Lighting Up Injunction Jurisprudence: US v. India

 To say that the Indian jurisprudence around injunctions is a hotchpotch of ad-hoc legal dicta is an understatement. Thus far, we’re not clear on what precisely the standards for the granting an injunction are.

The US courts on the other hand, have a bit more clarity on this. With the latest CAFC decision in Nichia, it is now clearer (post eBay) that patent injunctions cannot be had for the asking and are not to be granted as a matter of course.

As Prof Basheer noted here, Nichia effectively constitutes a compulsory license of sorts. In this post, I want to examine the other part of this judgment: the clarity around injunction standards in the US and compare and contrast the same with India.

In Nichia Corporation V. Everlight Americas. Inc, the court endorsed the findings of Ebay v. MercExchange in stronger terms. eBay had held that  four factors need to be fulfilled before an injunction could be granted against the infringer, namely:

(a)that the patentee has suffered irreparable harm (b) that non-injunctive remedies, like damages, are inadequate (c) that the balance of hardships favors the grant of an injunction and (d) the grant of an injunction will not harm public interest.

There was  some controversy over whether or not these factors were  all mandatorily to be proved (cumulatively) or function as mere guiding lights, and one/more could be dispensed with under a given set of facts.. The slew of cases after eBay also differed on how to read the four-factor requirement, further adding to this confusion.

In Nichia, the court endorses the former view and holds that the patentee has to satisfy all four equitable factors and that especially, irreparable harm must be proved, thus settling the question of interpretation to some extent. To quote from the judgment:

 “The movant must prove that it meets all four equitable factors. i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010). And it must do so on the merits of its particular case…”

The court then goes on to reject Nichia’s request for relief, as it failed to prove one of these equitable factors. This, in essence, converted the Supreme Court’s ‘four factor’ test to a ‘four element’ test, requiring these ‘elements’ to be fulfilled cumulatively for grant of an injunction, making it more difficult for a patentee to obtain it.

However, it is still to be seen how well this fits within the conception of an ‘equitable approach’ and if this is perceived to be placing an unduly heavy burden on the patentee.  In any case, the notion that infringement of a patent automatically entitles one to an injunction no longer holds good.

Shifting our focus to Indian jurisprudence, the road to injunctions has been riddled with inconsistent and ad-hoc jurisprudence, particularly so in the case of interim injunctions.  (See our series on interim injunctions here).

Illustratively, in the Bayer v. Ajanta case, the Court held that “public interest” (one of the factors to be taken into account whilst granting or denying an injunction) would also include ‘loss of employment’ and ‘revenue to the state’; and not just the conventional criterion of ‘interests of the patients who need access to the patented drug’.

This line of reasoning was however not followed in Bayer v BDR, a case decided right after Ajanta. Justice Endlaw in the BDR case, rejected this interpretation of ‘public interest’ with cogent reasoning, as analyzed here , placing the precedential value of Ajanta in a limbo.

Though both are decisions of single judge benches of the Delhi High Court, BDR holds more weight due to being later in time, and its strong reasoning. BDR’s interpretation was confirmed in the Cipla v Novartis case, which used the conventional conception of ‘public interest’; Justice Gauba’s formulation finds no place in this division bench decision. However, this back and forth only goes to shed more light on this labyrinth of ad-hoc legal reasoning, especially when injunctions are concerned.

Similarly, there exists no clarity as to what the Court means by ‘prima facie’ case, with a constant  tussle between the Cyanamid test (the ‘triable issue’ test), the relative assessment test analyzed here and the standard evolved in the Gurudas v. Rasranjan case, which requires that “plaintiff’s claim must not be vexatious, and that there should be some possibility of success.” Till date, we haven’t had a clear enunciation from Indian courts on what the prima facie threshold means. For more on this, see Prof. Shamnad’s paper here.

While it is now to see how the Nichia judgment fits with the injunction jurisprudence in the U.S, hopefully we’ll see more clarity and light in the future when it comes to its Indian counterpart.

Image from here

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