Understanding the Public Interest Element of the Injunction Analysis in Patent Infringement Cases

We are pleased to bring to you a guest post by Adarsh Ramanujan. Adarsh is an advocate primarily assisting clients as a litigation attorney. He has recently started his own counsel practice with offices in Delhi and Chennai after having spent considerable time with Lakshmikumaran & Sridharan at their New Delhi and Geneva offices. He obtained his B.Sc. LL.B. (Hons.) degree (Gold Medalist) from National Law University, Jodhpur  and LL.M. degree from University of California, Berkeley. He is a qualified Patent Agent in India. A major portion of his time is spent, practicing in the areas of IP & Technology Laws as well as in International Trade Law. He was however branched out into doing commercial litigation and arbitration work. His expertise also extends to regulatory laws such as environmental laws, biodiversity laws and cyber laws. Adarsh is currently teaching a seminar course on commercial arbitration in NLU, Delhi and has previously taught patent law in NLU, Jodhpur and at the CEIPI Institute (University of Strasbourg). He has authored or co-authored close to 30 publications on diverse topics, including on IP, WTO, constitutional law and international tax. He has guest blogged for us in the past as well (see here).

Understanding the Public Interest Element of the Injunction Analysis in Patent Infringement Cases

Adarsh Ramanujan

I happened to be sitting in on a proceeding before the Delhi High Court yesterday where a case of patent infringement was being argued and the case appeared to concern a patent in the healthcare sector (not a medicament though). As was expected, the parties and the Court reached the point where the traditional three-factor (or four-factor) test for granting interim injunction was being deliberated upon and again, as one would expect, the point of public interest became a prominent issue.

It was clear that almost everyone, as a matter of principle, agrees that public interest is a factor in determining whether interim injunctions are to be awarded or denied. The question, however, relates to the contours of this element. In particular, whether the fact that the accused infringer’s product was being sold at a price significantly lower than the price at which the patentee was apparently making available the said patented technology through its own products.

I felt that, perhaps, on many occasions, the perspective behind this “public interest” element is lost in translation:

1. The question to be assessed is whether the grant of an interim injunction would go against public interest. The burden on the patentee when it comes to this element, so to speak, is in the negative – that public interest would not be dis-served by the grant of an injunction.

2. When seeking an interim injunction on the basis of Section 48 of the Patents Act, 1970, Section 83 is not relevant because Section 83 only applies to compulsory license proceedings. This is a finding of our own Division Bench of the Delhi High Court in Novartis v. Cipla (2017). This means that to merely refer to the public interest embodied in Section 83 as a matter of general principle to argue denial of injunction may not be a strong argument.

3. In cases relating to the healthcare segment, the public interest element is not a one-way street, as is most often assumed. While there is public interest in enabling access to generic versions at lower prices, there is also a public interest element involved in enforcing patents and encouraging innovation.

a. Our own Delhi High Court in Merck v. Glenmark, citing Bayer v. Cipla, recognized the public interest element flowing in favour of grant of an injunction. The Delhi High Court emphasized the need to balance both these interests.

b. The US courts also consider the need to balance both the above interests in assessing the “public interest” leg of the analysis. I would refer to Pfizer v. Teva, 429 F.3d 1364 (Fed.Cri. 2005) and Sanofi v. Apotex, 488 F.Supp.2d 317 (S.D.N.Y. 2006).

c. The fact that enforcing validly granted patent monopolies is itself in public interest is also acknowledged in the UK. I would refer to Chiron v. Organon, [1995] F.S.R. 325.

d. If balancing these two competing interests in a given case suggests that both interests are at equipoise or slightly in favour of the patentee, the “public interest” prong of the analysis favours the patentee. If, however, the interest in favour of the making available generic version at a lower price outweighs the competing interest, this prong of the analysis favours the accused infringer.

4. In the context of balancing the above two interests, the US courts seem to take the position price differential alone is not a tipping point – the mere fact of the accused infringer selling at a lower price than the patentee is alone not enough to outweigh the interest in enforcing a valid patent. I would refer to the observations of the Federal Circuit in Pfizer v. Teva (noted above), which relies on an earlier judgment in Payless Shoesource, Inc. v. Reebok Int’l Ltd., 998 F.2d 985, 991 (Fed.Cir.1993). In fact, it appears that the arguments referring to the scheme of the US laws that enable faster entry of lower priced generics (the ANDA regime) are routinely rejected as being a sufficient basis on its own to conclude that grant of an injunction dis-serves public interest.

Note: This is to be contrasted with a fact situation where the patentee is not making the patented product, at all. Here is the balancing act will stand skewed in favour of the accused infringer because the patentee has not made the patented invention available to the market. Here, I refer to the US Supreme Court judgment in EBay v. MercExchange, 547 U.S. 388 (2006). See also, for instance, Bayer v. Ajanta, Delhi High Court (2017).

5. On the other hand, where the accused infringing product appears to grant an advantage, the assessment may tip in favour of the accused infringer. A very good example I know of is the case of Conceptus, Inc. v. Hologic, Inc., 2012 WL 44064 (N.D California, 2012), which involved a medical device. On facts, Court noted that the accused infringing device and the patentee’s products were not always interchangeable and the accused infringing device had some advantages. For this reason, the Court concluded that public interest would undoubtedly be harmed by an injunction.

6. Similarly, large scale market disruption, customer inconvenience and cost also seem to be a tipping point in favour of the accused infringer on the public interest element angle. Johnson & Johnson Vision Care, Inc., v. CIBA Vision Corp., 712 F.Supp.2d 1285 (M.D. Florida, 2010) is a good example. This involved eye care lenses and the evidence before the Court was that the accused device was being used by more than 5.5 million users and these patients would be being abruptly told that the contact lens for which they have been fitted and with which they are satisfied, is no longer available; choosing a new lens will at minimum require refitting and the new lens may not prove as efficacious. Moreover, patients may have to be refitted more than once until an appropriate lens is found. An undefined number will not be able to be refitted appropriately at all.

7. UK courts tend to have a much more fluid approach to this issue and there are fewer judgments that tend to analyse this specific issue in lengthy detail (quite ironic). Nevertheless, the conclusions are no different. For instance, in Actavis Group PTC EHF v. ICOS Corp, [2017] EWHC 2880 (Pat), the High Court of Justice noted the two competing interests (lower cost generics versus need to encourage innovation by enforcing patents) and stated that it won’t base its decision on the same, suggesting that the Court did not find the balance to be tipped in favour of the accused infringer. Similar findings are seen in Novartis AG v. Hospira UK Ltd, [2014] 1 W.L.R. 1264.

8. In Chrion v. Organon (noted earlier), the Patents Court stated simpliciter that all the factors contended by the accused infringer with reference to public interest being harmed by an injunction is addressed within the Patents Act, 1977 in the UK through compulsory license proceeding or through government authorized use. The Court rejected the stereotypical arguments of the accused infringer and concluded, simpliciter, that what the accused infringer wanted was a compulsory license without going to the proper authority and showing the necessary ingredients. To me, given the overlap in the legislative scheme of the Indian Patents Act, 1970 with the UK law, this decision is of vital importance.

9. In contrast, in Edwards Lifesciences LLC v. Boston Scientific Scimed Inc., 2017 WL 01339063, the High Court of Justice, noted that public interest is a separate ground that may militate against the grant of an injunction in a given case. This was a case involving an infringing heart valve and evidence was presented that in at least one hospital, close to 60-70% of the procedures involved use of the infringing valve since this infringing valve provided best results for a certain category of patients. The Court concluded that there existed a patient group for whom the accused device provided the best or only option and thus, an injunction would harm public interest. For various other reasons though, while the Court granted the injunction the operation of the injunction was stayed pending appeal.

My Conclusions

1. Defendants would be better-off focusing on items over and above price differentials when arguing why an interim injunction would dis-serve public interest

2. Complete non-working by patentee is a factor.

3. Focusing on market penetration of their product and the practical difficulties for patients and health care providers seems a better bet for defendants.

4. Focusing on the advantages of the accused infringing device over the patentee’s product, supported with some evidence, would also be a batter bet for defendants.

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6 thoughts on “Understanding the Public Interest Element of the Injunction Analysis in Patent Infringement Cases”

    1. Thanks. This was specific to the latest Edwards Life Science case where the fight was specific to stay during appeal, where both parties agreed for a stay but had a dispute over duration and other modalities.

  1. Amrutanshu Dash

    Hi Adarsh.

    Interesting analysis in your piece, thank you. I wanted to highlight an additional point which I thought might add to your article. The grant of such injunctions does not operate in an all or nothing fashio on the public interest factor. The (UK) courts have tailored the injuctions to specfically meet the public interest requirement despite awarding the injunctions in favour of the patentee. For instance – Mr. Justice Arnold of the English High Court in Edwards Lifescience v. Boston, 2018 EWHC 1256 (Pat) made two limitations in the (permanent) injunction order in favour of Boston:

    First, that Edward’s artifical heart valve will continue be available to the patitents for whom it remains the only option of treatment and Second, that the (permanent) injunction will be stayed for a period of 12 months allowing the clinical workers to be trained in alternative artifical heart valves.

    The 2018 Edwards v. Boston decision was a follow up of the 2017 Edwards decision cited in your piece. A tangential but important qualifier, I think, will be the relevance of use of the permanent injunction juriprudence while deciding cases relating to interim injunctions?

    1. Thanks. I had read this decision as well.

      1. Only limitation is that in the case you are highlighting, the parties had agreed for stay of injunction pending appeal but the fight was on the extent and modalities. The case did not directly address the question of public interest in the grant of an injunction.

      2. In my opinion, looking at the way the US and UK jurisprudence has developed in the past, the same considerations theoretically apply for both interim and permanent injunctions. Ultimately, both are discretionary but perhaps, the degree of discretion is different.

      3, Otherwise, I agree with you that there cant be an ‘all or nothing’ approach. As cliched as it may sound – facts and circumstances matter and more importantly, arguments made before the Court matter.

  2. Hi Adarsh. it seems you were in the court of Justice Yogesh Khanna (DHC). This argument was taken by the defendant in our case that day. it does not pertain to pharma. infact it is a mechanical product patent catering to the needs of the railways for its container wagons.

    On principle I agree with your note. Although i dont see this argument being abandoned soon in India.

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