Breaking News: Controller of Patents Revokes Patent on Sunitinib

In a 60-page order dated September 24, 2012 delivered in a post-grant opposition instituted by Cipla, the Indian Patent Office revoked Sugen Inc’s patent on Sunitinib IN209251. The drug is used to treat Renal Cell Carcinoma (RCC), which is a kind of kidney cancer. The patent was revoked on grounds of lack of inventive step. 

I thank a senior practitioner, a well-wisher of the blog, for sharing the order with me.

Interestingly, this is the second patented drug this year that treats kidney cancer against which the Patent Office has taken action. The first one was on Sorafenib Tosylate (Nexavar) of Bayer in which a compulsory license was issued this March.

I will shortly blog on the highlights of the decision. 

Representative Suits: “Interest”, “Cause of Action” and “Act”

In my last post, I had discussed the requirements of a representative suit under Order 1, Rule 8 of the CPC.  The explanation to O.I, R.8 clarifies that those claiming to file a representative suit need only have the “same interest”, they need not have the “same cause of action”.

Why does the CPC not use the words “acts or transactions” in Order 1, Rule 8, when Order 1, Rule 1 speaks of “acts/transactions”?

Order 1, Rule 1 deals with joinder of parties as Plaintiffs. The Rule permits joinder of parties as Plaintiffs so long as:

1. the relief is sought in respect of the same act or transaction or series of acts or transactions; AND

2. a common question of law or fact would arise if different suits were instituted by the parties seeking relief.

However, in Rule 8, the CPC does not speak of same acts/transactions, nor does it speak of common cause of action, it refers to the “same interest”. First of all, this means "act/transaction" is different from “cause of action”.

Technically, an act gives rise to a cause of action. What this means is that an actionable cause arises from an act since the act amounts to infraction of a party’s right. For instance, selling a patented product without consent is the act, it gives rise to a cause of action since it infringes the patentee’s rights.  

It could so happen that the same act could mean different things for different parties, which means it could gives rise to different cause of actions between different parties. For instance, in the above example, selling a product could involve infringement of patent as well as a trademark, with both rights being held by different persons. In such a case, the causes of action for both right holders would be different although the act concerned is the same.

Both these right holders may be joined as Plaintiffs under Order 1, Rule 1 of the CPC since the act is the same and there is a common question of fact, although there is no common question of law since the rights are different in nature.

This explains the difference between “act” and “cause of action”. But if Order 1, Rule 1 already provides for such joinder of plaintiffs and Order 1, Rule 3 provides for joinder of defendants, where is the need for Order 1 Rule 8?

Order 1, Rule 8 uses the word “interest” to increase the scope for joinder of parties beyond the scope provided for in Rule 1 and Rule 3. The word “interest” has been used to facilitate adjudication of all questions which arise from the same set of acts/transactions. This is basically a provision to avoid multiplicity of litigation where all persons are aggrieved by the same act/transactions.

In particular, Rule 8 has two concrete applications. The first is where the party affected by an act is not a juristic entity. Only a person, natural or juristic, may sue or be sued. In the case of a registered society which is not a juristic person, one member of the society may represent the interests of all members, instead of including all members of the society as “necessary parties”. 

In other words, under Order 1, Rule 1 all Plaintiffs need to be named, however, under Rule 8, one person may represent all other “interested parties”.

For instance, if a host of tenants have an issue with an act of the landlord, instead of filing multiple suits or instead of naming all tenants as parties in one suit, one tenant may represent all the others.

Further, Rule 8 vests the Court with suo motu powers to direct one or more persons to act on behalf of all other parties. In the same landlord-tenant example, the Court may itself direct one tenant to represent the rest.

Therefore, Rule 8 enlarges the scope of joinder of parties so long as there is a communion of interests between the parties.

Representative Suits: Requirements and Pleadings

The Civil Procedure Code (Order 1, Rule 8) lets parties file representative suits- suits in representative character. Does this mean all parties must be connected to or related by the same cause of action? 

Not necessary. The explanation to Order 1, Rule 8 clearly states that the requirement for filing a representative suit or to be sued in representative character is the existence of a “common interest”, not “common cause of action”.

Under Rule 1(a), a person or persons interested in suing or being sued or in defending a suit, may do so in representative capacity after taking the permission of the Court. Rule 1(b) allows the Court to issue a direction to this affect even when no party requests for it.

Both these sub-rules use the words “sue or be sued or may defend such suit”. Why do the Rules speak of “be sued or may defend” as if there is a difference between the two? The difference is that the first situation of “being sued” refers to a scenario where parties are sued in representative capacity as defendants.  

The second situation of “may defend” refers to a situation where one person or group of persons take upon themselves the responsibility of acting as defendants in representative capacity.

The question that also arises is, does Order 1, Rule 8 mandate that a suit in representative capacity may be instituted only after permission is sought from the Court? Courts have clearly held that such permission may be granted even after the suit is instituted.

Does Order 1, Rule 8 apply only to suits? What about appeals? Again, Courts have held that appeals may be filed in representative capacity even if suits were filed individually.

In every suit, the plaint must clearly reflect pleadings on material facts and issues. This applies to the right to sue in representative capacity as well. A party acting in representative capacity must clearly set out the “common interest” which entitles him to act in representative capacity. 

This requirement is set out in Order 7, Rule 4. However, Order 7 Rule 4 applies only to the Plaintiff since the order deals with Plaint. Ironically, there is no equivalent Rule in Order 8 which deals with written-statement of the Defendant. 

Notwithstanding the absence of a similar rule in Order 8, I think it would only be fair to state that the requirement of setting out the common interest to act in representative capacity must be read into Order 8 even if there is no such express Rule. 

Party to a Suit as a Witness

Sometimes the mere text of a provision is incapable of informing the reader of the purpose behind its existence, despite the textual import being free from ambiguities. One such provision which I recently paid greater attention to is Rule 3A of Order 18 of the CPC.

The Rule is titled “Party to Appear Before Other Witnesses” and it reads as follows:

“Where a party wishes to appear as a witness, he shall so appear before any other witness on his behalf has been examined, unless the Court, for reasons to be recorded, permits him to appear as his own witness at a later stage”

In plain and simple terms, this Rule requires any party who intends to testify, to appear before any other witness who may depose on his behalf. The reason for imposition of such a condition, on the face of it, was unclear to me when I read it for the first time. It took a judgment of the A.P High Court for me to deconstruct the Rule.

The object of the Rule is to prevent a party from using his testimony as a filler to plug in the loopholes in the testimonies of other witnesses who have deposed on his behalf. This is the sentiment that guides the Rule.

However, does this Rule preclude a party from deposing merely because he did not volunteer with his testimony prior to the rest of his witnesses? No. The Rule does not contain a caveat which says “Before the commencement of examination of witnesses and before any other witness on his behalf have been examined, a party who wishes to appear as witness shall inform the Court oh his intention to appear on his own behalf ”.

Therefore, it is permissible for a party to put forward his version of the story after all his witnesses have been examined. This is, however, subject to the Court’s permission and satisfaction that the party is up to no mischief, and that the party does not intend to make up for the mistakes of other witnesses. That said, the Court has to record its reasons for granting permission to the party to testify after others. 

“Sufficient Cause”- What Does the Supreme Court Say?

Often, non-lawyers wonder at the sheer breadth and width of words used in statutes such as “sufficient cause” or “reasonable delay”. The reason statutes need to use such broad terms is to provide Judges with sufficient latitude to accommodate genuine reasons which the facts of a case may present. 

But then, in exercising their discretion to decide sufficiency of a cause or reasonableness of a delay, what are judges bound by, other than reason and equity?

The Supreme Court had an opportunity to discuss the limiting factors which come into play in determining what amounts to a “sufficient cause” under Section 5 of the Limitation Act in Lanka Venkateswarlu v. State of AP. In this case, the AP High Court had condoned a delay of 3703 days without providing any reasons for the condonation.

The Apex Court observed that rules of limitation are not meant to destroy the rights of parties, but are intended to prevent use of dilatory tactics to drag or prolong the proceedings. The Court cited its own decision in Balwant Singh v. Jagdish Singh in which it held that although sufficient cause must receive liberal construction by Courts, “it must squarely fall within the concept of reasonable time and proper conduct of the party concerned”.

The Court went on to observe thus:

“The purpose of introducing liberal construction normally is to introduce the concept of reasonableness as it is understood in its general connotation. The law of limitation is a substantive law and has definite consequences on the right and obligation of party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case.

Once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party.

Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly.”

I think this observation is of critical relevance because sometimes Courts, in their eagerness to dispose matters, do not take parties to task which cook up stories and seek condonation on frivolous grounds. In other words, if limitation is intended to serve as a deterrent to parties from indulging in dilatory tactics, and from consuming the precious time of the Court, then Courts too have a duty to ensure that condonation is afforded only under genuine circumstances, which are properly accounted for by the party seeking condonation.

Is this principle applicable only to the Code of Civil Procedure or the Limitation Act? I would think that this sentiment applies to any provision of the law which prescribes a time period for undertaking a particular course of action, and also envisages extension of time. It applies even when provisions for extension of time do not expressly mention the words "for sufficient cause" or "reasonable delay".

Verification of Pleadings: Is It a Mere Formality?

I have sometimes wondered at the significance of the verification paragraph in pleadings. Turns out that improper verification has been the subject of deliberation of many a judgment. But first, where is the requirement of verification found in the CPC? 

Verification is required for pleadings, so it would be logical to look in the Order which deals with pleadings-namely Order 6.

Has the word “pleading” been defined in the CPC? Yes. Order 6, Rule 1 states in no uncertain terms that “Pleading” shall mean plaint or written statement. Verification of pleadings has been specifically dealt with in Order 6, Rule 15.

Rule 15(1) requires every pleading to be verified. But who can verify the pleadings? A party or one of the parties or anyone who is acquainted with the facts of the case may verify the pleadings. Since verification is required only for pleadings, and pleading means either the plaint or the written statement, it explains why there is no verification paragraph found in interim/miscellaneous applications, including applications for interim injunction.

Does every pleading need to be specifically verified? No. Rule 15(2) allows pleadings to be referenced by Paragraph numbers.

Are there categories in verification of pleadings? Yes. The first category is those pleadings which the deponent verifies on the basis of his knowledge.

The second is those pleadings which he verifies on the basis of information he receives AND which he believes to be true. This requirement of belief is conjunctive. In other words, if the deponent receives a particular piece of information, and he is in possession of a contradictory piece of information, unless he has convinced himself of the veracity of the information he has pleaded, he cannot and ought not to claim that he believes the information received to be true.

If there is evidence to show that the deponent had no reason to believe the information received as true, then he is liable for perjury.

In addition to the verification paragraph, Rule 15(4) also requires the deponent to furnish an affidavit in support of his pleadings. This is further required by Section 26(2) of the CPC which deals with institution of suits. Section 26(2) requires facts in every plaint to be proved by an affidavit.

Does this mean that if an affidavit under Rule 15(4) has not been annexed to a plaint, the plaint is liable to be returned under Order 7, Rule 11? This question was answered by the Calcutta High Court in the negative.

The Court held that non-compliance of Rule 15(4) is not a ground for rejection of a Plaint under Order 7, Rule 11 since there is no express mention of such a ground. In other words, the grounds provided under Order 7, Rule 11 are exhaustive and no new grounds can be read into it.

Further, the Court held that non-filing of an affidavit under Rule 15(4) is a curable defect and non-filing by itself does not make the suit non est (non-existent).

“Material Facts” and “Material Particulars” : How Do They Differ?

Pleadings in a suit, which refer to either a Plaint or a written statement, form the grist for further proceedings. 

Levity in the way one presents one’s case in writing can come back to haunt a party who does not think through his pleadings.

Order VI of the Civil Procedure Code, which deals with pleadings, uses “material facts” and “particulars” in different places. Are “material facts” and “particulars” synonymous with each other? Basic rules of statutory interpretation clearly tell us otherwise. 

Rules of interpretation aside, I would say that even common understanding of English tells us there is a clear difference between “facts” and “particulars”.

“Facts” would refer to the broad situations which give a clear picture of the dispute. Obviously “material facts” would mean those facts whose mention is an absolute must for a party to establish his claim to a relief he seeks. “Particulars”, on the other hand, could refer to addition of greater details to the facts, which refine the picture presented by the facts.

Naturally, absence of clear pleadings on material facts in a Plaint could justify the moving of a motion under Order 7, Rule 11 by the Defendant for failure to disclose a cause of action. As stated in an earlier post, accrual of a cause of action is tied to an act or a fact. Absent any averment on such acts/facts, how can a party justify or claim accrual of a cause of action?

Therefore, absence of material facts prejudices a party’s case at the outset, whereas absence of material particulars may be cured subsequently.

The Supreme Court has discussed the distinction between material facts and particulars in Udhav Singh v. Madhav Rao Scindia. In this case, the Court held that “all primary facts which must be proved at the trial by a party to establish the existence of a cause of action or his defence are material facts”. The Court further went on to observe thus:

“The distinction between "material facts" and "material particulars" is important because different consequences may flow from a deficiency of such facts or particulars in the pleading. Failure to plead even a single material fact leads to an incomplete cause of action and incomplete allegations of such a charge are liable to be struck off under Order 6, Rule 16, Code of Civil Procedure.

 If the petition is based solely on those allegations which suffer from lack of material facts, the petition is liable to be summarily rejected for want of a cause of action. In the case of a petition suffering from a deficiency of material particulars, the court has discretion to allow the petitioner to supply the required particulars even after the expiry of limitation.”

Duty of a Court When Party is Not Represented by a Pleader

It is common knowledge that a party to a civil suit need not necessarily be represented by a lawyer. Order 3 Rule 1 of the Code of Civil Procedure clearly states that the party may also choose to appear in person or he may appoint a recognized agent to appear on his behalf.

Rule 2 of the same Order identifies people who may qualify as “recognized agents” of the party to the suit. Although the decision not to engage a lawyer/pleader is that of the party himself, the CPC makes it incumbent on the Court to inform the party of some of his rights when he is not represented by a pleader.

One such duty of the Court is found in Order 20, Rule 5A of the Code. Order 20 of the Code deals with “Judgment and Decree”. Rule 5A goes on to state that except where both parties are represented by pleaders, at the time of pronouncement of the judgment the Court shall inform the parties of the forum before which an appeal lies from the judgment of the Court and the limitation period for filing the appeal.

This is to ensure that parties which are not represented by lawyers do not lose out on an opportunity to prefer an appeal merely because they do not have the benefit of a counsel.

Rule 5A, in fact, goes on to require the Court to record the information that was given to the parties. I guess the law is not so unfair after all, at least on paper. 

Blocking of Websites under the Information Technology Act

I received a few queries recently on the law regarding blocking of websites and remedies under the law against blocking. These queries were in the wake of the government's recent directions to block twitter handles of prominent journalists and commentators who were critical of the government's policies. I had an opportunity to address the issue in another forum last month. This post reiterates the broad points addressed by me in that forum.

Under the Constitution, the Government cannot muzzle free speech except if a reasonable restriction is imposed in order to preserve the sovereignty and integrity of the country, national security, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence (Article 19(2) of the Constitution)

MECHANISM UNDER THE IT ACT TO BLOCK WEBSITES

Below is Section 69A of the Information Technology Act, 2000, which was inserted in the Act through the Information Technology (Amendment) Act, 2008 (available here):

“69A. (1) Where the Central Government or any of its officer specially authorised by it in this behalf is satisfied that it is necessary or expedient so to do in the interest of sovereignty and integrity of India, defence of India, security of the State, friendly relations with foreign States or public order or for preventing incitement to the commission of any cognizable offence relating to above, it may subject to the provisions of sub-section (2), for reasons to be recorded in writing, by order, direct any agency of the Government or intermediary to block for access by the public or cause to be blocked for access by the public any information generated, transmitted, received, stored or hosted in any computer resource.

(2) The procedure and safeguards subject to which such blocking for access by the public may be carried out, shall be such as may be prescribed.

(3) The intermediary who fails to comply with the direction issued under sub-section (1) shall be punished with an imprisonment for a term which may extend to seven years and also be liable to fine.”

A reading of Sub-section (1) of Section 69 informs us that the provision may be invoked to preserve public order or to prevent incitement to the commission of any cognizable offence which relates to the areas mentioned in the provision.

The procedure for blocking of websites referred to in Sub-section (2) of Section 69 was notified in October 2009. This was called Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules, 2009 (available here).

In cases of emergency, the Govt may invoke Rule 9 of the Blocking Rules which is titled “Blocking of Information in cases of Emergency”.

Under Rule 9, a request is made by any govt department or agency to the Designated Officer (click the hyperlink to check the relevant notification on Designated Officer) under the Rules asking for blocking of information. The Designated Officer evaluates the request and forwards it to Secretary of the Department of Information Technology with his recommendations.

Upon receipt of the request and recommendations from the Designated Officer, if the Secretary, DIT is of the opinion that the information must be blocked, he issues an appropriate interim order to an intermediary such as an internet service provider or web-hosting service provider. The interim order could be to block the website/information which is deemed harmful. 

Critically, under the Rules, Neither the intermediary nor the owner of the information/website needs to be heard before the interim order for blocking is issued.

Within 48 hours of the interim order directing blocking of the website, the Designated Officer must place the request for blocking of the website for final determination before a Committee consisting of the Designated Officer, representatives from Law Ministry, Home Affairs and Information & Broadcasting and the Indian Computer Emergency Response Team.

In the meantime, the Designated Officer must issue notice to the intermediary against whom the interim order was passed, giving the intermediary at least 48 hours from the receipt of the notice to appear before the Committee.

The Committee considers the defense/reply offered by the intermediary with respect to the blocked information, after which the Committee forwards its recommendations to the Secretary, DIT. Based on the recommendations, the Secretary may issue final orders for blocking of the information.

This, in a nutshell, is the procedure the Govt is expected to follow when a website is blocked in cases of emergency.

HOW CAN INTERMEDIARIES/WEBSITES CHALLENGE THE BLOCKING OF INFORMATION?

Under the Information Technology Act, there is a Cyber Appellate Tribunal which sits in appeal over certain orders passed under the Act. Section 57 of the Act tells us which orders may be appealed before the Tribunal. However, an order under Section 69A does not appear to fall within Section 57. 

Simply put, there does not appear to be a provision for appeal before the Tribunal against orders of blocking of information passed under Section 69A. The only option that aggrieved intermediaries or websites have is to approach High Courts challenging the decision of the Secretary, DIT in a Writ Petition filed under Article 226 of the Constitution.

Comments and Corrections are Welcome!

Section 52(1)(i) of the Copyright Act: “in the course of instruction”

Section 52 of the Copyright Act, 1957 enumerates acts which do not amount to infringement. I have blogged on Section 52 earlier in the context of substantiality for infringement. In that post, I had written thus on the distinction between fair dealing and fair use under Section 52 before the Copyright Amendment Act, 2012:

“As for fair dealing, fair dealing is a stricter approach to exceptions to infringement than fair use. Under fair dealing, limited situations are envisaged whose metes are bounds are almost clear. Therefore, use of fair use principles to broaden the scope of such limited situations may not be permissible.

Section 52 of our Copyright Act uses fair dealing for a few instances and fair use for a few other. When it comes to literary works:

A. Section 52 (a) permits “fair dealing” for private use and criticism,

B. 52(b) permits “fair dealing” for the purposes of reporting,

C. 52(c) permits reproduction in a judicial proceeding,

D. 52(d) permits reproduction or publication for Legislative purposes,

E. 52(e) permits reproduction for the purposes of a certified copy,

F. 52(f) permits only reading and recitation of a reasonable extract,

G. 52(g) permits publication in a collection of essentially non-copyright matter for use in “educational institutions”

H. 52(h) permits reproduction during the course of instruction or in examinations

I. 52(i) permits performance in the activities of an educational institution

J. 52(j) permits making sound recording of the work with the license or consent of the owner of the work

K. 52(l) permits performance in an amateur club to a non-paying audience, or in a religious institution

L. 52(o) permits making of three copies for a library if the book is not sold in India

There are a few other provisions besides the above, but none of the provisions seems broad enough to employ “fair use” principles propounded in the US. This is because “fair dealing” provisions in most jurisdictions appear to be restrictively worded and are treated as such too.”

In this post, I am specifically interested in understanding the import of Section 52(1)(i)(i) which deals with “reproduction of any work by a teacher or a pupil in the course of instruction”.

In understanding the scope of the non-infringing use envisaged in the provision, regard must be had to the other two exceptions spelt out as part of Section 52(1)(i). The provision reads as follows:

The following acts shall not constitute an infringement of copyright, namely:

(i)                  the reproduction of any work-

(i)                  by a teacher or a pupil in the course of instruction; or

(ii)                as part of the questions to be answered in an examination; or

(iii)               in answers to such questions;

What clearly comes to the fore on a reading of the provision is the specificity in wording and intent. The first thing that must be borne is that the provision refers to “reproduction” and not “issuance of copies”. The Act recognizes the distinction between “reproduction” and “issuing copies” under Section 14(a)(i) and 14(a)(ii) which applies to literary (except a computer programme), dramatic and musical works.

The distinction between “reproduction of the work” and “issuing copies of the work” is of critical importance since the specific situations covered under the provision rely heavily on the distinction between the two.

“Reproduction” could mean to “re-produce” the work, and not making copies from an original manuscript. This means if a book is re-written and not photocopied (beware, not “Xeroxed”), it could amount to "reproduction". If contents of the book are written again as part of a question in an exam or as part of an answer or on the blackboard/white board during the course of instruction, it would amount to “reproduction”, and not “issuing copies of the work”.

On the other hand, “issuing copies” would mean to distribute copies/duplicates of the work or parts of the work to the public. 

At the expense of sounding repetitive, I reiterate that Section 52(1)(i) refers only to “reproduction of any work”, and not “issuing copies of any work to the public”. Therefore, only reproduction of a work in the specific circumstances enumerated in the provision is exempt from infringement, issuing of copies is not exempt from infringement under the specific provision.

Having dealt with the issue of “reproduction”, the next point of focus is “in the course of instruction”. It is imperative to note that the provision’s applicability is restricted to reproduction of any work, including a literary work, by a teacher or a pupil “in the course of instruction”, and not “for the purposes of instruction”, nor is it “for the purposes of education”.

The difference between “in the course of instruction” and “for the purposes of instruction” would be clear to anyone with common sense since the former relates to the act of reproduction of the work during the course of instruction i.e. at the particular instant the work is taught.

Further, the meaning of "for the purpose of instruction" includes "in the course of instruction", whereas "in the course of instruction" cannot include everything which is for the purpose of instruction. Consequently, there is no blanket exemption for anything related to education under Section 52(1)(i).

Therefore, to my mind, issuing of copies, regardless of the number of copies or quantum of copying from the original is, is not exempt from infringement under Section 52(1)(i) of the Copyright Act.

Comments and corrections are welcome!

Novartis Supreme Court Update: Arguments on Imatinib Mesylate and Efficacy

In my last update on the Novartis case, I blogged on the submissions made on behalf of Novartis on September 13, 2012. The update of the submissions made on September 12, 2012 is available here by Lawyers’ Collective.

On the 12^th, it appears that the submissions largely revolved around the contents of the patent application and the prior art cited against it. Mr.Gopal Subramanium, counsel for Novartis, seems to have submitted that the Zimmerman patent of 1993 disclosed only the imtainib freebase, whereas the subject-matter of Novartis’s application was beta crystalline form of imatinib mesylate.

Mr. Subramanium further submitted that the Zimmerman patent too was owned by Novartis and pointed out that although the Zimmer man patent disclosed methanesulphonic acid and the imatinib free base, there was no reference to methane sulphonate salt of imatinib.

Further, in light of the fact the Zimmerman patent disclosed a variety of compounds, their salts and acids, any number of combinations were possible, and that a person skilled in the art would not have arrived at the specific compound claimed in Novartis’s application. In short, the Zimmerman patent did not enable the working of beta crystalline form of imatinib mesylate.

It was also submitted that the free base of imatinib could not be administered to patients as it is and that the ingenuity of the invention lay in developing an administrable form, namely the beta crystalline form.

For the rest of the arguments relating to efficacy, I request the readers to read the update provided by Lawyers’ Collective. 

IPAB Upholds the Trademark “Xerox”

In a decision delivered on September 21, 2012, the IPAB has dismissed 4 out of 7 rectification petitions filed by Mr.B.V.Ilango Himachalapathy against trademark registrations on “Xerox” held by the Xerox Corporation. The primary ground for seeking rectification was “genericide”.

In Para 19, the IPAB sums up its conclusions as follows:

19. To sum up:

a) The response from High Courts, Government organizations, public sector undertakings, universities etc. acknowledging the trademark rights of the respondent proves that the mark had not become generic;

b) The mark had been on the Register since 1963 and continuously renewed without opposition.

c) After 40 years of continuance in the Register, the respondent has been called upon to prove use and we are of the opinion that they have proved their user almost to the date of user claimed in these particular facts of this case. However, the user so proved relates only to Class 09 – application No.217825 in ORA/199/2009/TM/KOL, Class 07 – application No.217824 in ORA/200/2009/TM/KOL, Class 01 – application No.155627 in ORA/204/2009/TM/KOL, Class 09 – application No.546220 in ORA/291/2009/TM/DEL. Hence these rectifications are dismissed.

For the other three marks in Class 03 – application No.254546 in ORA/202/2009/TM/KOL, Class 16 – application No.217826 in ORA/201/2009/TM/KOL and Class 01 – application No. 217823 in ORA/203/2009/TM/KOL there is no proof. Hence these rectification applications are allowed. No order as to costs.

The basis for allowing the rectification of three registrations was absence of proof establishing use of the mark by Xerox Corp.

The issue which was dealt with in the case, in a nutshell, is- “Should trademark registrations on “Xerox” be removed/rectified on the ground that the mark had become come generic?”

The IPAB’s decision to dismiss the rectification petitions seems to have turned on the fact that several Government organizations had responded to notices from Xerox Corp by undertaking to cease and desist from using the mark “Xerox” as a substitute for photocopying.

It needs to be pointed out that such notices were sent to these organizations by Xerox Corp after the filing of rectification petitions against its registrations on the mark Xerox. The IPAB notes that the undertakings from these organizations may have actually saved the mark from losing its distinctiveness.

What is to be noted is that the IPAB upheld the trademark registrations on Xerox despite the applicant for rectification presenting over 7 volumes of evidence, including internet search results reflecting generic use of the mark Xerox. This evidence appears to have been deemed as insufficient by the IPAB to establish genericide of the mark Xerox, probably because equally compelling evidence was led by Xerox Corp in the form of undertakings from Government institutions and Courts of law.  

Further, the fact that Xerox Corp’s registrations had never been challenged by any of its competitors such as Canon was also considered by the IPAB as being demonstrative of two things:

A. None of Xerox Corp’s competitors believed that the mark Xerox had become generic

B. Existence of the registrations did not deprive competitors from using alternatives such as “photocopiers”

To me, the lesson from this case for trademark owners is that it is easier to police acts of plain and simple trademark infringement than acts which lead to genericide. The latter being more discreet, requires greater vigilance and timely action on the part of owners.  

On a different note, the IPAB decision in this case contains a good compilation of cases on the issue of genericide, which may help readers in their research on the issue.

Novartis Supreme Court Update: Purpose and Interpretation of Section 3(d)

In an earlier post, I had blogged  on the update in the Novartis hearings before the Supreme Court.

A well-wisher of the blog has brought to my attention an update of the hearings held on September 13, 2012. It appears that on behalf of the patent applicant, Novartis, Mr.Gopal Subramanium submitted to the Supreme Court that the purpose of Section 3(d) is not to facilitate access to medicines. Its purpose, according to Novartis, is to prevent grant of patents to trivial modifications to existing products.

The submissions appear to have been made in connection with a clarification sought by Justice Aftab Alam. It was further submitted that the Doha Declaration, and consequently the issue of access to medicines has been incorporated in the Indian Act in its compulsory licensing provisions. A good part of the arguments seem to have revolved around the issue of compulsory licensing provisions of the Act.

With respect to Section 3(d), it appears that according to Mr. Subramanium, Section 3(d) applies only to discoveries which do not have an inventive step. Consequently, according to Mr.Subramanium, if something is covered by Section 2(1)(j) and 2(1)(ja), Section 3(d) is not attracted in such an instance. 

It was also submitted that Section 3(d) must be read as an aid to Section 2(1)(ja), and that 3(d) does not limit 2(1)(ja). Therefore, according to Mr. Subramanium, the IPAB had erred in rejecting the patent application of Novartis citing Section 3(d) despite holding that Gleevec was novel and non-obvious.

In my opinion, this is precisely the kind of mess that is created when the IPAB or the Patent Office examine for novelty and non-obviousness instead of first using Section 3 of the Act as a filter. A similar unnecessary analysis was undertaken by the IPAB in the Yahoo order where a patent application of Yahoo was rejected. In my opinion, if Section 3 is used as a filter to weed out what are not inventions under the Act, unnecessary analysis on novelty and non-obviousness can be avoided.

Coming back to the Novartis case, it was submitted on behalf of Novartis that the IPAB erred in applying the test of anticipation under Section 3(d), besides applying it under Section 2(1)(j).

What surprised me are the reported submissions by Mr.Subramanium on the distinction between obviousness and anticipation. It has been reported that the following is what was submitted to the Court by Mr. Subramanium:

“Responding to a clarification sought about the difference between obviousness and anticipation, Mr Subramaniam said that, in the analysis of obviousness, the existing knowledge is complete and enabling and therefore it is obvious to reach the claimed product. He said that, in the analysis of anticipation, full details are not given in the existing knowledge”

Further hearing in the matter was scheduled for September 18, 2012.

Roche v. Cipla- Section 8 of the Patents Act: Potential Ground(s) of Appeal?

In the last post, I had discussed those portions of the Roche-Cipla decision where the Learned Single Judge of the Delhi High Court has dealt with the ground of violation of Section 8 of the Patents Act by the Patentee in the suit (OSI Pharma).

In the decision, despite noting that the Patentee had violated disclosure obligations under Section 8 of the Act, the Single Judge took the view that Section 64(1)(m) of the Act allowed for exercise of discretion by the Court on whether or not the patent deserved to be revoked, despite violation of Section 8. The relevant extract from the judgment is as follows:

“156. Consequently, the ground of violation of Section 8 read with Section 64(1)(m) is made out. However, still there lies a discretion to revoke or not to revoke which I have discussed later under the head of relief. Under these circumstances, even in case, the said compliance of Section 64(1)(m) of the Act has not been made by the plaintiffs, still there lies a discretion in the Court not to revoke the patent on the peculiar facts and circumstances of the present case. The said discretion exists by use of the word ―”may” under Section 64 of the Act. Thus, solely on one ground of non-compliance of Section 8 of the Act by the plaintiffs, the suit patent cannot be revoked.”

The above observation gives rise to two questions:

1. Is there any room for exercise of discretion under Section 64(1)(m) once violation of Section 8 is established to the satisfaction of the Court or the IPAB?

2. Assuming there exists room for exercise of discretion, did the Learned Single Judge take a reasoned approach in exercising his discretion to not revoke the patent? In other words, has the Single Judge sufficiently reasoned as to why he was of the opinion that the patent on Erlotinib did not deserve to be revoked “solely on the ground of non-compliance” of Section 8?

Both these questions could actually constitute grounds of appeal which Cipla could use to challenge the finding of validity of the patent by the Single Judge. The first is a real question of law which an appellate court (Division Bench) may find important enough to address. The second relates to the very essence of judicial exercise of discretion.

I think it is easier to answer the second question. Besides taking the view that the “may” in the preamble to Section 64(1) is indicative of the non-mandatory nature of the provision, I do not find any explanation or reason in the decision offered by the Single Judge to substantiate the exercise of his discretion in favour of the patentee. In my opinion, absence of reasoning constitutes a reasonably tenable ground of appeal against the finding of validity of the patent by the Single Judge.

As regards the first question, it is important to understand the import and function of Section 8 along with implications of its violation under Section 64(1)(m) of the Act. Below is Section 8:

8. Information and undertaking regarding foreign applications:

(1) Where an applicant for a patent under this Act is prosecuting either alone or jointly with any other person an application for a patent in any country outside India in respect of the same or substantially the same invention, or where to his knowledge such an application is being prosecuted by some person through whom he claims or by some person deriving title from him, he shall file along with his application or subsequently within the prescribed period as the Controller may allow-

(a) a statement setting out detailed particulars of such application; and

(b) an undertaking that, up to the date of grant of patent in India, he would keep the Controller informed in writing, from time to time, of detailed particulars as required under clause (a) in respect of every other application relating to the same or substantially the same invention, if any, filed in any country outside India subsequently to the filing of the statement referred to in the aforesaid clause within the prescribed time.

(2) The Controller may also require the applicant to furnish, as far as may be available to the applicant, details relating to the objections, if any, taken to any such application as is referred to in sub- Section (1) on the ground that the invention is lacking in novelty or patentability, the amendments effected in the specifications, the claims allowed in respect thereof and such other particulars as he may require.

In a nutshell, the purpose of the provision is to bind a patent applicant with the duty of keeping the Controller informed of the status of foreign applications on substantially the same invention. This is to ensure that the Controller has the benefit of considering the prior art cited against foreign applications on the same invention, in addition to checking for consistency in scope and manner in which protection is sought over the same invention.

Clearly, there is an element of trust here between the applicant and the Controller.

Section 64(1)(m), when read with the preamble, reads as follows:

64. Revocation of Patents: (1) Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, [be revoked on a petition of any person interested or of  the  Central  Government  by  the  Appellate  Board  or  on  a  counterclaim  in  a  suit  for infringement of the patent by the High Court] on any of the following grounds, that is to say—

(m)  that the applicant for the patent has failed to disclose to the Controller the information required by section 8 or has furnished information which in any material particular was false to his knowledge;

The Learned Single Judge placed reliance on the “may” in the preamble to sub-section (1) to conclude that the “may” provided for exercise of discretion by the Court or the IPAB. The question is, is the “may” to be interpreted as “shall”, or as “may”?

It needs to be pointed out that the preamble, and consequently the “may” in Section 64(1) is applicable equally to all 14 grounds of revocation which are enumerated under Section 64(1). Therefore, it would be difficult and probably even untenable to argue that certain grounds are more serious (or more equal) than the rest.

In other words, it may not be possible to argue that violation of Section 8 is a minor ground compared to other so-called “substantive” grounds such as novelty or obviousness. Specifically, it may not be possible to argue that the “may” is a “shall” for certain grounds, but remains a “may” for certain other grounds.

Further, there are two sub-grounds within Section 64(1)(m) itself, namely:

A. that the applicant for the patent has failed to disclose to the Controller the information required by section 8; or

B. that the applicant has furnished information which in any material particular was false to his knowledge

These two grounds refer to two different circumstances. In the first circumstance, there is a failure on the part of the applicant to disclose information sought under Section 8. Specifically, the failure must relate to details of foreign application sought in Form 3. Such failure need not be deliberate or calculated. There just needs to be failure to disclose. Therefore, it could be said that the scope of analysis is restricted to establishing whether or not there was a failure to disclose by the applicant.

Before we jump to any conclusion, it needs to be pointed out that what amounts to “failure to disclose” is a subjective enquiry based on what constitutes sufficient disclosure under Section 8. It could also be argued that subjectivity allows for exercise of discretion. However, the exercise of discretion is limited to evaluating the adequacy of disclosure, and no more. If the applicant has disclosed the details sufficiently as sought in Form 3, there is no question of violation of Section 8.

However, if the disclosure is less than adequate, it must be concluded that the applicant/patentee has indeed violated Section 8. Once this conclusion is reached, there appears to be no more room for exercise of discretion. In other words, once failure to disclose is established, the “may” in the preamble to sub-section (1) of Section 64 cannot be used to further exercise discretion. Revocation appears to be the only legal and  logical course of action.

As regards the second circumstance which refers to willfully furnishing false information, it is clear that there must be a positive act on the part of the applicant to supply information which he knows to be false in a “material” way. Simply put, the false information must necessarily have a bearing on the decision of the Controller to grant or refuse a patent. Obviously, in this circumstance, the Controller has the power to exercise his discretion to understand whether the false information was “material” in any way to the outcome of the examination process.

To summarize, on a strict reading of relevant portions of Section 64(1)(m), it could be argued that there does not exist a room for exercise of discretion once failure to disclose information under Section 8 is established. Therefore, since the Learned Single Judge had arrived at a finding of contravention of Section 8 by the patentee, I don't think the Court had the option of not revoking the Erlotinib patent.

Comments and Corrections are welcome!

Roche v. Cipla: Section 8 Violation

I have posted a few posts on the Roche-Cipla decision, but my analysis is far from complete. In the mean time, I wish to draw the attention of the blog’s readers to a crisp and incisive analysis of the decision undertaken by Ms.Shwetasree Majumder (“Shwe” to her friends), founding partner of Fidus Law Chambers on Bar and Bench. I strongly recommend a reading of this analysis, especially by those who may not have the time or the patience needed to go through the 275-page judgment.

The specific portion of her piece which I think is particularly noteworthy is the one on Section 8 of the Patents Act, which I intend to discuss in this post. I thank Shwetasree for sharing her thoughts with me on the issue.

The ground of Section 8 is discussed in the decision from Para 127 onwards. In Paras 153, 154 and 156 (Pages 133 and 134), following are the observations of the Learned Single Judge of the Delhi High Court:

“153. When the defendant has raised this challenge in the counter claim and also filed the documents to that effect that there is an application which was made in US in 2000 as US‘221 containing a nexus between the previous compound and the Polymorphic B version of the same and also has read in consonance with the stand which is preferred by the plaintiffs now that both the versions are of the same nature and non grant of one in India is inconsequential, The defendant is able to discharge the onus which lied on him to show that there was an obligation to disclose.

Thereafter, it was upon the plaintiff to displace the onus and justify as to how the said disclosure was not required or the said disclosure was actually made. The responses which are coming forth from the plaintiffs for filing of Form-3 twice in 1996 and 2006 nowhere relates to foreign application and does not satisfy as to how the disclosure was properly made of the developments which happened in the year 2000. The fact that the Controller incidentally dealt with such application filed in US‘221 while testing the opposition with the third party does not absolve the responsibility of the plaintiffs as applicant for patent to disclose the said information before the Controller which could have impacted the decision making of the Controller.

154. Likewise, the stand of the plaintiffs that both the inventions are different also seems unjustifiable in the light of their present stand before this Court and no other response has been made except what has been discussed above in detail by the plaintiffs. In view of the same and also the requirements of Section 8 discussed above, it cannot be said that the plaintiffs have been able to displace the said onus casted upon them as to why the disclosure was not made as per the requirement of Section 8 of the Act. It appears at this stage from the attending circumstances that the disclosure was not made and the said Section was in fact violated by the patentee and therefore the ground contained in Section 64(1)(m) is made out.”

Therefore, from the underscored portions above, it is clear that the Learned Single Judge was of the opinion that Roche had violated Section 8 of the Act. What is the law on this point?

As Shwetasree points out in her article, the law on violation of Section 8 has been laid down by a Division Bench of the Delhi High Court (Justice Muralidhar) in Chemtura Corporation v. Union of India as follows:

“45. It is not possible to accept the submission, made by referring to the Halsbury’s Laws of England, that since the omission to furnish particulars is not serious enough to affect the grant of the patent, it did not impinge on its validity. Section 64 (1) (j) and (m) indicate to the contrary. Further under Section 43 (1) (b) a patent can be granted only when the application has been found not to be contrary to any provision of the Act. It cannot be said that the omission to comply with the requirement of Section 8 (2) was not serious enough to affect the decision of the Controller to grant the patent to the Plaintiff.

The information, if provided, would have enlightened the Controller of the objections raised by the US patent office and the extent to which the Plaintiff had to limit its claims to the torus shape of the compression spring, which was a key feature of the subject device. Had the Controller been informed of the Plaintiff’s own patent No.3932005 dated 13th January 1976, he would have been called upon to examine if that patent taught the use of a toroidal shape of a compression member and whether therefore the subject device was an inventive step within the meaning of the Act.” 

In Chemtura, the DB went on to vacate the interim injunction granted to the patentee on grounds that the Patentee had prima facie violated the provisions of Section 8 of the Act. Considering the strict interpretation of Section 8 followed by the DB, it is surprising that the Learned Single Judge in Roche v. Cipla does not refer to Chemtura although he is bound by the judgment of the DB. Instead, the Single Judge goes on to hold thus in relation to the patentee, OSI Pharma’s violation of Section 8:

 “156. Consequently, the ground of violation of Section 8 read with Section 64(1)(m) is made out. However, still there lies a discretion to revoke or not to revoke which I have discussed later under the head of relief. Under these circumstances, even in case, the said compliance of Section 64(1)(m) of the Act has not been made by the plaintiffs, still there lies a discretion in the Court not to revoke the patent on the peculiar facts and circumstances of the present case. The said discretion exists by use of the word ―may‖ under Section 64 of the Act. Thus, solely on one ground of non-compliance of Section 8 of the Act by the plaintiffs, the suit patent cannot be revoked.”

All this verbiage boils down to one question- Does the Court or the IPAB have the discretion to not revoke a patent when violation of Section 8 has been clearly made out and acknowledged by it?

I shall answer this question in the next post.