Product Patent Grants Under the Indian Patents Act

The Indian Patents Act of 1970 permitted the grant of product patent when an ordinance effecting certain changes in the Act was issued on 31 December 1994, to satisfy the transitional period requirements of the TRIPS Agreement of WTO. It is pertinent to note that the 1994 ordinance ceased to operate after six months, and an identical ordinance was thereafter issued in 1999.

The 1999 ordinance was subsequently replaced by the Patents (Amendment) Act, 1999, that was brought into force retrospectively from 1 January 1995. The amended Act provided for filing of applications for product patents in the areas of drugs, pharmaceuticals, and agro-chemicals, though grant of such patents for drugs, pharmaceuticals and agro-chemicals was not allowed by the 1999 amendment. The said amendment further clarified that such applications for grant or rejection of product patents were to be examined only after 31 December 2004. Meanwhile, the applicants for product patents such as drugs could be allowed Exclusive Marketing Rights (EMR) for five years, to sell or distribute these products in India, subject to fulfilment of certain conditions specified in the Patents (Amendment) Act, 1999.

The second amendment to the Patents Act, 1970, was made by the Patent (Amendment) Act, 2002, which came into force on 20 May 2003. The second amendment introduced Patent Rules, 2003, by replacing the earlier Patent Rules, 1972.

The third amendment took place through the Patents (Amendment) Act of 2005, which came into force from 1 January 2005. By this amendment, product patents for drugs, pharmaceuticals and agro-chemicals were allowed in India. Further, in line with the 1999 amendment, the examination of product patent applications for drugs that had been filed in the period of 1 January 1995 to 31 December 2004 commenced from 1 January 2005.

Section 3(d) of the Patents Act

The Patents (Amendment) Act of 2005 also introduced Section 3(d) in the Patents Act, 1970. The Indian Parliament’s objective of introducing Section 3(d) was to prevent evergreening of patents.

This provision initially underwent judicial scrutiny with regard to its constitutional validity before the Madras High Court in Novartis AG & Anr vs Union of India & Ors ((2007) 4 MLJ 1153). Reviewing Section 3(d) and the explanation thereof inserted by the 2005 amendment, the Madras High Court observed that in the pharmacology field, if a discovery is made from a known substance, a duty is cast upon the patent applicant to show that the discovery had resulted in the enhancement of a known efficacy of that substance. In deciding whether to grant a patent or not on such new discovery, the explanation creates a deeming fiction that all derivatives of a known substance would be deemed to be the same substance unless it differs significantly in properties with regard to efficacy.

The Court further opined that due to the advancement of technology in all fields of science, it is possible to show by giving necessary comparative details based on such science that the discovery of a new form of a known substance had resulted in the enhancement of the known efficacy of the original substance and the derivative so derived will not be the same substance, since the properties of the derivatives differ significantly with regard to efficacy. The Court further held that efficacy under Section 3(d) refers to therapeutic efficacy.

The Honourable Supreme Court in Novartis AG v Union of India & Others (2013 (6) SCC 1) further interpreted Section 3(d) of the Patents Act and observed that bioavailability may qualify for “therapeutic efficacy” if claimed with adequate research data.

The Division Bench of the Delhi High Court in the Roche v Cipla decision (FAO(OS) 92 of 2012 and FAO(OS) 103 of 2012 - decision dated 27 November 2015) interpreting Section 3(d) has further held that Section 3(d) “is not a patent term extension or an evergreening provision but in fact recognizes incremental innovations in pharmaceutical patents”.

F Hoffman-La Roche vs Cipla Ltd (“Roche v Cipla”)

Pursuant to enactment of the Patents (Amendment) Act of 2005, and the introduction of product patents in the pharmaceutical sector, one of the first patent litigations that were adjudicated under the Patents Act, 1970, was filed by F Hoffmann-La Roche AG. Roche owned a patent for the compound Erlotinib Hydrochloride, that covered the anticancer drug sold under the brand name Tarceva and enforced the same against Cipla, which manufactured and sold a generic version, under the brand name Erlocip, alleging that the same violated Roche’s patent.

At the interim stage, the Learned Single Judge of the Delhi High Court denied the interim injunction on the ground of public interest and also held public interest to be an important facet while allowing or disallowing an interim injunction for pharmaceutical patents. The Division Bench of the Delhi High Court also refused an interim injunction. The issue of interim injunction travelled all the way up to the Supreme Court of India, whereafter the matter was remanded back by the Supreme Court to the Delhi High Court to conduct an expeditious trial. The same culminated in a decision by the Learned Single Judge who found the patent to be valid but not infringed. Aggrieved by the same, the patentee appealed before the Division Bench of the Delhi High Court which finally held that the patent was valid and had in fact been infringed by Cipla.

The Division Bench decision of 2015 in Roche v Cipla ((2016) 65 PTC 1 (DB)), which held in favour of Roche, is a seminal decision for patent law jurisprudence as it laid down a myriad of principles. Illustratively:

• the Division Bench held that a claim over a chemical structure or formula covered within its scope any polymorph of the same chemical structure;
• that the concept of utility under patent law was different from commercial utility and the Court recognised that a claimed invention could have “utility” under patent law even if the compound, at the time of the invention, may not be commercially the most viable for immediate marketing; and
• the Division Bench also laid down 13 principles of claim construction, along with the test that has to be followed by courts for an inventive step inquiry.

Merck vs Glenmark

Pursuant to the enactment of the Patents (Amendment) Act of 2005, that introduced product patents in the pharmaceutical sector, another key patent infringement litigation that was initiated was by Merck Sharp and Dohme Corp against Glenmark for infringement in regards to the compound Sitagliptin, sold under the brand name “Januvia”, an anti-diabetic drug ((2015) 64 PTC 417). An interim injunction was denied by the Learned Single Judge on the very first day. The matter was carried forward in an appeal to the Division Bench of the Delhi High Court.

The Division Bench reversed the Learned Single Judge’s decision and held Merck’s patent for Sitagliptin and all its pharmaceutical salts, to be prima-facie valid and infringed by Glenmark’s products. The Division Bench also held the following.

• Claim construction to determine the coverage in the suit patent is to be determined objectively on its own terms with regard to the words used by the inventor and the context of the invention in terms of knowledge existing in the industry.
• The subsequent abandonment of a patent for Sitagliptin Phosphate Monohydrate cannot remove what is patented earlier (if an objective reading, considers it to be included), nor can it include something that was excluded earlier.
• Section 3(d) does not work backwards, such that two independent patent claims are to be construed in reference to each other. Each claim is regulated by its own terms, subject to the statutory prescriptions of inventive step and industrial applicability.
• Merely because an inventor applies for a later patent – that is already objectively included in a prior patent, but which the inventor subjectively feels needs a separate patent application – does not mean that it is taken to be at face value. The intent of the inventor, through the use of the words that have been employed, must be judged, but the subjective intent cannot replace a detailed analysis of the text of the patent.

The Division Bench’s decision was challenged before the Supreme Court, which, recognising the commercial nature of the matter, remanded the issue back to the Delhi High Court for an expedited trial, which resulted in the disposal of the lawsuit within five months from the date of the Supreme Court order ((2015) 6 SCC 807), and the adjudication of the entire case within a duration of two years.

The recognition of the matter as “commercial” was significant, owing to the procedural change that took place in the latter half of 2015, around the same time that the Learned Single Judge of the Delhi High Court gave its final decision (CS(OS) 586/2013 – decision dated 07 October 2015) in the Merck vs Glenmark dispute, in favour of Merck.

Commercial Courts Act, 2015

The Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendments) Act 2015 came into effect from 26 October 2015. The intent was to establish a specialised court for adjudicating commercial disputes, including in respect of intellectual property rights in India, and adopt best practices to reduce the lifespan of a commercial dispute action.

In the territories where the High Courts do not have an Ordinary Original Civil Jurisdiction, the Commercial Courts Act empowers the state government to set up Commercial Courts at the level of District Courts as in those territories the Ordinary Original Civil Jurisdiction was exercised by the District Courts. In these territories, the state government was further empowered to set up Commercial Appellate Courts at the relevant High Court.

In the territories where the High Courts have Original Civil Jurisdiction (the High Courts of Delhi, Bombay, Calcutta, Madras and Shimla), the Commercial Courts Act empowered state governments to set up Commercial Divisions within those High Courts through the appointment of one or more benches of Single Judges. In such territories, the state government was empowered to set up a Commercial Appellate Division at the level of the Division Bench of such High Court (such as the High Courts of Delhi, Bombay, Calcutta, Madras and Himachal Pradesh).

The jurisdiction to approach a Commercial Court or a Commercial Division was identified in pecuniary terms. The Commercial Courts Act was thereafter amended in 2018, which further amended the pecuniary limits for approaching a court and that led to the establishment of Commercial Courts even in territories where the High Court exercised Ordinary Original Civil Jurisdiction. For example, currently, for the jurisdiction of Delhi, if the patent infringement lawsuit is valued at less than 2 crore rupees (INR20 million; about USD250,000), then the lawsuit may be initiated at the Commercial Court set up in the District Court. However, if the patent infringement lawsuit is valued at 2 crore rupees (INR20 million; about USD250,000) or more, then the lawsuit can be directly filed before the Commercial Division of the Delhi High Court.

With the advent of the Commercial Courts Act, and the changes introduced by it to Indian procedural law, such changes are equally applicable to patent infringement actions, which also qualify as “commercial disputes”, and the timeline of commercial disputes has reduced, while the general pace of adjudication at various stages of a lawsuit has increased. For instance, now, if the defendants do not file their written statement within 120 days, their right to file the written statement is closed. Similarly, if the Plaintiff fails to file their replication within 45 days after the defendant’s written statement comes on record, the same creates a bar from the same coming on the court record. These steps have removed inordinate delays in the adjudication process of the courts.

Delhi High Court Rules, 2018, the Intellectual Property Division, and Patent Suit Rules, 2022

Specific to the Delhi High Court, in conjunction with the Commercial Courts Act that modified India’s procedural law governing patent infringement actions at a federal level, the Delhi High Court amended their original side rules in 2018 to further streamline the procedure and regulate the law that governs patent infringement actions. Illustratively, the Delhi High Court Rules, 2018:

• permitted service by way of WhatsApp;
• clubbed the procedural step of filing affidavit of admission and denial (a process by which a party to a lawsuit admits or denies the documents filed by the other side by way of an affidavit) with the stage of completion of pleadings; and
• set guidelines for the process of evidence such as providing guidelines for conducting evidence by way of video conference and providing a manner in which a confidentiality club could be created.

Subsequently, in 2022, with the abolition of the Intellectual Property Appellate Board (the tribunal that acted as the First Appellate Board from various IPR Registries such as the Patent Office) in 2021, the Delhi High Court has now created an Intellectual Property Division, enacted the Delhi High Court Intellectual Property Rights Division Rules, 2022, as well as the Patent Suit Rules, 2022 (the rules of which provide further guidance to patentees regarding a patent infringement action in the Delhi High Court). IPR disputes, which also include first appeals from various IPR registries, are now listed before the Intellectual Property Division, which are specific Benches in the Delhi High Court that hear only IPR matters on a day-to-day basis. In an illustrative analysis of the decisions rendered by the IPD since its creation in March 2022, the IPD has given over 50 decisions in one year up to March 2023.

With these changes in the Delhi High Court, a pharmaceutical patent infringement lawsuit may be adjudicated within a period of one to one-and-a-half years.

Illustrative Key Patent Law Judicial Developments in Life Sciences and Pharma IP Litigation

Bayer Corporation & Anr vs Union of India & Ors (2010 SCC OnLine Del 541)

In a decision analysing the overlap between the Patents Act, 1970 and the Drugs and Cosmetics Act, 1940 (the statute that governs the grant of regulatory approval for pharmaceutical products, hereinafter DCA), the Division Bench of the Delhi High Court held that there was no patent linkage in India between the two statutes.

Specifically, interpreting the object of the DCA, the Court held that the said Act regulated the import, manufacture, distribution, and sale of drugs and did not require the DCGI (Drug Controller General of India) to itself enforce a patent granted under the Patents Act, 1970. Further, a conjoint reading of the framework as available under the DCA and the rules framed under the same, clearly envisaged a situation where the marketing approval may be sought by a manufacturer of the generic version of a patented drug. There was no scope for the DCGI to travel beyond the DCA and the rules thereunder to ensure protection of a patent by refusing marketing approval to a generic manufacturer, only because the drug in question is patented.

Easai Co Ltd & Anr vs Satish Reddy & Anr (CS(COMM) 1169 of 2018 – decision dated 06 May 2019)

Easai instituted a suit for patent infringement restraining the defendants from infringing the plaintiff’s patent for Lorcaserin or any of its pharmaceutically acceptable salts. Granting an interim injunction in favour of the plaintiff, the Honourable Court held the following.

• A genus and species patent can co-exist.
• The mere application or grant of a species patent would not take the subject matter of the species patent out of the ambit of the genus patent.
• Non-working of a patent, especially in the pharmaceuticals field, has no bearing on the patentee’s right under Section 48 of the Patents Act, 1970.
• In a novel introduction of a concept to ascertain the balance of convenience in patent litigation proceedings, the court laid down the concept of “clearing the way”. Specifically, the court held that despite the knowledge of a possible litigation that may ensue against them, the defendants had not “cleared the way” by initiating any invalidity proceedings against the plaintiff’s patent either by way of an opposition before the patent office or filing a revocation, but had proceeded to obtain a marketing approval for the infringing drug.

Bayer Corporation vs Union of India & Ors (2019 (78) PTC 521 (DB))

The Division Bench of the Delhi High Court interpreted Section 107A of the Patents Act, 1970 (“Bolar Exemption” provision in India) as follows.

• A patented invention being used reasonably in relation to regulatory compliance as mandated by law would not constitute infringement under Section 48 of the Patents Act, 1970.
• Section 48 is subject to Section 107A and therefore the latter is neither subordinate to, nor an exception to, Section 48.
• Research exemption is not confined to Indian laws but applies as per global requirements on a country-specific basis.
• There is no reason to think that parliament intended to exclude “export” from the word “sale” as appearing under Section 107A. Therefore, Section 107A would also apply to exports.

Lundbeck & Anr vs Hetero Drug Ltd & Anr

Lundbeck had filed a suit (H. Lundbeck A/S & Anr. v Hetero Drug Ltd. & Anr., [CS(COMM) No 565 of 2020 – decisions dated 23 December 2020 and 26 March 2021]) against Hetero seeking to restrain it from manufacturing and exporting the generic versions of Lundbeck’s patented vortioxetine to Latin America. Considering that Hetero could not show any material on record to illustrate that it was doing so, only for research and development purposes, the court granted an interim injunction in favour of Lundbeck. Subsequently on an application under Section 107A of the Patents Act, 1970, the court disposed of the matter with the following directives.

• No commercial launch of Hetero’s product during the subsistence of Lundbeck’s patent.
• Lundbeck to be supplied with half-yearly statements of supply of vortioxetine hydrobromide by Hetero during subsistence of Lundbeck’s patent. All such supplies which had been made to third parties by Hetero, were also to be supported before the court by means declarations given by such third parties, that such supplies were made for purposes prescribed under Section 107A.
• Hetero to submit documents that showcase that the active pharmaceutical ingredient was being used by it for regulatory purposes only.
• Hetero to also disclose quantity of API required by law of the country to which the product was being exported.

Dhaval Divyora vs Union of India & Ors (WP(L) No 3718 of 2020 - Bombay High Court – decision dated 05 November 2020)

Upon the issue of delayed grant of patents on account of pre-grant oppositions and the filing of Benami oppositions, the Bombay High Court clarified the position on the procedure as provided under Section 25 (1) of the Patents Act, 1970.

Benami pre-grant oppositions are oppositions that are filed by entities where it becomes difficult to identify the actual opponent, and such proceedings are mainly aimed at throttling the process of patent grant and reducing competition.

Condemning this practice, the Court held that a person filing such an opposition must have credibility with regard to the same. In this case, on account of the petitioner being unable to showcase credibility, costs were imposed by the Court.

Novartis AG & Anr vs Windlas Biotech Pvt Ltd & Anr (CS(COMM) 156 of 2021 – decision dated 25 March 2022)

The Delhi High Court granted an interim injunction against all the defendants in an action brought by Novartis to enforce its Patent No IN 229051 for the pharmaceutical composition consisting of Valsartan or a pharmaceutically acceptable salt thereof, and Sacubitril or a pharmaceutically acceptable salt thereof, and a pharmaceutically acceptable carrier. The decision is noteworthy because taking cognisance of the fact that in the present dispute, the recall of the infringing products was not possible, hence, the Delhi High Court directed the defendant Eris Lifesciences to deposit a sum of 5 crore rupees (INR50 million; USD600,000) with the Registrar General of the High Court.

Novartis AG & Anr vs Natco Pharma Limited ((2022) 89 PTC 1)

Novartis brought an infringement suit against Natco for, inter alia, infringing its species patent relating to Eltrombopag Olamine (EO). The key findings of the decision are captured as follows.

• As the defendant had admitted to the manufacture and sale of generic EO, the court considered that if Natco’s challenge to validity did not hold up, infringement would be upheld.
• With respect to compliance with Section 3(d), the court accepted Novartis’ argument regarding the increased bioavailability of EO (over Eltrombopag freebase) and that it had three times the amount of plasma concentration.
• The court held that for prior claiming, the invention claimed in the genus patent and the species patent had to be identical.
• It re-affirmed that coverage by a patent is distinct from the concept of disclosure by a patent.
• Finally, the court held that casting a shadow of doubt on the patent was not enough to raise a credible challenge. If a patent was granted after thorough examination, a heavy onus lay on the infringer to demonstrate invalidity, and the standard for credible challenge was high.

It is pertinent to note that the decision has been appealed, and the appeal is currently pending before the Division Bench of the Delhi High Court. There is no stay operating on the decision of the Learned Single Judge.

Novartis AG & Anr vs Natco Pharma Limited (CS(COMM) 229 of 2019 – decision dated 09 January 2023)

In yet another suit brought by Novartis to enforce its patent IN 276026 relating to protein kinase inhibitors, the Delhi High Court granted an interim injunction in favour of the plaintiff. The Court held the following.

• To invalidate a patent on the ground that it is anticipated by prior claiming, the same requires a demonstration that the subject matter of the challenged patent was specifically claimed and exemplified in a prior art.
• To ascertain whether the Markush of a genus patent discloses any particular compound, the Court held that such disclosure should be enabling, ie, only those compounds which can be “reached” by a person of ordinary skill in the art (POSA) from the teachings in the Markush, can be said to be disclosed by the genus patent. The POSA cannot exercise any creativity whatsoever.
• On novelty, the Court held that the fact that the compound has not been synthesised by any person prior to the species patent is a strong indicator that the species patent is not invalid on the ground of anticipation by prior publication.

Pfizer Inc & Ors vs Triveni Interchem Pvt Ltd & Ors (CS(COMM) 442 of 2021 – order dated 24 January 2023)

In a contempt action, initiated by Pfizer, owing to the defendants continuing to offer for sale the infringing product on both its website and third-party websites in clear violation of an ad-interim injunction order of the Honourable Court, the Delhi High Court directed the defendant to pay 2 crore rupees (INR20 million; USD250,000 approximately) to the plaintiff, failing which the director of the defendant company would have to undergo two weeks of civil imprisonment.

Pharmacyclics LLC & Anr vs Lucius Pharmaceuticals & Ors (CS(COMM) 1067 of 2018 – decision dated 04 September 2023)

In a summary judgment, a unique provision introduced by the Commercial Courts Act, 2015, the Delhi High Court decreed a patent infringement suit against the defendants without trial and awarded costs of the suit to the plaintiff.

Pharmacyclics LLC & Anr vs Hetero Labs Limited & Ors

In multiple lawsuits filed by Pharmacyclics against various defendants (CS(COMM) 76 of 2021, CS(COMM) 709 of 2019, CS (COMM) 342 of 2020, CS(COMM) 451 of 2020, CS(COMM) 571 of 2020 and W.P.(C) IPD – 3245/ 2021 – decision dated 21 December 2023), which were consolidated and heard together, the Delhi High Court granted an interim injunction in favour of the plaintiff and restrained the defendants from manufacturing and marketing the drug Ibrutinib, claimed in the plaintiff’s patent IN 262968. The decision is noteworthy because the Delhi High Court held that “where a granted patent is prima facie found to be infringed and is being exploited without a licence from the patent holder, the balance of convenience is always in favour of restraining for further infringement”.

Cognisant of the fact that the drug involved was used in the treatment of various ailments, including cancer, however, balancing the same with the importance of protecting the patent rights of a patentee, the Court held that as the law sternly prohibits patent infringement, considerations of public interest could not be used to justify the circulation of infringing drugs in the market. The Court permitted the defendant to exhaust their existing stock in the market.

Novartis AG vs Natco Pharma Limited & Anr (LPA 50 of 2023 - decision dated 09 January 2024)

In this petition filed by Novartis, the Division Bench of the Delhi High Court adjudicated upon the extent of engagement of a pre-grant opponent under the Patents Act, 1970. Section 25(1) of the Patents Act, 1970, enables “any person” to oppose a patent, prior to its grant. Analysing the scheme of the Patents Act, 1970, in the context of a pre-grant opposition, the Honourable Court held as follows.

• The primary objective of the opposition process under the Act is to provide a platform for “any person” to express objections and concerns regarding a patent application. These objections play a crucial role enabling the controller to have the benefit of diverse views on the question of grant of the patent. Thus, the opposition process serves the purpose of allowing external inputs to be placed for the consideration of the controller enabling it to make a well-informed decision regarding the grant of the patent application.
• At the same time, the examination of the patent application is a duty cast upon the controller exclusively and proceeds independent of the objections, with the controller having an independent duty and obligation to be satisfied that the application merits grant. This examination process by the controller demands a focused evaluation of the patent application against set legal standards. Therefore, the pre-grant opposition filed by an opponent is independent of the examination of a patent application and has no bearing on such examination.
• The Court also held that maintaining a clear distinction between the examination and opposition process is essential for fulfilling the underlying objectives of the Act, but that maintaining this distinction is also fundamental to ensure that the sanctity and efficacy of each stage is maintained.

Boehringer vs Vee Excel

In Boehringer Ingelheim Pharma vs Vee Excel Drugs And Pharmaceuticals (OMP No 85 of 2022 – decision dated 02 June 2022), the High Court of Shimla granted an interim injunction to the plaintiff restraining the defendants from manufacturing Linagliptin in any form whatsoever, which was covered by the plaintiff’s patent No 243301, until the pendency of the suit. The interim injunction was in continuation of an ex-parte injunction already granted by the Honourable High Court in October 2021.

This decision is significant as it showcases that other High Courts in the country have also started following suit with respect to grant of interim relief regarding pharmaceutical patent infringement lawsuits.

Conclusion

The enforcement regime of pharmaceutical patents is robust in India, as evident from the procedural changes brought about by the legislature since the enactment of the Commercial Courts Act, 2015, which is supported by the decisions rendered by the courts. The process of the examination of a patent application and its distinction from a patent opposition has been clarified, interim injunctions with a nuanced appreciation of patent law principles have been granted, timelines of litigation have been reduced, summary judgments have also been granted and the courts have evolved concepts such as “clearing the way” to tailor make relief, to protect pharmaceutical patentees.