Extracts from IPAB's Order in Bayer's Stay Application on CL Order

In its 17-page order, the IPAB has dismissed Bayer’s application for stay of the CL Order passed on March 9, 2012 by the Controller General of Patents to NATCO in connection with Bayer’s patented drug  Sorafenib Tosylate sold as ‘Nexavar’. I thank a "Frequently Anonymous" friend for sharing the order with me for the benefit of the blog's readers.

Bayer’s Arguments

1. Para 5- According to Bayer, its drug was available with 334 Medical institutions in 102 hospitals. Bayer argued that the Controller ought to have granted adjournment as provided in S.86(1) to afford Bayer time to work the invention and that the Controller’s refusal to grant the adjournment was contrary to law.

2. Bayer also argued that “work” in S.84(1)(c) includes import and not necessarily local manufacture as evidenced from Form 25. Bayer further claimed that it had provided enough evidence of “working” and that “even import of small quantity and a de minimis proof of working” is sufficient proof of working under the Act. Article 27 of TRIPS was cited to support this argument.

3. The Controller General had failed to fix a reasonable price in accordance with Section 90 of the Patents Act which requires the Controller to take into account the expenditure incurred by the Patentee.

4. Para 5, Internal Page 4- Importantly, according to Bayer, Cipla’s sale of  Sorafenib Tosylate is legal. Bayer has even argued that since the drug was being made available by CIPLA at INR 5400, there was no need for grant of a CL to NATCO. Following is an excerpt from the order which captures Bayer’s contention:

“The public interest, public requirement and supply at reasonably affordable price have all been met by CIPLA, so there was no justification for this order.”

5. In breach of the terms of the CL, NATCO was exporting the drug to Pakistan and China.

NATCO’s Arguments

1. Para 9- “It was submitted that S.84 must be seen through the prism of S.83. The argument that CIPLA meets the requirement of the public at a reasonably affordable price is a tacit admission of the Bayer’s default. If Bayer wanted CIPLA’s presence to be factored in while considering the public interest angle, then it should have included the sales of CIPLA in Form 27 for “working”

2. “It was submitted that the words “reasonably affordable” should be understood leaning towards the ordinary man to whom Rs.2.84,000 is clearly not affordable. The learned counsel referred to documents to show that even a country like UK had found the price of Nexavar too high.”

IPAB

1. Para 18- Importation is included in the definition of working, but importation alone cannot be equated with working. True scope of working would need to be decided at the final hearing.

2. Para 20- “The Act does not indicate how long the compulsory license applicant must “woo‟ the patentee to get the license, it only states that Controller shall take into account whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and whether the efforts have failed within a reasonable period as “the Controller may deem fit”.

The applicant asked, the patentee replied that it was fully compliant with the fundamental objectives of patent law and therefore it does not consider it appropriate to grant license to the applicant. Clearly “Barkis was not willin’”

3. Para 22- “The words, “reasonably affordable” must be only seen from the eyes of those who need Nexavar. The learned Senior Counsel for the appellant said that even Rs 8000/- per month will be out of reach to many Indians in view of the per capita income. True, but that cannot mean that the price shall be raised higher, for then it will go out of reach to more number of Indians.

At Rs 8000 per month, more number of HCC/RCC stricken Indians will find it reasonably affordable, than if it is fixed at Rs 30,000 per month, and of course at Rs 2,80,000 it is beyond reach. So prima facie there is no error in the Controller fixing the price at Rs, 8880/- per month.”

4. Para 27- “We are unable to understand whether, according to the appellant, CIPLA rides with them or CIPLA is its rival, whether CIPLA is a friend or foe. When the grounds of section 84(1)(a) and 84(1)(b) are raised, the appellant wants us to take into the reckoning CIPLA’s presence.

CIPLA is satisfying the reasonable requirement of the public and therefore, the Board should not look at the ground under sub-section (1)(a) and CIPLA‟s product  is available to the public at a reasonably affordable price and so, the Board should not look at the ground under sub-section (1)(b).

Therefore, for these two grounds of attack, the appellant takes the presence of CIPLA along with it, but for the ground of attack under section 84(1)(c), the appellant takes a stand that CIPLA is its enemy which prevented the appellant from entering the market. We cannot accept this mutually inconsistent stand.”

5. Para 28- “CIPLA’s presence in the first place may loosely be called a “litigious” presence. If injunction had been granted by the Hon’ble Delhi High Court, CIPLA will not be in the market. Though the appellant is fighting CIPLA tooth and nail before the Hon’ble Delhi High Court, it took great pains to urge before us that CIPLA‟s presence was a legal presence....

...Further, CIPLA is not bound by any condition that is prescribed for the 3^rd respondent NATCO by the Controller general under section 90. Tomorrow, CIPLA may withdraw its product, Soranib for commercial reasons of its own.

The Controller General who has weighed the public interest in his mind rightly refused to reckon CIPLA’s presence in arriving at his decision. It is for the appellant/patentee to show that it has fulfilled the obligation under the grant of patent and therefore, its right should be protected.”

6. Para 29- “The powers of the Controller conferred by this Chapter must be viewed with the lens of section 83. Almost every sub-section in section 83 begins with the words, “patents are granted” which means that it should be viewed only from patentee’s angle”

7. Para 30- “Therefore, when we look at section 84 of the Act, having regard to section 83, as we are directed by that section, it is clear that it is the duty of patentee to show that the patentee by its own supply has satisfied the reasonable requirement of the public and by its supply, the drug is made available at a reasonably affordable price.

The appellant cannot ride piggyback on CIPLA’s sale, particularly when the appellant is fighting CIPLA before another forum regarding the same invention and the same drug”

8. Para 34- “The appellant has not made out a prima facie case for the grant of stay, since even its own admission is that it is CIPLA which is supplying the drug to satisfy the needs of the public. It is not the case of the appellant that its supply is at a reasonably affordable price and satisfies the reasonable requirement of the public.  

As regards public interest, we have already concluded in the earlier paragraphs that CIPLA’s presence is subject to litigation and CIPLA’s supply cannot be taken note of.   If stay is granted, it will definitely jeopardise the interest of the public who need the drug at the later stage of the disease, since it is admitted that this drug improves the quality of life.

Therefore, the right of access to affordable medicine is as much a matter of right to dignity of the patients and to grant stay at this juncture would really affect them and further, it would in effect amount to deciding the main petition itself. Though this is not a reason why we are not granting stay, yet this is an additional factor.”

Breaking News: IPAB Dismisses Bayer’s Prayer for Stay on CL Order

The Economic Times has reported that the Intellectual Property Appellate Board (IPAB) has dismissed Bayer’s prayer for stay on the Compulsory Licensing Order Issued this March by the Controller General of Patents to NATCO on Bayer’s patented drug Nexavar.

According to The Hindu, the following were the IPAB’s observations:

“If [a] stay is granted, it will jeopardise the interests of the public who are in need of the drug. The appellant has not made out any case…”

“The appellant cannot ride piggy-back on, or take shelter under, the sale by Cipla. It is the duty of patentee that its own supply be made available at [a] reasonable price to the requirement of the public.”

Further, the Board seems to have dismissed Bayer’s allegations that NATCO was exporting Nexavar to Pakistan and China. I will post more on this once I get to see the copy of the order. The hearing in Bayer’s appeal was concluded on September 6, 2012. To the best of my knowledge, the decision on the merits of the appeal has not been pronounced yet.

I thank a friend and well-wisher of the blog for bringing this development to my attention.

Off-Topic: Nexus between Creativity and Mentorship

A few hours ago, I was watching one of my all-time favourite movies “Swati Kiranam” (Telugu) starring Mammootty, Radhika and Master Manjunath (of Maligudi Days fame). The film narrates the fictional story of a singing prodigy whose creativity is steadily snubbed and snuffed out by an established classical singer under the garb of mentorship.

For me, the movie has three different take-aways:

1. Those of us who look for role models elsewhere would do well to draw inspiration from the glorious tradition of Indian Classical music which has produced perfectionists of the highest order.

2. Barring exceptions, raw unhewed creativity, without the benefit of mentorship, can only produce a few flashes of brilliance. Mentorship is imperative for consistent creativity.

3. Mentors must protect themselves from being afflicted by jealousy/envy.

“Consistent creativity” may sound oxymoronic thanks to the spirit of mavericism which has come to be associated with creativity. “Consistency” has probably become synonymous with lack of imagination and “standardization”. If “consistent creativity” is re-worded as “disciplined creativity”, it has too rigid a connotation and may not find favour with many.

That said, if one were to set aside all hair-splitting on semantics, and instead were to focus on the essence behind “consistent creativity”, one would understand that what is sought to be conveyed is a sense of responsibility which must go hand in hand with creativity. In other words, the truly talented/gifted ones must utilize their potential to the fullest possible extent, with a broad world view characterising the use to which such talent is put.

Responsibility/duty, contrary to the popular notion, is not a burden on “talent”. In fact, it builds a foundation which helps talent withstand negativity in the form of criticism motivated by vested interest and baser emotions like jealousy. A sense of responsibility gives talent a direction, instead of letting talent dissipate its energies in frivolous myopic pursuits or ego-trips or a game of one-upmanship.

Importantly, a duty-based approach to talent ensures that exhibitionism remains at bay, and the cause or purpose remains supreme. This is critical because talent, if not tempered by duty, is frequently mired in self-obsession and self-edification.

As for mentorship and mentors, the first and foremost qualities expected of them are a large heart and a broad mind, which are alive to and not unhappy with the prospect of finding a protégé who is better than the mentor himself or herself can ever be. Those who cannot keep jealousy at bay must never don the mantle of a mentor because not only does jealousy harm the protégé, it also pushes the mentor down a disgraceful path.

A good mentor, in my opinion, never imposes his or her mentorship on the prospective protégé, instead he recognizes the right of the protégé to accept or reject his or her mentorship. Voluntary acceptance of mentorship, to me, is a sign that the protégé respects both the mentor’s individual capabilities and his ability to act as a mentor. The pivotal role played by such voluntary acceptance is often ignored in a blind pursuit to “collect” protégés.

Voluntary acceptance of a mentor ensures that mistakes committed by the mentor are not interpreted by the protégé as the mentor’s lack of proficiency. Instead, they are treated as errors which are but human, and are hence not indicative/demonstrative of the mentor’s lack of talent. This window of error is necessary to avoid  loss of respect, and consequent ego tussle between the mentor and the mentored.

Unfortunately, these issues, which are integral to human resource management, do not appear to engage our attention as much as they ought to, when we speak of harnessing creativity for innovation. Sustained innovation calls for repeated introspection on how we handle creativity, and re-statement of values which we treat as cornerstones of an ecosystem which promotes innovation.

I look forward to hearing from our readers, especially those who have real-time experience in handling talent in their establishments.

Novartis Update: Supreme Court Asks Novartis to Cut Prices

Reportedly, the Supreme Court which has been hearing arguments in the Novartis matter since September 11, 2012, has asked Novartis to reduce the price of Glivec, the drug used to treat Chronic Myeloid Leukemia (CML) which currently costs around INR 1.2 Lakh for a month’s treatment.

The Supreme appears to have asked Novartis’s counsel Mr.Gopal Subramanium if the company would continue its programme for subsidized access to the drug if the patent on crystalline form of imatinib mesylate were to be granted.

This question was asked despite the Supreme Court acknowledging that Novartis had no legal obligation to continue the subsidized access programme. Apparently, the Apex Court urged Novartis to slash prices to earn the goodwill of the people and establish it bonafides.

In response to this suggestion by the Court, Novartis seems to have stated the following in its affidavit:

“In the event of patent being granted to petitioner, Novartis in India, undertakes to continue this programme till July 2018 and subject to there being no further regulatory price control/direction in relation to said (Glivec) product.” 

According to Health India, Novartis submitted to the Court that the number of patients afflicted with CML in India is 41,794, out of which 15,690 have been prescribed the use of Glivec. Out of these 15,690 patients, Glivec was being made available free of cost to 15,155 patients, 370 were being supplied the drug at a subsidized price and only 165 bought the drug at the full price.

Does a Pre-Grant Opponent Have a right of Appeal before the IPAB?

A decision delivered by the Chennai branch of the Indian Patent Office in a pre-grant opposition on July 16, 2012 was brought to my attention a few days ago by a well-wisher of the blog. The patent applicant was Hyderabad-based Laurus Labs, and the pre-grant opponents were Chiral Biosciences and Arch Pharmalabs. The oppositions of both parties were dismissed and a patent was granted to Laurus labs. I don’t wish to discuss the technical merits of the case. My enquiry is limited to the following observation in the last para of the Order:

“Having concluded thus both the oppositions are dismissed with no costs and patent right is hereby granted to the applicants.

However though this decision is provided under the provisions of the Section 25(1) of the Act, this decision is being issued under the provisions of the Section 15 to enable any party who feels aggrieved, may file an appeal before the Intellectual Property Appellate Board under the provisions of the Section 117-A of the Act in the prescribed manner.”

In light of this para, the question is- Can a pre-grant opponent file an appeal before the IPAB under Section 117A(1) if the opposition fails and a patent is granted?

Let me first start with Section 15:

15.     Power of Controller to refuse or require amended applications, etc., in certain cases: Where the Controller is satisfied that the application or any specification or any other document filed in pursuance thereof does not comply with the requirements of this Act or of any rules made thereunder, the Controller may refuse the application or may require the application, specification or the other documents, as the case may be, to be amended to his satisfaction before he proceeds with the application and refuse the application on failure to do so.

A reading of the provision tells us that both (1) refusal of a patent application and (2) acceptance with or without amendment are contemplated under Section 15. Further, when read with Rule 55(6) which applies to pre-grant oppositions, and which too contemplates rejection of a patent application or grant of a patent, it could be argued that the following orders fall within the scope of Section 15:

     A.     Rejection of  patent application by successful pre-grant opposition    

     B.   Grant of a patent and rejection of the pre-grant opposition

Therefore, it could be argued that as much as a rejection of a patent application in a pre-grant opposition is appealable under Section 117A, so is a grant of a patent/rejection of the pre-grant opposition. This line of interpretation has not been explored with rigour by the Delhi High Court in UCB Farchim v. Cipla which is reflected from Para 15 of the decision as follows:

“Where the pre-grant opposition is rejected and patent is granted

15. In the first eventuality, where the pre-grant opposition is rejected, it is apparent from the decision in J. Mitra and from a reading of Section 25 with Section 117A that as long as the person who has filed that opposition happens to be a person interested, he would, after 1st January 2005 [the date with effect from which Section 25 (2) came into force although the provision was introduced only on 4th April 2005] have the remedy of filing a post-grant opposition. He can, after 2nd April 2007, also file an application before the IPAB under Section 64 of the Patents Act for revocation of the patent. 

In other words, as explained by the Supreme Court in J. Mitra & Co. as long as that person is able to show that he is a person "interested‟, he is not without a remedy after his pre-grant opposition is rejected. He in fact has two remedies. Even if his post-grant opposition is rejected, he can thereafter file an appeal to the IPAB under Section 117A. Against the decision of the IPAB in either event he will have the remedy of seeking judicial review in accordance with law by filing a petition in the High Court.

18. To summarise this part of the discussion, as regards persons who have not succeeded in the pre-grant opposition stage to prevent the grant of a patent, and are persons “interested‟ within the meaning of Section 25(2) and Section 64 of the Patents Act, their remedy against the rejection of their pre-grant opposition is to file a post-grant opposition under Section 25(2) and await the decision of the Controller. If they are still aggrieved by that decision under Section 25(4) of the Patents Act, they can file an appeal before the IPAB in terms of Section 117A of the Patents Act.”

As regards pre-grant opponents who do not fall under the definition of “persons interested”, the Court observed as follows in Para 20 of the decision:

“Nevertheless, as regards the maintainability of a writ petition by such third party pre-grant opposer against the Controller's order rejecting the opposition, this Court would like to observe that the power under Article 226 of the Constitution is wide and can be exercised on the facts and circumstances of a given case where it appears to this Court that there is no other efficacious remedy available or that the interests of justice require this Court to interfere.”

In other words, according to the Court, the only option for an unsuccessful pre-grant opponent is a writ petition. This is indeed surprising in light of the Court’s observations in the very same decision on the scope of Section 15 prior to the 2005 amendment, which is reflected Para 4 of the judgment as follows:

“4. Prior to its amendment in 2005 with effect from 1 st January 2005, Section 25 (1) of the Patents Act provided that at any time within four months from the date of advertisement of the acceptance of a complete specification "any person interested may given notice to the Controller of Patents („Controller‟) of opposition to the grant of patent on the grounds set out in Section 25 (1) (a) to 25(1) (k) of the Patents Act. Section 25 (2), prior to the 2005 amendment, stated that when any such notice of opposition is given, the Controller shall notify the applicant (for a patent) and give to the applicant and the opponent an opportunity of being heard before deciding the case. 

Therefore, at the pre- grant stage, prior to the amendment in 2005, the Controller could either refuse the patent application or require the applicant to make amendments to the satisfaction of the Controller and if such changes were not made as directed, he would refuse the application. Therefore Section 15 of the Patents Act contemplated either eventuality resulting from a decision of the Controller on a pre-grant opposition under Section 25(1) i.e. the grant of the patent with or without amendments, or the refusal of the patent.”

My question is how is the wording of Section 15 before the 2005 amendment different from after the amendment ? If the scope of Section 15 remains the same before and after the amendment, which I think is the case, why should not unsuccessful opponents have the right to appeal under Section 117A since grant of patent/rejection of pre-grant opposition too would fall within Section 15?

If the analysis is flawed, I look forward to being corrected.

Supreme Court’s Guidelines on Reportage of Sub-judice Matters

Yesterday, I had put up a short snippet on the Supreme Court’s decision on guidelines to the media on reportage of sub-judice matters. Here’s the judgment which was pronounced yesterday. In an earlier post, coincidentally I had discussed those provisions of the Contempt of Courts Act, 1971 (“CCA”) which deal with the extent of reportage permitted in pending judicial proceedings and defenses available under Section 13 of the CCA in the event contempt is alleged on grounds of interference with administration of justice.

In that post, I had even discussed provisions of the Delhi High Court Rules which govern access to records of pending judicial proceedings. Pertinently, in its decision, the Supreme Court has observed in Para 33 as follows:

“33. At this stage, it may be  noted that the judgment of the Privy Council in the case of Independent Publishing Co. Ltd. v. AG of Trinidad and Tobago [2005 (1) AC 190] has been doubted by the Court of Appeal in New Zealand in the case of Vincent v. Solicitor General [(2012) NZCA 188 dated 11.5.2012].  In any event, on the inherent powers of the Courts of Record we are bound by the judgment of this Court in Mirajkar.  Thus, Courts of Record under Article 129/Article 215 have inherent powers to prohibit publication of court proceedings or the evidence of the witness.”

I do not wish to reproduce the facts of the petition in which the SC was asked to issue guidelines to the print and electronic media on sub-judice matters; however, the relevant fact in this case which attracted provisions of contempt was that a proposal which was exchanged between the counsel for Sahara, and SEBI was leaked to the media.

The Court observed that parties have the right to negotiate in privacy and the freedom of speech under Article 19(1)(a) cannot be exercised to undermine such privacy. The decision of the Court is educative on the law of prior restraint of publication and sub-judice reportage in several jurisdictions such as the UK, Canada, Australia, New Zealand and Germany.

On internal page 21, from Para 25 on the Court discusses the position of Indian law, which in a nutshell is as follows:

1. If prior restraint is sought on a publication, there must be reasonable grounds to believe that there is real and imminent danger to the administration of justice.

2. Critically in Para 31, the Court notes as follows:

“31. In the case of Naresh Shridhar Mirajkar v. State of Maharashtra [AIR 1967 SC 1], this Court dealt with the power of a court to conduct court proceedings in camera  under its inherent  powers and also to incidentally prohibit publication of the court proceedings or evidence of the cases outside the court by the media.  It may be stated that “open Justice” is the cornerstone of our judicial system.  It instils faith in the judicial and legal system.  However, the right to open justice is not absolute.  It can be restricted by the court in its inherent jurisdiction as done in Mirajkar’s case if the necessities of administration of justice so demand... Even in US, the said principle of open justice yields to the said necessities of administration of justice.”

3. In Para 32, the Court cites the Mirajkar decision in which it was held that a temporary prohibition of publication of court proceedings in the media under the inherent powers of the court cannot be said to offend Article 19(1)(a) rights [which includes freedom of the press to make such publication], since the prohibition is with a view to protect the interest of justice and the administration of justice.

4. As mentioned in the beginning of the post, Para 33 is of critical importance. In this Para, the Court observes that Courts of Record (such as High Courts) under Article 129/Article 215 have inherent powers to prohibit publication of court proceedings or the evidence of witnesses.

5. Further, all Courts which have inherent powers, i.e., the Supreme Court, the High Courts and Civil Courts can issue prior restraint orders or proceedings, prohibitory orders in  exceptional circumstances temporarily prohibiting publications of Court proceedings to be made in the media and that such powers do not violate Article 19(1)(a).

6. The SC further notes that if one reads Article 19(2) which refers to law in relation to Contempt of Court with the first part of Article 129 and Article 215, it becomes clear that the power is conferred on the High Court and the Supreme Court to see that “the administration of justice  is not perverted, prejudiced, obstructed or interfered with”. 

7. To ensure that administration of justice is not prejudiced or perverted clearly includes power of the Supreme Court/High Court to prohibit temporarily, statements being made in the media which would prejudice or obstruct or interfere with the administration of justice in a given case pending in the Supreme Court or the High Court or even in the subordinate courts.

8. Critically, the Court has observed that presumption of innocence is held to be a human right.  If in a given case the appropriate Court finds infringement of such presumption by excessive prejudicial publicity by the newspapers (in general), then under inherent powers, the Courts of Record suo motu or on being approached or on report being filed before it by subordinate court can under its inherent powers under Article 129 or Article 215 pass orders of postponement of publication for a limited period.

This may be done if the applicant is able to demonstrate substantial risk of prejudice to the pending trial and provided he is able to displace the presumption of open justice and to that extent the burden will be on the applicant who seeks such postponement of offending publication.

9. In Para 35, the SC discusses Sections 4, 7 and 13 of the Contempt of Courts Act, which I discussed in an earlier post.

10. Finally, the Court deals with mechanisms which neutralize the effect of prejudicial publication/reportage. In this context, the Court discusses the object and practicality of “postponement orders”- orders which postpone the publication of content which may have the effect of interfering with/prejudicing administration of justice.

11. On Page 45, the Court notes as follows:

“Thus, balancing of such rights or equal public interest by order of postponement of publication or publicity in cases in which there is real and substantial risk of prejudice to the proper administration of justice or to the fairness of trial and within the above enumerated  parameters of necessity and proportionality would satisfy the test of reasonableness in Articles 14 and 19(2).”

12. On Page 46, the Court observes the following:

“Fourthly, in case of criminal contempt, the offending act must constitute interference with administration of justice.  Contempt jurisdiction of courts of record forms part of their inherent jurisdiction under Article 129/ Article 215.  Superior Courts of Record have inter alia inherent superintendent jurisdiction to punish contempt committed in connection with proceedings before inferior courts. 

The test is that the publication (actual and not planned publication) must create a real and substantial risk of prejudice to the proper administration of justice or to the fairness of trial.  It is important to bear in mind that sometimes even fair and accurate reporting of the trial (say murder trial) could nonetheless give rise to the “real and substantial risk of serious prejudice” to the connected trials. 

In such cases, though rare, there is no other practical means short of postponement orders that is capable of avoiding the real and substantial risk of prejudice to the connected trials.  Thus, postponement orders safeguard fairness of the connected trials.  The principle underlying postponement orders is that it prevents possible contempt.  Of course, before passing postponement orders, Courts should look at the content of the offending publication (as alleged) and its effect. 

Such postponement orders operate on actual publication.  Such orders direct postponement of the publication for a limited period.  Thus, if one reads Article 19(2), Article 129/ Article 215 and Article 142(2), it is clear that Courts of Record “have all the powers including power to punish” which means that Courts of Record have the power to postpone publicity in appropriate cases as a preventive measure without disturbing its content.”

Roche v. Cipla- Inventive Step- II

In this post, I continue with the discussion on the Delhi High Court’s views on inventive step in Roche v. Cipla. In Paras 44- 64, the High Court has effectively said the following:

1. There is nothing in the Patents Act which requires the High Court to employ a stricter approach when it comes to pharmaceutical patents. The test which Indian Courts are governed by in assessing obviousness has been laid down by the Supreme Court in Biswanath Prasad Radhey Shyam vs Hindustan Metal Industries (AIR 1982 SC 1444). The High Court observed that since in the Biswanath decision the Supreme Court had pronounced a final verdict in a trial, the decision assumes greater importance.

2. According to the High Court, the test laid down by the Supreme Court in Biswanath on obviousness in effect is as follows:

“Was it, for practical purposes, obvious to a skilled worker, in the field concerned, in the state of knowledge existing at the date of the patent to be found in the literature then available to him, that he would or should make the invention the subject of the claim concerned ?"

However, to me it appears that the Supreme Court had observed the above with respect to novelty citing the 1969 Bombay High Court’s decision in Farbewerke Hoechst & Bruning Corporation v. Unichem Laboratories & Ors which I have discussed earlier on this blog. Simply put, I think the High Court may have misread the context in which the test was laid down by the SC.

3. The High Court then took the view that in light of the SC’s test on inventive step, the test of an unimaginative person and other such tests ought not to be applied since these are neither supported by the definition nor have they been prescribed by the Supreme Court. According to the High Court, foreign decisions cannot be used to further qualify the test laid down by the Supreme Court. In Para 49, the High Court has observed thus:

“49.The said observations relied upon by the parties are judicially created tests depending upon the nature of the case and the subjective satisfaction of the Judge in the given case. As there is no such requirement which exists at least in Indian Patent Act defining the further qualities of a person skilled in art, therefore, one has to leave the said point there and then which is that what is required to be seen is the obviousness from the standpoint of a person who is skilled in art.”

4. In Para 50, to the best of my reading, it appears that the High Court has confused and conflated the issue of anticipation and obviousness, which is as follows:

“Normal and grammatical meaning of the said person who is skilled in art would presuppose that the said person would have the knowledge and the skill in the said field of art and will not be unknown to a particular field of art and it is from that angle one has to see that if the said document which is prior patent if placed in the hands of the said person skilled in art whether he will be able to work upon the same in the workshop and achieve the desired result leading to patent which is under challenge. If the answer comes in affirmative, then certainly the said invention under challenge is anticipated by the prior art or in other words, obvious to the person skilled in art as a mere workshop result and otherwise it is not. The said view propounded by Hon‘ble Supreme Court in Biswanath Prasad (supra) holds the field till date and has been followed from time to time by this Court till recently without any variance.”

Again, this Para gives one the impression that the High Court has conflated a “workshop modification”, which is typically used in connection with an obviousness analysis, with the test of anticipation as to whether a document has sufficient information to help a person skilled in the art arrive at the patented result. Probably, the distinction between anticipation and obviousness was unclear to the High Court. Fundamentally, it seems the Court was not clear on the distinction between novelty and lack of inventive step...

On applicability of foreign decisions to understand the meaning of “inventive step”, the High Court’s categorical observations are as follows:

“57. One must also not forget that the tests are carved out by also considering the language of the Statute, coupled with other factors including avowed object of the Act and constitutional goals to be achieved and not in abstract. Accordingly, the test of obviousness as discussed above in the Indian context holds good so far as Indian Statute is concerned and may change in the future depending upon the change of definition of ―inventive step in case the legislature deems fit to amend the definition of inventive step or in the alternative provide some safeguards to medicinal patents so as to deal with them differently. Till the time it is not done so, it cannot be said that the test of American Courts and European Courts may be applied when it comes to adjudicate the obviousness of Indian Patents.

58. This clarification became necessary as lots of decisions are cited at the bar where American Courts have first laid down some tests and thereafter year after year changed the approach which goes either in favour of the plaintiffs in one case and in favour of defendant in another. I think it is not prudent to just follow such decisions in favour of either side and would be correct approach to consider only those decisions which go in consonance with our Indian patent law regime and judgments passed by the Supreme Court of India. It does not mean that the English and American decisions are not helpful. The aid is being taken from such decisions where it is necessary, which goes consistent with Indian law.”

With these observations and a few more in Para 62, the High Court proceeded to address the issue of obviousness on the basis of the test laid down by the SC in Biswanath. In Para 64, the Court has asked itself the question, whether it is sufficient to show a compound which appears similar to the patented drug Erlotinib Hydrochloride and combine it with the requirement of further experimentation to establish obviousness of the patented drug?

Having asked this question on obviousness, it is really surprising that the Court again cites a commentary on novelty. Here are the relevant observations from Para 65:

“65. The chain of events which are necessary for the purposes of finding obviousness in relation to selection of chemical compounds from the larger formula or molecule are discussed in the book titled as "The Modern Law of Patents" by Roughton, Johnson, Cook & Fysh, 2011 Edition, (Lexis Nexis), wherein the learned author quotes an authority from European Patent office. The learned author observed thus:

―2.125 In T279/89 Moulded polyurethane elastomers/ Texaco, the Board of Appeal gave some practical requirements which must be satisfied for a selection invention to be novel, in particular:

(a) The selection invention or range should be narrow.

(b) The selection invention or range should be sufficiently far removed from the known range illustrated by means of the examples.

(c) The selected area should not provide an arbitrary specimen from the prior art, is not mere embodiment of the prior description but another invention (purposive selection) (In T279/89 Moulded polyurethane elastomers/ Texaco (unpublished*) 9th July 1991 at (r 4.1); this test was based on the earlier decision T198/84 Thiochloroformiates/ Hoechst, (1985) OJ EPO 209)”

From the underscored portions above, clearly the High Court did not make the necessary distinction between novelty and obviousness because in Para 66, the Court appears to have applied the above test for novelty and non-obviousness. This is also evident from Para 71:

“71. Let me apply the principle of laws enunciated above relating to obviousness and test the present case on the basis of balance of the probabilities in order to see whether the defendant has discharged the burden as to show the obviousness or lack of inventive step in the suit patent”

From Para 71 to 109, the Court has discussed the prior art cited against Erlotinib and finally in Para 110, the Court held as follows:

“110. I may notice lastly that the finding arrived at as to non-establishment of obviousness is due to the lack of evidence and deposition in the present case wherein the defendant is not able to show by way of positive evidence three requirements as to material facts leading up to obviousness in the chemical compounds. If the chemical compounds are held to be obvious on the basis of mere perusal and appearance of the structures and assuming that the slight change here and there is inconsequential without a positive evidence medically and clinically as to how the said reaction is immaterial, then several novel compounds can be declared obvious by such exercise and the same shall affect the research process adversely. The innovation or invention in the sense of chemical compound is not merely to innovate a new set of the compound per se but also making improvements in the existing state of the art by taking the aid of the already existing compound and working upon the same by way of experimentation by way of the reactants. This is the reason why, the Court cannot simply be satisfied by mere reliance of similar structure in the previous art and thereafter assuming that slight substitutions are inconsequential. Therefore, the establishment of the material facts is essential, which is missing in the present case. Resultantly, no ground of obviousness or lack of inventive step under Section 64 (1) (f) of the Patents Act is made out due to the inability of the defendant to discharge the onus casted upon it.”