So how does Indian law on this point compare with the US? The key distinction appears to be that while US courts explicitly factor in “public interest” whilst deciding whether to grant an injunction (restraining order) or not, Indian courts do not normally recognise “public interest” as a separate factor. In a previous post explaining the US law on injunctions in IP cases, we note as below:
“Another landmark patent case that reforms US patent law to a considerble extent is “Ebay vs Merck Exchange”. This case by the Supreme Court came down heavily on the CAFC (Court of Appeals for the Federal Circuit) practice of grating injunctions in patent cases routinely, and almost as a matter of right. The Supreme Court held that an injunction in a patent case is not automatic but is dependent on the facts of each specific case. It is no different from injunctions in other cases, and can issue only if four conditions are satisfied:
1) that it has suffered an irreparable injury; (2) that remedies such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the “public interest” would not be dis-served by a permanent injunction.
For an excellent discussion on the judgment, see this post from the leading patent blog in the US, Patently-O.”
Subsequent to this case, in several electronics and IT cases, US courts have not granted injunctions, but only damages. Illustratively, see this note on a decision, where Microsoft benefited from the eBay rule. As one can appreciate, this operates very much like a “compulsory license” and if applied to pharma, would greatly favour the generic companies.
Contrast the US position/test above with the test in India where courts have traditionally gone by the 3 step test in the landmark British case, American Cyanamid vs Ethicon Ltd, and granted an injunction only when the IP owner has established:
i) That it has a prima facie case
ii) That the “balance of convenience” was in its favour
iii) That it would suffer “irreparable injury”, if the alleged infringer was not injuncted
As one can see, “public interest” is not a separate factor in the above 3 step test. Justice Ravidner Bhat however cleverly reads in “public interest” into the balance of convenience/irreparable hardhsip test (steps ii) and iii)). When assessing these factors, he not only looks into the direct convenience/hardship of CIPLA and Roche, but also factors in the interests of cancer patients in receiving affordable medication i.e public interest. I quote from the judgment:
““ Court is of the opinion that as between the two competing public interests, that is, the public interest in granting an injunction to affirm a patent during the pendency of an infringement action, as opposed to the public interest in access for the people to a life saving drug, the balance has to be tilted in favour of the latter. The damage or injury that would occur to the plaintiff in such case is capable of assessment in monetary terms. However, the injury to the public which would be deprived of the defendant’s product, which may lead to shortening of lives of several unknown persons, who are not parties to the suit, and which damage cannot be restituted in monetary terms, is not only uncompensatable, it is irreparable. Thus, irreparable injury would be caused if the injunction sought for is granted.”
So now, we have “public interest” as a factor in our injunction jurisprudence (apparently even the first Novartis EMR case seems to rely on “public interest” for denying an injunction). And if Justice Bhat’s ruling holds good, then in every case, where the “public interest” is in favour of the generic infringer (likely to hold true in most cases involving important drugs), no injunction would issue. Rather, the patentee is only entitled to damages i.e a “compulsory license” like situation prevails. In other words, apart from the compulsory licensing (CL) provisions in Chapter VII of the patents act, judicial decisions awarding compensation (whether as a lumpsum or as continuing royalties) operate as another stream of “compulsory licenses”.