asserted claims”) of U.S. Patent No. 6,910,601 are invalid for lack of written description. This decision was appealed by ScriptPro, LLC and ScriptPro USA, Inc. (collectively “ScriptPro”).

Details of the patent at issue:

US20040039482

This patent relates to a collating unit operable to automatically store prescription containers dispensed from an automatic dispensing system for subsequent retrieval by an operator.

Parties agreed that claim 8 is representative of the asserted claims. Claim 8 has been reproduced below for the convenience:

Claims 8:

A collating unit for automatically storing prescription containers dispensed by an automatic

dispensing system, the collating unit comprising:

an infeed conveyor for transporting the containers from the automatic dispensing system

to the collating unit;

a collating unit conveyor positioned generally adjacent to the infeed conveyor;

a frame substantially surrounding and covering the infeed conveyor and the collating unit conveyor;

a plurality of holding areas formed within the frame for holding the containers;

a plurality of guide arms mounted between the infeed conveyor and the collating unit conveyor and operable to maneuver the containers from the infeed conveyor into the

plurality of holding areas; and

a control system for controlling operation of the infeed conveyor, the collating unit conveyor,

and the plurality of guide arms.

In 2006, ScriptPro had sued Innovation Associates, Inc. (“Innovation”) for patent infringement in 2006. After ScriptPro filed suit, Innovation petitioned for, and the United States Patent and Trademark Office (“PTO”) instituted, inter partes reexamination. During reexamination, ScriptPro amended the asserted claims, adding language to claims 1 and 2, and rewriting claim 4 into independent format. Claim 8 was not amended. District court granted summary judgment that the asserted claims are invalid for lack of written description. Details of the decision are: ScriptPro, LLC v. Innovation Assocs., Inc., 762 F.3d 1355, 1356 (Fed. Cir. 2014) (“ScriptPro I”). This decision was reversed by the federal circuit which held that district court erroneously determined that the specification limits the invention to a collating unit that requires use of sensors to determine whether a holding unit is full.

On remand, Innovation moved again for summary judgment that the asserted claims are invalid for lack of written description. In this second appeal, Innovation argued that the specification “unambiguously limits the manner in which the collating unit achieves automated storage of prescription containers . . . based on the availability of an open storage position and patient-identifying information” but the asserted claims “broadly claim a collating unit for ‘automatically storing’ absent any limitation that makes [them] commensurate with the invention” as described in the specification. In response, ScriptPro argued that the specification describes associating stored containers with a specific patient as one, but not the only, goal of the ’601 patent, such that the specification does not limit the claimed invention to sorting and storing based on patient-identifying information. The district court granted Innovation’s motion.

Federal circuit de novo reviewed the grant of summary judgement. In second appeal, ScriptPro argued that the district court erred by interpreting the ’601 patent’s specification as limited to sorting by patient-identifying information. The problem, according to ScriptPro, was that the district court’s focus on one purpose of the ’601 patent caused it to erroneously determine the scope of the invention. Federal circuit agreed with ScriptPro that the specification does not limit the claimed invention to sorting and storing prescription containers by patient-identifying information. The ’601 patent discloses multiple problems that the invention solves and many, of these solved problems involve sorting prescription containers by patient-identifying information, not all of them do.

Federal circuit agreed that as innovation argues, that much of the ’601 patent’s specification focuses on embodiments employing a sorting and storage scheme based on patient-identifying information. But a specification’s focus on one particular embodiment or purpose cannot limit the described invention where that specification expressly contemplates other embodiments or purposes. This is especially true in cases, where the originally filed claims are not limited to the embodiment or purpose that is the focus of the specification.

Federal Circuit reversed the decision of the court and remanded back the matter to the district court again with the costs to ScriptPro. Copy of the judgement can be accessed here.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Only Common Sense Not Sufficient to Prove Obviousness Over Prior Art

Can the grant of patent be rejected on the obviousness criteria based only on common sense? This issue has been handled by United States Court of Appeals for the Federal Circuit in the case of ARENDI S.A.R.L., Appellant v. APPLE INC., GOOGLE INC., MOTOROLA MOBILITY LLC, Appellees, decided on August 10, 2016. On December 2, 2013, Apple Inc., Google, Inc. and Motorola Mobility LLC (collectively “Appellees”)) filed a petition for inter partes review (“IPR”) of U.S. Patent No. 7,917,843 (the “’843 patent”), which is owned by appellant Arendi S.A.R.L. (“Arendi”). On June 9, 2015, the Patent Trial and Appeal Board (“Board”) issued a decision finding claims 1-2, 8, 14-17, 20-21, 23-24, 30, 36-39, and 42-43 would have been obvious.

Details of the patent at issue:

US20080313159

This patent is related to a method, system and computer readable medium for name and address handling, and more particularly to a touch screen, keyboard button, icon, menu, voice command device, etc. provided in a computer program, such as word processing program, spreadsheet program, etc., and coupled to an information management source for providing address handling within a document created by the computer program.

The parties agreed that claim 1 of the ’843 patent is representative of the claims on appeal.

Claim 1:

Claim 1 has been reproduced below for the A computer-implemented method for finding data related to the contents of a document using a first computer program running on a computer, the method comprising:

displaying the document electronically using the first computer program;

while the document is being displayed, analyzing, in a computer process, first information from the document to determine if the first information is at least one of a plurality of types of information that can be searched for in order to find second information related to the first information;

retrieving the first information;

providing an input device, configured by the first computer program, that allows a user to enter a user command to initiate an operation, the operation comprising (i) performing a search using at least part of the first information as a search term in order to find the second information, of a specific type or types, associated with the search term in an information source external to the document, wherein the specific type or types of second information is dependent at least in part on the type or types of the first information, and (ii) performing an action using at least part of the second information;

in consequence of receipt by the first computer program of the user command from the input device, causing a search for the search term in the information source, using a second computer program, in order to find second information related to the search term; and

if searching finds any second information related to the search term, performing the action using at least part of the second information, wherein the action is of a type depending at least in part on the type or types of the first information.

The sole prior art reference on appeal was U.S. Patent No. 5,859,636 to Pandit (“Pandit”). Pandit was filed on December 27, 1995, and teaches recognizing different classes of text in a document and providing suggestions based on it.

Arendi had sued Appellees and several other technology companies alleging infringement of claims of the ’843 patent and related patents. Appellees responded by filing a petition requesting an IPR of claims 1-44 of the ’843 patent. The Board instituted review of claims 1, 2, 8, 14-17, 20, 21, 23, 24, 30, 36-39, 42, and 43, and declined to institute review of the other challenged claims.

PTAB found that it would have been obvious, as a matter of common sense, to modify Pandit to include the required preliminary step of searching for the identified number in the address book in order to avoid multiple entries of the same address.

The single question at issue at Federal Circuit was whether the Board misused “common sense” to conclude that it would have been obvious to supply a missing limitation in the Pandit prior art reference to arrive at the claimed invention. Federal Circuit agreed that common sense and common knowledge have their proper place in the obviousness inquiry.

According to the Federal Circuit, the Appellees failed to show why it would be common sense for the “Add to address book” function to operate by first searching for entries with the same telephone number.

Federal circuit observed that Rather than clearly explaining with concrete examples what benefit searching for entries with the same number would achieve, Appellees keep returning to their general mantra that Arendi’s argument against searching for a number would apply equally to a search based on a name. Yet the burden is Appellees’ to provide more than a mere scintilla of evidence of the utility of a search for a telephone number before adding the number to an address book, where such a search is not “evidently and indisputably within the common knowledge of those skilled in the art.

Federal circuit observed that reasoned analysis and evidentiary support are important in obviousness analysis.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Can Inventors Who Contribute to Only One Claim or One Aspect of One Claim of a Patent, may be Listed on Patent?

This question was handled by United States Court of Appeals for the Federal Circuit in the case of VAPOR POINT LLC, KEITH NATHAN, KENNETH MATHESON, Plaintiffs-Cross-Appellants DON ALFORD, JEFFEREY ST. AMANT, Counterclaim Defendants-Cross-Appellants v. ELLIOTT MOORHEAD, NANOVAPOR FUELS GROUP, INC., BRYANT HICKMAN, Defendants-Appellants, decided on August 10, 2016.
Vapor Point, L.L.C., Keith Nathan (“Nathan”), and Kenneth Matheson (“Matheson”) (collectively “Vapor Point”) had sued Elliott Moorhead (“Moorhead”), NanoVapor Fuels Group, Inc., and Bryant Hickman (“Hickman”) (collectively “NanoVapor”) in the United States District Court for the Southern District of Texas, seeking to have Nathan and Matheson recognized as joint inventors under 35 U.S.C. § 256 on NanoVapor’s U.S. Patent Nos. 7,727,310 (“the ’310 patent”) and 8,500,862 (“the ’862 patent”). NanoVapor responded by suing Vapor Point, seeking to have Moorhead recognized as a joint inventor under 35 U.S.C. § 256 on Vapor Point’s U.S. Patent Nos.7,740,816; 7,803,337; 8,337,585; 8,337,604; 8,337,763 and for declaratory relief regarding inventorship of NanoVapor’s ’310 and ’862 patents. After a four-day evidentiary hearing, the district court issued an order granting Vapor Point’s motion for correction of inventorship and denying each of NanoVapor’s motions. Vapor Point moved for exceptional case status and attorneys’ fees. The district court issued a final judgment correcting inventorship, dismissing the action with prejudice, and denying Vapor Point’s motion for exceptional case status and attorneys’ fees. NanoVapor appealed the district court’s order on inventorship and its dismissal of the case. Vapor Point crossappealed the same order to the extent it holds that the case is not exceptional and that an award of attorneys’ fees is not warranted.
The patents-in-suit are generally directed “to the removal of volatile fuel vapors, also known as volatile organic compounds (‘VOCs’), from storage tanks and other holding vessels, generally in the oil and gas industry.
“NanoVapor is an industry leader in the field of [VOC] containment, including a process called Vapor Suppression System developed by Moorhead that aims to control or eliminate combustible and toxic gases in fuel storage and transfer operations. After working with Moorhead to help market this technology, Nathan became Chief Operating Officer of NanoVapor in 2007. NanoVapor later hired Matheson to help with the “commercial embodiment” of the technology being developed.
Consistent with § 256, the district court held a four-day evidentiary hearing to determine inventorship of the patents-in-suit. After the hearing, the district court issued an order denying NanoVapor’s claims of inventorship and granting Vapor Point’s to the extent Nathan and Matheson sought to be added to the ’310 and ’862 patents as additional inventors. In that decision, the district court addressed the “four key concepts in the ’310 and ’862 patents”: (1) using biodiesel as a vapor capture medium; (2) removing VOCs from a vessel containing fuel vapors and introducing them into a vapor capture medium (such as biodiesel); (3) using a particulatizer to create micro-sized VOC particles for treatment; and (4) using diffusion plates to distribute micro-sized particles across the vapor capture medium. The district court found that Nathan contributed to the conception of the first three of these four key concepts and that Matheson contributed to the third and fourth concepts. The district court denied NanoVapor’s claim that Moorhead should be a named inventor on Vapor Point’s patents. Because NanoVapor did not join Nathan and Matheson—now deemed to be two of the inventors of the patents-in-suit—in the infringement claims against Vapor Point, Vapor Point argued that NanoVapor “did not have standing to pursue [its] claim for infringement of the ’310 patent, eliminating any claim against Vapor Point.
Federal circuit found that the district court did not err in dismissing the case after determining inventorship. Federal circuit further found that the district court did not abuse its discretion in denying Vapor Point’s motion for exceptional case status and attorneys’ fees. Therefore, federal circuit affirmed the decision by holding that all inventors, even those who contribute to only one claim or one aspect of one claim of a patent, must be listed on that patent. A co-inventor does not need make a contribution to every claim of a patent. A contribution to one claim is enough.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

U.S. District Court Confirms Validity of Patent For UCB Pharma’s Vimpat®

UCB Pharma, a Belgian pharmaceutical company, announced on 14th August 2016 that the U.S. District Court for the District of Delaware confirmed the validity of its U.S. reissued patent RE38551 related to anti-epileptic drug Vimpat® (lacosamide). The patent challenge was brought by generic drug makers who had questioned the validity of the UCB’s patent which is scheduled to expire in March 2022.

Vimpat®, one of four key products for UCB Pharma, generated net sales of 379 million euros ($423.7 million) in the first half of 2016. Vimpat® is indicated for use alone or as add-on therapy in the treatment of partial-onset seizures in patients with epilepsy who are 17 years of age or older.

In 2013, UCB had sued numerous generic drug companies, including New York-based generics maker Argentum Pharmaceuticals, after they applied ANDA application to market a generic version of Vimpat® in the United States. In late May, Argentum Pharmaceuticals won an inter partes review of UCB’s patent by the USPTO’s Patent Trial and Appeal Board (PTAB).

The Delaware district court has ruled that UCB’s patent covering the epilepsy drug Vimpat® is valid. The Court upheld the validity of the UCB’s patent after issuing a sealed opinion on the patent. The court’s favorable decision for UCB now guarantees patent protection for Vimpat® until 2022.

Anna S. Richo, executive vice president and general counsel for UCB stated “We are pleased with Delaware Chief Judge Stark’s decision”. “This confirms the strength of our intellectual property for Vimpat®”.

The decision is currently under seal and will be released following an order from the court.

About the Author: Antony David, Senior Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at:antony@khuranaandkhurana.com.

Federal Circuit Rules 180-Day Post-Licensure Notice is Mandatory in Biosimilar Litigation

In Amgen v. Apotex (No. 2016-1308), the US Court of Appeals for the Federal Circuit on July 5, 2016 affirmed a district court’s ruling that a biosimilar applicant must provide a reference product sponsor with 180 days’ post-licensure notice before commercial marketing of a biosimilar product begins, regardless of whether the applicant provided the § 262(l)(2)(A) notice of USFDA review.

            In Amgen v. Apotex, the Federal Circuit rejected Apotex’s contention that the 180-day pre-marketing notice requirement does not apply to biosimilar applicants who participated in the “patent dance” procedure of the Biologics Price Competition and Innovation Act (“BPCIA”), expanding on its decision in Amgen v. Sandoz that the 180 days notice provision under § 262(l)(8)(A) is mandatory in all circumstances, whether or not the applicant engages in the patent dance.

Background:

            The biologic product at issue is Amgen’s Neulasta® (pegfilgrastim). Pegfilgrastim is a PEGylated form of the recombinant human granulocyte colony-stimulating factor (GCSF) analog filgrastim. Pegfilgrastim treatment that can help patients make white blood cells after receiving cancer treatment. After Apotex filed a Biologic License Application (BLA) seeking FDA approval to market a biosimilar version of Neulasta® (pegfilgrastim), the parties began the BPCIA’s patent information exchange process, known as the “patent dance”, and as a result, Amgen concluded that two patents U.S. Patent Nos. 8,952,138 and 5,824,784 will be infringed by Apotex’s biosimilar version of Neulasta®. Those infringement claims are being litigated in the U.S. District Court for the Southern District of Florida, although the ‘784 patent has been dropped since it expired.

            Apotex sent Amgen a letter on April 17, 2015, stating that it was “providing notice of future commercial marketing pursuant to § 262(l)(8)(A), though Apotex lacked an FDA license.” Amgen sought a preliminary injunction to “require Apotex to provide … notice if and when it receives a marketing license from FDA and to delay any commercial marketing for 180 days from that notice.” The district court granted that motion, citing the Federal Circuit’s decision in Amgen v. Sandoz that notice cannot be given before the biosimilar product is approved. Apotex appealed.

What is Biosimilar Patent Dance:

            The US Biosimilars Act sets forth several requirements for biosimilar applications, including the so-called “Patent Dance” which describes the process by which the biosimilar applicant and the reference product sponsor (“RPS”) exchange patent-related information for resolving any patent disputes before a biosimilar product can enter the US market.  This procedure has strict timing and sequencing requirements and involves several rounds of information exchanges between the reference product sponsor and the biosimilar applicant. Some of the key steps of this process include:

  • Within 20 days after the FDA has accepted its abbreviated application, the biosimilar applicant must provide the reference product sponsor with confidential access to the biosimilar application and relevant manufacturing information for the proposed biologic.
  • Within 60 days of receiving these materials, the reference product sponsor must provide to the biosimilar applicant: (1) a list of patents it believes are infringed, and (2) identify which, if any, of these patents it would be willing to license to the biosimilar applicant.
  • Within 60 days of receipt of the patent list, the biosimilar applicant must provide the reference product sponsor a statement describing, on a claim-by-claim basis, the factual and legal basis as to why each patent is invalid, unenforceable, and/or not infringed. Within this same 60 day period, the biosimilar applicant may provide to the reference product sponsor a counter list of patents that the biosimilar applicant believes could be subject to a claim of patent infringement.
  • Within 60 days of receiving these materials, the reference product sponsor must provide a reciprocal statement describing, on a claim-by-claim basis, the factual and legal basis that each patent will be infringed, as well as a response to any statement regarding validity and enforceability.
  • The parties then have up to 15 days to negotiate in good faith to arrive at a list of patents, if any, that should be subject to a patent infringement action.

– If the parties reach agreement, then the reference product sponsor must bring an infringement action within 30 days for each patent on the negotiated list.

– If the parties do not reach agreement, the biosimilar applicant must notify the reference product sponsor of the number of patents it will provide in a second list, and the parties then simultaneously exchange within 5 days of this notice a list of patents that each party believes should be the subject of the infringement litigation. Within 30 days after this exchange, the reference product sponsor must bring an infringement action on all the patents on the simultaneously exchanged lists.

The Federal Circuit’s decision in the Amgen v. Apotex case:

            Two provisions of the BPCIA were at play in the Federal Circuit’s decision.  First, under § 262(l)(2)(A), the biosimilar applicant initiates the statutory “patent dance” by providing a copy of its biosimilar application and information about how its product is manufactured.  Second, under § 262(l)(8)(A), the applicant must provide a notice to the innovator 180 days before the first commercial marketing of the biosimilar product.

            In Amgen v. Apotex, Apotex argued that it had followed the patent dance procedure and made its (2)(A) disclosures to Amgen, and that the (8)(A) notice of commercial marketing is only mandatory if the applicant failed to provide the information required by (2)(A).

            The Federal Circuit rejected this argument and upheld the district court’s grant of an injunction to Amgen.  The court held that (8)(A) is mandatory in all circumstances, whether or not the applicant engages in the patent dance.

            The Federal Circuit looked to the text of the law, finding that the “language of (8)(A) is categorical”, and there is “no other statutory language that effectively compels a treatment of (8)(A) as non-mandatory.”  The court further noted that § 262(l)(8)(A) “contains no words that make the applicability of its notice rule turn on whether the applicant took the earlier step of giving the § 262(l)](2)(A) notice that begins the patent dance (i.e. information-exchange) process,” and stood by its holding in Amgen v. Sandoz that the statute is “‘a standalone notice provision’ not dependent on the information-exchange processes that begin with (2)(A).” The court held that “the (8)(A) notice must be a notice given after FDA licensure of the biosimilar product, not before, and that pre-licensure notices are of no legal effect for purposes of (8)(A)”. The court explained that the 180 days period gives the reference product sponsor a period of time to assess and act upon its patent rights.

            In sum, the Federal Circuit concluded that a biosimilar applicant must provide a reference product sponsor with 180 days’ post-licensure notice before commercial marketing begins, regardless of whether the applicant provided the (2)(A) notice of FDA review.

The Federal Circuit’s order can be found at the following link:

http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1308.Opinion.6-30-2016.1.PDF

About the Author: Antony David, Senior Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: antony@khuranaandkhurana.com.

Intersection between Intellectual Property (IP) and Competition Law

With a growing buzz around how IP and Competition law interface with each other, instances when they can be coupled by Defendants to raise concerns/defense arguments, as to how and when investigations can be initiated through the Competition Commission of India (CCI), are becoming critical and hence need clarity at all ends. This piece is a small step towards the same.

Introduction

Covered under the Competition Act, 2002, a key objective of the CCI is to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto. As its key areas of focus, the CCI aims to prohibit a) anti-competitive agreements, b) abuse of dominant position, along with c) regulating combination of enterprises (such as mergers and/or acquisitions) at large.

In order to initiate an inquiry, the CCI can either inquire into any alleged contravention of Section 3(1) or 4(1) on own its own or on receipt of relevant information from a person/consumer/trade association or based on receipt of information from Central Govt. Following step-wise flowchart helps explain, at a high level, the process followed by the CCI post receipt of potential anti-competitive activity information:

Step 1: Receive Potential Anti-Competitive Activity Information (Complaint)

Step 2: Understand Market Parameters Relating to Activity (Section 19(3))

Step 3: Understand Attributes of Enterprise under Scanner (Section 19(4))

Step 4: Understand Relevant Geographic Market and Product Market Factors (Section 19(6) and 19(7))

Step 5: Undertake Inquiry to determine whether the Activity Information causes adverse effect on competition in India

Step 6: Issue order directing discontinuance of agreement/imposition of penalty/modification of agreement/other appropriate orders

Intersection of IP and Competition law is observed when there is an imbalance between the exclusivity rights accorded by IP law and anti-competitive practices that the Competition law tries to protect, and therefore cases such as Ericsson vs. Micromax, where on one hand, Ericsson attempted to enforce its Standard Essential Patents (SEPs), and Micromax, on the other hand, contended anti-competitive practice by Ericsson based on the nature of royalty practices that Ericsson tried to impose on the Defendant (along with other issues of patent bundling, coaxing informant to enter into one-sided NDA), is just one among the growing number of examples where the interface between the two laws is strengthening.

But before coming to know of all that, as a background, in the Competition Act, 2002, as amended by the Competition Amendment Act, 2007, section 3, sub section 5, clause (i) in chapter II relating to Prohibition of certain agreements, states: -“Nothing contained in this section shall restrict -(i) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under: – (a) the Copyright Act, 1957 (14 of 1957); (b) the Patents Act, 1970 (39 of 1970); (c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999); (d) the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999); (e) the Designs Act, 2000 (16 of 2000); (f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000).’

In context of IPR’s, Section 4 of the Competition Act would be considered to be abused when an IPR holder is involved in:

(i) directly or indirectly, imposing unfair or discriminatory condition or price;

(ii) limiting or restricting production of goods or provision of services or market;

(iii) limiting or restricting technical or scientific development to the prejudice of consumers;

(iv) denies market access in any manner;

(v) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts;

(vi) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

As can be seen, relevance of points (i), (ii), and (iv) are compulsory licensing (CL) provisions of the Indian Patent Act, 1970, wherein among the three grounds for filing of the CL, one ground is non-commercialization/working of the patent in India, and another one being on restrictive pricing.

Understanding the Intersection

Standards being technical requirements or specifications aiming to provide a common design for a product or process, are adopted by Standard Setting Organizations (SSOs) (which can be governmental, quasi-governmental or private). These set up, develop, coordinate, interpret and maintain standards. The Bureau of Indian Standards (BIS) is India’s SSO. SSOs play a vital role in the interaction between standards and intellectual property rights and most of the times, the technology required to achieve a standard is protected by Patents. And the patents without which a standard cannot be achieved (in any way), are termed as “Standard Essential Patents” (SEPs). So in these cases, the patentees, already enjoying the usual exclusionary rights over the patented technologies, have an extra-added benefit by virtue of their technologies becoming essential to standards or SEPs. Thus, SSOs are seen implementing IPR Policies that require members to disclose all their IP related matters and to license their SEPs under FRAND Terms (Fair, Reasonable and Non-Discriminatory). However, the varied interpretation of “FRAND Terms” along various jurisdictions has led to expensive litigations world over. India too, has seen a recent rush of SEP litigations, with over ten lawsuits being filed over a span of two years.

In an aspect, Section 3 sub section (5) of the Competition Act declares that “reasonable conditions as may be necessary for protecting” any IPR will not attract Section 3, wherein the expression “reasonable conditions” has not been defined or explained in the Act per se. However, common sense may prevail in most circumstances to determine whether an act of a Licensor/Patentee is reasonable, wherein, for instance, if the royalty/upfront demanded is more than industry standards or is not based on rational logic, or is varied by the Licensor considerably across different geographies without any territory-based rational, or for that matter, if the Licensor removes any IP infringement liability falling on him/itself, among other like conditions, unreasonability of the agreement can be substantiated. Comparative assessment and difference in stands taken by a patentee/licensor across different jurisdictions can always be incorporated while making a complaint against the patentee for unreasonable terms.

Some exemplary IP (Patent) interfacing cases that have been handled by CCI and other courts of jurisdiction have been highlighted below for better appreciate of the current position.

Ericsson vs. Kingtech

In 2011, Ericsson, a Swedish multinational corporation, filed an application before the Commissioner of Customs, complaining about the import of goods by one Kingtech Electronics (India), claiming that the goods infringed several of their SEPs in AMR Codec (Adaptive Multi-Rate) technology. This was the beginning of all the SEP litigations in India. Subsequently, when consignments belonging to Kingtech were detained by the Customs Authorities, Kingtech approached the Delhi High Court challenging that the Commissioner had detained the goods with no appropriate reason to ascertain that the goods actually infringed the patents as claimed by Ericsson. It was also alleged that the Commissioner of Customs was not competent to make such determinations. In answer, the Delhi High Court ruled that while the Commissioner’s order did not show any application of mind with regard to the claims he made (regarding infringement), Ericsson had also failed to follow due procedure, which was to approach a court of law to assert claim to its patents. Thus the Commissioner’s order was set aside and the court ordered the release of Kingtech’s goods. Ericsson consequently filed an appeal challenging the order before the High Court, which on July 2012, directed the Commissioner of Customers to pass fresh orders in the case, containing adequate reason to believe that Kingtech’s goods infringed Ericsson’s patents. This was followed by Ericsson taking a patent infringement suit before the Delhi High Court asking for an injunction against Kingtech, preventing the use, sale of any mobile phone that incorporated their patented AMR Technology. Consequently, by an order dated August 2013, the High Court directed Kingtech to refrain from importing any devices incorporating Ericsson’s AMR technology patents.

Ericsson vs. Micromax

The second instance of SEP litigation in India involved a suit filed in March 2013, by Ericsson against Micromax Informatics Limited, one of India’s largest phone makers. Ericsson claimed that Micromax had infringed eight of it’s SEPs on AMR, 3G and EDGE technologies, by selling mobile devices compliant with standards issued by the European Telecommunications Standards Institute (ETSI) and recognized by the Department of Telecommunications (DoT) in India. It was said that Micromax had not obtained licenses for said technologies from Ericsson under FRAND terms. Ericsson wanted permanent injunction, damages up to Rs. 100 crores and that Micromax render its sales accounts of mobile devices for years 2008-2012. By its order dated March 2013, the Delhi High Court granted interim relief to Ericsson and directed Micromax to make interim royalty payments. The Court also in addition allowed Ericsson to inspect every consignment for Micromax that arrived at Customs. The parties were then directed to negotiate on FRAND licensing terms for the technologies in question on and an arbitrator was appointed for the same matter. Later in November 2013, Micromax filed a complaint before the Competition Commission of India (CCI) claiming that Ericsson had abused its dominant position in the market by imposing exorbitant royalty rates for licensing its GSM technology under FRAND terms. The CCI found the claim made by Micromax to be valid and ordered an investigation on November 2013, which was subsequently challenged by Ericsson before the Delhi High Court. The jurisdiction of the CCI to investigate the actions of Ercisson was asked in question. The court, in furtherance, in its interim order dated January 2014, ruled that the CCI had indeed entered into an adjudicatory and determinative role by recording a detailed and substantial reasoning at the very initial stage, which was to order the Director General to conduct investigation. The court disallowed the Director General from contacting Ericsson officials stationed abroad, but the officials in India could be contacted for the purpose of investigation, and also restrained the CCI and Director General from passing any final orders till the proceedings of the Court is completed. The Court also directed that CCI’s order should not interfere with Ericsson’s negotiations with other third parties. Thereafter, the Delhi High Court in the judgment dated November 2014, fixed new royalty rates as interim arrangements till the time the trial of the suit was pending. The court also set December 31 2015 as the deadline for a decision in the suit. However, recently Ericsson had approached the court stating that Micromax was not paying, and it was dodging the orders by selling the handsets through a separate company floated by it, and Micromax was arguing that the order pertained to Micromax and not the entity through which the devices were being sold. This contention of Micromax was rejected by the court, also issuing bailable warrants against the chief owners. Lawyers for Ericsson debated in detail in the court inDecember 2015 that Micromax was trying to defeat the orders through a new venture and the new firm was just a tool to keep infringing the patents. Micromax opposed the allegations, contending that YU Televentures was a separate legal entity and was not bound to pay royalty. However, as the situation stands now, Micromax will have to pay royalty on sale of phones through YU Televentures also (of which Micromax owns 99.98% stakes). Micromax co-founder Vikas Jain told that the company is going to pay in dissent, meaning it would pay, pending the final judgment on the dispute, which will be delivered by the court. The Delhi High Court will resume hearing on the case on January 11, 2016.

Ericsson vs. Gionee

The third SEP litigation yet again involves the suit filed by Ericsson against Gionee and claiming infringement of the same SEPs over which Micromax was sued earlier. In October 2013, the Delhi High Court ordered Gionee to make interim royalty payments for its sales in India. The royalty rates were set on the basis of the interim royalty rates awarded to Ericsson in March 2013 in the patent infringement suit against Micromax.

Ericsson vs. Intex

The fourth in the series of litigations involving Ericsson began with a complaint filed against Ericsson before the CCI in September 2014 by an Indian phone maker, Intex Technologies. It alleged that Ericsson demanded exorbitant royalty rates (in comparison to the cost of the product to the user) and used unfair terms to license its SEPs (GSM technologies) to Intex. On January 2014, the CCI ordered for a clubbed investigation into Ericsson’s actions, based on allegations made by Intex as well as Micromax. And just like in Micromax’s case, this order was also challenged by Ericsson before the Delhi High Court, who on February 2014 ruled that the CCI had entered into a determinative process at the initial stage of investigation and imposed restrictions on the CCI and Director General similar to those that were imposed in the Micromax case. Thereafter Ericsson filed a patent infringement suit against Intex for infringement of the same SEPs. During the proceedings, Intex told the court about a similar case which happened before the Court of Rome, where all of Ericsson’s claims against mobile manufacturer ZTE had been rejected by the court who challenged the very presumption of essentiality of Ericsson’s patents. The Court of Rome had observed in that case that in order to assess the claim of essentiality, it would be necessary to examine the patents, which was too complex an analysis for the purpose of interim proceedings. Then the Roman Court held that even if it were to be assumed that the patents asserted were indeed “essential”, Ericsson would not suffer irreparable harm since the primary issue between the parties was pecuniary or money-related in nature. Thus Ericsson had to drop all the suits instituted against ZTE and settle the matter. But in contrary, the Delhi High Court refused to accept Intex’s challenge to the validity of the SEPs as a ground for rejecting Ericsson’s request for injunction. The court said that Intex in spite of being notified of the SEPs way back in December 2008, never questioned their validity over the years and this was enough evidence of validity of the SEPs (on grounds of Estoppel). Further based on contradicting statements made by Intex before the CCI and Court, regarding the validity of the SEPs, the court concluded that the SEPs were prima facie valid. The court took the view that Intex had initiated proceedings before the CCI just to prolong litigation by avoiding to pay the royalty. While granting royalty rates (in line with those granted in the infringement suit against Micromax on November 2014), the Court directed Intex to pay 50% of the royalty due from the date of the lawsuit till March 1 2015, directly to Ericsson. The remaining amount was to be paid by Intex with a bank guarantee within four weeks. These terms were to apply every six months until the disposal of the suit is complete. Intex was also restrained from importing goods that were infringing Ericsson’s SEPs.

Ericsson vs. Xiaomi

In December 2014, Ericsson filed yet another suit against Xiaomi before the Delhi High Court, alleging infringement of the same 8 SEPs that Micromax and Gionee were sued over for. Ericsson contended before the Court that despite requesting Xiaomi to license the SEPs, Xiaomi launched their infringing devices in India in July 2014. Ericsson was granted an ex-parte injunction in December 2014 preventing the sale, manufacture, import and advertisement of Xiaomi’s devices. This injunction was subsequently challenged by Xiaomi before a Division Bench of the Delhi High Court, claiming that its latest devices sold in the Indian market used Qualcomm chips, which were in fact licensed by Ericsson. Accordingly, in a temporary order dated December 16 2014, the Court permitted Xiaomi to import and sell devices carrying Qualcomm chips, on the added condition that Xiaomi would deposit Rs. 100 as royalty for every device it imported to India from the date of the launch of the device in India to January 5 2015. The matter is still pending before the High Court of Delhi.

Ericsson vs. iBall

In November 2011, Ericsson issued a letter to iBall stating that the iBall mobile devices were infringing Ericsson’s patents, the same 8 SEPs (over which Micromax, Gionee, Intex, and Xiaomi were later sued). Ericsson also offered to discuss a FRAND licensing agreement with iBall. On Ericsson’s proposal of entering into a global patent license agreement (GPLA), iBall agreed, but on the condition that details of its alleged patent infringements be disclosed to it. Ericsson replied that it could reveal the details only after entering into a non-disclosure agreement (NDA) with iBall. In subsequent communication with Ericsson, iBall contended that it was only a vendor importing products from China and selling them in India, and thus an “innocent infringer”, if it was one. Upon receiving the terms of the NDA, iBall brought the matter before the CCI, claiming that Ericsson’s refusal to identify the allegedly infringed SEPs, the threat of infringement proceedings, the attempt to persuade iBall to enter into a “one-sided and burdensome NDA”, tying and bundling patents irrelevant to iBall’s products by way of a GPLA (known as Patent Stacking) and demanding unreasonably high royalties by way of a certain percentage value of handset as opposed to the cost of actual patented technology, used all constituted abuse of Ericsson’s dominant position under Section 4 of the Competition Act, 2002. In May 2015, the CCI found prima facie abuse of dominant position by Ericsson and asked the Director General to conduct an investigation within 60 days. In the month of May 2015, Ericsson challenged the CCI’s order before the Delhi High Court on the grounds that the order was “arbitrary in nature and without jurisdiction”. In September 2015, the court ordered that the Director General of the CCI shall not submit a report of the investigation or pass a final order in the case before the CCI. In the same order, the Delhi High Court observed that iBall had not entered into a licensing agreement under FRAND terms despite Ericsson’s willingness to do so. It also found that iBall was aware of Ericsson’s portfolio of standard essential patents pertaining to GSM, GPRS, and WCDMA standards. The court held that as the infringing technologies are “standards”, and there exists no substitute for them and thus these technologies are necessarily used by iBall’s telecommunication devices. Hence iBall’s plea of not being aware of the violations was dismissed. The court also passed an interim injunction against iBall in light of interim orders passed in the matters of Ericsson vs. Xiaomi (December 2014), Ericsson vs. Gionee (October 2013), and Ericsson vs. Micromax (March 2013). While the injunctions imposed on Xiaomi and Micromax were on the sale, manufacture, advertisement and import of their devices, iBall and its agents and affiliates have been restrained from only importing devices that are allegedly infringing in nature. The court also held that without an interim injunction, Ericsson would suffer irreparable losses. The injunction against iBall would last from September 9, 2015 to the date of the next hearing at the Delhi High Court. But as the recent developments are to be believed, iBall and Ericsson have settled the dispute outside the court, and the agreement directs iBall entering into a licensing agreement with Ericsson.  “The parties have executed a Global Patent Licence Agreement (GPLA), which settled the disputes in the patent infringement lawsuit. Under the terms of the GPLA, the parties consented to dismissal of the patent infringement lawsuit by the Court, which finally occurred in November,”.

Ericsson vs. Lava

The most recent litigation involves a case against Lava International Limited, where Ericsson once again claimed its SEPs relating to AMR, GSM and EDGE technologies. At the first couple of hearings, Lava International claimed that Ericsson refused to reveal information about its agreements with other parties. While the suit is still at its initial stage, the parties have been directed to make efforts towards resolving their dispute but have failed to do so and thus the matter is now scheduled to be taken up on merits.

In addition to the Ericsson lawsuits, other SEP infringement lawsuits include those filed during 2013 and 2014 by Vringo Infrastructure, a wholly owned subsidiary of the Vringo Corporation in USA. These are summarized herein.

Vringo vs. ZTE

Vringo Infrastructure Inc. and Anr vs. Xu Dejun and Others

Vringo filed a suit against ZTE, its CEO Xu Dejun and its Indian subsidiary ZTE Telecom India in November 2013 over the alleged infringement of its patents, which is engaged in the development and monetisation of intellectual property and mobile technologies. ZTE manufactures products and provides services in the telecom infrastructure, equipment, systems, mobile phone and telecom software sphere. The Delhi High Court granted an ad-interim ex-parte injunction on the manufacture, import, sale, use, or advertisement of ZTE’s infringing products. ZTE challenged the injunction, which was lifted by the court on December 2013. ZTE was directed to pay a bank guarantee of Rs. 5 crores, along with an affidavit containing details of devices sold in India. The Delhi High Court agreed for appointment of a Scientific Advisor from the list drawn by the parties.

Vringo Infrastructure Inc. and Anr vs. Indiamart Intermesh Ltd. and Others

Vringo and Vringo Infrastructure filed another patent infringement suit in the Delhi High Court in January 2014, against ZTE, ZTE’s Indian subsidiary and Indiamart, a distributor of ZTE’s products. In February 2014, the court granted an ad-interim ex-parte injunction restraining ZTE from importing, selling, advertising, installing or operating devices that comprise the infringing components. It also appointed local commissioners to inspect ZTE’s premises and instructed customs authorities to detain ZTE’s shipments that may contain such devices and to notify Vringo about them. In March 2014, ZTE appealed against the injunction, which was lifted on August 2015 with ZTE being ordered to deposit Rs. 17.85 crore to the court. The affidavit of Expert submitted by Vringo was rejected by the Delhi High Court and a Committee of three Professors was appointed by the Court.

Vringo vs. Asus

In April 2014, Vringo filed a third patent infringement suit against AsusTek Computer Inc., one of its distributors in New Delhi, Nuage Techsol Pvt. Ltd. in the High Court of Delhi. In this suit Vringo claims infringement of a Non-SEP by AsusTek. No interim Order has been passed in the matter till date.

Concluding Remarks

The motivation theory for the protection of IPR rewards the inventor by giving him a monopoly right for a limited period of time. Competition law on the other hand acts against monopoly rights which are abusive in nature. Competition law seeks to enhance the market conditions by more choice and competition in the market. Intellectual property rights appear to go against this principle leading to possible conflicts between these two areas of law. Competition law can play a proactive role in arresting the abuse of monopoly rights granted by IPR. At the same time IPR monopolies are meant to facilitate further innovation and thereby boost further competition in the market. A dominant position in the market per se is not prohibited, but its abuse goes against competition provisions. India can use the compulsory licensing provision in case of excessive pricing of any products including patented softwares and technology. Tying arrangements between the producers and dealers should be dealt with using the competition provisions. The CCI should come up with specific guidelines in dealing with cases involving both competition and intellectual property. The interaction between intellectual property and competition policy is neither conflicting nor is it aimed at replacing the other. Rather the two streams of law are complementary and supplementary to each other. The courts have now settled the principle that the ‘interest of the consumer and competition in the market’ is of supreme importance and cannot be sacrificed at the cost of the right holder, and thus should come up with some balancing universal solution to the rising issue between IP and Competition.

References

  1. K D Raju, The Inevitable Connection between Intellectual Property and Competition Law: Emerging Jurisprudence and Lessons for India, Vol 18, March 2013, pp 111-122.

Admin, An overview of Standard Essential Patent litigations in India, June 29, 2015.

About the Author: Mr. Tarun Khurana, Partner and Patent Attorney in IIPRD can be reached: Tarun@iiprd.com and Abin Sam, an intern at Khurana and Khurana, Advocates and IP Attorneys.

Revocation of Valganciclovir patent by Controller of Patents, Chennai

Recently in a matter remanded from IPAB to Controller of Patents, Chennai, a decision of revoking Roche’s patent IN207232 for Valganciclovir was delivered after hearing both the parties. The subject patent was granted on January, 2009 followed which post grant oppositions were separately filed by CIPLA, Matrix, Ranbaxy and Bakul Pharma along with two NGOs Delhi Network of Positive People and lndian Network for People living with HIV/AIDS & The Tamil Nadu Networking People with HIV/AIDS (hereinafter INP+ and TNNP+), wherein INP+ and TNNP+ were allowed by the Apex court to raise all contentions in the form of an intervention cum affidavit before the Assistant Controller and the parties agreed to be heard along with CIPLA, Matrix, Ranbaxy and Bakul Pharma. In the opposition proceedings, the patent was revoked limiting it to single process claim by the Controller of Patents on 30.04.2010 and being aggrieved by this decision, Roche filed an appeal at IPAB challenging the decision. IPAB on 30.01.2014 set aside the Patent Controller’s decision to revoke the patent on technical grounds and remanded it to the Controller for re-consideration.

Issues before the controller:

  • Determining whether the expert evidence was prior art publication or disclosure

Answering the issue, controller observes that the expert evidence is not a prior art document to be relied upon for deciding a case, but it may be considered for understanding the prior art documents, if the evidence covers such prior art documents. The opinion of the expert evidence, if it is based on further laboratory or animal study of a given subject matter, it cannot be considered for concluding such invention because it is later acquired knowledge, but it can be used for understanding the present invention. Therefore, expert evidences cannot be considered as prior publications/disclosures, but it can be taken as opinion on the prior arts.

  • Deciding upon the obviousness of the present invention

The next issue which the controller addressed was whether the present invention was obvious with respect to prior art references. The controller observes that the present invention is obvious against two prior arts US 4957924 and EP 0375329A2.

Claim 1 of the present invention recites,

  1. The compound 2-{2-amino-1, 6-dihydro-6-oxo-purin-9-yl} methoxy-3-hydroxy-1-propanyl-L-valinate or a pharmaceutically acceptable salt thereof, in the form of its (R) or (S)- diastereomers, on in the form of mixtures of the two diastereomers.

Regarding this , the controller states that the monovaline ester of ganciclovir is disclosed in the form of Markush formula in EP ‘329, which covers both monovaline and di-valine ester of ganciclovir where support for the both mono and di-valine ester of gancicloviris is provided in the specification. Thus the disclosure of EP ‘329 is clear and unmistakable direction to the mono valine ester of ganciclovir. Hence, a skilled person working in the synthetic chemistry field can easily arrive at the present invention without further experimentation. Therefore mono valine ester of present invention is anticipated by EP’329. Controller further emphasizes that claim 1 of EP ‘329 clearly and unambiguously discloses as at least one of the substituents is valine residue which indicate the presence of mono valine ester. Therefore, EP’329 undoubtedly disclosed mono valine ester of ganciclovir.

With respect to process claim, controller observes that the synthetic method for preparing mono valine ester of ganciclovir as claimed in independent claim 12 of present invention may not be explicitly disclosed in EP ‘329, but said method is just a general method for coupling acid group in the amino acid with hydroxyl group, which can be adopted for any type of alcohols. Therefore, using EP’329, a person working in the synthetic chemistry can easily prepare ester of ganciclovir with lysine without undue burden.

Further the controller observes that the object of the present invention is to provide a prodrug of ganciclovir with improved oral bioavailability. Controller notes that the solution for poor absorption in the gastrointestinal tract for acyclovir is disclosed in US ‘924 patent. Therefore a person skilled in the art can perceive to prepare mono valine ester of ganciclovir from the teachings of both EP’329 and US’924 references. Thus all the claims including process claim are obvious to a skilled person in the art.

  • Deciding upon the efficacy of substance under the subject patent under section 3 (d)

Deciding upon the efficacy of substance under the subject patent, the Controller observes that the new form L-monovaline ester of ganciclovir molecule has shown improvement in oral bioavailability than bis-valine ester of ganciclovir and ganciclovir, whereas there is no support in the specification pertaining to efficacy. Controller observes that the ester modification of the present invention was made to protect the substance from destruction in the gastrointestinal tract and make the molecule more bioavailable. Thus the controller has ruled that while bioavailability is one of the factors affecting efficacy, it cannot be directly equated to efficacy. Citing Hon’ble Supreme Court of India’s decision on Novartis case, the Controller rules that: “lmprovement in bioavailability of the new form cannot be considered directly related to efficacy. Even any unforeseen property observed in new form, unless such property directly relate to efficacy, it will be considered as inherent property of such substance. Since there is no direct relation shown for the improved bioavailability of new form of ganciclovir in the description with regard to significant difference in the efficacy, and therefore such a new form shall be considered as a same substance. Thus new form of the present case Monovaline ester of ganciclovir is considered as a same substance i.e. ganciclovir because,the difference in enhanced efficacy is not shown in the complete specification.” According to the controller, since there is no direct relation shown for the improved bioavailability of new form of ganciclovir in the description with regard to significant difference in the efficacy, therefore such a new form shall be considered as a same substance. Further regarding process used for preparing present invention, the controller held that the process used to prepare new form is a conventional process as it is already known process as disclosed in EP ‘329. Thus, the Controller rules that the present patent was a ‘mere use of a known process’ which was not patentable under S. 3(d), Patents Act.

  • Locus standi of the two NGOs as “person interested” under section 2(1)(t)

Deciding the locus standi of the two NGOs, as person interested under section 2 (1)(t) of patent act, Controller notes that NGOs would fall under the ambit of persons interested as the criteria of locus standi in post grant opposition is to be viewed in broader perspective to grant quality patent. According to the Controller, the two NGOs are the end users or directly affecting parties, if the patent is granted. Thus it is held by the controller that viewing in to the broader prospective, the two NGOs falls under the purview of under section 2 (1)(t) of the patent act and hence the parties have locus standi to oppose the patent.

Thus hearing all the parties and considering all facts and relevant arguments, the Controller revoked the patent granted for the drug Valganciclovir under section 25(4) of Indian Patent act.

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

Division Bench of Delhi High Court passed an interim order in Glenmark v. Symed (July 2015)

The High Court of Delhi has passed an interim order wherein the  Justices have made it clear that the appellant (Glenmark) may use any other process which may be a development of Glenmark process / Upjohn process so long as it does not infringe the patented processes of the respondent (Symed).

Background:

Symed Laboratories Ltd. is an Indian bulk drug manufacturer based in Hyderabad. Among other drug products, it manufactures Linezolid, an antibacterial used to treat skin and blood infection including pneumonia. Symed owns two process patents (IN213062 and IN213063) for the manufacture of intermediates for linezolid. The product patent for the drug is owned by Pfizer. Symed has sued a number of Indian manufacturers of Linezolid for patent infringement including Glenmark, Optimus Pharma, Alkem Laboratories Limited (Symed has now entered into a settlement with Alkem), Mankind Pharma Limited and Sharon Bio-Medicine Ltd.

The Delhi High Court had granted an ad interim injunction on 19 January 2015 restraining the Defendants, through their officers, directors, agents and distributors from manufacturing, selling, offering for sale, advertising or directly or indirectly dealing in the production of Linezolid manufactured in a manner so as to result in infringement of the Symed’s registered Patents IN213062 and IN213063 till the disposal of the suit.

The grant of interim injunction had been predicated on four criteria:

  • That there is a prima facie case in favour of the plaintiff;
  • That the plaintiff is likely to suffer an irreparable injury if the defendant is not restrained;
  • That the balance of convenience lies in favour of the plaintiff; and
  • That public interest would not be dis-serviced by the grant of the injunction.

However, the injunction against Glenmark was vacated by the Delhi High Court consisting of Justice Badar Durrez Ahmed and Justice Sanjeev Sachdeva within 2 weeks of the Single Judge’s decision. The other defendants in this case have not been as lucky and continue to suffer the injunction.

While setting aside the January 19 order, the court noted: “It was incumbent upon the single judge to prima facie come to a finding that the active pharmaceutical ingredient (API) of both Glenmark and Symed were identical.”

“This (prima facie finding) does not appear to have been done. In these circumstances, we are vacating the interim order and modifying the same by directing appellant (Glenmark) to maintain accounts and file same in court..,” the Bench said and listed the matter for further hearing on 16 March 2015.

It was also noted by the Court that the single judge did not go into the point regarding applicability of section 104A of the Patents Act 1970 as per which in suits alleging infringement of process patents, the defendant (Glenmark) has to prove that its process is different from that of the plaintiff.

Symed Labs Ltd. vs Glenmark Pharmaceuticals Ltd. on 17 July 2015

In the very recent decision, the Delhi High Court has ordered that Glenmark shall use its process which is virtually identical to the Ujohn process as indicated in the expert report of Prof. Steven W. Baldwin (filed by Glenmark). The Court noted that the expert report indicates that the appellant (Glenmark) process and the Uphohn process are different from the process of preparation of Linezolid, which is employed by the respondent (Symed).

It has been agreed by both the parties that the appellant (Glenmark) shall manufacture Lineolid through its process indicated in the expert report which does not infringe upon the patented process of Symed as indicated in the report. The learned counsel for the respondent (Symed) has accepted the report to the extent that the process shown as the Glenmark process which is virtually identical to the Upjohn process does not infringe the patented process of Symed for production of Linezolid. The learned counsel for the appellant has also stated that they have not and shall not use the patented process of Symed numbered as IN213062 and IN213063.

Paragraph 24 of the report of Prof. Stephen W. Baldwin reads as under:

24. The two claimed intermediate compounds discussed above (PHPFMA and CHFA) do not appear in the Glenmark process for making Linezolid. Moreover, the reaction conditions involved in the various Glenmark process steps would not produce either of these claimed comounds, even as trace inpurities

[CHFA (N-[3-Chloro-2-(R)-hydroxprophy1]-3-fluoro-4-morpholinyl-anlaniline) : PHPFMA (N-3 [Phthalimido-2-(R)-hydroxprophyl]-3-fluoro-4 (morpholinyl) aniline]

While both the parties have accepted the above extracted paragraph No.24 of the report, the Justices have made it clear that the appellant (Glenmark) may use any other process which may be a development of Glenmark process / Upjohn process so long as it does not infringe the said patented processes of the respondent.

Dr. Singhvi, the learned senior Advocate stated on behalf of appellant (Glenmark) that the appellant has already been and will continue to take declarations from sellers of Linezolid to the effect that the seller does not violate anybody’s registered patent and will also in future specify in the declaration b the seller that he does not violate Symed’s aforesaid two patented processed, adding that in the event the respondent initiates legal proceedings against a seller for infringement of the aforesaid two patents, the appellant, on a request being made, would supply the aforementioned declaration.

About the Author: Antony David, Senior Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: antony@khuranaandkhurana.com

Recent Patent Litigation Cases (2014-15): India

Patent Litigation in India has steadily increased over last 2-3 years. Dramatic swift has been observed in the innovator’s perspective from the mere aspect of invention to gaining patent protection for their respective invention. Patent owners have adopted aggressive approach towards their patent protection and enforcing their proprietary rights as businesses, are now well-positioned in the realm of patent litigation.  The patent owners are not at all hesitant to challenge the validity of patent rights of their rivals. There has also been gradual increase in the understanding of the complex patent infringement and validity issues.

We will now deal with some of the recent and important patent litigation cases in India.

Merck vs. Glenmark over “Sitagliptin”

In an interesting note, Hon’ble Supreme Court of India on Special Leave Petition filed by Glenmark stayed the Delhi High Court order which passed injunction against Glenmark for the generic drug Sitagliptin till 28th April 2015. Merck Sharp & Dohme filed an application for an ad interim injunction restraining the respondent/defendant Glenmark Pharmaceuticals from using its patented product Sitagliptin (Indian Patent No. 209816) at the Supreme Court. The Delhi high court conclusively held that all the three ingredients (Prima facie, Irreparable injury and balance of convenience) for passing the order of injunction were established by MSD and hence injuncted Glenmark from manufacturing and selling of Zita and Zitamet.

Ericsson vs. Xiaomi

In December 2014, Ericsson had filed a suit against Xiaomi in India for the alleged infringement of the 8 standard-essential patents. The Delhi High Court granted an ex-parte injunction on the sale, manufacture, advertisement, and import of Xiaomi’s devices.

Xiaomi claimed that its latest devices in the Indian market (as of December 2014), the Mi3, Redmi1S and Redmi Note 4G, contained Qualcomm chipsets, which implemented technologies licensed by Ericsson. Xiaomi subsequently challenged the injunction before a Division Bench of the Delhi High Court, which issued temporary orders to allow Xiaomi to resume the sale, import, manufacture, and advertisement of its mobile devices subject to the following conditions:

  • Xiaomi would only sell devices having Qualcomm chips.
  • Xiaomi would deposit Rs. 100 towards royalty for every device it imported to India from the date of the launch of the device in India toJanuary 5, 2015. This amount was to be kept in a fixed deposit for three months during the proceeding of the case.

Novartis vs. Cipla

In another patent litigation case, Delhi High court barred Indian generic drugmaker Cipla from making or selling generic copy of Novartis’s “Onbrez” by giving temporary injunction to Novartis. Citing famous Roche vs Cipla case, the court observed that Novartis has a strong prima facia case and as the validity of the patent is not seriously questioned, there is a clear way out to grant injunction. Further, the court observed that Cipla did not provide any figures about the “inadequacy or shortfall in the supply of the drug.” Earlier Cipla lunched its generic version of Indacarterol in October claiming “urgent unmet need” for the drug in india.

Without going conventional way, Cipla, also 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. Cipla argued on the basis of 3 main points i.e. “epidemic” or a “public health crisis” of COPD, unable to manufacture the same in India by Patentee and high cost of patented drug.

Vringo Vs. ZTE

In January 2014, Vringo and Vringo Infrastructure filed a patent infringement suit in the Delhi High Court against ZTE, over the alleged infringement of its patent IN200572.

In February 2014, the Delhi High court granted an ad-interim ex-parte injunction restraining ZTE from importing, selling, advertising, installing or operating devices that comprise the infringing components. The High court also appointed local commissioners to inspect ZTE’s premises and instructed customs authorities to detain ZTE’s shipments that may contain such devices and to notify Vringo. In March 2014, ZTE appealed against the injunction, which was vacated on August 5 the same year with ZTE being ordered to deposit Rs. 17.85 crore to the court.

The suit is sub judice now. As of August 2014, ZTE had filed for the revocation of IN200572 on grounds of it not being innovative as well as for violating some statutory provisions under Section 64 of the Indian Patents Act.

Reference: http://inpublic.globenewswire.com/2014/09/02/VRINGO+PROVIDES+UPDATE+TO+SHAREHOLDERS+HUG1853040.html

Vringo vs. Asus

In April 2014, Vringo filed a patent infringement suit against AsusTek Computer Inc. in Delhi High Court. As per public updates issued by Vringo to its shareholders, Vringo has alleged the infringement of patent IN223183 entitled “Method and system for providing wireless communication using a context for message compression” by Asus in India.

Asus had claimed that in the context of IN 223183 it was using technology licensed to it by Google. In August 2014, Google filed a request to become a party to the proceedings.

Vringo had requested for an injunction on Asus’ use of the technology in India. The injunction has not been granted yet. No further information about the lawsuit is publicly available.

Reference: http://inpublic.globenewswire.com/2014/09/02/VRINGO+PROVIDES+UPDATE+TO+SHAREHOLDERS+HUG1853040.html

SYMED Labs vs. Glenmark Pharmaceuticals

In another case of SYMED Labs vs. Glenmark Pharmaceuticals, Symed Labs Ltd. had sued Glenmark Pharmaceuticals Laboratories before the Delhi High Court for allegedly infringing two of its patents: IN213062 & 213063. First patent was granted for “Novel intermediates for Linezolid and related compounds” while the ‘063 patent was granted for “A novel process for the preparation of linezolid and related compounds. While declaring the judgment on 9th Jan 2015, the judge convinced that the Plaintiff has got good prima facie case in favour of SYMED. Further the judge decided that protection to the patent processes ought to be granted to the Plaintiff as damages will not be an efficacious remedy. Thus, there will be irreparable loss and injury because of the long uninterrupted use of patents, the balance of convenience also lies in favour of the Plaintiff. Thus the judge granted an ad interim injunction restraining Glenmark from manufacturing, selling, offering for sale, advertising or directly or indirectly dealing in the production of Linezolid manufactured in a manner so as to result in infringement of the Plaintiff’s registered Patents.

Maj. (Retd.) Sukesh Behl & Anr. vs Koninklijke Phillips

In this litigation case, Sukesh Behl made a counter claim for revocation of the suit Patent No. 218255 under Section 64(1)(m) of the Patents Act, 1970 (for short “the Patents Act”) for non-compliance of the provisions of Section 8. Earlier in another suit Koninklijke Phillips sought for permanent injunction restraining Sukesh Behl from infringing its patent and for other incidental reliefs. While delivering the judgement, the judge answered the question of whether the failure to comply with the requirement of Section 8 of the Patents Act would invariably lead to the revocation of the suit patent under Section 64(1)(m) of the Patents Act, the word “may” employed in Section 64(1) indicates that the provision is directory and raises a presumption that the power of revocation of patents conferred under Section 64(1) is discretionary. Citing Chemtura case, the judge hold that the power to revoke a patent under Section 64(1) is discretionary and consequently it is necessary for the Court to consider the question as to whether the omission on the part of the plaintiff was intentional or whether it was a mere clerical and bonafide error. Finally, the judge dismiss the plea of Sukesh Behl for revocation of said patent under section 64 (1)(m).

Enercon vs. Dr. Aloys Wobben

In this land mark decision, Hon’ble Supreme Court of India addressed the multiplicity of patent proceeding cases with respect to Invalidation, opposition and revocation. Dr.Aloys Wobben has filed around 19 infringement suits before the High Court and Enercon India Limited have filed around 23 “revocation petitions” before the Appellate Board, praying for the revocation of the patents held in the name of the Dr. Wobben. The respondents had also filed “counter claims” to the “patent infringement suits” filed by the appellant.  Even though some revocation petitions have been settled by the IPAB, the same issues were being re-agitated by Enercon before the High Court. The Supreme Court of India following rules – firstly, if “any person interested” has filed proceedings under Section 25(2) of the Patents Act, the same would eclipse all similar rights available to the very same person under Section 64(1) of the Patents Act. This would include the right to file a “revocation petition” in the capacity of “any person interested” (under Section 64(1) of the Patents Act), as also, the right to seek the revocation of a patent in the capacity of a defendant through a “counter-claim” (also under Section 64(1) of the Patents Act). Secondly, if a “revocation petition” is filed by “any person interested” in exercise of the liberty vested in him under Section 64(1) of the Patents Act, prior to the institution of an “infringement suit” against him, he would be disentitled in law from seeking the revocation of the patent (on the basis whereof an “infringement suit” has been filed against him) through a “counter-claim”.  Clearly, this judgement laid a smooth road for complex patent litigation practices in India.

It would be interesting to note the developments that would take place in the Patent protection scenario in India and the gradual increase in the patent litigation cases in India.

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