Roche vs CIPLA: The Rhetoric of Patent Busting


The Indian Express carried a short note of mine on the Roche vs CIPLA decision by Justice Ravinder S Bhat. I’ve reproduced the text below. For our previous posts on this issue, see here.
Unless Roche is able to demonstrate empirically that CIPLA’s lower prices for Erlotinib (the lung cancer drug in issue) does not really translate to increased access to poor patients, it is difficult to see how Justice Bhat’s order will be overturned in appeal.

“The rhetoric of ‘patent busting’

Shamnad Basheer

Posted online: Saturday, April 12, 2008 at 0028 hrs IST

The verdict on one of the most keenly watched patent litigations was finally out last month. In a carefully nuanced and remarkably well-researched judgment, Justice S. Ravindra Bhat of the Delhi High Court refused to injunct Cipla from selling generic versions of a patented anti-cancer drug belonging to Roche. The judgment has received mixed reviews, while innovative pharmaceutical companies see this as “patent busting” of the worst order, public health activists are ecstatic at this clear preference for patients over patents.

To me at least, the judgment appears to strike the right balance between private patent rights and public health imperatives. A careful reading of the 58-page order suggests that the key factors that influenced the judge to decide way he did were: First, Cipla’s drug, Erlocib was being sold at one-third the price of Roche’s patented anti-cancer drug, Tarceva.

Second, Roche was not manufacturing the drug in India, but importing it — causing the judge to worry about the prospects of long term supplies from a multinational corporation operating within India.

Third, Cipla raised very serious doubts about the validity of the patent.

Fourth, Roche’s attorneys were ill prepared and committed a number of lapses. Illustratively, they requested an ex-parte interim injunction from the court without so much as producing a copy of the patent claims. Besides this, as the judge himself points out in his judgment — they failed to raise the issue of “irreparable hardship”, a critical component of the three step injunction test in India.

Apart from the above, an ill reasoned order from the patent office in response to a pre-grant opposition filed by Natco against Roche’s patent application influenced the court. In particular, the court found that the patent office, while granting the patent, wrongly relied on a recently overturned US test that considerably lowered the threshold for patentability. Little wonder then that Roche’s argument that the patent office decision in its favour renders the patent immune from attacks on validity did not sway the court much.

What is most unique about Justice Bhat’s judgment is that it stresses that “public interest” has to be factored in before a court decides to grant a temporary injunction or restraining order against an alleged infringer.

The crux of his judgment appears to be this: At this “interim” stage, one cannot conclusively determine whether or not Roche’s patent is valid. In the light of this uncertainty, the critical factor for consideration is “public interest” — whether or not the grant of an injunction will cause “irreparable hardship” to critically ill lung cancer patients, who may not be able to afford Roche’s monopoly prices. And if the court finally finds in favour of Roche that the patent is a valid one, then Cipla can be made to compensate Roche for all the losses up to that stage. To this extent, the court asked Cipla to maintain a clear account of moneys made from the sales of its drugs.

Given that the validity of the Roche patent is in serious challenge, does the denial of a temporary injunction to the patentee amount to patent busting? Should patent injunctions be granted as a matter of right at this stage? Has India got its policy wrong? We need look no further than the most patent friendly nation on the face of this planet — the US, where the Supreme Court held that the grant of an injunction in patent cases is not a matter of right but a discretionary remedy. And this discretion has to be exercised carefully, taking into account several factors, one of which is “public interest”.

Even as we speak, Roche is asking a US court to do exactly what Cipla had requested Justice Bhat to do — not to grant an injunction on grounds of “public interest”. Effectively Roche’s claim is that, although its anaemia drug, Mircera infringes Amgen’s patented Epogen, there ought to be no injunction on grounds of “public interest” because Mircera is cheaper, requiring less frequent “dosing” and is therefore beneficial to patients. Surely what’s sauce for the goose is sauce for the gander as well!

What remains to be seen is whether future Indian judges will apply the tenets laid down in Justice Bhat’s judgment in an unbiased manner to home grown patentees such as Ranbaxy and Dr Reddy’s. In other words, if the concern is that patients are prejudiced by potentially “invalid” patents and high prices, then the concern ought to equally apply when the patent in question is held by Ranbaxy and not by an MNC.

To conclude, one is not certain at this stage if the Roche patent over Tarceva is a valid one or not. Prior to a final decision on this count, deploying adjectives such as “patent busting” or “patent breaking” to describe the Delhi High Court order smacks of ignorance. If at all anything has been “busted”, it is the notion that patents are sacrosanct monopolies that cannot be derogated from. Most patent scholars today readily agree that patents are nothing more than a statutorily granted right by the state in exchange for the useful disclosure of scientific information. As with other statutory rights, they can be derogated from, when “public interest” so demands. Sophisticated patent policy requires a careful balancing of innovation imperatives through patents against other competing and perhaps more important interests, such as the right to health. And it is this delicate balance that Justice Bhat strives for and achieves in his judgment — a judgment that will no doubt go down in the annals of history as representing a milestone in Indian patent jurisprudence.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof Amartya Sen. Professional History: After graduating from the NLS, Bangalore Professor Basheer joinedAnand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

6 comments.

  1. AvatarShamnad Basheer

    Ken Shadlen (who teaches at LSE) writes:

    Shamnad — I’m thrilled (and not surprised) that you support the decision, but let’s remember that you were extremely critical before of CIPLA’s strategy. Here’s from a January posting, quoting an article from Businessworld:
    “But some believe that Cipla has weakened its hand. By not opposing the patent through the usual channels, and directly launching its copy, it may convey the impression that “it does not respect the law”, says Shamnad Basheer, a New Delhi-based associate of the Oxford Intellectual Property Research Centre who runs a popular blog on patents. “This infringement strategy might backfire against them in court.” Basheer points out that Cipla does not seem to have approached the patents office with its opposition prior to this. Nor has it sought a licence, such as rival Natco Pharma of Hyderabad, from Roche in exchange for royalty payments. At the time of writing, the court had yet to finish hearing the case though proceedings began last week.” — http://spicyipindia.blogspot.com/2008/01/roche-vs-cipla-businessworld-article.html

    And in plenty of other blog entries you were fairly critical of Cipla’s strategy, which was essentially to say “we’re infringing, come after us if you dare!” I don’t have time to go through the blog entry-by-entry, but you were always quite critical of Cipla’s strategy. But now they prevailed. Their “audacious” gamble has paid off, right?

    I don’t mean this as a “gotcha” sort of comment, but rather an invitation to write a blog entry on legal challenges and strategies for generic producers in light of this decision. Fascinating stuff.

    Please post this on comments section as you see appropriate.

    Tks,
    Ken

    Reply
  2. AvatarShamnad Basheer

    Dear Ken,

    Thanks for the comment. As you will appreciate, commenting on the merits of a judgment is very different from commenting on the merits of a legal strategy. You have to go through the judgment carefully to understand that Roche’s counsels had completely botched up the case.

    I deal with some of their shortcomings in one of the posts and also in the Indian Express write up. If they were savvy enough, they would done what Novartis did in the EMR decision from the Chennai High Court—put in place a programme called GIPAP and insist that they are taking care of access issues. Far from doing this, Roche did not even argue on the irreparable injury point—a critical point in injunction jurisprudence. And they didn’t even submit the patent claims in court on the day that they asked for an injunction!!

    You also have to bear in mind that they didn’t get the normal Delhi Judge (who are very pro injunctions) but a new judge (Bhat took office very recently) who is known to be critical of MNC’s. So CIPLA was really lucky here in a lot of ways. But when we assess the merits of the judgment itself, it seems clear that the judge could not have decided any other way—and to this extent, it is a very sensible judgment.

    Had Roche put up a better fight, CIPLA’s strategy of openly opposing the patent, might have backfired. And this is what I stress upon in the earlier posts. But even here, I have always cautioned that current Indian case law was slightly tilted against the grant of injunctions and in CIPLA’s favour. See this post here. http://spicyipindia.blogspot.com/2008/01/roche-vs-cipla-update-law-on-temporary.html

    I understand that you’re not a patent litigator or lawyer—and this may have caused you to overlook some these finer nuances. But I hope I have made it clear to you now.

    And I better put this up on the comments section—lest others suffer from this misconception. Unfortunately, pharma patents are a deeply polarised issue and no one is interested in a case by case and nuanced approach—all I hear is : whose side are you on? A bit like George Bush: either you’re with us or against us!! Hopefully things will get better and folks like us who take the middle ground on some of these issues won’t be attacked each time we comment:)

    Thanks again for your comments.

    Take care,

    Shamnad

    Reply
  3. AvatarShamnad Basheer

    Ken Shadlen writes:

    Shamnad – This is excellent, extremely insightful as always. I wish everyone explained things so clearly. Do post on the comments section, and please do write an entry on legal strategies. I look forward to it.

    Tks,
    Ken

    Reply
  4. AvatarAnonymous

    Justice Bhat judgement is laudable. He has outweighted the public interest first without seeing validity of patent granted to the M/s Roche by the patent office. By virtue of the Patent Act,the importation of the Drug by Roche to India as Patentee is taken as manufacture in India. This provision itself is wrong because patents are granted in lieu of disclosure of the invention to the public, apart from this there is one more important thing patents are being granted for the industrial development of the Nation. If the Patent provision treates importation is manufacture then how industry grows in India. Both the things are contradictory. If Roche manufactures in India the price of the drug is far chaper than the imported price. Why the public has to bear the burden of importation cost and very high manufacturing cost in a foreign country from where the drug is being imported. Let Roche manufacture the drug in India. In constrast to Shri Bhat’s view in this case Hon’ble Justice Shri P. Jyothimani of Chennai High Court has taken the opposite view regarding the validity of patent granted to M/s Bajaj in Bajaj vs TVS Case. The judge thinks once patent is granted by the Patent Office the validity of the patent can not be questioned misinterpreting section 13(4) of the Patents Act. The section 13(4) says that the Patent office is not responsible for the validity of patent becuase Patent Office sees the Novelty,inventivestep and industrial applicability of the invention but not the validity of the Patent. Hon’ble Justice Shri P. Jyothimani says the validity of the Patent can not be questioned now because Bajaj is selling the automobile for the past 4 years. Validity of the patent can be questioned even in 20th year of the term of patent if it affects somebody let Bajaj earn Crores of rupees in due course. The vehicle buyer is least bothered about the patented articles(Engine) are being used in the vehicle or not rather he bothers about the mileage. Above all vehicle buyer now-a-days goes by the influence of Advertisements crores of rupees are being spent. Consumersim!!! Hats up?

    Reply
  5. AvatarAnonymous

    Shri Basheer, Please Comment on the above anonymous comment on the comparison of Roche Vs Cipla with Bajaj vs TVS case. It is interesting to know. Since Chennai High Court has granted Bajaj an interim injunction in the preliminary stage itself in contrast to Delhi High Court view in Roche vs Cipla.

    Reply
  6. AvatarShamnad Basheer

    Dear Anonymous,

    You raise a very interesting point: how does the Roche decision denying injunctive relief compare with the Bajaj decision that grants such relief. To me, the critical distinction lies in teh fact that while involved motorbikes (a commodity that the public can do without, at least relatively), the other case involved a lung cancer drug–a critical medicine to which the public “needed” access. On the point of patent validity and presumption of validity etc, I think both judgments point the same way. i.e. the 6 year rule is wrong in law and even a recent patent can be treated as valid enough at least to establish a “prima facie” case. And a mere challenge to invalidity will not maket he plaintiff lose on the “prima facie” issue. However, on balance of convenience and irreparable hardship (the prong under which “public interest” was read in,) a more expensive drug (relatively mugh higher than generic cost) will tilt the balance against the grant of injunction. I hope this is somewhat helpful in striking a distinction between these two cases.

    Reply

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