In a judgement dated 30th January 2015, Justice Rajiv Shakdher of the Delhi High Court upheld the contentions of Gilead Sciences regarding their “blockbuster” Hepatitis C Virus drug, Sovaldi. We’ve previously covered the controversy surrounding Gilead’s pricing policies with respect to Sovaldi (see Rupali’s two-part post here and here), but the issues raised in the current writ petition are only tangentially connected to the price of the drug. We’d also carried the news of Gilead’s rejection at the IPO, and their subsequent decision to appeal the order. This writ petition, however, questioned the procedure adopted by the patent office in dealing with their application rather than the substantive merits of their application.
The story so far
Gilead applied for a patent on sofusbovir (branded as Sovaldi) and received a First Examination Report, along with a list of objections to the claims as mandated by S. 14 of the Patents Act. Gilead’s application for sofosbuvirthen ran into trouble in March 2014, with pre-grant oppositions (under S. 25) coming in from Natco Pharma and the advocacy group IMAK. The crux of the issue is that while S. 14 mandates that the applicant be given a chance to be heard, pre-grant opposition under S. 25 contains no such imperative.
To complicate matters further, IMAK sought a simultaneous hearing regarding the issues raised under both sections – exactly the relief being sought by Gilead in its writ petition. The patent office, however, did not issue notice to Gilead in the matter of the pre-grant opposition. A hearing was conducted, and the impugned order was passed in January 2015, around five months after the hearing.
It is Gilead’s claim that it was never given a chance to counter the arguments made by IMAK, Natco and others in their pre-grant oppositions. While this would not be problematic in and of itself, Gilead further claims that the patent office’s order denying its application was substantially influenced by the arguments raised in the pre-grant oppositions. What’s more, Gilead alleges that entire paragraphs of the pre-grant oppositions were reproduced verbatim (with the inclusion of typographical errors in the original documents) in the patent office’s order.
Gilead argues that such a proceeding that denied it representation violates its natural justice right to be heard. Further, Gilead’s argument is that in such a situation where the pre-grant opposition had a chance to influence the patent office’s order, it would be unfair to the applicant to summon them for a S. 14 hearing, while effectively conducting a hearing on the merits of arguments raised under S. 25.
The court accepted Gilead’s claim that the patent office’s order was influenced by the pre-grant oppositions, right down to the typos contained in them. At a broader level, the court took issue with the circumstances of the case, in which the material contained in the pre-grant objections were available to the patent office during the pendency of the S. 14 proceedings. The court’s analysis, essentially, is that regardless of whether the patent office chooses to utilise arguments raised in pre-grant oppositions, the mere availability of this material in the patent office’s records represents a possibility of influencing the final order of the patent office. The court held that such influence would be unduly prejudicial to the applicant’s interest. Further, the court noted that combining the pre-grant and the S. 14 proceedings, giving Gilead an opportunity to be heard on both counts, would have saved the patent office time and effort, while mitigating allegations of bias.
The entire matter boils down to one fundamental question: would it be fair to an applicant if the patent office summoned them for a hearing ostensibly on objections contained in the FER and then hit them out of the blue with arguments contained in pre-grant oppositions? The court has rightly answered this question in the negative, and remanded the case back to the patent office for a fresh decision, after holding hearings for both S. 14 and S. 25 proceedings, and issuing notice to all parties including Gilead.
While the setting aside of the patent office’s denial of theSovaldi patent claim is based on sound legal reasoning, it remains to be seen what (if any) effect this will have on the broader debate surrounding the drug and its pricing. It is well within the realms of possibility that the patent office rejects the claim again. However, Gilead has shown a commitment to pursue this case through every possible avenue, and it appears that the matter will become newsworthy again in the coming months when the fresh decision comes out (and, in all probability, gets appealed).