Enercon and Positive Patent Perception

The recent Enercon decision by the Supreme Court will go down as a landmark judgment. For a succinct summary of this decision, see Aparajita’s post here. And for a review of this decision and some of the questions that it raises, see my post here.

In today’s Financial Express, I argue that this Supreme court ruling more than amply illustrates that Indian IP law is neither anti IP nor anti MNC. That is, if one were willing to look at the law with a dispassionate fact based lens and not a tainted one.

For those interested, I reproduce the piece below.  

Patently Positive

In a recent landmark decision, the Supreme Court may have unwittingly taken the sting out of the charge that India’s IP laws are anti-IP and biased against multinationals. In Enercon vs Yogesh Mehra, the apex court ruled that a patent opponent cannot take multiple shots at challenging the same patent, but must choose between the various options spelt out in India’s Patent Act. If she chooses to challenge the patent in a post-grant opposition proceeding (to be filed within one year of the patent grant), she cannot then seek to revoke it later before the Intellectual Property Appellate Board (IPAB)—India’s specialised IP tribunal—before which any patent can be challenged. If she chooses to file a revocation proceeding before the IPAB, she cannot then challenge the validity before a High Court through a counter-claim (a claim filed in response to a lawsuit for patent infringement).

While all of this may sound a bit technical, its impact is enormous from an efficiency perspective. Up until this decision, multiple patent challenges were the order of the day, resulting in enormous wastage of resources; the only winners were lawyers who would charge by the hour for each one of these multiple proceedings.

Though infirm on a few minor counts, the court’s decision essentially paves the way for a leaner IP dispute resolution framework. However, efficiency considerations notwithstanding, this decision is vastly significant for another reason. It may have blunted the current critique against India’s allegedly-biased IP framework. For this decision is clearly in favour of the patentee, a German multinational in the business of creating technologically advanced wind turbines and other ecofriendly instruments. Indeed, Enercon’s victory comes after a series of losses at the hands of the IPAB, where 19 of its patents were invalidated. The Supreme Court ruling could also arguably mean that the IPAB invalidations do not count any more, but that this issue must now be decided by the High Court.

Juxtapose this decision favouring Enercon against an earlier Supreme Court decision denying Novartis the right to patent its breakthrough anti-cancer drug Glivec. Multinational pharmaceutical companies and their governments were up in arms lambasting India for its outrageous IP theft and playing spoiler on the international innovation landscape. Never mind that the decision itself hinged on the specific facts of the case, and may have been spookily similar to a US decision some years ago, where the court denied a patent to Pfizer’s hypertension drug Norvasc on the ground that mere physical advantages such as increased stability were not enough to merit a patent grant.

The Novartis decision came close on the heels of a decision by the Indian patent office to grant a compulsory licence over Bayer’s patented anti-cancer drug to Natco, an Indian generic company, upon the payment of a 6% royalty. The reason was simple enough. While the version sold by Bayer (a German multinational) was pegged at a whopping R2.8 lakh a month, Natco promised to do so for R8,880. It bears noting that the statute itself (section 84 of India’s Patent Act) entitles a third party (Natco) to apply for a licence, when the patented invention is excessively priced and not reasonably affordable to the public. The decision was then upheld on appeal by the IPAB and came after strict compliance with judicial due process.

Unfortunately, the Novartis and Bayer sagas were enough to paint India in a negative light, triggering serious political lobbying, a cheap shot at ranking India last on an alleged IP index, a US Senate committee hearing, and last but not the least, the insidious threat of unilateral (Special 301) trade sanctions from the US.

Never mind that the US itself issued several compulsory licences in the past and even threatened the very same Bayer with a compulsory licence when it refused to bring down prices of Ciprofloxacin at the height of the Anthrax scare.

Hypocrisy, thy name is intellectual property!

Our media added fuel to the fire by highlighting patent losses, but giving a miss to the patent wins. Illustratively, when two of Glaxo’s patents covering a breast cancer drug (Tykerb) were challenged before India’s specialised IP tribunal (IPAB), the main patent covering the basic compound was upheld and the secondary patent covering the salt invalidated. While our media moguls hailed the death of the secondary salt patent, they all but ignored the more important primary patent that had been upheld. This creates a rather one-sided perception. Similarly, while the refusal of an injunction to Merck against domestic major Glenmark was lauded in the press, the various injunctions obtained by Merck against six other pharmaceutical companies went happily unreported.

In fact, the present case itself is an excellent example. While the Novartis and Bayer losses triggered article after article in the mainstream media, an Enercon win has not received any media attention as yet.

One hopes that governments will not fall prey to perception, but will take a more studied and dispassionate view of the matter, moving away from a “faith-based” IP debate to a “fact-based” one. Unless, of course, one is keen on sacrificing truth and objectivity at the altar of convenience, where trade is neither “free” nor “fair”, and where IP is a mere mirage for protecting the vested interests of multinational corporations and their home governments.