Patent Enforcement Trends in India

12 November 2012

The surge in patent applications post introduction of the product patent regime in India has also apparently pushed patent enforcement to centre stage. Since January 1, 2005, the stakes in protection and enforcement of patents have increased by astronomical proportions. Patent litigation is on the rise, especially in respect of pharmaceutical patents, due to the newly introduced product patent regime. Another reason often cited in this regard is the existence of Section 3(d) in the Indian Patents Act 1970 that deals with non-patentability of incremental inventions. It bars patent grant to new form of known substances, unless they depict enhanced efficacy. The criterion of efficacy was discussed by the Madras High Court in Swiss pharmaceutical company Novartis’s petition, where it was determined that Section 3(d) required therapeutic efficacy.

Forum to Enforce Rights

Ordinarily, for instituting a suit for infringement, the forums available are the District Court and the High Court, the District Court being the Court of first instance. However, where the defendant makes a counter claim for revocation, the suit, along with the counterclaim, is transferred to the High Court for decision. In such cases, the High Court pronounces judgement on both the original claim of infringement and the counter claim of invalidity of the patent. The counterclaim of invalidity is the most common defence to infringement available in all jurisdictions having a defined patent regime. In Lambda Eastern Telecommunication and Ors v. Acme Tele-Power Private Ltd and Ors, it was held that a combined reading of Sections 64, 107 and 109 of the Act leaves little to doubt that a District Court loses its jurisdiction to try a petition alleging infringement of patent the moment a counter claim for revocation is filed by the defendant. The district court also loses the power to deal with all interlocutory applications pending as on that day. These days, most patent litigations are filed in High Courts of India’s four metropolitan cities, Delhi, Mumbai, Kolkata and Chennai. As a result, the courts handling these cases have come to be known as IP-savvy courts.

Interim Injunctions

The most common and effective relief in cases of intellectual property infringement remains an interim injunction to prevent the infringer from manufacturing, using, distributing, selling or offering for sale the patented product himself or through his agents. The significance is enhanced due to the often-protracted patent litigation, where the technicalities and intricacies of the patent are discussed in trial. The onus of proving a prima facie case and irreparable injury, if the injunction was not granted, lies on the plaintiff, as was also held in Bajaj Auto v. TVS Motors, that “the amendment to Section 48 by Act 32 of 2002 had not made any significant change on the celebrated principle of prima facie case to be proved by the plaintiff before granting an order of injunction pending disposal of the suit.” If the plaintiff establishes a strong and clear case of infringement, an exparte injunction may also be granted in some cases. For instance, in Novartis AG & Anr v. Adarsh Pharma & Anr, the Madras High Court granted an ex-parte injunction against the defendants who were violating the exclusive marketing rights granted to the plaintiffs. It is the function of the court to weigh the arguments of both plaintiff and defendant and determine where “the balance of convenience” lies.

Generally, if the impugned patent is new, an interlocutory injunction shall not be granted. Where an interlocutory injunction is turned down, the court may order the defendants to maintain correct and regular accounts of their business in respect of the alleged use of the patented invention and file periodically a copy of the accounts in the court with a copy to the plaintiff, as evidenced in Roche v. Cipla, by the single bench of the Delhi High Court.

In cases of alleged infringement of pharmaceutical patents, several other considerations are seen to be influencing the decision of the courts: (a) whether the drug is a life saving drug; (b) demand for the drug in India; (c) the price differential between the drug of the plaintiff and that of the defendants; and (d) whether the plaintiff manufactures the drug in India or imports it.

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