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

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

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

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

The above observation gives rise to two questions:

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

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

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

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

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

8. Information and undertaking regarding foreign applications:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comments and Corrections are welcome!