Impact Of The Probable Incorporation Of An Additional Step (Of Public Interest) In Indian Injunction Jurisprudence10/11/2008 by Intellectual Property Watch 8 CommentsShare this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The views expressed in this article are solely those of the authors and are not associated with Intellectual Property Watch. IP-Watch expressly disclaims and refuses any responsibility or liability for the content, style or form of any posts made to this forum, which remain solely the responsibility of their authors.By Swarup Kumar From the content of the recently decided Roche v Cipla 2008 (37) PTC 71(Del) interim order issued by Justice S. Ravinder Bhatt of Delhi High Court, it appears that an additional step, i.e., a fourth step of public interest – over and above the three-step test laid down in historic judgment in American Cyanamid Co v Ethicon Ltd, 1975 (1) All. ER 504 – has at least for the time being been incorporated into the Indian jurisprudence for deciding the grant or non-grant of interim or ad-interim injunctions vis-à-vis essentially pharmaceutical patent infringement issues.In the Roche v Cipla case, Justice Bhatt ruled that “Courts while deciding applications seeking interim injunction, involving claims for infringement of patents, especially when life-saving drugs are involved, have to strike a balance between the imponderables such as the likelihood of injury to unknown parties and the potentialities of risk of denial of remedies.”The Indian courts have in general applied the well-established three-step test of American Cyanamid in order to decide whether to grant an ad-interim injunction against an infringer or not. In determining whether to grant an interim injunction in accordance with the Cyanamid principles, a court ought to consider the following three points: (1) That the claimant can show that there is a serious issue to be tried; (2) that the court considers where the balance of convenience lies; and (3) if there is no imbalance, then the status quo is preserved.On the other hand, the Roche v Cipla order clearly implied that a fourth step, i.e., taking into consideration whether the interest of the general public will be hampered, ought from now onwards also be taken into consideration by the Indian courts with respect to the cases involving grant or non-grant of interim injunctions against a so-called infringer (generic) when pharmaceutical patent infringement issues are involved in India.In some respects, it makes sense that in a country like India (where purchasing capacity of the general public is extremely low), the interest of the public be taken into account before a decision is taken to award an interim injunction against a generic drug manufacturer (a so-called infringer) who manufactures and sells a generic version of a life-saving patented drug (having the same or at least substantially the same composition as that of the composition patented by the patentee) to a substantial population of the country.In this respect, Justice Bhatt went ahead to observe in the Roche v Cipla judgment that “Between the two competing public interests, that is, the public interest in granting an injunction to affirm a patent during the pendency of an infringement action, as opposed to the public interest in access for the people to a life-saving drug, the balance has to be tilted in favour of the latter.” This logic makes more sense when prima facie it appears that such generic manufacturer manufactures and sells their version of the patented drug at a much lower price, say for example, at almost one-third the reported price of the patentee’s drug.However, one wonders whether the repercussion of the Roche v Cipla order will be that with respect to every case relating to infringement of an essential life-saving patented drug, a legitimate patentee invariably will be not awarded the benefit of interim injunction merely because an infringer manufactures and sells a version of the patentee’s patented drug at a price lower (not necessarily much lower) than the actual price of a drug being sold by the patentee. The question is when a lower price of a generic drug is sufficiently low to be considered to have qualified to hamper the interest of the public? If one-third the price of the patented drug has been considered too low, how about one-half or even two-thirds the price of the patented drug?On the other hand, it is not too much to ask if one argues that a well-reasoned, good decision such as the order of Justice Bhatt in Roche v Cipla should be based on more concrete, tangible evidence and preferably, well-documented information or data or statistics (which are understandably difficult to procure) regarding the percentage of population which would de facto be severely affected if the generic version of a particular life-saving drug suddenly became – because of the interim-order – not available to the public at large than on presumptions that public interest would in general be harmed. A delicate balance between the right of an individual and/or a company to enforce his patent right and rights of people in general to have access to medicine has to be established but that has to be done only on the basis of tangible evidence and not presuppositions or emotional rhetoric.Moreover, the four-step test – the fourth step being public interest – ought to be invoked only in situations where a life-saving drug or medicine is involved and NOT with respect to any and every pharmaceutical product or chemical composition. For instance, with respect to a patent involving dietary supplement(s) or ancillary medicine(s), it is not very difficult to conjecture that the interest of the public would NOT be hampered as substantially if such product(s) becomes unavailable in the same price range (presuming prices of the generic variant of a product is almost invariably much lower than the price of a patented product) in which a generic company sells it. In situations where life-saving drugs are not involved, applying the age-old and time-tested three-step test (laid down in the American Cyanamid case) should be perfectly alright.On a different note, wouldn’t it be really interesting to see how the things shape up on the issue of rendering compensation or issuing damages incurred by the aggrieved party (say, a legitimate patentee) in the due course of time. Furthermore, would the trend to make the generic company – manufacturing and selling their version of a patented drug – pay the patentee a royalty (as a particular percentage of the sale or profit made by them) as compensation be also adopted invariably by the courts across India? No need to mention that this trend, if followed invariably, will be more or less in the nature of compulsory licence wherein a licensee pays royalties to a patentee after the grant of a compulsory licence. Is it not that this trend, if continued, in turn would create a court-made compulsory licence regime even though provisions for compulsory licensing already exist in Sections 84, 92, 92 A etcetera of the 1970 Patents Act.It would also be interesting to see if the amount of royalty the court eventually directs a generic company to pay (if the patentee eventually wins the infringement proceeding) would be a fixed percentage of sale or profit made irrespective of the specifics and circumstances of a case in question (uncanny it would be then) or such royalty would be decided on a case-to-case basis after due consultation with the generics company and more importantly, with the patentee.There is a further issue, which will keep intriguing many among us. If subsequent to the awarding of an interim or an ad-interim injunction, the actual case of infringement – decided on the basis of the merit of a case – goes on for, say, a couple of years and the decision is eventually awarded in favour of the patentee, would the consequence of such a win actually be sweet enough for the patentee.Let us attempt to dig on this issue a little. As many Indian attorneys are aware, the grant of a patent on an Indian patent application takes almost five to six years from the date of filing of such application. Recently, though, there has been some remarkable progress by the Indian Patent Office on this front. Post 2007, with respect to some of the relatively recently filed cases, letters for patent documents (patent registration certificates) were issued in some instances within a fortnight from the date of allowance of an application.Barring the recent outstanding developments, the effective term of a patent in India is in general limited to fourteen to fifteen years (if you are lucky enough not to have been bombarded with pre-grant oppositions before the grant of a patent and then subsequently with post-grant oppositions). Deduct another five to six years for litigation (threat to institute suit, suit for infringement, counter-claim of invalidation, interim orders, decision reserved and eventually, the final judgment/decision) from the effective term and you are actually left with only nine to ten years of effective term.One does not need to be a rocket scientist to infer that by the time the rights are eventually decided in the favour of say, for instance, a patentee, the patented drug would have perhaps become obscure or would have gained the status of being a drug which is no more in demand. It is not unlikely that the third, fourth or even nth generation(s) of such drug (including the generic variants) would have already flooded the market. The patentee would thus be left with a situation wherein even though it has been restored the exclusive right to manufacture, offer for sale, sell and export its patented drug, it has no more been left with a potential market. A remote consolation for the patentee could be, however, that it would end up earning royalties, which will ostensibly be only a small percentage of what the patentee would have earned if they had retained their privilege, inter alia, to sell and/or market their patented product exclusively for a term of five to six years (i.e., post the grant of the patent).To sum up, it appears prima facie that the introduction of the fourth step (of public interest) in infringement jurisprudence is a some win (for the generics), some (read much more) lose (for the patentee) situation for the patent infringement litigating parties but is perhaps the beginning of an all win-win situation for at least the consumers.Swarup Kumar is a senior IPR Associate/Attorney with the IP law firm Groser & Groser in India, where he has worked since February 2004. During Swarup’s stint as a patent attorney, he has handled, inter alia, drafting of complete specification, rendering opinions on the patentability of inventions related to different fields of technologies, filing and prosecution of patent applications, attending to hearings – both application as well as opposition, handling patent litigation matters etc. Swarup is qualified as an advocate and is a registered patent agent. He completed his LLB in 2003 after graduating in chemical and biological sciences from the University of Delhi. Swarup then pursued a diploma course in intellectual property law from the Indian Law Institute, Delhi along with a certificate course in IP with the World Intellectual Property Organization (WIPO) Academy. Subsequently, Swarup also added an MSc (Chemistry) degree from the MP Bhoj University to his educational qualifications. Though Swarup’s thrust area of practice is patent, he also handles trademark, design and copyright related matters in his present position.Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Related"Impact Of The Probable Incorporation Of An Additional Step (Of Public Interest) In Indian Injunction Jurisprudence" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.