Changes in Indian IP Jurisprudence Since the Abolition of the Intellectual Property Appellate Board

Patent litigation in India, especially in the pharmaceutical and life sciences sector, has by and large been associated with the jurisprudence that has emerged from the decisions of the High Court of Delhi, and to some extent the Intellectual Property Appellate Board (IPAB).

The year 2022 saw a change in this status quo. Legislative changes such as the abolition of the IPAB, as well as the inclusion of other civil courts in India (such as High Court of Himachal Pradesh and the High Court of Telangana) as venues in which pharmaceutical companies could “battle it out”, were some of the contributing factors.

With the IPAB (a quasi-judicial body) abolished, High Courts in India have once again been tasked with sitting in appeal over decisions of the Indian Patent Office (IPO). As a result, 2022 saw several decisions which have clarified the law, not just on core issues of patent litigation, but also those concerning patent prosecution, and its governing legal principles.

Furthermore, the previous year also saw the Competition Commission of India decide (and dismiss) perhaps India’s first antitrust complaint against a pharmaceutical entity which was accused of being anti-competitive for having denied a licence to an Indian entity.

This article enlists some of the key developments that have taken place in India in 2022.

Pharmaceutical Patent Licensing and Competition Law

The past 12 months have seen India’s first ever decision by the Competition Commission of India concerning a claim of anti-competitive behaviour and abuse of dominance against a pharmaceutical entity. The case concerned allegations against Vifor, which holds a patent for Ferric Carboxymaltose (used for treatment of iron deficiency anaemia). (Re: Swarapn Dey and Vifor International (AG), Case No 05 of 2022)

The antitrust claims against Vifor were that it was preventing fair competition in the market, by granting licences only to two entities in India. Further, Vifor’s supply to government institutions at a lower price than its market cost, was also claimed to be anti-competitive. However, the denial of a patent licence by Vifor to an entity named West Bengal Chemical Industries Limited was really at the heart of the dispute.

Although the Competition Commission of India held that it did have the jurisdiction to hear anti-competitive claims against a patent-protected drug, it dismissed the complaint against Vifor at the initial stage. The reasons of the commission are as follows:

• Vifor’s patent licence agreements are short term (three years), with the possibility of extension. They are not restrictive or one-sided, and do not impose any unreasonable limits that can be deemed anti-competitive.
• The patent is expiring in October 2023, and thus, all interested players can enter the market with their respective versions after that.
• Vifor has the freedom to choose its own trading partners. Not every company has the right to seek access to Vifor’s patent, unless such companies can establish a legitimate need to access the patent.
• Not all price differentiation is discriminatory, especially if it is based on reasonable classification of consumers. Prices under government procurement programmes are not comparable with those applying to the open market (bulk v individual buying).
• Vifor did not receive a satisfactory request for a patent licence from third-party entities (barring its licensees). Any party interested in securing a licence must be able to demonstrate its ability to satisfy the requirements of the patent holder.

The decision by the Competition Commission of India is encouraging, and with pharmaceutical patents making their entry into the IP-competition law saga, India’s first decision on this aspect makes for a healthy and welcome start.

Strengthening Jurisprudence on Patent Infringement

Indian patent law has come a long way in the last decade. Not too long ago, Indian IP was dominated by trade mark and copyright-related disputes. Patent decisions, which interpreted the law were few and far between.

In 2013, the Supreme Court of India passed a landmark judgment in Novartis v Union of India (CA 2706-16 of 2013) which interpreted the provision of Section 3 (d) of the Patents Act, 1970 in a manner unique to India. The Court held that a new form of a known substance would be entitled to patent protection, only if the new form possessed enhanced therapeutic efficacy over the known substance.

Two years later, in 2015, the Delhi High Court delivered two landmark, final decisions in the pharmaceutical patent field. F. Hoffman La Roche v Cipla Ltd (RFA (OS) 92/2012) and Merck Sharp & Dohme Corporation v Glenmark Pharmaceuticals, cs (OS) 586/2013 not only recognised infringement of patents but dealt with complex legal principles. These decisions discussed the importance of claim construction, a breakthrough invention, the understanding a Markush claim in a genus patent and deciding infringement of such a patent; the duty of candour, etc.

The year 2023 saw the courts recognise such and other principles of law on genus and species patents as being well-established and requiring no further reconsideration. As a result, with courts being well-versed in a multitude of issues, and having access to a vast body of work as reliable precedent, a large number of decisions on patent infringement were passed by Indian courts, in a rather short period of time.

Disclosure coverage, prior claims, etc, are no longer grey areas

A recent decision in Novartis v Natco Pharma, CS(COMM) 299/2019 (9 January 2023), concerning infringement of Natco’s patent over its non-small cell lung cancer drug Ceritinib, saw the court reject the defendant’s arguments with relative ease and clarity. This is an encouraging trend, because the defences raised by the defendant, until a year ago, were untested and would consume a lot of judicial time. Some of the concepts clarified by the Court in this case are as follows.

Prior claiming

Unless the cited prior art contains the same compound, which is the subject matter of the patent, prior claiming cannot be established.

Disclosure v coverage

Mere coverage of a compound, within a Markush structure given in prior art, is not equivalent to disclosure of the compound. Disclosure must be “enabling in nature”, and the prior art must contain teachings to enable a “person of ordinary skill in the art (POSA) to make the correct substitutions to reach the compound of the subsequent patent. Therefore, obviousness is the determining criterion to assess disclosure and anticipation.

Obviousness and inventive step

The absence of a third party being able to reach the compound from the teachings in the genus patent is a relevant element in the determination of whether the invented compound is obvious. Further, hindsight bias must be factored and duly considered by the court. When the prior art being considered is a genus patent with a Markush moiety, the difficulty of establishing obviousness increases significantly.

FDA Orange Books, patent term extensions in the USA

It is common practice for patent owners to make declarations to authorities in the USA that a particular drug, if manufactured by a third party, would infringe multiple patents. Such declarations are found in the USFDA Orange Book, as well as applications filed for patent term extensions in the USA. However, this does not mean that the compound is disclosed in the genus patent. This is because a generic drug will infringe not only the specie patent claiming that compound (drug), but also an earlier, genus patent, which does not claim the drug. Therefore, Orange Book declarations and patent term extensions only show that the drug is covered by the genus patent, and do not in any manner, indicate disclosure and anticipation.

Doctrine of equivalents – with a new spin

A Division Bench of the Delhi High Court revisited the doctrine of equivalents, in the context of process patents (FMC Corporation v Natco, FAO (OS) (COMM) 301/2022).

It rejected the argument that the doctrine of equivalents is applicable only in the case of product patents. Instead, it held that, the three ingredients of the doctrine:

• performance of substantially the same function;
• such performance being substantially in the same manner; and
• the result achieved being the same,

may require a slight adjustment in the context of process patents. The Court held that to assess similarity of the two competing processes, a three-part test should be used:

• identify the essential elements of the two processes;
• identify the necessary steps of the two processes; and

• examine the interaction of the key elements at each step.

Only when there is substantial similarity in the three aspects of both the processes involved will infringement be established under the doctrine of equivalents. Further, any changes between the two processes must be minor and non-essential to establish infringement.

Balance of convenience favours a registered patent

Because the Patents Act, 1970 enables challenges to the validity of a patent at several stages, even after its grant, one of the most repeated arguments by generics players in patent litigation was that the grant of a patent is not a relevant factor in deciding whether an interim injunction should be granted against a generic drug.

However, this argument has gradually been rejected. One of the latest decisions to do so is MSN Laboratories v Novartis [COM CA 21/2021 (14th February 2022)], by the Telangana High Court. Here, the court held that the very fact that a patent has been granted after significant scrutiny and examination by the IPO significantly bolsters the patent holder’s case.

Therefore, once the IPO has already taken a view that the patent is novel, has an inventive step and is capable of industrial application, the court will usually be persuaded to agree that the patentee has established a prima facie case on validity and that the balance of convenience favours the grant of an injunction. An interim injunction will be refused only once the defendant is able to establish a very strong case against the validity of the patent. The onus to prove this aspect is a very heavy one.

Clearing the way – the calculated decision to launch a drug during a patent’s term ought to be awarded with an interim injunction

The High Court of Shimla has passed a number of orders granting interim injunction to Boehringer Ingelheim, restraining several generics players from manufacturing or selling generic Linagliptin (used in the treatment of type 2 diabetes).

In one such case, Boehringer Ingelheim Pharma v Excel Drugs & Ors., COMS Nos 7, 8 and 9 of 2022 (2nd June 2022) , the High Court, after dismissing claims of prior claiming and evergreening, held that the defendant’s action of launching an infringing drug during the term of the patent was a calculated decision. Before doing so, the defendant did not challenge the patent (through a revocation petition or other means), and this calculated decision works against it, and favours the plaintiff’s claim for an interim injunction instead.

Injunction refused due to evergreening

The Delhi High Court rejected an interim injunction and allowed the manufacture and sale of the insecticide product, Chlorantraniliprole (CTPR). (FMC Corporation v GSP Crop Science Pvt. Ltd., CS (COMM) 662/2022) The claim in the patent concerned an intermediate used in the manufacture of CTPR.

The Court found that CTPR itself was the subject matter of at least 30 patents and applications in India, excluding the Markush patent, the compound patent for CTPR and the process patent involved in the suit. Calling it a “maze of patents”, the Court observed that such patents and applications related to the preparation of intermediates, processes for various steps in the preparation of those intermediates, processes for preparing crystals comprising certain intermediates, methods for synthesising intermediates, and methods for preparing anthranilamide compounds.

The Court said that the law recognising multiple patents for different aspects of a product is one thing, while serial patenting to evergreen a particular monopoly, is quite another.

Another aspect leading to the denial of the requested injunction was the Court’s observation that the process of the suit patent was already disclosed and claimed in a prior patent concerning the process to manufacture CTPR. The differences in the claims of the two patents were found to be superficial.

The Court also found infirmities in the submission made before the Indian Patent Office (IPO) by the patentee during the patent’s prosecution, as the IPO was not informed that the corresponding patent in EU had lapsed, and that the patent was abandoned in Japan.

Lastly, the Court also held that the fact that a patent had not been put to use in India for 19 years (out of a 20-year term) is also a relevant factor, in denying an interim injunction.

Simplicity No Bar to Grant of Patent

In Avery Denisson Corporation v Controller of Patents & Designs (2022/DHC/004697), concerning an appeal against the refusal of a patent for a “Notched Fastener”, the Delhi High Court gave welcome and needed clarity to the IPO, that the mere simplicity of an invention is not a criterion for refusing patent protection.

As regards the assessment of inventive step, the Court held that one must also bear in mind the time gap between the prior art document and the invention under consideration. Lapse of a long period of time since the publication of the prior art, would work in favour of patenting an invention, no matter how simple it may be, especially if it resulted in unpredictable advantages over the prior art.

In its decision, reversing the IPO’s refusal of a patent for the invention, the Court also considered that the corresponding patent had been protected in the USA, Japan, South Korea and China.

Amendment of Patent Applications Not to Be Rejected on Hyper-technical Grounds

An application to amend before the patent is granted should be treated with leniency

Nippon A&L Inc. v The Controller of Patents saw the Delhi High Court present an interesting difference between the treatment to be given to an application to amend a patent prior to its grant versus an application to amend a granted patent.

The Court held that the legislative scheme of the Patents Act, 1970 calls for lenient treatment for an application to amend claims and specification prior to the grant of a patent, while calling for a restrictive approach after the grant and advertisement of a patent.

The Court reiterated the well-established test that that so long as the invention is disclosed in the specification and the amended claims are restricted to disclosures already made in the specification, the amendment application should not be dismissed by the IPO at the threshold. With this test, the Court observed that the desire to amend the patent from a product-by-process patent to a process patent was admissible, as the scope of the patent application was being narrowed, and not expanded.

On this basis, the IPO was directed to rehear the application to amend the patent afresh.

No foreclosure of right to amend a patent at the time of national phase filing of a Patent Cooperation Treaty (PCT) application

A recent decision in Allergan Inc v Controller of Patents (2023/DHC/000515) saw the court hold that the right of a patent applicant to amend the claims (vis-à-vis the originally filed foreign PCT application) is not foreclosed, as there is no occasion provided to the applicant to amend the claims at the time of the PCT application entering the India national phase.

In this case, the original application filed in the USA contained method claims. Such claims are recognised in the USA, and the patent was duly registered. In India, method claims are not patentable under Section 3 (i) of the Patents Act, 1970. Therefore, the invention as filed originally in the USA would not be patentable in India.

Thus, the patent applicant sought to amend the method claims into product claims. The IPO, however, had raised an objection, stating that the amendment may be impermissible, as the amended claims (product claims) were not contained in the claims as they were originally filed in the US application.

However, the court recognised the glitch, and remedied it by holding that since there was no occasion for patent applicants to amend the claims as originally filed in the USA, they could not be faulted for the national phase application not having the amended product claims.

Further, the court also held that while the US application claimed methods for treatment using intracameral implants; the amendment in India to claim the implants (product) should be allowed. This is because, the implants were disclosed in the complete specification of the US patent.

Next, the court had to interpret the test of Section 59 of the Patents Act, 1970 concerning the amendments sought in a patent, and whether they were disclosed in the original patent, or would fall within the scope of the claim of the original patent (as opposed to a divisional application, which is discussed later).

The court held that disclosure and “scope of a claim” cannot be assessed only by reading the original claims, while ignoring the complete specification. Dichotomising claims and complete specification is incorrect. Therefore, the court held in favour of the amendment, as the implants were disclosed in the specification of the original, US application.

Divisional Patent Applications

Boehringer Ingelheim v The Controller of Patents (2022/DHC/0026682), saw the Delhi High Court shed light on the concept of “plurality of inventions” and the circumstances under which the filing of a divisional application for an additional invention claimed in the parent application can or cannot be accepted.

The Court held that for the purpose of deciding whether there is a plurality of inventions in the parent patent application, the following aspects are relevant:

• Though the specification describes the invention, the scope of the invention itself is defined in the claims.
• Although the claims have to be based on the disclosure in the specification, if one wishes to ignore the specification and still identify the invention, the place to look is the claims.
• The unity of invention, plurality of inventions, and whether they form a single inventive concept, have to be gleaned from a perusal of the claims.
• If the subject matter of a divisional application is not contained in the claims, but is contained in the specification instead, such a divisional application cannot be granted. Allowing such applications would be ignoring the fundamental rule of patent law – ie, what is not claimed is disclaimed.

Based on this legal test, the Court denied the divisional application as the original DPP IV inhibitor was not claimed as a product claim in the parent application (albeit it was disclosed in the specification and was mentioned in the examples of the specification). The parent application contained only method claims, while the divisional application claimed products (medicaments or their combinations). Thus, the Court held that the claims of the parent application did not contain a plurality of inventions.

Conclusion

The past year has seen several decisions in India that show that the pharmaceutical patent regime has changed gears from being merely “mature” to having command and expertise of deep and complex aspects. The year 2023 promises to deliver compound interest on the investments made over the years by litigants, lawyers and judiciary alike.