SpicyIP Weekly Review (April 30 – May 6)

Our topical highlight of this week is Balaji’s 3-part analysis of the ‘policy schizophrenia’ that he argues plagues pharma price control.

In his first post, Balaji sets the tone for his analysis by highlighting the sharp divergence between the government’s grand promises of controlling the prices of essential medicines and its actions on the ground.
He then grapples with the conduct of the National Pharmaceutical Pricing Authority in its role as the administering authority for the Drug Price Control Order, noting that its decision to abruptly revoke price control measures relating to 108 formulations after the Modi Government came into power merits closer scrutiny.

In his second post, Balaji seamlessly transitions from the particular to the general and analyzes the overall success of the price control regime in India.
He comments on the market structure of pharmaceutical products in India, noting that the market is structured in such a way as to be vulnerable to both supply-side and demand-side dominance. He then adverts to the practice of coordinated price increase by pharmaceutical suppliers that is designed to render any price control exercise futile and deals with the example of the anti-diabetic drug metformin in this respect.

In his third post, Balaji outlines the deleterious ramifications of a sub-optimal price control regime and sets forth more optimal options.
He begins by noting that the problem of ineffectiveness of price control has been largely brushed by industry players under the carpet. Thereafter, he explains that the imposition of ceiling prices, far from meaningfully curbing price rise, in fact has the opposite effect, inasmuch as it gives manufacturers a carte blanche to fix the price of drugs at any rate below the ceiling.
He finally concludes by outlining a possible solution to deal with this problem that entails the use of existing provisions in patent law and competition law to constrain the actions of pharmaceutical companies.

Our thematic highlights this week are the second and third parts of Mathew’s analysis of the CCI’s order concerning the conduct of Roche relating to its biological drug, Herceptin.

In the second part, he commences by setting forth the reasons underpinning the CCI’s conclusion that Roche was at the relevant time in a position to operate independently of market forces and opines that the CCI arrived at the right conclusion.
He then deals with the CCI’s rejection of the informants’ argument that Roche engaged in vexatious litigation in this case. Noting that a claim of vexatious litigation cannot pass muster sans evidence of an adverse ruling, he opines that the CCI arrived at the correct conclusion.
Finally, he opines that such claims cannot be divorced from the cancer of delays that plagues the Indian judicial system.

In the third part of his analysis, Mathews begins by dealing with the CCI’s treatment of the argument that Roche denied market access to the informants by influencing regulatory authorities. He opines that the CCI’s conclusion that Roche did influence such authorities stems from Roche’s failure to conduct an apposite due diligence exercise vis-à-vis its market strategy.
He then adverts to the CCI’s conclusion that complete denial of market access is not necessary and that Roche failed to properly discharge the special responsibilities imposed upon dominant players.
Finally, he outlines the CCI’s conclusions as regards the subsidiary points that arose for its consideration and notes that the matter will now be investigated by the DG.

Our first post this week comes from Balu who analyzes the government’s decision to form an inter-ministerial group to review royalty outflows. After briefly narrating the history of government actions on royalty outflows, he outlines the deleterious ramifications that have flowed from the government’s decision to bring such payments under the automatic route and the concomitant removal of any restrictions on the same.
Noting that the move makes sense from a corporate governance standpoint, he wonders if it can be viewed as a retaliatory measure against the American government’s decision to erect substantial barriers to the procurement of H1-b visas.

Next, I covered the legal controversy surrounding Arnab Goswami’s use of the phrase ‘the Nation Wants to Know’. After outlining the factual matrix of the controversy, I alluded to the video released by Arnab in which he vehemently defends his right to use this phrase.
Thereafter, I explained why I think the Times Group’s claims rest on a tenuous footing and delineated two main reasons in support of my assertion. I finally noted that, given the widespread use of the phrase and its lack of distinctiveness, the Times Group’s arguments are unlikely to pass muster.

Next, Pankhuri informed
us that the deadline for registration for FICCI’s online course on competition law and IP has been extended up to 10th May. Readers interested in learning more about this course should click here.

Finally, Prashant analyzed the independence and appointment of IPAB members after the Finance Act, 2017. He begins by alluding to a writ petition that has been filed by one Umesh Shah in the Delhi High Court to rectify the problem of the IPAB being without a chairperson for more than a year.
He then adverts to relevant provisions of the Finance Act, 2017 which have superseded the provisions of the Trademarks Act insofar as the terms of appointment and service of IPAB members are concerned. Noting that this is likely to result in a Finance Ministry, as opposed to the DIPP, overseeing the functioning of the IPAB, he opines that the latter is unlikely to have any say in the matter whatsoever.
He then comments on the constitutionality of the provision in the Finance Act by which the changes sketched above have been effectuated and argues that it is unconstitutional, inasmuch as it amounts to delegation of essential legislative functions.
Finally, he exhorts the IP bar to challenge the constitutionality of this provision and warns that the independence of the IPAB will be the victim if this is not done.

International developments:
1. Trump Administration Advises US Supreme Court not to grant review in a copyright case involving a YouTube video
2. Eminem Copyright Case heard by a New Zealand court
3. Federal Circuit upholds invalidation of audio patents held by Apple and Volkswagen
4. Eagles sue Hotel California for Trademark Infringement


Rahul Bajaj

Rahul Bajaj is a fourth year law student at the University of Nagpur. His interest in intellectual property law began taking a concrete shape when he pursued Professor William Fisher's online course on copyright law in the second year of law school. Since then, Rahul has worked on a diverse array of IP matters during his internships. He is particularly interested in studying the role of intellectual property law in facilitating access to education.

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