Sometime ago, Aparajita and I embarked on an empirical study on the issue of Indian patent litigation. Although the paper was never written, Aparajita did dig out some very interesting statistics on the filing and pendency of patent infringement lawsuits before 5 High Courts at Bombay, Delhi, Madras, Calcutta and Gujarat for the period of 2005 to 2015 i.e. the first decade of TRIPS.
As most of you may know compiling litigation data in India is quite the nightmare because our judiciary is terrible at record keeping and even worse at releasing the statistics to the general public. Digitization has improved things slightly but there remain problems with how data is classified by different High Courts. For example when Aparajita filed a Right to Information request with the Delhi High Court for all patent infringement cases, the Registrar sent her a list of all IP cases i.e. trademark, patent, copyright and design – the reason being that the Delhi High Court classifies all IP matters under one head without sub-classifying each IP legislation. The other High Courts appeared to have been worse at record keeping and the RTI replies did not reveal much. As a result, cases have to be searched manually based on interim orders, blog posts and news reports. It was a very difficult task ferreting out these cases from these sources but I think Aparajita has done a pretty good job. However it is possible that we may have missed some cases while compiling this database. We have also provided the status of each case as of last month if the status was available on the court’s website.
The entire list can be accessed over here.
Decrees after trial
In the ten year period of 2005 to 2015, we found a total of 143 patent infringement lawsuits filed before the Delhi High Court, Bombay High Court, Madras High Court and Calcutta High Court. Of these 143 lawsuits, only in 5 lawsuits were judgments delivered by the High Courts after the conclusion of trial. Of these 5 judgments, 2 were from the Delhi High Court and 3 were from the Madras High Court. The two before the Delhi High Court were lawsuits by Roche and Merck. The 3 cases decided by the Madras High Court are M.C. Jayasingh v. Apollo Hospitals, Venkatraman Das v. VNS Innovations. Pvt. Ltd. and Atlas Metal Processors v. H.K. International. In other words just 2% of the patent infringement cases have ended in the delivery of a decree after a trial.
There are also some cases where trials have been completed but the final arguments are yet to take place. For example in the lawsuit of Strix Ltd v. Maharaja Appliances Ltd. the lawsuit was filed in the year 2008 and the trial was concluded in August, 2014. It was last listed in January, 2015 where the court gave directions for it to be listed in the final list for final arguments. The matter seems to still be on the list 2 years ago and there is no judgment.
For some other lawsuits which were shown as disposed on the websites of different High Courts, it wasn’t possible to identify the reason for why they were disposed.
Settled or withdrawn
Around 17 more patent infringement lawsuits or 11.88% were settled by both parties – most of these cases were filed in relation to pharmaceutical patents. Since settlements are confidential we don’t know why exactly the parties settled. One possible reason is that several of the infringers in these cases were marketing companies for larger manufacturers. These companies have low margins and it makes no financial sense for them to litigate expensive lawsuits. The other reason possibly for some lawsuits to be settled is the fact that the defendants lacked financial resources or confidence in the ability of the judicial system to deliver justice. Some others possible settled after the High Court’s judgment in the Merck v. Glenmark case – there were multiple pending lawsuits related to that patent which were settled after the High Court ruled in favour of Merck.
Another 9 lawsuits were unilaterally withdrawn by the patentees, most likely because of the delays or a strong defense, but it is impossible to be certain since the reasons for withdrawal aren’t usually recorded in the order.
A vast majority of the 143 lawsuits are therefore pending for more than 3 years, with quite a few, pending for a decade.
Framing of issues & pendency
One of the important markers that we used to identify the progress of cases through the judicial system was the date on which issues are framed. The framing of issues marks the completion of pleadings, disposal of any interlocutory motions (including the motion for an interim injunction) and the beginning of the trial, which is the most time-consuming aspect of civil litigation.
In several of these cases, the framing of issues has taken several years. For example, in the case of Ravi Kamal Bali v. Kala Tech which was filed before the Bombay High Court in 2005, the issues were framed only in 2013 i.e. 8 years later. (The suit has since been disposed for reasons not clear).
Most astounding however is the patent litigation between Bajaj Auto Ltd. v. TVS Motor Company that was initiated in 2007. This as a very high profile litigation since it involved two domestic giants in the highly competitive motorbike market. The issue of whether an interim injunction could be granted was litigated all the way till the Supreme Court. In 2009 a bench headed by Justice Katju famously ordered trials in all IP cases should conclude within 4 months of the suit being filed. A decade after the lawsuit was filed in 2007 there is no sign of a judgment although there have been a couple of orders on procedural issues that arose in the course of the trial.
Similarly a lawsuit filed by Bayer against Cipla in 2010 for infringement of its patent covering Nexavar is still going through trial. The issues in this case were framed the same year the suit was filed because Bayer didn’t push for an interim injunction. Ever since the lawsuit has been chugging along through a trial that is now in its 7th year and according to one of the recent orders in the case, Cipla has been granted leave to amend its written statement during the course of the trial. There are several other lawsuits filed before different High Courts where the mere framing of issues has taken over 4 years and where trials are continuing even after 5 years.
What’s the solution?
I’m sure none of the delays identified above come as a surprise to anybody familiar with the speed of litigation in India. The question is how do we fix the situation? The usual solutions discussed in India are increasing the number of judges or having special IP courts. I’m not partial to either. In most of these cases, especially those pending before the Delhi High Court, the trial, which is the most time consuming aspect of litigation is conducted before a court commissioner who is usually a retired district judge, who is appointed by the presiding judge and who is paid jointly by both parties. This court commissioner can basically sit whenever the parties are ready. Theoretically these trials should conclude within two-three weeks. This is unlike the situation in cases where High Courts conduct trials themselves and have huge dockets meaning that trials cannot be conducted on a daily basis. Yet, even the trials before court commissioners are taking donkeys years to complete.
What then is the problem?
In my opinion, a large portion of the blame rests with the IP Law Firms in India. Conducting patent infringement trials is extremely resource intensive – law firms need to have skilled, experienced lawyers who are capable of conducting such trials. However the phenomenal rate of attrition at some of these law firms, the generally low pay of IP litigation lawyers and the fact that most of these firms remain family shops means that talented lawyers will usually leave within 3 to 5 years once they’ve gained enough experience. What is perhaps most striking about Indian IP law firms is the absence of junior litigating lawyers joining competing IP law firms. I’ve heard rumours of an oral ‘no-hire’ agreement between some of the IP litigation law firms. This could be one of the reasons. The sum total of this analysis is the lack of competition between IP law firms in India and as we all know, the lack of competition leads to a decline in efficiency of these law firms.