Patent

Enercon and Positive Patent Perception


The recent Enercon decision by the Supreme Court will go down as a landmark judgment. For a succinct summary of this decision, see Aparajita’s post here. And for a review of this decision and some of the questions that it raises, see my post here.

In today’s Financial Express, I argue that this Supreme court ruling more than amply illustrates that Indian IP law is neither anti IP nor anti MNC. That is, if one were willing to look at the law with a dispassionate fact based lens and not a tainted one.

For those interested, I reproduce the piece below.  

Patently Positive

In a recent landmark decision, the Supreme Court may have unwittingly taken the sting out of the charge that India’s IP laws are anti-IP and biased against multinationals. In Enercon vs Yogesh Mehra, the apex court ruled that a patent opponent cannot take multiple shots at challenging the same patent, but must choose between the various options spelt out in India’s Patent Act. If she chooses to challenge the patent in a post-grant opposition proceeding (to be filed within one year of the patent grant), she cannot then seek to revoke it later before the Intellectual Property Appellate Board (IPAB)—India’s specialised IP tribunal—before which any patent can be challenged. If she chooses to file a revocation proceeding before the IPAB, she cannot then challenge the validity before a High Court through a counter-claim (a claim filed in response to a lawsuit for patent infringement).

While all of this may sound a bit technical, its impact is enormous from an efficiency perspective. Up until this decision, multiple patent challenges were the order of the day, resulting in enormous wastage of resources; the only winners were lawyers who would charge by the hour for each one of these multiple proceedings.

Though infirm on a few minor counts, the court’s decision essentially paves the way for a leaner IP dispute resolution framework. However, efficiency considerations notwithstanding, this decision is vastly significant for another reason. It may have blunted the current critique against India’s allegedly-biased IP framework. For this decision is clearly in favour of the patentee, a German multinational in the business of creating technologically advanced wind turbines and other ecofriendly instruments. Indeed, Enercon’s victory comes after a series of losses at the hands of the IPAB, where 19 of its patents were invalidated. The Supreme Court ruling could also arguably mean that the IPAB invalidations do not count any more, but that this issue must now be decided by the High Court.

Juxtapose this decision favouring Enercon against an earlier Supreme Court decision denying Novartis the right to patent its breakthrough anti-cancer drug Glivec. Multinational pharmaceutical companies and their governments were up in arms lambasting India for its outrageous IP theft and playing spoiler on the international innovation landscape. Never mind that the decision itself hinged on the specific facts of the case, and may have been spookily similar to a US decision some years ago, where the court denied a patent to Pfizer’s hypertension drug Norvasc on the ground that mere physical advantages such as increased stability were not enough to merit a patent grant.

The Novartis decision came close on the heels of a decision by the Indian patent office to grant a compulsory licence over Bayer’s patented anti-cancer drug to Natco, an Indian generic company, upon the payment of a 6% royalty. The reason was simple enough. While the version sold by Bayer (a German multinational) was pegged at a whopping R2.8 lakh a month, Natco promised to do so for R8,880. It bears noting that the statute itself (section 84 of India’s Patent Act) entitles a third party (Natco) to apply for a licence, when the patented invention is excessively priced and not reasonably affordable to the public. The decision was then upheld on appeal by the IPAB and came after strict compliance with judicial due process.

Unfortunately, the Novartis and Bayer sagas were enough to paint India in a negative light, triggering serious political lobbying, a cheap shot at ranking India last on an alleged IP index, a US Senate committee hearing, and last but not the least, the insidious threat of unilateral (Special 301) trade sanctions from the US.

Never mind that the US itself issued several compulsory licences in the past and even threatened the very same Bayer with a compulsory licence when it refused to bring down prices of Ciprofloxacin at the height of the Anthrax scare.

Hypocrisy, thy name is intellectual property!

Our media added fuel to the fire by highlighting patent losses, but giving a miss to the patent wins. Illustratively, when two of Glaxo’s patents covering a breast cancer drug (Tykerb) were challenged before India’s specialised IP tribunal (IPAB), the main patent covering the basic compound was upheld and the secondary patent covering the salt invalidated. While our media moguls hailed the death of the secondary salt patent, they all but ignored the more important primary patent that had been upheld. This creates a rather one-sided perception. Similarly, while the refusal of an injunction to Merck against domestic major Glenmark was lauded in the press, the various injunctions obtained by Merck against six other pharmaceutical companies went happily unreported.

In fact, the present case itself is an excellent example. While the Novartis and Bayer losses triggered article after article in the mainstream media, an Enercon win has not received any media attention as yet.

One hopes that governments will not fall prey to perception, but will take a more studied and dispassionate view of the matter, moving away from a “faith-based” IP debate to a “fact-based” one. Unless, of course, one is keen on sacrificing truth and objectivity at the altar of convenience, where trade is neither “free” nor “fair”, and where IP is a mere mirage for protecting the vested interests of multinational corporations and their home governments.

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's 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 Prof. Basheer joined Anand 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. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

2 comments.

  1. Avatarr k jain

    In the article Patent Positive Mr Basheer highlights the judicial pronouncements to counter the artificial perception being spread that Indian IP laws are archaic, anarchic and invention dissuasive.
    He is right but there seems almost a game plan to force the government to tinker with the IP laws making them more favourable to MNCs.
    I highlight three strategies which can be noticed for this gamelan.
    First: Very vocally asking the senior government officials including ministers to give explanations (defend) on the judicial pronouncements which have been given against the MNCs and in favour of the patients welfare. Being on foreign soil and with the requirement of the govt to maintain the geopolitical goodwill and envisaged economic benefits cause them to commit “to look into the matter” and at best take an ambivalent stance. Wide media coverage follows. The mind space of the decision makers is now accessed by the MNCs.
    Second: Increasingly taking over Indian generic mfrs by MNCs and putting Indian regulators on the defensive by challenging every decision they make. This is not allowing them to built a combined strong response against the MNCs. Week live only to survive , they do not fight.
    Third: As pointed out by Mr Basheer. Getting disfavour able verdicts highlighted more by media who are also a running business and it make economic sense to be on right side of MNCs
    Mr. Basheer wish of having an IP debate based on facts may be there, but only those facts which the MNCs accept. Truth and objectivity are never convenient. Free and fair trade is a mirage only. The way out is not to wish that MNCs will acknowledge welfare requirements over super duper vanilla profits but to hope that our strong generic manufacturers do not shy away from recognising their own combined strength and challenge the MNCs on their own turf. We need to have a situation where the MNCs do not see the vast market but they get to see a battlefield when they look at India. And the pharma industry must build a stake in governance success so that they are not ignored under the MNCs pressure. The pharma industry current strategy of letting patients fight their battles will be no match to persuasiveness of MNCs.

    Reply
  2. AvatarJagdish Sagar

    Thanks for an what for me is an educative post. But I’m sceptical of such a thing as a “fact based ” law of any kind, including any kind of property law.

    Reply

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