The test for interim injunctions involves 4 prongs. In Part I and Part II of this series I have examined the first three prongs of prima facie case, irreparable loss and balance of convenience. In this post I look at the final prong – public interest.
The UK only follows a tripartite test that does not include a separate public interest standard. Rather, public interest is included in the balance of convenience analysis. US courts, however, include an independent public interest assessment. [eBay, Inc. v. MercExchange, LLC, 547 US 388, 392 (2006)]. Indian courts have followed both approaches. Public interest was recognized as a separate factor to be considered in Novartis AG v. Mehar Pharma and was read into the ‘balance of convenience’ test in Hoffman-La Roche Ltd. v. Cipla Ltd where both the Single Judge and the Division Bench found that an interim injunction would deprive thousands of the life saving cancer drug.
Public interest and access to medicines
Public interest is a crucial element in pharmaceutical patent infringement cases since interim injunctions not only reduce the amount of the drug in circulation, but also usually imply a shoot up in its price. The disparity between generic and branded drug prices could often mean that the drug will be effectively completely out of reach for most Indians who suffer from the disease. None of the Symed linezolid cases considered the question of the public’s access to the drug in granting the injunctions. The price per kilo of linezolid API has increased by 36% in the last three years – could this be in part due to the injunctions? This begs the question: In which cases would it be okay for courts to pass injunctions that could affect the affordability, availability and accessibility of drugs?
The question of denied access to drugs is also not one that can be assessed for damages and therefore immediately tips the balance of convenience in favour of the defendants.
Public interest and anti-competitive strategies
The allegations that interim injunctions are only used as a means of eliminating competition are not entirely baseless. In Bull Machines vs JCB India, the Competition Commission of India made a prima facie finding that JCB India had obtained an ex parte interim injunction order in its favour my misrepresentation and fraud to the court. It noted that ‘predation through abuse of judicial processes was a threat to competition.’ In the linezolid cases, Sharon Bio-Medicine has argued that Symed’s case against them is towards eliminating any competition in the manufacture of the said drug. Defendant No. 1 pointed to the out of court settlement between the Plaintiff and Defendant No 2 – Alkem Laboratories, highlighting that one of the terms of settlement is allegedly that D2 would cease sourcing linezolid from D1.
The undiscerning grant of interim injunctions, particularly through ex parte orders leaves dangerous scope for abuse in a fiercely competitive domestic pharmaceutical market. It is imperative that the courts require complete disclosure about allied infringement suits and patent validity challenges in India and abroad at the time of application for an injunction order. Even so, immense leeway remains for vexatious and anti-competitive abuse of the judicial process.
Interim injunctions, while originally meant to provide immediate relief to Plaintiffs, have introduced considerable confusion, hardship and lengthy litigation to the IP disputes environment. Doctrinal gaps coupled with poor and uncritical implementation has meant that certain defendants suffer interim injunctions for long periods of time without any relief. In the linezolid saga, it has had the potential to completely drive some of the defendants out of business. This, I argue, is ample basis for rethinking whether interim injunctions are suited to Indian patent litigation at all.
My final recommendations that are consistent with those made on this blog in the last 5 years are:
1) Dispensing with the interim phase for complex patent cases where a defendant mounts a credible argument in terms of non-infringement or invalidity (or both). This has been followed by the Supreme Court in Bajaj Auto Ltd. v. TVS Motor Co. Ltd. and the Delhi High Court in Bayer Corp. v. Union of India; and
2) Simultaneous implementation of institutional changes required to expedite the patent litigation process such as
A. Abridged trials, where
- parties must reduce all their submissions to writing,
- produce only limited number of expert witnesses,
- recording of evidence by court-appointed commissioners,
- daily hearings [The Supreme Court noted in Bajaj Auto Ltd. v. TVS Motor Co. Ltd. that the proviso (a) to Order XVII, Rule 1(2) of the CPC required that trials be conducted on a daily basis until exceptional circumstances prevent the same]
- And strict adherence to adjournment limits as provided in the CPC [Order XVII, Rule 1 restricts this to 3 adjournments per case];
B. Specialist courts and specialist advisers [Section 115 of the Patent Act, 1970 permits the court to suo motto or on application of either party, to request for a technical adviser to assist in the case].
These measures should address concerns of patentees regarding the dispensation of interim relief as suggested above.