Snippet: Round table on IP Protection for Pharmaceuticals in India at NLU Jodhpur

The Ministry of Human Resource Development (MHRD) IP Chair of National Law University, is organizing a round table symposium on 17^th and 18^th March, 2012 on the topic ‘The Emerging Legal and Policy Landscape of Intellectual Property Protection for Pharmaceuticals in India’. The link to the event is available here.

According to the website of NLU Jodhpur:

“The event is expected to bring academicians, legal experts and policy specialists from across India working on IP law and pharmaceutical policy issues. The aim of the roundtable symposium is to generate a nuanced dialogue on many critical issues concerning intellectual property protection for pharmaceutical inventions in India in the light of the emerging scenario in the Post- TRIPS world.

Fifteen years have passed by since India adhered to certain internationally binding IP obligations through the WTO-TRIPS agreement. And yet, India is still garnering worldwide interest concerning the level of protection provided by its IP laws. The administrative and the judicial thought process on how best to balance competing interests cannot be divorced from this context.

Indeed, much of IP law in its application to the pharmaceutical sector cannot be looked in isolation from the intricate policy issues and general societal interest. While a lot of attention is focused on the pros and cons of IP regimes, there remains an enormous task of calibrating the IP regimes that could best serve the needs of balancing competing interests. The symposium will provide a good forum to exchange valuable information, ideas and experiences in articulating legal and policy issues on IP protection for pharmaceutical inventions in India.”

Some of the speakers who will attend the symposium are:

1. Hon’ble Justice S.Ravindra Bhat of the High Court of Delhi,

2. Mr.Dilip Shah, Secretary General of Indian Pharmaceutical Alliance,

3. Dr.Malathi Lakshmikumaran from the law firm Lakshmikumaran and Sreedharan,

4. Prof.Madhukar Sinha from Centre of WTO Studies of IIFT,

5. Prof. Sudeep Chaudhuri of IIM Calcutta,

6. Mr.Anand Grover, Advocate from the Supreme Court of India,

7. Mr.K.M.Gopakumar, Legal Advisor to Third World Network

8. Prof.Shamnad Basheer of NUJS Kolkata

9. J.Sai Deepak (me), Saikrishna & Associates

I will write a post next week on the deliberations at the round table. It'll be interesting to analyse the tone and tenor of the discussions in light of the recent compulsory licensing order. 

Breaking News: Compulsory Licence Granted to NATCO for Bayer’s Nexavar

We had earlier blogged on applications for compulsory licenses filed by NATCO and Cipla. Thanks to a dear friend, we now have news of a 62-page order delivered on March 9, 2012, P.H.Kurian granting a compulsory license to Hyderabad-based NATCO Pharma in respect of Bayer’s patented drug “Sorafenib Tosylate” which is sold as Nexavar and is protected by the patent no. 215758.

Nexavar is used to treat advanced kidney and liver cancer. The drug prevents growth of new blood vessels and targets other important cellular growth factors. The order treats the drug as “life-extending” drug and not as a “life-saving” drug, which extends the life of kidney cancer patients by 4-5 years, and of liver cancer patients by 6-8 months.

The cost of the therapy using the patented drug is INR 2,80,428 per month and costs approximately INR33.65 lakhs a year. NATCO, on the other hand, proposed a price of INR8800 for a pack of 120 tablets.

The Controller used GLOBOCAN data to peg the number of liver cancer patients as 20,000 and the number of kidney cancer patients as 8900. The Statement of Working filed by Bayer revealed that approximately 200 bottles of the drug were imported in 2009, with no figures for the years 2008 and 2010. The Controller noted that besides being “exorbitantly priced”, the drug was available only in metropolitan cities, and even there, it was out of stock in most pharmacies.

It was also observed that the patentee had reaped revenues in the millions in sales of the drug outside India, whereas the availability of the drug in India left much to be desired. Besides, the patentee imported the drug into India, with there being no evidence of domestic manufacture.

We will discuss the merits of the order in greater detail in a later post. For now, the terms of the compulsory license are as under:

a. The price of the drug covered by the Patent, sold by the licensee shall not exceed Rs.8880 for a pack of 120 tablets, required for one month's treatment.

b. The licensee shall maintain accounts of sale etc. in a proper manner and shall report the details of sales to the Controller as well as the Licensor on a quarterly basis, on or before fifteenth day of the succeeding month.

c. The licensee shall have the right to manufacture the drug covered by the Patent only at his own manufacturing facility and shall not in any whatsoever outsource the production.

d. The license is non-exclusive.

e. The license is non-assignable.

f. The licensee shall pay royalty at the rate of 6% of the net sales of the drug on a quarterly basis and such payment shall be affected on or before fifteenth day of the succeeding month.

g. The license is granted solely for the purpose of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the Territory of India.

h. The licensee shall supply the drug covered by the Patent to atleast 600 needy and deserving patients per year free of cost. The licensee shall annually submit in the form of an affidavit the details of such patients, i.e. name, address and the name of the treating oncologist, to the Office of the Controller of Patents and such report shall be submitted on or before 31st January of the year, in respect of the preceding year.

i. The licensee shall not have the right to import the drug covered by the Patent.

j. The license is for the balance term of the patent.

k. The license does not include any right to represent publicly or privately that the Licensee's product is the same as the Licensor's or that the Licensor is in any way associated with the Licensee's product. The Licensee's product must be visibly distinct from the Licensor's product (e.g. in color and / or shape); the trade name must be distinct, and the packaging must be distinct. The Licensor will provide no legal, regulatory, medical, technical, manufacturing, sales, marketing, or any other support of any kind to the Licensee.

I. The Licensee is solely and exclusively responsible for its product and for all associated product liability. The Licensor, its Directors, Officers, Employees, Agents, and affiliates shall not be held liable in any manner whatsoever for any action of the licensee.

m. The Licensor is free to do whatever it wishes with its residual patent rights subject to the non-exclusive license to the Licensee, and is free to compete with the Licensee and to grant licenses to third parties to compete with the Licensee. 

Stale News: Custom Laws to Shift towards Trust-based Self-assessment Model

The Business Line on February 27, 2012 reported that the Customs department is considering shifting to a “trust-based” self-assessment model.  As it stands today, the duty and onus of verifying the compliance of importers and exporters with Customs laws is on the Customs department, although disclosures are made by the importers and exporters in the documents submitted by them to the Customs department.

However, it appears that the authorities are considering shifting to a model where, in the words of the Business Line, “businesses are expected to discharge their Customs duty liability, with no or minimal involvement of authorities at the port”. This effectively translates to an onus on businesses to comply with customs laws.

The proposed model envisages a compliance audit by the Customs authorities at a later point in time.

One wonders how would this “trust-based” self-assessment model, work with the IPR border measures under the IPR enforcement customs Rules. On one hand, the IP Rules vest the customs authorities with suo motu powers to check for IP infringement, and on the other hand the proposed systemic overhaul seems to encourage a laissez faire approach with minimal intervention from authorities.

Would a “trust-based” model encourage counterfeiting?

It might be argued that most customs regimes across the world have already adopted or are gravitating towards a trust-based model to avoid clogging of the customs conduit. But the question is, do Indian conditions justify adoption of the model?

It could be argued that a shift to a trust-based system enhances the onus on businesses, including counterfeiters, to be truthful to the authorities. This might translate to a presumption of fraud or willful non-compliance if IP infringement is established at a later stage.

This issue needs to be debated, and we look forward to hearing from our readers on their thoughts on it. 

Substantiality- Where Does one Draw The Line?

In the first post on this topic, I had posed a few questions based on the use of popular quotes in Ashwin Sanghi’s book “Chanakya’s Chant”. Divya posted her thoughts on the questions posed. In this post, I would like to continue the discussion and delve deeper into the thought-provoking points raised by Divya.

In a series of posts earlier elsewhere, I had discussed the issue of vestation of copyright in characters of literary works. During the course of discussing the issue, the question that I had raised was as follows- when a literary work is vested with copyright, does the copyright vest in the work alone, or could portions of the work enjoy stand-alone copyright as well?

In other words, do parts of the whole enjoy a copyright besides the copyright in the whole? The answer to this question was, to a certain extent, found in the Irish Rose case and subsequently in the Sam Spade case. In both these cases, the line of approach that was taken by US Courts with respect to copyright in characters was that, if the characters are merely vehicles for the story, there is no stand-alone copyright in the characters. Here, it is only possible to claim copyright infringement of the story by association of the characters to the story.

However, if the story revolves around the characters and the story is a vehicle to extol the virtues or vices of the characters, the characters could be treated as enjoying stand-alone copyright. For instance, the characters from the movie Rocky were treated by US Courts as falling within the latter category, and it was held that the characters themselves enjoy copyright protection because they stand out from the common stock of characters.

Simply put, the thumb rule appears to be that if the characters lead to association with the work, it is the copyright in the work that would be infringed if the characters are used by third parties. Whereas if the characters themselves enjoy popular acceptance regardless of the setting in which they were used in the work, the copyright in the characters would be infringed if they are used by third parties.

The same rule could be applied to quotes as follows:

Situation 1: If the quotes lead to association with a particular work or character in a work, it could be said that the copyright in the work is infringed. After all, if the intention is to prevent third parties from using the quotes, a creative plaintiff need not claim copyright in the quote, he could simply allege that the use of the quote infringes the work in which the quote was originally used.

The first objection could be- what cannot be done directly cannot be achieved indirectly as well. In other words, if a quote cannot be protected directly, it cannot be protectly indirectly using the work as a facade.

The second objection could be that association is a trademark-like argument, which I mentioned in the first post.

The third objection could be that lines like “I’ll make an offer he can’t refuse” are actually normal statements, but it is the association of these lines with a particular character that gives it a “secondary significance” and makes them “quotes/dialogues”. The question that now arises is, should association of such otherwise unremarkable lines with popular characters, deprive third parties the right to use the lines?

There are again two ways of looking at this issue- On one hand, if the line has not been used in the same manner as it was used in the original work, copyright infringement would be difficult to claim or establish. For instance, if the character who mouths the line “I’ll make an offer he can’t refuse” is not a mafiosi, but happens to be a character like “Holly Golightly” from “Breakfast at Tiffany’s”, the setting is entirely different (although the use of the line is apt for her character...).

On the other hand, if the line has indeed been used by a gangster, whose character arc is similar to that of the character in the original work, it might be arguably possible to assert exclusive rights over the quote through the character/story.

Situation 2: If however the quote is unique in itself, the author could claim a stand-alone copyright in it. The issue with this is the use of quality as a relevant factor to vest a work with copyright. The burden on the copyright owner would be to show that the quote is not a “commonly used line”, but was a “quote” in the strict sense of the term. Again here, his attempts would veer towards establishing the popularity of the quote to prove uniqueness. This too brings in the trademark/association angle.

Turning to the issue of criticism, regardless of the tone being positive or negative, criticism is “about” the work. I am not sure if a work in itself can be called a critique of another if it does not comment on the earlier work. Chanakya’s chant, in that sense, is not a critique of any work.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Now, given that Sanghi’s use of the quotes does not fall under any of these “fair dealing” exceptions, and if one were to prove that the use of the quotes infringes either the copyright in the original works, or copyrights in the quotes themselves, what possible defense could Sanghi have?

The big picture argument could be- does a “quote/line” qualify as “literary work”? The counter-question is “why can’t I write and sell a one-quote book?” Does copyright law preclude the possibility of a book with a single-quote being bought and read by people? Also, does “literary work” always mean a “book”? 

As obscure or far-fetched as the example may be, I am not sure the answer is either obvious or settled. 

Stale News: Intermediary Rules under the Information Technology Act Challenged

An advocate from Kerala Mr.Shojan Jacob has filed a writ petition challenging the Information Technology (Intermediary Guidelines) Rules, 2011.

Bar and Bench has reported this development, which was brought to my attention by Mr.Aditya Arun Kutty, Advocate before the High Court of Delhi.

Reportedly, Rule 4 of the Intermediary Guidelines and Rules 8 and 16 of the Information Technology (Procedure and Safeguard for Blocking of Access to Information by Public) Rules, 2009 have been challenged as being illegal, arbitrary and unreasonable. It has also been alleged in the petition that the Rules curtail fundamental freedoms of speech and expression.  Rule 4 of Guideline Rules is as follows:

(4) The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by an affected person in writing or through email signed with electronic signature about any such information as mentioned in sub-rule (2) above, shall act within thirty six hours and where applicable, work with user or owner of such information to disable such information that is in contravention of sub-rule (2). Further the intermediary shall preserve such information and associated records for at least ninety days for investigation purposes.

The requirement of taking down the content within 36 hours of being apprised of the content could be accused of not affording the intermediary sufficient time to apply his mind to the content, and decide if at all there is an infraction of a third party’s legitimate interests. On the other hand, it could be said that given the lightning speed with which the medium is capable of creating a multiplier effect if the content is indeed damaging, 36 hours could be justified on the grounds of “intelligible discrimination” when compared to other media.

In other words, the basic question that ought to be asked is- why should take down rules apply against an intermediary when it comes to the internet, when the norm applied to print medium is different? It would be interesting to see how the issue is dealt with by the Kerala High Court.

Among the reliefs sought in the petition are guidelines to the Centre from the court to the effect that owners of content, which is sought to be taken down, must be given prior notice before the content is banned. Also, after the content is taken down, a reasoned order must follow clearly stating the objections and the basis for the objections to the content.

In short, the petition seeks infusion of principles of natural justice in the Rules. Not an unreasonable petition, but given the wind blowing these days, this petition may draw the ire of the establishment for raising genuine concerns. 

Evaluating Substantiality

Sai indeed has raised an interesting question in his post- what is substantial enough to make a case for copyright infringement?

I will attempt to answer this question, in the context of Chanakya’s Chant. Am sure readers will appreciate that it is often easier to answer questions, when one uses a live example!). For starters, I agree the book is an awesome read. However, I would like to take a look at the situation from a somewhat different perspective..

As I see, the prolific use of quotes in the book, can be compared to a sort of compilation. One has learnt from the US Supreme Court decision in Feist, that the modicum of creativity required in a work of authorship, to be copyright eligible, is minimal. 

In other words, what I am attempting to say is that it is possible to look at what Sanghi did, to be in fact a weave/compilation of perhaps, his favourite quotes, into an altogether different historical setting, an attempt, which (in my humble opinion) is extremely creative in fashion.

I am not sure if what I say above holds good. Let me try to substantiate that by layering it with another line of thought.

We all know that copyright is an exclusive right over the expression of an idea. In other words, the expression describes the idea. If a known expression is picked up (say Oh My God! From FRIENDS) and used in a distinct set up, with a different plot, I think the expression, would be inextricably linked to the new idea. 

In such a scenario, if a couple of lines commonly used, were to be taken and looked at, they perhaps, would be associated with multiple scripts. Just because they have been used again in a different context, may not necessarily mean that they are infringing the copyright subsisting in the previous work. This in my view, is especially true, since copyright subsists in a work, and not in an “extract” from a work.

Coming to the point on fair dealing, the test of fair dealing under S. 52 must be applied before determining Infringement. As Sai rightly pointed out, “criticism” is covered as an exception there under.

But, to answer his question, I believe that praise would also be included under the ambit of “criticism”, especially because,criticism is not merely understood to be a negative opinion, but is in fact an opinion rendered by someone with knowledge or expertise in the field, and whose opinion on a particular work, may give rise to a positive or negative opinion about it. With this in mind, I think an ode or tribute would definitely qualify as fair dealing.

Further, to answer the question of substantiality of the work, I think the Folsom v. Marsh test used to determine fair use proves useful. The four factor test, which has been incorporated in the Indian jurisprudence, takes the following into account:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2. the nature of the copyrighted work;

3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. the effect of the use upon the potential market for or value of the copyrighted work.

Let me attempt applying these to the Chanakya’s Chant case:

1. Yes, Chanakya’s Chant is a work for commercial gains. The purpose and character could perhaps be said to be descriptive of a character’s response.

2. The nature of the copyrighted work is literary

3. The amount and substantiality of the portion in relation to the original work, is miniscule- few dialogues, as compared to the whole book

4. Effect on the commercial value of the copyrighted work –negligible. I don’t think the sales of any of the works whose dialogues/quotes have been referenced would be affected by Sanghi’s use.

If at all any, the only cause of action that the authors have against Sanghi's use, is one of “violation of moral rights”. Under S. 57 dealing in Author's Special Rights, they would have to make out a case showing that either (a) there is a distortion, mutilation or other modification of the said work; or (b) that an action prejudicial to his honour or reputation has been taken.

Having said all of this, mostly on impulse, I think Sanghi played it safe by giving due credit to the authors of the quotes. Whether his use is decided to be fair or not, he at least cannot be accused of blatant plagiarism!

Copyright Infringement: How is "Substantiality" to be Assessed?

The last few days I was reading a book by Ashwin Sanghi titled “Chanakya’s Chant”. The book is a page-turner and is certainly worth a read. 

The entire book is peppered with quotable quotes of various icons from history, which are conveyed through the central character of the book, namely Chanakya. 

At the end of the book, the author has been honest enough to attribute the quotes to their original authors. However, this, for me, posed an interesting question relating to the law of copyrights.

The quotes have not been “cited” by the author in the book. In other words, the quotes have not been referenced by way of foot-notes. Instead, they have been woven seamlessly in the book and are spoken by the central character of the book as and when the occasion justifies the use of the quote.

If attribution to the original authors of the quotes had been absent, a reader would have got the impression that the quotes/witticisms were originally spoken by Chanakya (despite the fact that the book is marketed as a work of fiction).

The question here is- despite attribution, does the use of the quotes in the manner in which they have been used in Ashwin Sanghi’s book constitute copyright infringement of the prior published original copyrighted work in which the quotes were originally used (if they indeed form part of copyrighted works)? If yes, can attribution to original authors/works dilute the allegation of infringement?

In answering these questions, it is first necessary to understand the interplay between Sections 14 and 52 of the Copyright Act. Section 14 enumerates the bundle of rights available to a copyright owner and Section 52 provides exceptions to infringement.

For an act to constitute infringement, there must be a right envisaged under Section 14 which is capable of being infringed, and there must not be an exception under Section 52 which offsets the allegation of infringement.

I am proceeding under the assumption that no consent has been sought from the copyright owners of the original work. 

In the absence of consent from the copyright owners, is it possible to treat Sanghi’s use of the quotes as “reproduction and publication” amounting to infringement? Or does the question of “substantiality” need to be addressed when the issue of “reproduction” is analysed?

Sometimes, in instances like these, the human tendency is to look at the popularity of the quote to decide the issue of infringement. For example, if a book were to reproduce “I’ll make him an offer he can't refuse”, we immediately associate it with Mario Puzo’s immortal work “The Godfather” and peremptorily conclude that the reproduction of the quote/line amounts to infringement.

Besides such a conclusion being biased, the analysis is strictly not a copyright-based analysis, it becomes one which has trademark undertones to it. To ascertain infringement of copyright, the enquiry must restrict itself to the requirements of copyright vestation and the bundle of rights that constitute a copyright. Consequently, is there a justification to use a “popularity” argument to assess substantiality of reproduction? If yes, then the issue turns on the quality of the portions reproduced.

That said, if quality is not decisive in vesting copyright in a work, why should it play a role in making a case for infringement?

Let me restate this argument- if a few paragraphs of a book, which are not necessarily seminal in terms of quality, are reproduced in another book, would we approach the issue of infringement from a qualitative standpoint? In most cases the answer would be “No”. We would go by simpliciter reproduction to establish copyright infringement.

Why should the approach be any different for a quote or a line? By using quality-based arguments, are we trying to fill the quantitative voids? Is this permissible and would this be true to the fundamentals of copyright jurisprudence? 

Besides the above arguments, is it possible for Sanghi to take the defense that the quotes belong to the annals of history and popular lore, and therefore, there can no copyright in them? or could he argue that his use would amount to an ode or tribute to these quotes through a fictional character in his work? Is an ode/tribute a defense under Section 52?

I’d love to hear from our readers on this issue- my co-blogger Ms.Divya Subramanian will also contribute her two pence to this discussion.