New Technology, New Law? - First Sale in the Digital Context

I recently blogged here on the boost given to the first sale doctrine by the decision of the US Supreme Court allowing parallel imports of books by rejecting a leading publisher’s contention that a book sold by it abroad could not legally be resold in the US.

While the doctrine may seem rather easy to apply in the case of material goods such as books, its applicability in the digital context is certainly tricky territory. The US District Court for the Southern District of New York in Capital Records v. ReDigi Inc was most recently faced with the issue and went on to hold  that the first sale doctrine is limited to material items.

When a book is purchased, the ownership of the copy of the book so purchased vests in the buyer. The first sale doctrine in this case means that the buyer who is now the owner of such a ‘lawfully made’ copy may sell or otherwise dispose of that particular copy in any manner that she wishes.

On the other hand, in the digital context, possession of a copyright protected work or a ‘lawfully made’ copy does not entail ownership of such work. To illustrate, if you buy a copy of The Godfather at a book store, you own the copy by virtue of such lawful possession and you are free to sell it or rent it or even throw it away. However, if you buy a song on itunes, you are only a licensee of the song and have no ownership rights on the song whatsoever. The owners of the original material are only providing you with a license to use such material. To put it simply, if it is digital, you don’t own it.

While it is true that the internet has enabled greater dissemination of copyrighted works across the globe, it has also led to widespread use and dissemination by non-owners without compensation to copyright owners. The dilemma is this- whether to give copyright owners the power to control all copies of their work in the digital sphere OR allow the operation of the first sale doctrine in the digital context and aim to regulate it through technology, by destroying/preventing making of copies.

ReDigi Inc, for instance, devised a system where users could buy or sell downloaded digital music. What was unique is that it allowed only those music files that were legally acquired from itunes to be uploaded using its service. Additionally, the system removed the uploaded file from the hard drive at the time of uploading thus ensuring that sharing and storing on a computer do not occur simultaneously.

Even as one hopes that India will take cue from the US and recognises the first sale doctrine in at least material goods such as books, the struggle faced by Indian courts in its application in the analogue context makes one wonder. There is bound to be a great level of difficulty which judges may face in making decisions where digital content is involved, using laws that were not even devised to be made applicable to such mediums.  

Apart from the much needed change in the law on its applicability to material goods, one also hopes that India undertakes a comprehensive review of its copyright law to fit the needs of an age where digital networks are dominant means of distributing copyrighted works.

Merck’s Appeal Transferred to Justice Ravindra Bhat, Will Hear on Interim Injunction, Notice Issued to Glenmark

I had reported two days ago that Merck had preferred an appeal against refusal by the Single Judge to grant interim injunction against Glenmark for alleged infringement of Merck’s patented drug Sitagliptin. I have been informed by a dear friend and a well-wisher of the blog, Ms.Sneha Jain, that the appeal which was listed before Justice Sanjay Kishan Kaul has been transferred to the Division Bench presided by Justice Ravindra Bhat.

Today when the appeal was listed before Justice Bhat, he appeared to take the view that the order passed by the Learned Single Judge was prima facie unsustainable because Merck could not have been expected to foresee the defenses of Glenmark and factor them in its Plaint. Justice Bhat has decided to hear the matter on merits on the issue of grant of interim injunction. Accordingly, notice has been issued to Glenmark directing it to file its reply to Merck’s application for interim injunction (under Order 39, Rules 1 and 2 of the CPC).

We will keep our readers posted on the developments in the matter.

Non-Science Grads as Patent Agents and the Patent Agent Examination

In my last post, I had briefly discussed the Madras High Court’s decision striking down the amendment to Section 126 of the Patents Act as unconstitutional. According to the Court, the requirement of a science/engg. degree to appear for the patent agent exam is “unreasonable and irrational”.

The Court’s argument was essentially this: Non-science grads are in no way inferior to science grads when it comes to performing the duties of a patent agent. Therefore, non-science grads too must be allowed to appear for the patent agent examination.

After the last post, friends, law students and a few readers wanted me to state my views on the issue. Before I do so, a statement of fact is necessary- I failed to clear the patent agent examination. The reason I have to state this is that may be for some, this information is necessary in order for them to decide if my thoughts on the issue are worth reading.

Now, moving to the issue at hand, I have articulated my views on this issue to a limited extent elsewhere. But maybe it is time to reconsider previously held positions.

Although my core competence is litigation, with patent litigation being one of my strong areas, I have put considerable effort in understanding patent drafting and prosecution to lend more value and conviction to my practice as a litigator. This effort has only strengthened my rather non-novel and obvious belief that although litigation and patent prosecution are two very different animals and therefore comparisons/generalizations may not be entirely justified, a patent drafter/prosecutor’s work requires greater technical depth, diligence and foresight. After all, the patent document must withstand challenges and also be capable of effective enforcement.

In that sense, the drafter is figuratively building in the shield and the sword in the same document. Therefore, to me, he is the most valuable link in the patent value chain, after the inventor of course.

The drafter needs to understand the inventor’s point of view, and apply his mind to deliver optimum value to the client within the bounds of the law. This calls for an ability to grasp the nuances of the invention, and the subtleties of the law as well. Therefore, ideally it would help if the drafter is a lawyer too- this, according to me, would be the ideal package.

The next best option would be for the drafter to have access to a lawyer who can act as an intelligent sounding board.

But the question is, can we have drafters who are non-science grads, but who have cleared the patent agent examination? Is clearing the patent agent examination sufficient proof of the candidate’s technical skills to the extent that the requirement of a science/engg. degree is altogether done away with?

There could be two ways of going about the issue- either taking the call that a science degree is a must to guarantee a minimum level of expertise, or leaving it for the market to decide the quality and worth of a drafter regardless of his educational qualifications.

There is no doubt that there are a few outstanding patent drafters in India (who I personally have had the privilege of working with) who do not have a science/engg. degree and who could probably give the science/engg grads a run for their money thanks to the sheer number of hours they have put in, besides their innate ability to digest anything under the sun. 

That said, when we discuss the way forward, it is important to address the norm with greater clarity and purpose than the exception. Consequently, I think for an evolving patent regime like India, quality control is important, particularly if we are interested in creating a reliable ecosystem for patent drafting, where work is farmed out to Indians for our quality first and cost-effectiveness second.

Clearing the patent agent exam may at best vouch (and that too not always) for a minimum level of knowledge of the Act and Rules, and the established norms of drafting. But clearing the exam is certainly no metric or index by which to assess the technical skills of an individual. Therefore, I do believe that a science/engg degree must be a condition precedent to appear for the patent agent examination.

One of the suggestions made by a friend was that science/engg graduates, who have a law degree as well, must be exempt from writing the patent agent exam, and must be allowed to register directly as patent agents. Although this was the position between 2002 and 2005, I don’t think such an exemption was and would be justified because having science and law degrees does not necessarily translate to knowing the basics of patent drafting or being familiar with the minutiae of the Act and Rules. If the counter to this is that clearing the exam too is no guarantee of the same, then by that logic no exam is a guarantee of future potential, and therefore non-science non-lawyers too must be permitted to register as patent agents directly.

Simply put, my point is if the exam is here to stay, then it must apply equally to lawyers with a science background, and non-lawyers with a science background.

If the exam is sought to be done away with altogether, I think that would be catastrophic because the exam does serve the object of quality control, albeit to a limited extent. The only way to ensure that the exam selects a better pool of agents is to restructure the exam, and not to consign it to the wheelie bin altogether.

I had written on this issue in an earlier post drawing lessons from the Singaporean model. In that post, I had said thus:

“To qualify in the examination, particularly the drafting part, one requires practice. I don’t think I am the first person to say that the art of patent drafting cannot be divinely acquired at the time of the examination; it needs consistent practice.

This being so, wouldn’t it help to have a mandatory provision in the law where a candidate who applies for the patent agent examination must have worked under a registered patent agent for at least a year or so?

This proposal isn’t new or radical; the Singaporean Patent law already envisages this. Rule 6 of the Patents (Patent Agents) Rules 2001 spells out the entitlements for registration as patent agent in Singapore. The said provision reads as follows:

6.  Subject to rules 7 and 8, an individual is entitled to be registered as a patent agent if he —

(a)  is resident in Singapore;

(b)  holds a university degree or equivalent qualification approved by the Registrar;

(c)  has passed the course specified in Part I of the Third Schedule;

(d)  has passed the examination specified in Part II of the Third Schedule; and

 (e)  has completed internship in patent agency work under the supervision of a registered patent agent, or an individual registered as a patent agent or its equivalent in a country or territory, or by a patent office, specified in the Fourth Schedule, for —

(i)  a continuous period of at least 12 months; or

(ii)  a total period of at least 12 months within a continuous period of 24 months.

The course referred to in clause (c) is the Graduate Certificate in Intellectual Property Law course conducted by the Faculty of Law, National University of Singapore. The examination referred to in clause (d) is the Patent Agents Qualifying Examinations conducted by the Registrar comprising 4 Papers. Clause (e) requires at least 12 months of continuous internship under a registered patent agent....

..........That said, what we could certainly take a leaf out of is the requirement of an internship. This way, we would know that a registered patent agent is not raw, but is at least semi-finished to handle patent applications and to advice clients with some degree of confidence, which is borne out of experience.

The other point to be noted is that there is no provision for a Viva Voce. The examination basically has 4 papers, the first relates to specification drafting, the second to amendment of a specification, the third relates to claim construction to determine validity and infringement and the fourth relates to knowledge of patent law and practice in Singapore.

Even the European Patent Office does not envisage a viva voce in the European Qualifying Examination. Of course, the exam is held over a marathon duration of 20.5 hours, which I think is a fairly rigorous way of filtering candidates!

Viva voce may or may not be an important issue, but the larger point in the big picture is that the quality of candidates who qualify for practice must not be sub-par.

Ultimately, patent jurisprudence is applied every time a claim or a specification is drafted, therefore it is imperative to ensure quality at the most fundamental level before we start asking for specialized IP benches.”

Comments and Corrections are welcome!

Breaking News: Merck Appeals Against Denial of Interim Injunction

I have been informed that Merck has appealed against the order denying interim injunction against Glenmark's drug "Zita", which allegedly infringes Merck's patented drug Sitagliptin (IN209816). The appeal, F.A.O.(O.S.) 190/2013, was listed before a Division Bench of the Delhi High Court presided by Justice Sanjay Kishan Kaul. We will keep our readers informed of the developments in the appeal.

Advocates as Patent Agents: What did the Madras High Court Say?

On March 15, 2013, the Madras High Court delivered a decision (available here) striking down as “illegal, unconstitutional, ultra vires, void and unenforceable” the amendment to Section 126 of the Patents Act, 1970 which prescribes the qualifications for registration as patent agents.

The decision was delivered in a writ petition filed in 2006 by an advocate practicing before the Madras High Court, Mr.SP.Chockalingam, who was deemed ineligible by the patent office to appear for the patent agent examination in accordance with Section 126 of the Patents Act, as it stands today since 2005.

I seriously and strongly recommend reading this decision for reasons best left unsaid. This is a long post because certain paras of the decision have been reproduced for best “effect”! I have chosen to not analyse the decision, and fervently hope that it is appealed against and set aside!

History of Section 126

The original Section 126 read as follows:

“126. Qualifications for registration as patent agents

(1) A person shall be qualified to have his name entered in the register of patent agents if he fulfils the following conditions, namely: -

1. he is a citizen of India;
2. he has completed the age of 21 years;
3. he has obtained a degree from any University in the territory of India or possesses such other equivalent qualifications as the Central Government may specify in this behalf, and, in addition,-

(i) is an advocate within the meaning of the Advocates Act, 1961; or

(ii) has passed the qualifying examination prescribed for the purpose;

(d) he has paid such fee as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), a person who has been practicing as a patent agent before the 1^st day of November, 1966 and has filed not less than five complete specifications before the said day, shall, on payment of prescribed fee, be qualified to have his name entered in the register of patent agents.”

Under the original provision, the requirement was to have “a degree from any university” in addition to being an Advocate or passing the patent agent examination. In 2002, the requirement of a degree in science, engineering or technology from any University was brought in. Clearly, between 2002 and 2005, following were the requirements:

1.       the candidate must have a degree science, engineering or technology

2.       The candidate must also be an advocate or must pass the patent agent exam

In 2005, the additional requirement of being an advocate was removed. After all these amendments, sub-section (1) of Section 126 reads as follows:

126. Qualifications for registration as patent agents.—(1) A person shall be qualified to have his

name entered in the register of patent agents if he fulfills the following conditions, namely:—

(a) he is a citizen of India;

(b) he has completed the age of 21 years;

(c) he has obtained a degree in science, engineering or technology from any university established under law for the time being in force in the territory of India or possesses such other equivalent qualifications as the Central Government may specify in this behalf, and, in addition,—

(i) [Omitted by the Patents (Amendment) Act, 2005]

(ii) has passed the qualifying examination prescribed for the purpose; or

(iii) has, for a total period of not less than ten years, functioned either as an examiner or discharged the functions of the Controller under section 73 or both, but ceased to hold any such capacity at the time of making the application for registration;

(d) he has paid such fee as may be prescribed.

The Writ Petition

According to the decision, it was the case of the petitioner that the 2005 Amendment was unconstitutional since it prevented non-science graduate advocates from appearing for the patent agent exam. This statement itself is factually incorrect because the requirement of a science-degree was introduced in the 2002 amendment, as pointed out above, and not in 2005. In 2005, only the additional requirement of being an advocate was removed.

In other words, between 2002 and 2005, only advocates with a science/engg. degree could register as patent agents without having to clear the patent agent exam. The rest of the candidates, with only a science/engg. degree, had to clear the exam. In either circumstance, between 2002 and 2005, candidates with no science/engg. degree were ineligible for registration as patent agents.

Anyways, neither the Petitioner nor the Court seems to have bothered to verify this point, which is more or less reflective of the quality of reasoning in the judgment. Although I hate this phrase for its abuse, I am tempted to use it- “Let’s sample these “nuggets” of the Court in the decision”.

“16. It could not be disputed that to become an Advocate, one should have passed B.L., or LL.B degree through a recognized University or its affiliated law college and such a degree could have been approved  by Bar Council, as per Advocates Act. Hence, mere law degree granted by any recognised university is not sufficient, if the same has not been approved by Bar Council. It is an undisputed fact that to become an advocate, one should have studied various laws and passed the law examination, including drafting and procedural laws, as per the curriculum prescribed by any recognised University. The respondents cannot say that in imparting legal education or conducting the law examinations, a recognized law college or University would be inferior to the respondents and further, to be a qualifying degree, either B.L., or LL.B., to enroll as Advocate, power of supervisory control is vested with the Bar Council, as per Advocates Act. Even if a Law college or University is empowered to confer any Law degree, such a degree would not be a sufficient educational qualification to enroll as Advocate, unless the same is recognised by the Bar Council, as per Advocates Act....

17. In this regard, this Court has to consider whether the impugned amendment has been made on public interest, based on reasonable classification or otherwise to be construed as an unreasonable class legislation. It cannot be said that a degree holder in science, engineering or technology, who has passed the examination conducted by the respondents in Patents Act and drafting would be a better qualified person to function as patent agent, than an Advocate, who passed various law papers in his Examinations, including drafting and procedural laws. It is an admitted fact that to be an advocate, one has to pass the examinations relating to various laws conducted by any recognised University. Pointing out the same, the petitioner, party-in-person argued that the amendment, deleting sub-clause (i) of Section 126 (1) (c) of the Patents Act, removing the term Advocate, within the meaning of Advocates Act, 1961, has to be construed as an unreasonable class legislation and not a reasonable classification, as contemplated under Article 14 of the Constitution.

23. The view of eminent Jurist and great academicians is that "law is a social science" and a practicing lawyer is a social engineer. When such is the view of Courts and eminent Jurists, the respondents are not entitled to take a decision mechanically, that law is not a science and that graduates in science, engineering or technology, after passing a Departmental Examination in Patents Act and drafting, conducted by the respondents, they will be better qualified persons than any practicing advocate. Based on the nomenclature given by the Universities either B.L., or LL.B., the respondents cannot hold that law is not a science, in spite of the fact that it is an important social science. This Court is of a considered view that B.L., or LL.B., awarded by any recognized university is a degree of social science in law and a practicing lawyer is a social engineer. It is the prerogative of the university to decide the nomenclature of a degree, based on which, the respondents cannot hold that law degree is not a degree in science. The petitioner, party-in-person argued that the impugned amendment deleting sub-clause (i) to Section 126 (1) (c) of the Act, preventing Advocates to register as patent agents as a matter of right, is arbitrary, based on a wrong notion that a degree holder in science, engineering or technology, passing the Departmental Examination in Patents Act, the Rules there under and drafting would be better qualified persons to function as patent agent. Hence, the impugned amendment, could be construed only an unreasonable class legislation, prohibited under Article 14 of the Constitution, as the same is not a reasonable classification, as decided by the Hon'ble Supreme Court."

In effect, according to the Court: 

A.      Advocates without a science degree are better qualified to act as patent agents than science/engg. graduates;

B.      A degree is law too is a degree in science because law too is science (!!!)

Paras 19, 41 and 42 of the decision are even more “critical” since they impute “sinister reasons” for leaving the law degree out of Section 126. I strongly recommend reading every line and word of these paras.

“19. The Patents Act and Rules framed thereunder empowers the respondents, in prescribing the syllabus, conducting exam, appointing patent agents and also power to remove patent agents. The Court can take judicial notice that after the impugned amendment, normally such patent agents may not be practicing advocates before High Courts or Supreme Court, as the amended Act has taken away the rights of Advocates, to register as patent agents as a matter of right, that was available prior to the amendment, under Section 126 (1) (c) (i) of the Act. Therefore, in all practical purposes, after the amendment, the patent agents have been made amenable to the respondents, since the term advocate has been deleted from the section. It is further contended that if a practicing lawyer is permitted to register as patent agent, as per the Act, prior to the amendment, being a legal practitioner, he may directly approach the High Court and the Supreme Court, in case an order passed by an authority under the Patents Act is against law. Hence, prior to the amendment, the authority was made more vigil in following Rule of law and passing proper and appropriate orders, regarding the duties and functions of patent agents. If all the patent agents are selected only by the respondents, as per the procedure prescribed by the respondents, leaving Advocates, there would be no broad outlook in the functioning of patent agents, in respect of preparation, drafting, filing and appearing before the first respondent and make proper and broader interpretation of law, relating to Patents Act. Therefore, preventing advocates, who are more qualified in preparing documents, drafting, transact business before the Controller and permitting only the degree holders in science, engineering or technology, who passed the Departmental examination conducted by the respondents, by way of the impugned amendment, that would certainly narrow down the skill of patent agents. It was also argued by the petitioner, party-in-person that the impugned amendment violates Articles 14, 19 (1) (g) and 21 of the Constitution and the amendment is also not beneficial to the interest of the common people and the country.

41. The Court can also take judicial notice that if any lawyer is permitted to register as patent agent, he may directly challenge any order passed by the respondents or any other officers subordinate to the respondents, in case the order is contrary to law, however, persons selected by the respondents, on the syllabus prescribed and the examination conducted by the respondents and also appointed by them, the respondents would have professional control over the said patent agents and normally they would be amenable to the authorities under the Patents Act and that would not beneficial to the larger interest of the pubic and that may likely to increase corruption.

42. In this regard, it is relevant to refer the Golden Words that "Power corrupts a man and absolute power corrupts absolutely". Leaving advocates and creating only a group of persons, who pass the departmental examination conducted by the respondents as patent agents, which will create only a narrow circle and they may be amenable to the officers of the respondents, however, that would not be in the larger interest of the public. In any angle, I am of the considered view that deleting sub-clause (i) to section 126 (1) (c) of Patents Act, by way of the impugned amendment, whereby preventing advocates from becoming patent agents, would be against the mandate of Article 14, on the ground that the same is against equality before law and equal protection of law, as unreasonable class-legislation.”

IPAB Stays Revocation of Sunitinib Patent until May 13, 2013

Vide an order delivered on April 5, 2013 (available here), the IPAB has stayed the revocation of the Sunitinib patent IN209251 which was revoked by the Controller of Patents on February 11, 2013. The revocation order has been stayed until May 13, 2013 subject to an undertaking from Sugen Inc that the patent would not be used against Cipla in “other proceedings”. I thank a friend and well-wisher for alerting me to this development!

The matter has been fixed for hearing on Sugen’s main appeal against the revocation on May 13, 2013.

The primary ground for stay of the revocation order raised by Sugen was that the Controller had considered the ground under Section 25(2)(b) when such a ground had not been pleaded by the Opponent Cipla. On this issue, the IPAB observed thus:

"14.        Union of India v. Col.J.N.Sinha [(1970) 2 SCC 458]  was cited to support the appellant’s case that the rules of natural justice can operate only in areas not covered by any law and they do not supplant law but supplement it.  Bachhaj Nahar v. Nilima Mandal [(2008) 17 SCC 491] was cited in support of their case that no amount of evidence can be looked into upon a plea which was never put forward in the pleadings and that the Court cannot make up a case not pleaded.  But in the same case, the Hon’ble Supreme Court has stated that the case not specifically pleaded can be considered where the pleadings in substance, though not in specific terms, contain the necessary averments and the parties were conscious of the plea put forward.   Therefore, the fact that in the statement of case certain grounds were taken and certain grounds were not taken will not clinch the issue,  if in the body of opposition, the opponent had in clear and categorical terms raised the objection against the grant of patent.  Therefore, this issue relating to Section 25(2)(b) will not prevail with us at this stage of grant of stay."

To me, this appears to be an unduly broad position. A challenge to the grant of a patent does not mean that by implication all grounds of challenge have been raised by the Opponent. If a specific ground has not been raised, and there are no pleadings to support the ground, mere challenge to the grant of the patent cannot be used to raise the unused ground at a later stage.

Sugen also challenged the fact that Cipla’s reply evidence was filed beyond time and therefore ought not to have been taken on record. To this the IPAB said that this ground was being raised at a belated stage when this could have been raised before the Controller.

The other ground raised by Sugen was that its expert’s affidavit had not been submitted to the Opposition Board for its consideration. Consequently, a critical document had not been evaluated and therefore the procedure stood vitiated. To this, Cipla countered saying this objection was being raised for the first time.

Sugen responded saying it could not have raised this ground until it had access to the contents of the report of the Opposition Board. Since the Report of the Board was supplied to it only after direction from the Supreme Court, it was justified in raising this ground at this stage. Following were the observations of the IPAB on this issue:

“It is the appellant’s contention that the ground relating to non-furnishing of the second Dr.Cui affidavit to the Opposition Board was known to them only after the report was filed and therefore, they could not have raised this ground earlier.  Assuming without accepting this plea, we definitely feel that the other two grounds could have been raised in the earlier writ petition, but they had not chosen to do so. Therefore, they cannot be grounds which can be raised now for the purpose of grant of stay.”

Having said this, the IPAB went on to grant a stay on the revocation on the following grounds:

“19.  The grounds that were raised on merits by the appellant are grounds that are to be examined in detail while we hear the appeal.  According to the appellant, they have a strong case for patentability of the invention and the prior arts are actually  teaching away from the invention.  The jurisdiction of this Board is restricted and limited by the statute.  We have no powers to restrain the second respondent from marketing the drug or to direct them to keep accounts if they so market the drug.  However, we cannot brush aside the apprehension of the appellant that if stay is not granted,  third parties will rush in with their generic drugs and that it will be impossible to set the clock back thereafter.  We are also informed by the letter from the Controller’s Office that the patent will not be removed and the details of the patent remain on the Register with the endorsement as to the orders passed by the Controller or IPAB or the High Court. 

20.  Considering the injury that may be caused to the appellant, if the order of revocation is not stayed,  we grant stay till 13^th May, 2013, subject to the undertaking given by the appellant that they will not use the revoked patent against the second respondent herein in other proceedings.  The petition is ordered accordingly. List the main appeal along with the connected appeal on 13^th May, 2013.”

We will keep our readers posted on the developments in the case. 

U.S Supreme Court applies International Exhaustion in Parallel Imports of Books

On the 19th of March, the United States Supreme court decided on the much debated question of parallel importation in books in what is possibly one of the most important copyright cases of the century. The court, through this decision in Kirtsaeng v. John Wiley, legitimized grey market goods by answering the long overdue question of whether the common law doctrine of first sale applies to copies of a copyrighted worked lawfully made abroad, in the affirmative.

Facts:

Kirtsaeng, a student from Thailand studying in the US, in order to fund his education, resold textbooks in the US that were mailed to him by family and friends from Thailand. Being a lower segment market, textbooks in Thailand are available at a price much lower than in the US and through this, Kirtsaeng made profits that helped him get through college and supplement his scholarship from the Thai government.

Enter the respondent, John Wiley & Sons, publisher of textbooks, which prints, publishes and sells abroad through its fully owned subsidiary John Wiley & Sons (Asia). In 2008, Wiley sued Kirtsaeng for infringement of its exclusive right to distribute and import its copyrighted textbooks under 17 USC Section 106(3) and 602, respectively. 

Doctrine of First Sale:

To succinctly summarize, the doctrine of first sale allows the owner of a copyrighted work to sell or dispose the work in any manner as he wishes. The question under consideration in the present case was whether the Doctrine of First Sale as embodied in 17 U.S.C Section 109(a) applies to copies of a copyrighted work lawfully made abroad. Specifically, the issue was whether the textbooks imported from Thailand to be considered as ‘lawfully made under this title’. The doctrine is set out in the provision which reads as follows:

"Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."

Section 109(a) is one of the many limitations on the exclusive right of a copyright owner to distribute copies of the copyrighted work to the public through sale which is provided for under Section 106(3).

Decision:

The court, speaking through Justice Breyer, in a 6-3 decision, held that there is no geographical limitation on the operation of the doctrine, either in the language of the statute or in the intent of the legislature as deciphered from the history of the Copyright Act. It further clarified that the phrase ‘lawfully made under this title’ does not impose any such limitation on copies that are ‘lawfully’ made abroad.

The court identified 3 problems with reading geographical limitation into the provision. Firstly, that such an interpretation would render the word ‘lawfully’ redundant, as it is absurd to think of a situation where something is ‘unlawfully’ made under this title. Secondly, reading in such a limitation would not be in consonance with the ‘equal treatment’ principle between domestically manufactured copies and those made abroad. Thirdly, it was a parade of horribles. It was noted by the court that such an interpretation would result in disastrous consequences for libraries, the used book industry, museums as well as industries such as the automobile industry. 

The court noted as follows:

“Associations of libraries, used-book dealers, technology companies, consumer-goods retailers, and museums point to various ways in which a geographical interpretation would fail to further basic constitutional copyright objec­tives, in particular “promot[ing] the Progress of Science and useful Arts”

It is also pertinent to note the court’s observation that the doctrine prior to codification in the statute was a common law doctrine and the Congress is presumed to retain the substance of common law which does not impose geographical limitations.

The court ended with the following lines with a beautiful note to the respondents:

“Wiley and the dissent claim that a nongeograph­ical interpretation will make it difficult, perhaps impos­sible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights…. The Constitution’s language nowhere suggests that its limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain”

Implications of the decision:

The decision is bound to have implications on pricing practices of copyright holders in the US. This holding against the interests of copyright holders reduces the incentives to engage in price discrimination across different markets. This may result in an increase in prices of such works in low and middle segment markets or result in their abandonment altogether.

The decision is also likely to resolve a similar case on the point, Pearson Education v. Liu, which is now pending before the US Supreme Court.

As the tremendously enjoyable IPKat blog notes, the ruling also confirms that the decision applies only to analogue copies of copyrighted works. Procuring a digital copy does not make the procurer the proprietor of such a copy (the procurer will merely be a lessee) and thus, the first-sale doctrine does not apply in such cases.

If the US, being a pro-copyright regime can allow parallel imports, India should perhaps take cue. Courts in India have time and again enlarged the scope of exclusive rights under copyright law by disallowing parallel imports in the book industry even where such copies have been lawfully procured.

Even post the decision in Penguin Books Ltd v. India Book Distributors courts have continued to hold parallel imports to be illegal despite the explanation added to Section 14 through the amendment in 1994. The explanation which states that ‘For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation’ has been overlooked in subsequent cases such as Eurokids International Pvt. Ltd v. India Book Distributors Ltd. decided by the Bombay High Court.

As Mr. Ananth Padmanabhan, who in his excellent book Infringement and Remedies in Intellectual Property Rights (which has also greatly enriched my understanding on the point) notes on page 407, it is incorrect to manipulate the words of a statute by courts merely because the sale of low priced editions elsewhere is perceived to be unfair. It is the duty of the legislature to step in and make appropriate changes if such an end is, in fact, desired.

Breaking News: Interim Injunction Denied to Merck by the Delhi High Court

In a 22-page decision (available here) delivered on April 5, 2013, a Single Judge of the Delhi High Court denied interim injunction to Merck in its suit for patent infringement against Glenmark Pharmaceuticals. Merck’s patent IN209816 claimed the drug sitagliptin sold under the name “Januvia/Janumet” which is used to treat non-insulin dependent diabetes (Type 2), and restraint was sought against Glenmark’s “Zita/Zita-met”.

The suit was heard just 3 days ago, on the 2^nd of April. Glenmark, which was on caveat, was represented in the Court by Dr.Abhishek Manu Singhvi, while Merck was being led Mr.Parag Tripathi. Despite Glenmark’s request that it was only contesting the grant of an ex parte relief, and not with respect to the interim injunction itself, the learned Single Judge took the view that Glenmark was prepared to argue the interim injunction itself, and proceeded to hear the application.  Here’s the relevant portion:

“I may however record that the senior counsel for the defendant has argued that the application for interim relief should not be disposed of and the Court at this stage should consider only the aspect of grant of ex-parte relief, saving the disposal of the application to after the reply thereto has been filed but the said request was declined as the defendant had come well prepared with the case which it was required to meet and has chosen to make lengthy arguments in opposition and the Court cannot repeatedly grant opportunities to the parties.”

On merits, Glenmark alleged that Merck had 3 different patents in the US covering 3 products, namely Sitagliptin, Sitagliptin Phosphate and another derivate of Sitagliptin respectively. However in India, there is only one patent claiming Sitagliptin Hydrochloride, and the applications for the other two derivates stand abandoned By Merck. Consequently, according to Glenmark, the other two derivatives could not now be claimed as part of the sole subsisting Indian patent. Para 156 of the Novartis judgment on coverage and disclosure was cited to support this argument.

Merck, on the other hand argued, that the phosphate salt must be deemed to be included as part of the patent on Sitagliptin in light of Section 3(d). Further, Merck drew attention to Glenmark’s patent application in the US wherein it was stated that Sitagliptin Phosphate is a pharmaceutically acceptable salt of Sitagliptin.

The Court narrowed down the issue to the following question- “Does the phosphate salt materially alter the working of the Sitagliptin? If no, then isn’t the addition of the salt an immaterial variant?”

When the above question was posed to Glenmark, the judgment says no satisfactory response was forthcoming. Here’s the relevant portion:

“20. I had for this reason asked the senior counsel for the defendant to explain as to how the combination by the defendant in its product of Phosphate with SITAGLIPTIN amounted to a different treatment of Type-II Diabetes than treatment by SITAGLIPTIN. 

21. No satisfactory response was forthcoming.

22. To my mind, if the infringing product are made with the same object in view which is attained by the patented article, then a minor variation does not mean that there is no infringement. Trifling and unessential variations are to be ignored. Conversely, a miniscule advancement could be recognized as an invention.

These observations could lead any reader to conclude that the Court was convinced that there was a prima facie case of infringement, however, the following paras reflect the subsequent turn of the tide:

“23. Interestingly in the present case, the plaintiff Merck as patentee of SITAGLIPTIN is also not marketing SITAGLIPTIN alone as a product and is marketing Sitagliptin in combination with Phosphate just as the defendant is doing. The senior counsel for the plaintiff in his opening argument, on being asked to demonstrate infringement, had done so on the basis of identical pharmaceutical composition of the product of the defendant as of the plaintiff.

24. However the defendant pointed out that the patent of the plaintiff Merck was not in the pharmaceutical composition as described on plaintiff’s product but only in a part thereof and which fact was not denied by the plaintiff. Thus, similarity of pharmaceutical composition of the products cannot be a ground for infringement.

25. Strangely, the plaintiff, neither in the plaint nor in the opening arguments has pleaded/made out a case on which ultimately interim relief is claimed, i.e., of Sitagliptin Phosphate being made by the defendant being made with the same object as the patent of the plaintiff and the addition of Phosphate to the patented SITAGLIPTIN not embodying any inventive advancement and the treatment of Type-II diabetes by Sitagliptin Phosphate being no different from treatment by SITAGLIPTIN.”

True, product to product comparison is not the basis for infringement. That said, if the Court can form a view on whether the phosphate salt is an immaterial variant of Sitagliptin, wouldn’t the issue be answered? But again, Merck’s own treatment of the products and existence of separate US patent did not help its case. This coupled with the absence of a claim to product comparison to establishment infringement, dissuaded the judge from granting an interim injunction. Here are the relevant paras:

“28. The position which thus prevails today is that we have the argument of the defendant of Sitagliptin Phosphate being a different product than patented SITAGLIPTIN together with the plaintiff Merck’s admission to the same effect in its patent applications aforesaid for Sitagliptin Phosphate. Though the plaintiff when faced therewith has urged such patent applications to be a mis-adventure, under wrong advise at least in India, but the plaintiff in the plaint has not pleaded so.

29. I have wondered whether in the absence of the plaintiff having pleaded so, can interim relief be granted on the basis of such explanation. The answer has to be an emphatic no. It was for the plaintiff to plead the circumstances in which its application for a separate patent in Sitagliptin Phosphate was made and to explain away the admission made therein. The plaintiff has not done so. Though it may be open for the plaintiff to at the trial explain so, but the plaintiff certainly cannot be granted interim relief on a case not pleaded and in the face of its admission of Sitagliptin Phosphate being a new invention worthy of patent.”

But what surprises me is the following observation of the Court:

“26. The plaintiff in a suit restraining infringement of patent ought to have known the defence which the defendant has put forth and ought to have met the same in the plaint, as has been done in the arguments in rejoinder by arguing on “basic” and “improvement” patents. There is not an iota of pleading on the said aspect...”

How can a party be expected to anticipate the arguments of the other side? I am not sure...

A Pill by Any Other Name Would Work As Neat

The title of the post, according to me, is the essence of the decision of the Indian Supreme Court in the Novartis case. I think the Supreme Court has done justice to the object of inclusion of Section 3(d) and has effectively sent out a very balanced positive (yes, not negative) message in the process- India does encourage genuine enterprise and innovation.

The Supreme Court has been pragmatic and careful enough to categorically draw an unequivocal distinction between “ever-greening” and “incremental innovation”, which is evident from the manner in which ever-greening was established in the facts of the case, and the following observation of the Court:

“191. We have held that the subject product, the beta crystalline form of Imatinib Mesylate, does not qualify the test of Section 3(d) of the Act but that is not to say that Section 3(d) bars patent protection for all incremental inventions of chemical and pharmaceutical substances. It will be a grave mistake to read this judgment to mean that section 3(d) was amended with the intent to undo the fundamental change brought in the patent regime by deletion of section 5 from the Parent Act. That is not said in this judgment.”

If there was any doubt about the status of incremental innovation under the Patents Act, 1970 (“Act”), this paragraph removes all such doubts/myths with abundant clarity. Therefore, there need not be any fear-mongering that the decision has shut the doors on incremental pharma innovation.

If anything, this decision has only clarified the position of the law by etching the contours of “efficacy” as envisaged in the Act, thereby reducing uncertainty to a fair extent, which is significant from a commercial standpoint. Lack of clarity in law leads to capricious application, and to the extent the Novartis decision “enhances known clarity” of the law, it is a positive development for all prospective patent applicants.

What is also to be critically noted is that, contrary to what is popularly assumed, the Supreme Court did not even take the blanket position that “enhanced bioavailability” cannot be used to satisfy the requirement of “enhanced efficacy” under Section 3(d). Here’s the relevant extract of the judgment which bears out my point:

“189. Thus, even if Mr. Grover’s submission is not taken into consideration on the question of bioavailability, the position that emerges is that just increased bioavailability alone may not necessarily lead to an enhancement of therapeutic efficacy. Whether or not an increase in bioavailability leads to an enhancement of therapeutic efficacy in any given case must be specifically claimed and established by research data. In this case, there is absolutely nothing on this score apart from the adroit submissions of the counsel. No material has been offered to indicate that the beta crystalline form of Imatinib Mesylate will produce an enhanced or superior efficacy (therapeutic) on molecular basis than what could be achieved with Imatinib free base in vivo animal model.

190. Thus, in whichever way section 3(d) may be viewed, whether as setting up the standards of “patentability” or as an extension of the definition of “invention”, it must be held that on the basis of the materials brought before this Court, the subject product, that is, the beta crystalline form of Imatinib Mesylate, fails the test of section 3(d), too, of the Act.”

It is evident that the finding with respect to absence of enhanced efficacy in the case was on the basis of the record of the case, rather lack of it, to establish enhanced efficacy. Had the patent applicant presented a co-relation between increased bioavailability and enhanced efficacy, which was supported by empirical evidence, nothing stops us from plausibly assuming that the Court would have ruled in its favour.

What is also surprising is that once the arguments before the Supreme Court commenced, surely Novartis would have sensed the mood of the Court, and realized that empirical data to prove the relationship between bio-availability and efficacy was absolutely necessary if its case was to have a decent chance of success. And yet, based on the contents of the judgment, it does not appear that there was any attempt to present any such data or scientific evidence. It is even more surprising considering that lack of data has been the primary flaw in the application right from the stage of opposition before the Patent Office.

Now, let’s look at a few other positives of the decision. The Novartis judgment, despite a few avoidable inconsistencies, is a fairly reasoned one, at least on critical issues such as Section 3(d). Also, contrary to what was expected by a cross-section of foreign investors, the decision does not take an anti-patent or anti-patentee stance. In fact, there is a clear message to protect genuine inventions using patents, and prevent subversion of the patent system, which is after all a re-statement of the stated goals of patent jurisprudence. Here’s the relevant observation of the Court:

“156. However, before leaving Hogan and proceeding further, we would like to say that in this country the law of patent, after the introduction of product patent for all kinds of substances in the patent regime, is in its infancy. We certainly do not wish the law of patent in this country to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skilful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”

For a fledgling patent regime which is still exploring itself, setting out these first principles is important. One hopes that this sentiment percolates every level of the Indian Patent establishment, right from the Department of Industrial Policy and Promotion to the Indian Patent Office to the Intellectual Property Appellate Board and finally to Indian Courts.

A word of caution here would not be out of place- a few enthusiastic health professionals seem to be reacting to the decision of the Supreme Court with unmeasured glee and jubilance, thereby contributing to a situation where India is pitted against innovator drug companies. I don’t think such a situation is in the best interests of the country. India needs innovator companies which have solutions to the ever-growing list of life-threatening diseases, and equally needs the generic industry which has mastered the art of providing cost-effective access to drugs. Until such time the Indian industry is capable of confidently undertaking high-end drug development, it would help to observe a sense of restraint since the law has anyway proved its effectiveness.

Novartis Decision: Disclosure and its Nexus to Section 3(d)

In the Novartis case, the Supreme Court dealt with the law on disclosure and anticipation. This is because in order to apply Section 3(d) to the Glivec application, it was imperative to first prove that the beta crystalline form was a “new form of a known substance”. Therefore, whether there was a “known substance”, if yes, which was the “known substance” were to be answered as part of this enquiry.

Novartis took the position that the Imatinib free base must be treated as the “known substance” with reference to which the issue of enhanced efficacy must be addressed. According to Novartis, Imatinib Mesylate was not a known substance with respect to its application since there was no literature which enabled the manufacture of the mesylate salt. Therefore, the mesylate salt was not a known substance according to Novartis. This was the position adopted by the IPAB as well.

The Court, on the other hand, took the view that the Mesylate salt had been disclosed in the Zimmerman patent. In Paras 108-126, the Court has dealt with the specification of the Zimmerman patent (Column 3, Lines 21-65), and Novartis’s own application for term extension of the Zimmerman patent where it was stated thus:

“(9) Statement Showing How the Claims of the Patent for Which Extension is Sought Cover the Approved Product: The operative claims in question are Claims 1-5, 10-13, and 21-23. Each of claims 1-5, 10-13 and 23 claim a compound or compounds which include the approved product, imatinib mesylate. Claim 21 claims a composition containing a compound or compounds which include the approved product, imatinib mesylate. Claim 22 claims a method of treating tumors in warm-blooded animals with a compound or compounds which include the approved product, imatinib mesylate.”

Clearly, if one were to apply the infringement test to the Zimmerman patent, it becomes apparent that on the basis of the said patent Novartis could have prevented manufacture of the mesylate salt by a third party. And this is precisely what Novartis did with respect to NATCO’s VEENAT product, whose active ingredient was imatinib mesylate. From the decision, it appears that Novartis sent a legal notice to NATCO alleging infringement of its Zimmerman patent by VEENAT. If this be the case, then the mesylate salt is clearly disclosed and claimed in the Zimmerman patent.

Apart from these documents, the Court also placed reliance upon journal publications of 1996 by Novartis’s inventor Jurg Zimmerman wherein the mesylate salt had been disclosed.

To this, Novartis argued that these documents merely “covered”/mentioned the mesylate salt, but had not disclosed it. It was also submitted with respect to the Zimmerman patent that “claim defines through language the various ways the invention could be used, i.e., possible but not actualized products” and that the standard for disclosure was higher than this.

I am not sure how tenable this argument is on facts because a reading of column 3 of the specification of the Zimmerman Patent  makes it difficult to claim that imatinib mesylate was not “disclosed” in the patent. Below are certain paras from Column 3:

“Salt-forming groups in a compound of formula I are groups or radicals having basic or acidic properties. Compounds having at least one basic group or at least one basic radical, for example a free amino group, a pyrazinyl radical or a pyridyl radical, may form acid addition salts, for example with inorganic acids, such as hydrochloric acid, sulfuric acid or a phosphoric acid, or with suitable organic carboxylic or sulfonic acids, for example aliphatic mono- or di-carboxylic acids, such as trifluoroacetic acid, acetic acid, propionic acid, glycolic acid, succinic acid, maleic acid, fumaric acid, hydroxymaleic acid, malic acid, tartaric acid, citric acid or oxalic acid, or amino acids such as arginine or lysine, aromatic carboxylic acids, such as benzoic acid, 2-phenoxy-benzoic acid, 2-acetoxybenzoic acid, salicylic acid, 4-aminosalicylic acid, aromatic-aliphatic carboxylic acids, such as mandelic acid or cinnamic acid, heteroaromatic carboxylic acids, such as nicotinic acid or isonicotinic acid, aliphatic sulfonic acids, such as methane-, ethane- or 2-hydroxyethane-sulfonic acid, or aromatic sulfonic acids, for example benzene-, p-toluene- or naphthalene-2-sulfonic acid. When several basic groups are present mono- or poly-acid addition salts may be formed. 

For the purposes of isolation or purification, as well as in the case of compounds that are used further as intermediates, it is also possible to use pharmaceutically unacceptable salts. Only pharmaceutically acceptable, non-toxic salts are used for therapeutic purposes, however, and those salts are therefore preferred.

Owing to the close relationship between the novel compounds in free form and in the form of their salts, including those salts that can be used as intermediates, for example in the purification of the novel compounds or for the identification thereof, hereinbefore and hereinafter any reference to the free compounds should be understood as including the corresponding salts, where appropriate and expedient.”

The argument/approach advanced by Novartis also seeks to leave out of the discussion, the knowledge of a person skilled in the art to make a pharmaceutically acceptable salt of a new compound. Critically, it appears that according to Novartis, it is possible to claim/cover a product, without disclosing/enabling it, warranting the following reaction from the Supreme Court:

“139. The dichotomy that is sought to be drawn between coverage or claim on the one hand and disclosure or enablement or teaching in a patent on the other hand, seems to strike at the very root of the rationale of the law of patent. Under the scheme of patent, a monopoly is granted to a private individual in exchange of the invention being made public so that, at the end of the patent term, the invention may belong to the people at large who may be benefited by it. To say that the coverage in a patent might go much beyond the disclosure thus seem to negate the fundamental rule underlying the grant of patents.”

Assuming one were to hold Novartis to its own position, does this mean the Zimmerman patent claims pharmaceutically acceptable salts without disclosing the method of making it? In fact, in the Zimmerman patent, from my reading of it, salt claims have been appended to independent claims as “or a pharmaceutically acceptable salt”. So if these salts have only been claimed but not disclosed/enabled, wouldn’t this be violative of Section 112 of the US patents Act?...

In light of the above, it becomes apparent that “Imatinib Mesylate”, not the free base, is the “known substance” with respect to which enhanced efficacy must be established. The other reason why imatinib free base must not be used as the benchmark to judge efficacy is that, if efficacy were to be hypothetically treated as including bioavailability, wouldn’t it be obvious that the salt form would have greater bioavailability than the free base? If yes, wouldn’t this be an obvious contribution lacking in inventive step? I think so. 

Novartis Decision: Interpretation of “Invention”, “Inventive Step” and Interplay with Section 3(d)

The Novartis decision raises several fundamental questions which quite a few of us have been pondering over for quite some time. For instance, the need for and relevance of definition of “new invention” in Section 2(1)(ta) of the Act. If the definition of invention under Section 2(1)(j) already refers to a “new product or process” which is then governed by “Anticipation” in Chapter VI, where is the need for another term called “new invention”? I’d be grateful if readers could point out any section or rule of the Patents Act other than  Section 2(1)(ta) which uses the term “new invention”.

The Supreme Court has attempted to address some of these issues in its decision. For instance, in Paras 25 and 26, the Court asks thus:

“25. Some important provisions of the Patents Act, 1970, as they stand after the amendment of the Act in 2005, and with which we are especially concerned in this case, indeed present a problem of interpretation. Why was section 5, which, in one sense, was the distinctive feature of the patent law in India, taken off the statute book? What does the legislature wish to say through clauses (j) and (ja) of section 2(1), section 3 and several other sections? How is it that some of the provisions of the Act apparently seem to be of no use or purpose, e.g., sections 2(1)(l) and 2(1)(ta)? Why is it that some of the crucial provisions in the Act appear to be wanting in precision and clarity?

26. It is easy to know why section 5 was deleted but to understand the import of the amendments in clauses (j) and (ja) of section 2(1) and the amendments in section 3 it is necessary to find out the concerns of Parliament, based on the history of the patent law in the country, when it made such basic changes in the Patents Act. What were the issues the legislature was trying to address? What was the mischief Parliament wanted to check and what were the objects it intended to achieve through these amendments?”

Though these questions were raised in Page 14 of the decision, the Hon’ble Court goes on to discuss the entire history of the Indian Patent regime and its tryst with TRIPS until Para 86@Page 50....It is only again in Para 87 that the Court returns to the issue of “invention” and “inventive step”.

In an earlier post titled “Inventive Step under the Patents Act: Where is the Confusion”, I had taken the following view to clear a few prevalent misconceptions about the definition:

“Therefore, inventive step does not refer solely to a “non-obvious technical advance”, but in fact refers to a “non-obvious feature” which involves either a technical advance or has economic significance or both.

...

The other important corollary is that the presence of technical advance is not the sole criterion to judge if an invention has an inventive step. Economic significance of a feature which is non-obvious too by itself could help the product or the process satisfy the “inventive step” requirement. Importantly, the criterion of economic significance is equally applicable to products and processes.”

Following is what the Supreme Court has held in Para 90@Page 52 of its decision:

“90. On a combined reading of causes (j), (ac) and (ja) of section 2(1), in order to qualify as “invention”, a product must, therefore, satisfy the following tests:

(i) It must be “new”;

(ii) It must be “capable of being made or used in an industry”

(iii) It must come into being as a result of an invention which has a feature that:

(a) entails technical advance over existing knowledge;

Or

(b)has an economic significance

And

           (c) makes the invention not obvious to a person skilled in the art.”

Clearly, according to the Supreme Court, a feature which has an economic significance, which feature also makes the invention non-obvious qualifies as “inventive step” under the Patents Act. In other words, it is not just technical advance that qualifies as “inventive step”. The “or” in the definition is meant to distinguish between “technical advance” and “economic significance”. That settles the issue for good...

Relationship Between Section 2(1)(j) and Section 3: “Invention” and “Patentability”

The Supreme Court, in Paras 91 and 92, has taken the view that “invention” and “patentability” are two distinct requirements that a patent application has to satisfy for grant of a patent. The Court has noted that “Something may be an “invention” as the term is generally understood and yet it may not qualify as an “invention” for the purposes of the Act. Further, something may even qualify as an “invention” as defined under the Act and yet may be denied patent for other larger considerations as may be stipulated in the Act.”

With specific reference to the nature of proscriptions under Section 3, the Court observed in Para 92 that “section 3, it puts at one place provisions of two different kinds: one that declares that certain things shall not be deemed to be “inventions” [for instance clauses (d) & (e)]; and the other that provides that, though resulting from invention, something may yet not be granted patent for other considerations [for instance clause (b)]”

Again in Para 181, the Court took the following view:

“181. While dealing with the explanation it must also be kept in mind that each of the different forms mentioned in the explanation have some properties inherent to that form, e.g., solubility to a salt and hygroscopicity to a polymorph. These forms, unless they differ significantly in property with regard to efficacy, are expressly excluded from the definition of “invention”.....(continued)”

In other words, if the subject-matter of a patent application fails to overcome the requirement of Section 3(d), it is not an invention within the meaning of the Act under Section 2(1)(j). Therefore, at least with respect to pharmaceutical substance, Section 3(d) must be used as the first filter before the subject-matter is tested on the anvils of Section 2(1)(j). This was exactly the view taken by the IPAB in the Yahoo decision on Section 3(k), which was as follows:

“Finally we come to the ground of non-patentability under S. 3 (k). If the claimed subject matter is not an invention or if the invention is not patentable or if it is excluded by S.3 of the Act, then none of the other objections need to be considered. Only if the claimed subject matter is a patentable invention we need to look at anticipation, obviousness etc.”

It is another matter that the IPAB itself was inconsistent in the application of this logic in the very same Yahoo decision...

Similarly, in the Novartis decision, having stated clearly in Para 181 that forms of a chemical substance which do not exhibit significantly different efficacy characteristics are “expressly excluded from the definition of invention”, the Supreme Court again blurs this position by stating as follows in Para 192 (read with Para 104):

“192. Section 2(1)(j) defines “invention” to mean, “a new product or …”, but the new product in chemicals and especially pharmaceuticals may not necessarily mean something altogether new or completely unfamiliar or strange or not existing before. It may mean something “different from a recent previous” or “one regarded as better than what went before” or “in addition to another or others of the same kind”. However, in case of chemicals and especially pharmaceuticals if the product for which patent protection is claimed is a new form of a known substance with known efficacy, then the subject product must pass, in addition to clauses (j) and (ja) of section 2(1), the test of enhanced efficacy as provided in section 3(d) read with its explanation”

The above-underscored line gives room for some to say that only after the claimed subject-matter is tested under Section 2(1)(j) and (ja), it must be additionally scrutinized under Section 3(d). In the absence of the above statement, it would have been possible to test the invention first for satisfaction of Section 3(d), and if it failed to overcome the provision, there would be no further need to examine it under Section 2(1)(ja). This would have been better since a Section 3(d) analysis, by its very nature, entails a check for novelty as well.

It remains to be seen how the Patent Office and the IPAB interpret and apply the decision of the Supreme Court in this regard to pharma and chemical applications henceforth.