NOVARTIS SAGA: MAKING A MOCKERY OF THE IPAB!

“The Union government has told the Madras high court, which is hearing a petition filed by Swiss drug major Novartis AG challenging the appointment of former patent controller S. Chandrasekharan on the Intellectual Property Appellate Board (IPAB), that it is ready to make a revision in the structure of the board. Novartis is challenging the Chennai patent office’s decision to reject its patent application for Gleevec, a blood cancer drug, last year. The rejection took place when Chandrasekharan was supervising India’s patent administration. Novartis believes his presence on the board can be prejudicial and has asked the court’s help in seeking his removal from hearing the case.

The government has now proposed that the board will now comprise a chairman and a vice-chairman instead of a three-member panel. The court agreed to consider the removal of the current technical member on the Gleevec patent appeal—who is Chandrasekharan—and invited written comments from both parties ahead of a 22 October hearing. Chandrasekharan was inducted into the appellate board as a new technical member on patents in April.

Novartis’ patent application for a crystal form of the cancer drug imatinib mesylate was rejected by the Chennai patent office in 2006, citing that the Indian patent law does not allow patent exclusivity for derivatives or marginally innovated form of known drugs unless it is proved that it enhances the treatment value substantially. When Novartis applied for patent in India, it was opposed by non-government organizations such as Lawyers Collective and local drug making companies including Cipla Ltd, Ranbaxy Laboratories Ltd and Natco Pharma Ltd. The companies also joined the current court case.

“The appellate board can hear the matter with the chairman and the vice-chairman, without the technical member,” said Cipla’s legal counsel A. Ramesh Kumar.“If this formula is acceptable to everybody, then the court will pass a consent order, failing which the matter will be heard by the court on merits.” A lawyer, who did not want to be named, said the Act says “there ought to be a technical member, so I am not sure if the government can really override it.

Also, Novartis itself may not agree with the new revision and may insist on another technical member as only such a technical member, who is an expert in patents, may be capable of understanding the nuances of their case and their line of reasoning.” G. Gopakumar Nair, a patent expert in Mumbai, said, “Since the government has not spelt out its plan to remove Chandrasekharan, one cannot say that it has retraced the steps. The government has only proposed a new constitution of the panel. Everyone is back discussing the proposal with their clients and a clear picture will emerge only later.”

A Novartis spokeswoman said, “We petitioned the Chennai court for a new technical member because we disagree with the appointment of the former controller general of the Indian patent office to the appellate board.”

I tend to agree with the anonymous lawyer quoted above. Section 84 (2) of the Trademarks Act states that every IPAB bench must consist of at least one technical member and one legal member. And section 116 (2) of the Patents Act lays down the qualifications for a “technical member”. In short, a technical member ought to have been a Controller of Patents for at least 5 years or should have been a patent agent for at least 10 years. This being so, I fail to understand how the government can now ignore these provisions and have an IPAB bench without a “technical member”. If accepted, the Government proposal above would mean that an IPAB bench consisting of just the Chairman (Justice Ansari) and the Vice Chairman (ZS Negi) will decide a sophisticated patent matter.

Neither of them qualify as “technical members”. Given that India has had only about 80 odd patent cases till date, I’d be surprised if Justice Ansari who retired as a High Court judge prior to his joining the IPAB has heard more than one patent case in his entire career as a judge.

If the scheme proposed by the government is accepted by the parties and put into operation, aren’t we making a mockery of the legislation creating a specialized IP tribunal (IPAB)? I’m assuming that the philosophy underlying its creation was that IP disputes called for some level of specialised expertise not normally possessed by ordinary judges.

On another note, I just wish I knew that if all parties to a dispute agreed, we could subvert a statutory provision—during my days as an IP attorney in India, there were plenty of times when I sat with opposite counsels and moaned about statutory provisions that neither of us liked!!

So what next? Parties to a dispute decide that they don’t like a provision in the Civil Procedure Code mandating that a court cannot grant more than 3 adjournments, barring exceptional circumstances? Or that none of the parties want the judge to apply sections X and Y of the Patents Act that is not entirely to their liking? Or perhaps, they draft their own codes that they wish the judge to apply!!

A classic case of “I told you so”. Spicy IP had warned right at the start that shifting the forum from the Madras High Court to the IPAB midway through the litigation was a bad idea. Come to think of it, isn’t this what we are getting now–a non specialised team sitting in judgment over this complicated patent dispute.

Of course, I’m still at a loss to understand why the government decided to shift the matter to the IPAB midway. Something to do with Nalini Chidambaram (the wife of Finance Minister, Chidambaram) representing Novartis at the initial stages of the litigation and an apprehension of bias??

Anyway, now that it is clear that the government goofed up and created a dent in what might have otherwise been a strong case on merits, what are the possible ways forward?

1. Appoint another technical member. This has the added advantage that if similar situations arise in future (where a technical member such as Chandrasekharan is recused on account of bias), we have a clear way out. In fact, the government should use this as a perfect opportunity to appoint such a person. It may take a little while but it’s well worth the effort.

2. Continue with the solution recommended by the government of having a panel without a technical member—and make a mockery of the system. Of course, this might lead to tricky questions of why tax payer money was wasted in creating this specialised IP tribunal.

3. Shift the litigation back to the High Court. A solution that is not very likely at this stage.

Before I end this post, I wish to reflect on another point dealing with legal strategy. Spicy IP can’t fathom why counsels opposing Novartis in this matter are arguing in favour of making a mockery of the IPAB. In fact, when the government decided to pass an order shifting the matter from the High Court to the IPAB, I wrote to some counsels and hinted that it was a foolish move and that they ought to oppose it. One of them wrote back suggesting that it was too late and that there was nothing they could do about it. Later I found that some of them vehemently argued that Chandrasekharan ought to sit in on the panel on account of something called the “doctrine of necessity”!! And now Mr Kumar representing CIPLA argues (as stated in the LiveMint article extracted above) that it’s perfectly okay for the IPAB to hear the matter without a patent expert.

Why are they actively in favour of an improperly constituted IPAB deciding this matter in a hurry? Wouldn’t a delay help them? After all a delay means that the patent office order rejecting Novartis’ application continues–in other words, generic manufacturers can continue manufacturing generic versions of Glivec. In fact, it is in Novartis’ interest to speed up this litigation. So then, why are generics, including Mr Ramesh Kumar appearing for CIPLA arguing in favour of an improperly constituted IPAB? Very baffling—any enlightenment on this count will be most appreciated.