(C)Leaning Up India’s IP Dispute Resolution Framework

The recent Supreme Court decision in the controversial Enercon saga (Alloys Wobben vs Yogesh Mehra) is a significant milestone for Indian intellectual property law. For a succinct summary of this case, see Aparajitha’s post here.

One hopes that this is the first step towards a leaner IP dispute resolution framework. However, the judgment however leaves open the following issues:

 1. What if X challenges Y’s patent before the IPAB in a revocation petition. Y then sues X for patent infringement. As per this judgment, X cannot now counterclaim in the infringement suit that Y’s patent is invalid. So far, so good. But what happens now? Should the judge wait for the IPAB to issue a decision on the revocation petition filed? Or should he/she issue a decision merely on infringement (similar to the German system). From a policy perspective, it makes sense for the judge to stay the proceedings till the validity issue is resolved. For without this, one might have an injunction issue (and stop a more affordable generic medication) only to find later that the patent itself was invalid (as per the IPAB). Ideally, the Supremes ought to have provided that if the issue of validity has already been raised earlier, then the later proceeding ought to be stayed till the validity issue is resolved. Better still, from a policy perspective, one needs to simply scrap the IPAB and return the jurisdiction to specialised IP benches at the leading high courts. I hope to discuss this in more detail later.

 2. Also, section 107 of the the Indian patents act permits a defendant in an infringement suit to raise all the counterclaim/revocation grounds as defences in the law suit. Even if the judge does not permit the counterclaim to stand (in view of the SC judgment below), he/she is effectively forced to decide the validity issue through the various defences that have been raised. So where does that leave us in terms of potentially conflicting rulings on validity from the IPAB which decides an earlier revocation proceeding, and a HC judge who decides the validity challenge (posed as defences in the law suit) at a later date? A stay on the later validity challenge would have been the right policy prescription, me thinks. Unless of course the earlier validity challenge at the IPAB had not yet proceeded to any significant extent (in which case, the IPAB should yield to the allegedly “higher forum” that is the High Court).

3. Lastly, what happens to the various IPAB proceedings initiated by Enercon India (Yogesh Mehra and group). A large number of these proceedings were successful, and many of Enercon’s patents were invalidated. The SC judgment however appears to state that in view of an agreement between the parties to consolidate all proceedings, the IPAB proceedings need to give way to the present set of HC petitions (including possibly the counterclaims as well). I’m not sure I agree with the SC in this regard, since a careful reading of the alleged consent agreement between the parties only records the clubbing together of the various HC proceedings in a single forum. It does not speak about pending IPAB revocations. However, the Supreme Court decision (whether right or wrong) stands as of today. If so, are all of the earlier IPAB rulings on patent validity (of Enercon) null and void? And the patents now resurrected back into force?

 4. Although the decision is an excellent one in terms of reducing multiplicity of proceedings and paves the way for a leaner framework,  it would seem that the SC committed some errors in its reasoning. For one, it hold that a patent does not really come into force till one year has elapsed from grant and the period for post grant opposition is over. Where is the SC getting this from? There is no provision in the patents act warranting this interpretation 

All in all very interesting, and one looks for more clarity in the days to come. But would be great to have the views of our readers, many of whom are more experienced and infinitely more nuanced on these issues than we can ever hope to be.

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