Drug Regulation

Breaking News: Patent Linkage Killed by Delhi High Court and Bayer Fined


In a judgment handed down today by Justice Ravindra Bhat, the Delhi High Court dismissed a writ petition filed by Bayer seeking to institute a drug patent linkage mechanism through the backdoor.

Essentially, Bayer’s writ petition asked the court to direct the Drug Controller to desist granting drug regulatory approval to Cipla’s generic version of Nexavar, as this would allegedly violate the patent rights of Bayer.

The Delhi High Court indicated its strong disapproval of Bayer’s intention to use the judiciary to sneak in a drug patent linkage mechanism by imposing costs of Rs 6.75 lakhs. This cost was awarded to both Cipla and the Union of India and was to be shared equally between them.

The judge merely read out the key portions of his judgment (as outlined above) today and indicated that a copy of the judgment will be made available tomorrow after a few corrections.

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.

13 comments.

  1. AvatarAnonymous

    the judgment is available on website of Delhi HC. Just see the column “Judgments in PDF” and type in the judge name with the date.

    Reply
  2. AvatarNilanjana

    What would have been the proper mechanism for Bayer to get an injunction against Cipla in case of the drug Nexavar?

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  3. Avatarmnbvcxzaq1

    dear shamnad,
    today, i had the opportunity to quickly go thru the judgment. i plan a detailed analysis in a full-fledged paper (I don’t know how much time it will take to get published. my last effort of paper on section 3(d) took exactly 6 months to get published, as it was written/submitted in april and is slated to be published in the september, 2009 issue of JIPR). however my quick response on the patent linkage judgment is as follows. prima facie, it appears that many of the bayer’s legal arguments were fundamentally wrong/ lacked strength, e.g. (i)that cipla’s drug is “spurious” and not “generic”, which in my view, is a fundamentally wrong interpretation of the term “generics” (was it deliberate or was it an outcome of imperfect understanding of the term, only bayer’s lawyers can tell; however, mine is not a comment on the lawyers – they might ve there own compulsions to advance some particular line of argument); (ii)that generic drugs can be produced only after the expiry the patent, if granted; (iii)that the legislative intent (by inference), too, was for patent linkage. as far as the judge’s denial of any patent linkage is concerned, i see it more as a resultant of ‘perspective’ (national interest, to be precise), rather than sound jurisprudence. from this standpoint, denial of patent linkage is correct. however, if one rises above nationalistic concern, one will find certain reasonableness in bayer’s argument, which is largely based on sections 2, 17-B & 18 of the drugs & cosmetics act (dca), form-44 under rule 122-B(1)(b), read with rule 21 9 (b) and appendix 1 to schedule y of the rules under the dca, which have to be read “in addition to” the sections 43, 48 & 53 of the indian patents act (ipa). from a neutral standpoint, it seems very reasonable and logical to contend that if there is a patent granted in any territory for any particular product, then how can anyone else get the right to market the same product without violating the patentee’s rights (section 48, ipa)? in any case, at least this contention is not infested with a mala fide to such an extent as to invite the ire in the form of imposition of cost. It is the sheer bad luck of the contenders of this argument that it falls into the camp of “north” in the “north versus south” game of global IPR. however, from a neutral standpoint, i feel that it is at least a reasonable, if not correct, contention. there is yet another aspect of this contention, that requires deliberation. i personally feel that apart from its merit on the strictly neutral criteria, this contention has another advantage (but only if the Indian pharma companies want it to be so) for the Indian pharmaceutical companies whose forte, traditionally, has been primarily generics, so far. if they pull up their socks and re-focus their vision primarily (or even substantially) on the ‘invention of NME/NCE’, rather than incremental improvements/processes/deliver-mechanisms/peripheral devices, then there stand the chance to become global pharma players. otherwise they will remain marginal players at the global level. and if the recent border measures (i.e. consignment seizures across europe), kenya-like legislation (regarding treatment of patent-infringing goods) and the increasing competition from the some developing countries (e.g. brazil) are any indicators of the things to come, then innovation-shy Indian pharma companies better re-focus themselves primarily on innovation, rather than incremental development. the attempt at patent linkage should serve as an opportunity (to correct their vision) and an eye-opener for the Indian pharma companies.
    (……contd.)

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  4. Avatarmnbvcxzaq1

    (….contd. from last comment/post)
    if the Indian companies themselves become innovating companies, the issue of patent linkage will either become immaterial or even advantageous to them. this same position i ve strongly advocated in my earlier paper on section 3(d), which is slated for publication in the september issue of jipr. Anyway, till any particular side conclusively prevails over the other, a balancing act, in the meantime, is required. i am merely thinking aloud whether wont one possible way to balance this ‘north versus south’ tug-of-war in IPR field, in the context of ‘patent linkage’, be to allow patent linkage for domestic marketing while permitting marketing/export abroad? i ve not examined this aspect, as it has just come into my mind while writing this comment. however, i feel that this last proposition will require two things: 1. transformation of indian pharma companies into innovators & 2.tremendous amount of courage and belief-in-self that they can aggressively take on the ‘north’ on the latter’s own turf. i run the risk of getting branded ‘pro-north’, which i actually am not. i strongly feel that the might of the ‘north’ can be best met with might only. and by our might, i mean Indian companies’ innovative strength.

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  5. Avatarsehgal_ck

    IN such scenarion if the regulatory body approves the product then it will be launch at risk as if the inventor company wins the case by proving infringement then damages will be very high may under the category of willful infringement dating back to the date of launch.

    To avoid such a thing the regulatory body may evolve a system that if the inventor company files a suit for infringement the the regulatory approval may be delayed for a specific period or till the decision whichever is earlier

    Reply
  6. Avatarmnbvcxzaq1

    dear shamnad,
    i had commented on the patent linkage issue earlier and have been waiting for your response thereto, eagerly. my eagerness is on account of my unorthodox view on the legitimacy of patent linkage. i just want to test my proposition, as i find different outcomes when i view patent linkage from different perspectives. and since different perspectives shall always be present, where n how to strike a balance or reconcile them.
    also, i find that some “prakruthip” has posted another blog on patent linkage. if u could somehow merge/relate/cross-refer (if possible) these two posts, then it would ve been better for the readers.

    Reply
  7. AvatarAnonymous

    The reason for the use of the term ‘spurious’ in Bayer’s argument, rather than ‘generic’ as said in a previous comment is primarily because its the general term used in filing lawsuits all around the world! The Westerners define ‘spurious’ as anything that has been copied, thus effectively, a DUPLICATE. In India, spurious is anything that is of a lower quality. Hence, due to the differing definitions, there’s a mis-conception in the use of the term. Well, as stated before, it could very well have been a reason for the ruling against Bayer. I hope that the next hearing on Oct 6 results in a better outcome for Bayer. They should contest patent infringement rather than contesting marketing rights to Cipla. This way, the Indian courts will have a hard time balancing national interests against potential infringement cases, which would be answerable at the WTO.

    Reply
  8. AvatarShamnad Basheer

    Dear Nilanjana,

    You’ve asked a very pertinent question. Bayer could have easily approached the court in a quie timet action, asking that Cipla be restrained from actually introducing teh drug into the market. This is a very different course of action than asking the DCGI to block regulatory approval.

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  9. AvatarShamnad Basheer

    Dear Sehgal,

    you’re right to point to the fact that a wrongful entry could hit Cipla really hard with damages etc. But that is Cipla’s problem, isn’t it? If Cipla doesn’t care (and presumably it has enough reason to believe that the patent won’t stand), what business do we have in blocking regulatory approval–presumably in the interests of Cipla?

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  10. AvatarShamnad Basheer

    Dear mnbvcx,

    You state that: “from a neutral standpoint, it seems very reasonable and logical to contend that if there is a patent granted in any territory for any particular product, then how can anyone else get the right to market the same product without violating the patentee’s rights (section 48, ipa)? “

    You have to draw a distinction between the grant of a right to market (since the drug is safe and effective) from the actual manufacturing and sale of the drug itself. Drug regulatory approval only means that the drug is safe and effective to market. It does not mean that Cipla is free to infringe patents while doing so. Rather, Cipla can only sell “at risk”. As I’d mentioned to Sehgal earlier, that might mean that Cipla will be hit with costs when it is finally found to infringe. That might also mean that Cipla will not be found to infringe at all, sine the patent is invalid. And if Bayer is truly aggrieved, it must file a quia timet action before the court asking for an interim restraint against any launch of the drug.

    You’re distinction between permission for domestic and foreign sales is an interesting one. And I look forward to hearing from you as you develop this argument. Though I am not sure we need to draw this distinction at all, since a drug regulator should never be made to enforce a patent. Period.

    I’ve recommended a middle path “notification” system in an earlier post. http://spicyipindia.blogspot.com/2008/07/drug-patent-linkage-controversy-middle.html

    Reply
  11. AvatarAnonymous

    wondering whether request for marketing approval would have filed if DCGI is allowed to issue “timed” approvals.

    Reply

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