In this guest post, Prashant Reddy reflects on the major decisions by Justice Manmohan Singh of the Delhi High Court in the field of intellectual property law and on the larger question of criteria for appointment of persons to the position of Chairperson of the Intellectual Property Appellate Board.
Warning: Very long post ahead.
Title: A review of Justice Manmohan Singh’s judgments
Author: Prashant Reddy
As reported by Shamnad recently, the grapevine has it that Justice Manmohan Singh of the Delhi High Court is the prime contender for the position of Chairperson of the Intellectual Property Appellate Board (IPAB). Before his appointment as a judge of the Delhi High Court on April 11, 2008 he was primarily an IP lawyer, as per his profile on the website of the Delhi High Court. Appointing IP lawyers to the bench can be a double edged sword. While there is no doubt that IP lawyers are likely to bring a certain degree of expertise to the bench, there is a perception in some circles that such appointees also tend to reflect a pro-plaintiff bias because the most successful IP lawyers are usually the plaintiff lawyers and it is these successful lawyers who make the transition to the bench.
Several years ago, a comment left on one of my posts critiquing a judgment by Justice Manmohan Singh, had claimed that “Justice Manmohan Singh is more or less a pro plaintiff”. I don’t believe such generalisations serve any purpose. A judge should be judged by the quality of his judgments. Over the years, I’ve covered several judgments by Justice Manmohan Singh on this blog, as have other SpicyIP bloggers and I would like to discuss and link back to a few of the most memorable, or should I say controversial, judgments that he has delivered on various issues of IP law.
Exhaustion of IP rights under the Copyright Act and Trade Marks Act
One of the most critical issues in IP law today is the question of exhaustion of IP rights. For example, once a copyrighted book or trademarked article is sold to a retail customer, the IP owner usually “exhausts” its right to control the further circulation of the good in the market. So the buyer in such a case can resell the article to whomsoever. The principle of exhaustion is the bedrock of the second hand economy. Over the last 6 years, Justice Manmohan Singh has the opportunity to decide two cases dealing with the principle of exhaustion– one on copyright law and the other on trademark law.
In a copyright case from 2010, the international publishing house, John Wiley, sued an Indian reseller who was exporting Wiley’s low-cost Indian editions to foreign countries like the US. The reseller argued that under the Copyright Act, Wiley had exhausted its right in the physical copy of the book once it was placed in the market for circulation – Section 14 of the Copyright Act is quite clear on this point. Despite the law being crystal clear on the point, Justice Manmohan Singh ruled in favour of the copyright owner and issued an interim injunction restraining the Indian reseller from exporting low cost Indian editions to foreign jurisdictions. In my opinion Justice Singh’s judgment was very, very poorly reasoned – I’ve explained the various problems with the judgment in this post over here written 6 years ago. My main grouse with the judgment is that it completely misunderstands simple legal principles of contract law like ‘privity of contract’ apart the doctrine of exhaustion. As a result, a completely legitimate business was shut down. As far as I’m aware, this judgment was never appealed and the trial dragged on for several years.
A couple of years later, Justice Manmohan Singh had an opportunity to consider exhaustion under the Trade Marks Act, 1999. Section 30(3) of this legislation makes it quite clear that the trademark owner exhausts the right to control the further sale of a trademarked article once it is placed in the market with the consent of the proprietor. Justice Manmohan Singh was faced with interpreting this provision when Samsung began to sue several Indian resellers who were purchasing genuine Samsung printers from countries where the printers were cheaper than in the Indian market and taking advantage of the price arbitrage to sell the imported printers at rates lower than Samsung was selling such printers in India. Justice Singh had to decide whether such parallel imports were legal and whether the trademark owner exhausted its rights once it placed the goods on the market in the foreign market.
Justice Manmohan Singh ruled in favour of trademark owners in a rather surprising judgment which had the effect of shutting down the business of resellers who were selling genuine Samsung goods! On appeal, the Division Bench comprehensively and conclusively over-ruled Justice Manmohan Singh. Sai Vinod’s post on the judgment can be accessed over here. The Customs Board simultaneously published a circular making it very clear that parallel imports were allowed under the Trade Marks Act – Justice Manmohan Singh subsequently passed strictures against one of the revenue officers for certain comments made in a file noting related to the circular and his previous judgment – I had written it about here. (An appeal before the Supreme Court is still pending.)
Copyright and the internet
One of Justice Manmohan Singh’s big judgments on the issue of copyright infringement and liability of internet intermediaries was the MySpace judgment from 2011. This was the first case in India to deal with the thorny issue of intermediary liability in cases of copyright infringement. MySpace, which was a YouTube type platform, was sued by T-Series for copyright infringement. Justice Singh had to rule on two very important legal issues – the first was whether MySpace was liable for copyright infringement under the Copyright Act as the same does require an element of knowledge. The second issue was the interpretation of the ‘safe-harbour’ created by Section 79 of the Information Technology Act for internet intermediaries. Justice Singh ruled in favour of the copyright owner on both issues. Amlan has written two posts over here and here criticising the judgment. Ananth Padmanabhan had written a more detailed piece for IJLT also criticising the judgment – a lot of the criticism is warranted in my opinion. As far as I’m aware, this judgment was never appealed and the trial dragged on. Luckily for the internet industry, Justice Singh’s judgment in this case was neutralised by a new safe harbour provision in the Copyright (Amendment) Act, 2012. If his judgment hadn’t been effectively over-ruled by the Copyright (Amendment) Act, 2012, intermediaries like YouTube would have been under very high legal risk.
Another problematic judgment by Justice Manmohan Singh on the issue of copyright infringement on the internet is the case of Star India Pvt. Ltd. and Ors. v. Roy Ma and Ors. In this ex-parte judgment, he ordered the blocking of 150 websites which were allegedly streaming Star TV’s signals. At no point of time does he mention in the judgment that he has actually viewed all 150 websites – how can a judge take the Plaintiff’s word at face-value and block 150 websites without actually viewing the websites?
The LG Case and the IPR (Imported Goods) Enforcement Rules, 2007
This LG case involved an interpretation of the IPR (Imported Goods) Enforcement Rules, 2007. These rules allow Customs Officers to restrict the import of any goods into the country if such goods are found to infringe copyright, trademark or patent rights. In this case, the Customs Department had issued notice to LG because a patentee had claimed that LG’s imports were violating its IP rights. LG responded by filing a civil suit seeking declaratory relief before the High Court and the case was marked to Justice Manmohan Singh. In my opinion it was as clear as day that the suit should have been thrown out because such notices from the Customs Department can be challenged only before a writ court and not a civil court – there is a clear rule in the Customs Act against instituting civil actions against the customs department. I had blogged about it over here.
Far from dismissing the suit, Justice Manmohan Singh interpreted the IPR Import Rules, 2007 to hold that Customs Officers could not adjudicate whether a patent is infringed under the rules. This was a stunning misinterpretation to say the least because the rules clearly gave the Customs Department the right to adjudicate such disputes. On appeal, the Division Bench passed a short, concise order over-ruling Justice Manmohan Singh’s order and held that the Customs Department had every right to decide the issue of patent infringement under the rules unless it felt that the case was beyond its capabilities. Our post on the Division Bench’s judgment can be accessed here. The saga involving the LG case doesn’t end here – Justice Manmohan Singh later also issued a declaratory judgment ruling that LG did not infringe the patent in question – strangely he did not analyse whether the claims of the patent were infringed despite the suit being filed under the Patents Act. I had written about that judgment over here.
The pharma patent cases
Given that the Delhi High Court is the hotbed of pharma patent litigation, it should not surprise anybody that a fair number of these cases landed before Justice Manmohan Singh.
Let me begin with the famous Hoffman La Roche v. Cipla – the first pharmaceutical patent infringement case to be decided in India post-TRIPS after trial. Justice Manmohan Singh had delivered the final judgment in this case – he ruled that although the patent was valid, it was not infringed because Cipla was allegedly manufacturing a different polymorph version of the patented compound. Shamnad had written a long post outlining the many jurisprudential flaws with the judgment. On appeal the Division Bench conclusively over-ruled Justice Manmohan Singh’s judgment – especially on the point of Cipla’s polymorph defence. The SpicyIP post on the DB ruling can be accessed here. (An appeal before the Supreme Court is still pending.) Other judgments of the Delhi High Court in the Merck case have also conclusively overruled the polymorph defence put forth by generics companies.
While Roche v. Cipla was certainly one of the more widely publicised pharma judgments by Justice Manmohan Singh, it certainly isn’t the only such case where a judgement by him has come under criticism. In 2012, Justice Manmohan Singh passed an ex-parte interim injunction restraining Ind-Swift from infringing a patent belonging to Issar Pharmaceuticals. I had written a post outlining the many flaws with the patent, namely the fact that the patent had been granted for a pharma invention prior to 2005. A mere reading of the patent should have set off alarm bells. As documented in a post last year by Balaji, that ex-parte injunction hadn’t been vacated even 36 months later.
There is then also the Dastinib case, where Justice Manmohan Singh passed an interim injunction against two Indian pharma companies restraining them from infringing BMS’s patent over Dastinib. Spadika had written a post documenting the problematic issues with Justice Manmohan Singh’s judgment over here. Apart from the issues that she raised, I would like to point out that the High Court should have simply waited for the trial to be completed – why pass another interim order 6 years after the suit had been instituted?
There was also the Novartis v. Cipla patent infringement case over Onbrez where Justice Manmohan Singh restrained Cipla from infringing 5 patents belonging to Novartis. In my opinion, the judgment in this case was perfectly justified because Cipla’s legal strategy was quite silly and it had basically invited an injunction.
The controversial judgment on biosimilars
In my opinion this was one of the most controversial judgments of Justice Manmohan Singh. This judgment was promptly stayed by the Division Bench. Notwithstanding the stay, the judgment is shocking at so many levels.
The judgment was passed in a lawsuit filed by Genentech against the DCGI, Biocon and Mylan over the launch of a biosimilar of Herceptin. There are several issues with this judgment of Justice Manmohan Singh. Let me mention just two. The first is the judgment’s creation of a ‘data exclusivity’ regime out of thin air. I’ve written in favour of a data exclusivity regime over here (although not in the context of biosimilars) but I had supported such an argument by proposing an amendment to the law. A judge cannot create such a regime through an interpretation of the law.
Apart from creating a data exclusivity regime through very flimsy reasoning, there is also the larger question of how the lawsuit was even admitted. Regulatory decisions of the DCGI can be challenged only before a writ court – Genentech however had filed a suit for declaratory relief under the Specific Reliefs Act. We’ve seen LG adopt a similar modus operandi in the case discussed earlier in this post. Like in the LG case, Justice Manmohan Singh ruled that he had the jurisdiction to hear the case. Section 37 of the Drugs & Cosmetics Act clearly provides immunity to the DCGI from any liability in civil suits. This is a standard clause in all legislation – you cannot sue the Government of India or any of its officers in a civil court. Justice Singh however dismisses this point with just these three lines: “As far as bar of Section 37 of the Act is concerned, as argued by the defendants, there is no force as the suit has not been filed against any Government employee who may have involved in the process of approvals.” In plain English, he’s ruled that Section 37 protects against suing officers in their personal capacity and not as officers of the law. This is completely contrary to the wording of the provision which reads as follows:
“37. Protection of action taken in good faith. —No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.”
Going by Justice Manmohan Singh’s interpretation we can now sue the Patent Office and the DCGI and the Customs in district courts across India for administrative decisions taken by these officers.
There are several other legal issues in this judgment that Rahul has highlighted in his post here. Hopefully the Division Bench will overrule this judgment by Justice Manmohan Singh.
The problematic damages jurisprudence – Interim damages and Punitive damages
Over the last couple of years, Ericsson has been filing multiple patent infringement lawsuits against Indian mobile phone companies. The Delhi High Court has passed several strange orders in this series of litigation. Last year, Justice Manmohan Singh passed a judgment basically ordering Intex to pay Ericsson ‘interim damages’ even before the trial had started – this was an incredible order because there is no such concept of ‘interim damages’ in India or under common law. I had written a lengthy guest post for SpicyIP on this issue over here. I have been informed the Division Bench has stayed the operation of this judgment on appeal but am unsure of the current status of the case.
The second problematic damages related judgment of Justice Manmohan Singh is the Sholay judgment. I’ve written about the judgment over here – in this case the judge awarded the plaintiff punitive damages of Rs. 10 lakhs. In my opinion, the entire conclusion regarding punitive damages was flawed – I explain in my post the reason why the judgment was jurisprudentially flawed. Most surprisingly however Justice Singh granted punitive damages, when the plaintiff apparently conceded that it was unable to prove actual damages – how then does a court calculate an amount that is punishing enough to be punitive?!
The Swatanter Kumar case
Apart from the several problematic IP judgments listed above, I would also like to take an opportunity to point out to a very problematic non-IP judgment by Justice Manmohan Singh. This judgment is the gag order passed by Justice Manmohan Singh in a defamation lawsuit filed by Justice Swatanter Kumar against a former law clerk of his who had accused him of sexual harassment and also some media outlets who had reported the story. Justice Kumar, a former Supreme Court judge was heading the National Green Tribunal at the time and the scandal caused significant embarrassment to him and the entire Supreme Court.
When the national media began reporting on this case 24/7, Justice Swatanter Kumar filed a defamation lawsuit seeking a gag order on the basis of the Supreme Court’s judgment in the now infamous Sahara case – the SC had basically legitimised gag orders in such a case on the ground that it was merely postponing reportage and not banning it. A battery of Senior Advocates appeared for Justice Swatanter Kumar before Justice Manmohan Singh who then passed a very vaguely worded injunction restraining the media from reporting on certain aspects of the case. Although a blanket ban wasn’t imposed the vaguely worded order was enough to chill the reportage because reporters weren’t quite certain of the boundaries.
I had written a piece for Legally India at the time pointing out the most obvious flaw in Justice Manmohan Singh’s judgment – the Supreme Court had located the power to pass a ‘gag order’ or ‘postponement power’ under the contempt powers of the High Courts – which means that a contempt petition had to be filed before the High Court and allocated to the roster judge who was authorised to hear such contempt petitions – a judge cannot pass such orders in a civil suit for defamation. Yet, that is exactly what happened when Justice Manmohan Singh issued the gag order while sitting as a judge on the original side of the High Court. Justice Kumar continues on the NGT and the former law clerk, as far as I’m aware, has received no justice from the Supreme Court.
Some closing thoughts
As is obvious from this post, I think there are serious legal issues with the many landmark IP judgments issued by Justice Manmohan Singh. Whether or not he is appointed as the Chairperson of the IPAB will now be decided by an appointments committee comprising a majority of members from the judiciary as mandated by the Madras High Court in the case of Shamnad Basheer v. Union of India. I have no clue of the criteria that will be used by this committee to decide the suitability of a particular candidate for the post of the Chairman of the IPAB.