Supreme Court on Exclusive Marketing Rights


This post discusses the recent decision of the Supreme Court on continuance of Exclusive Marketing Rights (EMR) delivered in a special leave petition involving GlaxoSmithKline (GSK) and the Controller of Patents and Designs. But before that, SpicyIP thanks Sandeep Rathod of GenericIPGuy blog for forwarding this decision to us. SpicyIP also congratulates Mr.Pravin Anand of Anand and Anand who was the lead counsel in this case. This month alone, Mr.Anand has won 3 Supreme Court IP decisions, the first one being the JM Mitra case followed by the HLL case (the one on double patenting) and the GSK case being the last one in the series. The HLL case made its way to the Supreme Court and a decision was given sometime back (SpicyIP will shortly post on this judgment). We wish Mr.Anand all success in his future endeavours.

Facts of the Case
Applicant: GlaxoSmithKline (GSK)
Date of Filing of the Patent Application: 28-08-1998
Date of Filing of EMR Application: 30-07-2000
Filing of First Examination Report: 28-07-2000
First Rejection of EMR Application: 03-05-2002

On rejection of the EMR application, GSK filed writs before the High Court which resulted in a Single Judge setting aside the rejection by an order given on 16-12-2004. Pursuant to this order, a re-examination of the EMR application was undertaken, which nevertheless resulted in the Controller again shooting down the application on 28-12-2004.

Six days after the tsunami hit us, the Patent (Amendment Act) 2005 came into operation, which among other things, deleted/repealed Chapter IVA (ss.24A-24F) under s.21 of the Amendment Act. More than six months after the second rejection of their EMR application and the coming into force of the Patent Amendment Act, GSK filed another writ on 09-06-2005 challenging the rejection (dated 28-12-2004) of the Controller. To this, the Controller filed an appeal which not only questioned the correctness of the earlier order passed by the Single judge, but also objected to the maintainability of GSK’s writ in the light of the 2005 Amendment Act.

The objection was raised on the ground that the Amendment Act left no scope for further consideration of the EMR application since Chapter IVA of the Act had been deleted and that in Section 78 of the Amending Act, it has been specifically stated that all pending applications for grant of EMR filed under Chapter IV-A of the unamended Act which were pending on 1st January, 2005 should be treated to be a claim for patents covered under sub-section (2) of Section 5 of the unamended Act. Consequently, such application should be deemed to be treated as a request for examination of grant of patents under sub-section (3) of Section 11(B) of the Act.

Simply put, according to the Controller, there was no scope for considering any pending cases for grant of EMR after 1st January, 2005 and in any case the applications relating to grant of EMR, disposed of earlier, could not be revived for consideration. However, according to GSK, as on January 1st, 2005 there was no pending application filed by the writ petitioner for grant of EMR and so the transitional provision in Section 78 of the Amending Act had no application to the facts of the case. It was pointed out that since the application for EMR was disposed of at a point of time when the amendment had not come into operation, therefore, there was a vested right to challenge the order before an appropriate forum in accordance with law. The High Court accepted the Controller’s arguments and so GSK filed an SLP before the Supreme Court.

Issue
The issue before the Supreme Court was:
In the light of the Amendment Act which repealed provisions relating to EMR, was the petition filed by GSK regarding an EMR application, maintainable?”

Discussion
S.78 of the 2005 Amendment reads thus:

78. (1) Notwithstanding the omission of Chapter IVA of the principal Act by section 21 of this Act, every application for the grant of exclusive marketing rights filed under that Chapter before the 1st day of January, 2005, in respect of a claim for a patent covered under sub-section (2) of section 5 of the principal Act, such application shall be deemed to be treated as a request for examination for grant of patent under sub-section (3) of section 11B of the principal Act, as amended by this Act.
(2) Every exclusive right to sell or distribute any article or substance in India granted before the 1st day of January, 2005 shall continue to be effective with the same terms and conditions on which it was granted.
(3) Without prejudice to any of the provisions of the principal Act, the applications in respect of which exclusive rights have been granted before the 1 st day of January, 2005 shall be examined for the grant of patent immediately on the commencement of this Act.
(4) All suits relating to infringement of the exclusive right granted before 1st day of January, 2005 shall be dealt with in the same manner as if they were suits concerning infringement of patents under Chapter XVIII of the principal Act.
(5) The examination and investigation required as carried out for the grant of exclusive right shall not be deemed in any way to warrant the validity of any grant of exclusive right to sell or distribute, and no liability shall be incurred by the Central Government or any officer thereof by reason of, or in connection with, any such examination or investigation or any report or other proceedings consequent thereon.

s.78 (1) speaks of an application filed under Chapter IVA before 01-01-2005; though it doesn’t state so explicitly, it refers to applications which are pending i.e. those which are under examination and those which have not been rejected or abandoned. This can be inferred from the rest of the sub-sections which deal with the treatment of such applications once the amendment comes into force; accordingly, an application which has been rejected by the office and has moved on from an administrative forum to a judicial forum cannot be brought within the aforesaid provision since this is not in line with the concept of pendency. Consequent to the rejection of the application, there are two possible situations:
1. A petition lies before the High Court before the 2005 amendment comes into force or
2. A petition lies before the High Court after the coming into force of the 2005 amendment

The issue of maintainability does not arise under the first situation. Clearly, GSK’s petition falls under the second category. Can such a petition be maintained? To answer this, one would first of all need to look into the repealing Act. If the repealing Act is silent on the issue of pending proceedings initiated under the repealed Act, then one has to fall back on the General Clauses Act of 1897. Section 6 of the General Clauses Act reads:

6. Effect of repeal.- Where this Act , or any Act made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not—
a. revive anything not in force or existing at the time at which the repeal takes effect; or
b. affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
c. affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
d. affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
e. affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
f. and any such investigation, legal proceedings or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed.

It is clear from a plain reading of the above provision that whenever there is a repeal of an enactment, the consequences of section 6 of the General Clauses Act would follow unless, as the section itself says , a different intention appears. In this case, the 2005 Act is silent about the effect of repeal on the pending proceedings. In such a situation section 6 of the General Clauses Act would apply.

Further even in cases where appeals have not been filed, the same may be filed even after the repeal because the right to appeal is accrued and vested in the affected person the moment the proceedings were first initiated under the repealed Act. The vested right of appeal would not be dislodged by the repeal of the enactment unless the repealing Act expressly or by necessary implication takes away that right.

Thus it follows, that neither would the impugned rejection passed under the repealed Act become inoperative on repeal of the enactment nor would the right of appeal against the same be affected in any manner by the repeal. Also, the right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by a lower forum, and such a right cannot be taken away except by express enactment. Accordingly, GSK’s petition was held maintainable.

13 comments.

  1. AvatarAnonymous

    Dear Dipak
    Congratulation for excellent post. I want to knwo more details about HLL case. I have doubt it went to Supreme court.

    Reply
  2. AvatarJ. Sai Deepak

    Hi Anon,
    I am informed by a reliable source who has closely followed the case that the Supreme Court remanded the case back to the trial court. There’l b a post on this case shortly.

    Reply
  3. AvatarAnonymous

    Dear Sai
    Thanks for Information . I would like to draw your attention in GSK EMR case Parvind anand is not a party .
    Swetashree is the lawyer infact i donot know shwetashree is part of anand& anand gorup?
    please clarify this matter
    thanks in advance

    Reply
  4. AvatarJ. Sai Deepak

    Hi Anon,
    Here’s a quick clarification. Ms.Majumder was with A&A when GSK matter was underway and she did handle the matter. It is also true that Mr. Anand was listed as the primary counsel. As regards, Ms.Majumder’s current status, i am not disposed to comment on that.

    Wishes,
    J.Sai Deepak.

    Reply
  5. AvatarAnonymous Coward

    “SpicyIP also congratulates Mr.Pravin Anand of Anand and Anand who was the lead counsel in this case. This month alone, Mr.Anand has won 3 Supreme Court IP decisions. . .”

    Wow! This is the heights of sycophancy! I have no issues with Mr. Deepak congratulating Mr. Anand. But let that congratulation be on the fact that Mr. Anand managed to steer the court into making good and correct decisions, not just the fact of Mr. Anand winning cases in his favour.

    The former would be appreciation of Mr. Anand, based on the fact that the author agree with his opinions. Even exclaiming at his enviable record at the Supreme Court would have been acceptable. But what this blog post descends to is sycophancy!

    Reply
  6. AvatarJ. Sai Deepak

    Dear AC,
    I think your comment calls for a detailed response and though I am not exactly in the best of my health and spirits, I cannot let you or anyone for that matter, get away with a comment such as this which is nothing short of slander against the blog and me as well.

    1.Firstly, I would like draw your attention to my comments on Mr.Basheer’s post on the same EMR decision where I have expressed my honest doubts on the clarity and wisdom of the decision; please note that these comments were part of my dialogue with Ms.Majumder, one of the attorneys who handled/is still handling this case. This should prove that for all your accusations of sycophancy, I have not surrendered my right to hold an independent opinion and to dissect an issue solely on the basis of its merits without casting unwarranted aspersions whatsoever on any individual involved.

    2.Secondly, it is not often that ones comes across a patent case in India which is of consequence either in terms of technology or interpretation of the law; such being the case, one cannot, more so SpicyIP cannot, turn a blind eye if a single individual has won 3 cases in the Apex forum as the leading counsel. This is a fact and not speculation, so how can I or the blog be accused of sycophancy for merely stating facts? Of all the professions, law is one profession where opposing counsels are known to be magnanimous and generous in their praise for each other, so why shouldn’t you see this as just another instance where a bunch of young lawyers and lawyers-in-the-making express their wishes to one of their senior contemporaries? Has Mr.Anand been glorified at the expense of any other person? Absolutely not, so where is the question of sycophancy? Either you are guilty of the Leviathan sin- jealousy, or you simply wish to make yourself relevant by propping yourself as a party-pooper. Whatever be the case, I shall not be cowed into being apologetic about my statement congratulating Mr.Anand on behalf of the entire SpicyIP Team.

    3.Thirdly, if one were to take an isolated view of this comment, I am sure that even I would have been forced to admit that there is a smidgeon of merit in your allegation. However, given your unenvious track record of baiting bloggers into a slugfest (I have been following your comments on posts by other bloggers as well), applying the principle of res gestae, I will have to slot this comment in the same category- rhetoric sans logic (yes, sometimes rhetoric does have logic).

    Frequently you seem to be taking the Holier-Than-Thou attitude which I believe is partly derived from the advantage which every commentator or observer enjoys simply because he/she has the benefit of standing outside the circle to comment on its circularity or otherwise. Even if you are an “interested party”, I wouldn’t be misplaced when I say that that the swagger and smugness in your tone is the result of your confidence in the cloak of anonymity which shrouds your identity. This probably indicates that you lack the guts to hold on to your convictions and I must congratulate you on your ability to understand your nature so well that you have given yourself an apt name.

    4.I remember that in an earlier comment you had asked Mr.Basheer the reason that your comments were ignored or “moderated”. By now it must have become clear, that your uncanny knack for resorting to ad hominem attacks has not gone down well and is in extremely poor taste. I request you to restrict your comments to the merits of the issue alone and if at all you have a grievance against any individual, kindly refrain from using SpicyIP as a forum to settle your personal scores. You can send me a personal mail and both of us can mud wrestle to our heart’s content.

    5.Finally, even those who have interacted with me for however brief a period of time will vouch for the fact that I am incapable of sycophancy. Fawning, though elevated to the status of an art in the medieval ages, is certainly and thankfully not one of my gifts. By His Grace, I am not in a position where I have to eke out a living by base flattery nor do I harbour vested interests in edifying any individual. So let this be your last act of indiscretion on SpicyIP.

    Reply
  7. AvatarShamnad Basheer

    Dear Anon Coward,

    While I really value your incisive comments on this blog (most recently, your very astute comments re: Mihirs post on Scrabulous), I have to urge you to please refrain from making ad hominem attacks against our bloggers.

    These are people who spend a considerable amount of time reviewing IP developments in India, so as to enrich your understanding. So please be a little more respectful of their efforts, before condemning them.

    As Sai rightly mentioned, our blog also tracks patent strategies (please read earlier posts where we exposed the failure in litigation strategies of Novartis and Roche). A patent litigator who wins 3 cases at the Supreme Court (where, as you will appreciate, an IP case pops up about once every 2 months or so) must surely be congratulated for his excellence in litigation strategy. And why not?

    Did you see Sai writing heavily in favour of the judgment? In fact, he was quite skeptical of GSK’s position –if he was a mere sycophant, wouldn’t he have praised the decision since it was in Mr Anand’s favour? You must go through his exchanges with Shwetashree and me to understand his perspective on this case.

    The HLL case involved a serious public interest issue—double patenting, raising serious issues of transparency. So even from a policy perspective, it was a good outcome. Please read all of these previous posts before you condemn our bloggers as mere sycophants.

    Once again, I appreciate your participation on this blog and respect you as one of the more astute commentators. But please refrain from mounting ad hominem attacks in future–its really a waste of time–time that could have been spent debating the merits of these cases and advancing the cause of IP education.

    Thank you for understanding.

    Reply
  8. AvatarAnonymous Coward

    Dear Sai and Shamnad,
    While I appreciate your rebuttals of my comments, I see little cause for your bringing up the ad hominem accusation.

    Let me make this clear: I am not trying to score a brownie point by tarnishing Sai’s reputation. I am not trying to win an argument by focussing on someone’s character instead of his/her contentions. I am very much attacking the crux of the matter, which from where I stand is about your congratulating. I am noting that a post that says: “Mr. Pravin Anand of Anand & Anand Associates has done himself rather well with an enviable record of three Supreme Court case wins this month alone. This is noteworthy given the relatively few IP cases that reach the SC. In this post I shall appraise one of his wins.” would have not attracted my allegation of sycophancy the way that “SpicyIP congratulates Mr. Pravin Anand…” did.

    I guess I should instead have said, “By using such language you open yourself out to accusations of sycophancy.”

    A minor quibble from my perspective. But reading Sai’s over-reaction made me feel like a troll flame-baiting a young blogger (which is what he accuses me of doing). Let me clarify: I do take issues with your blog, and your bloggers. But only when I find them being lazy about reporting, or when they seem to have overlooked something I consider important, and in other similar cases. Heck, I’ve even been encouraging (of you, in those lost comments on http://spicyipindia.blogspot.com/2008/05/choking-patients.html, and of Mr. Naniwadekar in the recent past). I am too old now to be flame-baiting, and legal blogs on intellectual property do not lend themselves well to such an activity in any case.

    I am still left wondering whether “SpicyIP”, that amorphous entity that often refers to itself in the third person believes that I spout “rhetoric sans logic” or “astute comments”. I guess I straddle the divide.

    And Sai, a friendly piece of advice on dealing with flame-baiters: ignore them (for they only get off on your angry response). Unfortunately (or fortunately, I can’t decide), I got no such kicks from your response. Only mild amusement, ending in a pitying sigh.

    Reply
  9. AvatarAnonymous Coward

    I just thought I might explain one thing: from my perspective, the argument was not about whether Mr. Deepak or Mr. Anand were correct in their conclusions, but rather the fact that congratulation of the sort that was in that post was unseemly. My unhappiness was not with the decision in the case, with Mr. Pravin Anand’s success (it is another matter that I disagree with his viewpoint on most occasions), or with the blog/author’s analysis of the decision. It was with the nature of the congratulatory message he was conveying to Mr. Anand. Hence, it wasn’t an ad hominem attack.

    Reply

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