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INDIA (DOMESTIC FIRMS): An Introduction to Intellectual Property

2021 - A YEAR OF PROMINENT PATENT DECISIONS IN INDIA.

2021 saw many patent decisions being delivered by the Indian judiciary, with the Delhi High Court as the flag-bearer for forging new jurisprudence. This piece looks at some of the most prominent decisions of 2021, and also provides a sneak peek into the decisions to watch out for, from the Supreme Court of India, in 2022.

A. TREATMENT OF ‘EXPORT’ UNDER THE PATENTS ACT

Lundbeck v Hetero saw an interim injunction being granted against export of a generic version of Hetero’s patented Vortioxetine (concerning an anti-depressant). The court noted that:

i. Hetero hadn’t provided proof that significant quantities exported were for research purposes;
ii. Under patent law, export amounts to use in India, and thus, infringed Lundbeck’s Indian patent.

Later in 2021, the High Court delivered a decision, which revisited fundamental principles concerning India’s equivalent of the “Bolar exemption” (s 107A) in Merck Sharp & Dohme Corp v SMS.

The case involved a claim for infringement of MSD’s patent (IN ‘816) for the anti-diabetic drug Sitagliptin. The drug was exported in huge quantities, and per MSD, it signified commercial exploitation and was, therefore, out of the purview of ‘bolar exemption’ which was restricted to ‘research’.

Taking note of the lack of proof to show that the exported quantities were being used for commercial exploitation, the court held that commercial gain was acceptable, so long as the export was ultimately for research purposes.

Though the court permitted continuing exports, it required the defendants to comply with the legal position established in Bayer Corporation v UOI by filing an affidavit stating inter alia the quantity of export; that it is intended only for research; undertaking that it would pay damages if found liable at the final stage. It also required an affidavit from foreign importers, confirming that the drug would be used for research only.

B. GENUS-SPECIES PATENTS 

1. FMC CORPORATION & ANR V. NATCO PHARMA LIMITED AND BEST CROP SCIENCE LLP

This suit concerned infringement of FMC’s patent (IN ‘307) for Chlorantraniliprole (CTPR) relating to superior insecticidal activity. Concluding that there was an infringement, the court held an interim injunction to be the correct deterrent as damages were no panacea.

(a) Genus-Species patents 

The Patents Act does not spell out concepts such as a Markush claim, a genus or a selection patent. Though foreign jurisprudence on these aspects were often adopted, this is perhaps the first Indian decision which legitimises “selection patents” under the statute.

Selection (species) inventions are patentable if (a) selected from the Markush (b) contain an inventive step (c) are otherwise not unpatentable.

To be unobvious, a POSA must arrive at the species from the genus, without unduly straining imaginative faculties. The exercise must have a flavour of directness; not trial and error. In doing so, the court upheld principles in foreign cases of IG Farben (amongst others)

(b) No disclosure, only coverage 

The invalidity attack on CTPR, on the ground of disclosure in the former genus patent was dismissed because:

i. The law doesn’t presume disclosure of a species within a Markush claim;
ii. The defendants’ argument was based on hindsight and cherry-picking;
iii. No teaching in the genus patent to reach CTPR.

For this, the court also deconstructed the landmark decision of the Supreme Court in Novartis v Union of India, and put to rest the controversy on the treatment given to concepts of “coverage” and “disclosure” in Indian law. It held the two concepts were different.

(c) Inventive Step (Secondary Factors) 

Because no other entity (despite volume prior art cited) besides the patentee had developed CTPR, inventive step was upheld.

(d) 3 (d) 

On enhanced efficacy, the court noted that the description of the species and genus patents was different, besides CTPR’s superior insecticidal activity being fully explained in the patent.

2. NOVARTIS v NATCO 

Novartis brought an infringement suit against Natco, for inter alia infringing its species patent relating to Eltrombopag Olamine (EO). The drug helped in increasing platelet production.

Jurisprudentially, this decision is significant as it summarises core principles from leading decisions in India, and thus proving a ready reckoner for any patent lawyer.

i. Infringement admitted 

With the defendant (Natco) admitting manufacturing and sale of generic EO, the court held that if Natco’s challenge to validity didn’t hold up, infringement would be upheld.

ii. Increased bioavailability acceptable to rebut section 3 (d)

Novartis cited increased bio-availability of EO (over Eltrombopag freebase) and claimed it had three times the amount of plasma concentration.

This found support from the court. Interpreting the landmark Novartis v Union of India, it held that the Supreme Court didn’t rule out bio-availability as therapeutic efficacy, but only required the contention to be supported by empirical data.

iii. Anticipation by “prior claiming” rejected 

Natco challenged the patent on the ground that EO was not only claimed by the species patent (IN ‘161), but was also claimed by the genus (IN ‘176).

The court disagreed and held that for prior claiming, the invention of the species and the genus had to be identical. This inquiry had no room for hindsight, and one cannot cherry-pick from the genus patent to somehow arrive at the species (EO).

• Coverage not equal to disclosure 

It also held that just because the Working Statements (Form 27) in India and US FDA Orange Book had listed both the (corresponding) genus and the species patents as being related to EO, it did not mean that both the patents claimed EO. These listings only referenced to the “broad coverage” of EO by the genus patent.

The court buttressed this conclusion by holding that this broad coverage, coupled with the “enabling disclosure” in the genus patent did not lead a POSA to EO. It reaffirmed that coverage and disclosure are distinct.

iv. Obviousness rejected 

Natco based its obviousness challenge also primarily on the teachings of the genus patent. However, this was rejected because:

(i) It suffered from hindsight bias;

(ii) No justification was offered for picking specific substituents in the genus patent;

(iii) No teachings in the genus for a POSA to make the substitutions to arrive at EO.

With respect to claim 6 of the genus patent, for pharmaceutically acceptable salts of Eltrombopag, the court held that Natco didn’t discharge its onus that a POSA would have chosen “olamine” from a multitude of salts.

v. Infringement of both genus and species 

Though Novartis had initially pressed both patents, it restricted its claim to the species patent, during arguments. Thus, the court dismissed Natco’s suggestion that infringement of both patents implied that the genus necessarily disclosed EO.

vi. ‘Credible Challenge’ defined 

Indian patent litigation had witnessed a trend where generic companies pleaded that so long as they could show that the patent was “vulnerable” on any ground, a ‘credible challenge’ was established, and an interim injunction ought to be denied.

This decision saw the court putting a spanner in the works, by holding that casting a shadow of doubt on the patent wasn’t enough.

A patent granted after thorough examination can’t be treated as easily vulnerable and to beat an injunction, the onus to show invalidity lay heavily on an infringer. Thus, the court clarified that the standard for a credible challenge was high.

vii. No Clearing the way 

Lastly, the court called Natco out on its silence despite the EO patent being registered for 12 years. It didn’t file a pre-grant, post-grant or a revocation petition, and chose to challenge its invalidity only when it was “caught in the act” by Novartis and brought to court.

C. DECISIONS TO WATCH OUT FOR IN 2022 

The Supreme Court of India is set to hear nine appeals from orders passed by the Delhi High Court, which refused an injunction to AstraZeneca against generic versions of its patented anti-diabetic drug ‘Dapagliflozin’. After almost two years, two full-scale decisions of Single Judges and one decision by the Division Bench, the dispute is now before India’s apex court.

Some important questions of law before the Court are:

a) Does coverage of a compound within a large, Markush claim, amount to its disclosure?

b) Can one drug be protected by two or more patents?

c) Does a claim for infringement of both the genus and the species patent, through one compound, necessarily mean that the compound was disclosed in the genus?

d) Does the test of novelty and obviousness change to the “knowledge of the inventor” when prior art and the patent have the same inventor?

Once final arguments are heard and orders are reserved, this is going to be the most-awaited decision of 2022 and is expected to lay the foundation on which the law surrounding genus-species patents will develop.