Patent

Interim Injunctions: What’s the Damage? – A Summary


[This post has been co-authored with Praharsh Gour. His previous posts can be found here.]

Oprah meme, with text "You get an interim, you get an interim, everyone gets an interim!"

(Someone somewhere had already made this meme! Found here)

India’s tryst with interim injunctions in high tech patent disputes is a long, problematic one, as covered several times in this blog.  Despite all the issues pointed out, and despite courts stating that it should be used judiciously, it probably surprises few observers to see it being used too frequently. Over the course of this two part post, we will first try to provide an overview of the interim injunction minefield, as it were, including several of the points put forward by various authors on this blog over the years, and then look towards some possible remedies for this. 

Numbers and More

A study by Prof Ramakrishna Thammaiah looking at patent cases between 2000 to 2016 in High courts across the country, notes that in about 60% of the cases (36/59) where an application for an interim injunction has been filed, the courts have granted it. Praharsh and Rishabh Joshi (a former intern with SpicyIP) manually went through the PTC Journals for 2016-19 and found that of the 13 patent cases heard in the High Courts in this period, interim injunctions were granted in 5.

And what happens to those interim injunctions? Prashant and Aparajita, who combed through 143 patent suits, instituted between 2005 – 2015 at the High Courts at Bombay, Delhi, Madras, Calcutta and Gujarat, noted that only 5 judgments were delivered in this period – underscoring the massive delays that happen (despite, as they point out, Justice Katju’s order that trials in all IP cases should conclude within 4 months!). Research compiled by the SpicyIP team that had worked on the i3 series (“interrogating interim injunctions”) points towards several ‘interim’ injunctions which have lasted more than a couple of years! Vifor v. D Mohan was the standout example here, wherein the injunction lasted for more than four years!. We are in the process of updating this data and at a later point, we’ll try to bring out more of  the egregious examples, as well as problematic patterns over the years.   

Various posts on SpicyIP have looked into these problematic interim injunctions in the past (indicatively, by Namratha here, by Shamnad here and by Saahil here). Shamnad had also strongly argued for doing away with this interim phase altogether in complex matters, in an earlier blog post here, as well as in this paper jointly authored with Jay Sanklecha and Prakruthi Gowda.

In the context of broader patent policy vis-a-vis development, there may even be more to this debate. The 2017-18 Annual Report of the CGPDTM (“Patent Office” – which for some reason has yet to publish the Annual Reports for 2018-19, and 2019-20) shows that:

i) of the 13,045 patents granted that year, only 1937 were granted to Indians/Indian entities.

ii) of the 56,764 patents in force currently, only 8830 belong to Indians. 

(Tangential note: The Annual Report on Page 31 also notes that only 12,246 patents are shown as being worked in India, out of the 56,764 patents. Those interested in interim injunctions in this context may be interested in this new paper by Sandeep Rathod. It is outside the scope of the current posts though). 

In other words, the development and technology transfer promise of the TRIPS Agreement is still far from being realised, with so few Indian patent holders even 15 years after India’s become a TRIPS compliant country. In this light, interim injunctions which unfairly prevent or delay indigenous activity (patented or not) are also worth noting as possible contributors to this failure. This is of course a topic that requires more investigation and detailed nuancing – perhaps a question we can look into in the future. Nonetheless, the question is one worth considering.

Issues with Issuing Interims 

pic of cartoon character saying "I can see that you're only interested in the exceptionally rare"

Meme template from here

While there has been some consensus (at least on paper) that interim injunctions are to be granted only in exceptional circumstances, things are less clear when it comes to translating that into reality. Nonetheless, there are usually three criteria that the court must look into while considering these grants: (i) prima facie case, (ii) irreparable injury, (iii) balance of convenience. In matters of pharmaceutical patents, courts have opted for an additional criterion i.e. (iv) assessment of the impact of the proposed injunction on public interest. As pointed out by Shamnad in the above link, and Maitreyee here, there is inconsistency in interpreting the scope and matter of these heads. Applications for interim injunctions are (to be) decided within a very short span of time and are occasionally ex parte i.e. without the presence of the defendant. With respect to ‘public interest’, the principle of audi alteram partem is unfortunately a difficult one to implement in this framework where private rights have public interest fallouts. This leaves it up to the court to watch out for the irreparable harm that may be happening to the larger public interest, including those whose lives (or deaths) may be depending on the medicines in question. It is therefore vital that court-imposed changes to the status quo during the interim period, be imposed only in very carefully considered circumstances. As Adarsh’s argument here shows, even understanding ‘public interest’ is more than a black and white matter, with possibilities for ‘public interest’ aligning with the patentee’s position in some situations, and in other situations – possibilities for multi-faceted application of ‘public interest’ aligning with defendant’s position, beyond just the mere ‘price-differential’ factor.

There is also the need to watch out for clever litigation tactics that are sometimes employed. As discussed by Sandeep Rathod (here) and Prof. Yogesh Pai (here), the recent past has seen a hike in the number of pharma patent cases where the case is instituted against an individual as the first defendant, rather than the supposed infringing generic company. Pointing towards data put forward in Sandeep’s paper, both authors say that while these individuals usually do have some nexus with the entity, the intention seems to be more to create an impression of the defendant being a ‘fly by night’ party or a party with not much to lose.

While there is much that can be said on all of these 4 factors, for now we’ll just highlight one issue regarding developing the prima facie case. Due to the ‘presumption against validity of a patent’ rule  (under Section 13(4) and upheld by the Supreme Court here), courts are not expected to automatically assume patent validity in all cases. For instance, in cases where strong oppositions are in process, a court would be at liberty to require the plaintiff to defend the patent afresh. In other cases of course, where there are little to no questions about the patents validity, the court is free to assume that it is valid. (See more on this in the Basheer, Sanklecha, Gowda paper linked above. They additionally note that our courts are vulnerable to the lack of expertise to understand the technical jargon of the pharmaceutical patent claims, which is a problem particularly in ex-parte hearings – more on that later below.) 

However, this needs to be seen in consonance with  the seemingly high error rates by the IPO, as pointed out by Prof. Feroz Ali and Roshan John here. The study underlying their article is this 2018 AccessIBSA study suggesting the error rate is as high as 72% for pharmaceutical patents! Along similar lines, Prof. Bhaven Sampat had conducted an empirical study that indicated that the “high standard” for judging the eligibility of an invention for a patent under the Indian Patent Act, in section 3(d) isn’t actually put into practice by the Patent Office. Of course, the statistic alone is not reason to automatically tilt the balance against patentees – but it does give good reasons for courts to be a little more careful before assuming validity. The unfortunate fact is that there is no easy method, barring either drastically fixing the challenges faced by the Patent Office, or just outright challenging the majority of patent applications, to correct for this potentially huge error.

Ex-parte Injunctions

Ex-parte interim injunctions, especially in complex/high tech patent cases, are almost always even more problematic. Indicatively, Shan had highlighted the SC judgment in Ramrameshwari Devi v. Nirmala Devi that laid down circumstances in which ex-partes could be granted. The SC in that case noted, “experience reveals that ex-parte interim injunction orders in some cases can create havoc and getting them vacated or modified in our existing judicial system is a nightmare.” Further, patent specific posts on how problematic ex-parte injunctions can be, include this one by Prashant, and this one by Shamnad. Nonetheless, courts have used the (supposedly) exceptional power to issue ex-parte interim injunctions much more frequently than one would expect in patent disputes.

Order 39 Rule 3A of the CPC prescribes that the court shall ‘make an endeavour’ to dispose of the ex-parte application within 30 days from the date on which it is granted. However, pharma patent disputes are comprised of extremely complex scientific and technical issues which are difficult to resolve in such a short time span, opening the door to errors. The difficulty in successfully establishing all four criteria without looking into substantive questions of law and facts also frequently results in what is essentially a mini-trial. This is despite the Supreme Court in Colgate Palmolive v. Hindustan Lever Ltd. expressly stating “..the court should not attempt to resolve difficult issues of fact or law on an application for interlocutory relief.” (Readers can also refer to Prashant’s post here, for more on this). 

In short – determining the prima facie case of infringement of a patent (which might not have been eligible for the protection in the first place) by authorities (who might not be equipped with the technical prowess to address the issue at hand) coupled with the limited time accorded to adjudicate upon the application for ex parte injunction, essentially leaves a wide margin of error. On one hand, this may lead to courts extending this interim process, sometimes to a painful extent. On the other hand, courts may hastily grant what turns out to be an unfair / inequitable injunction, which also may have damaged the business and reputation of the defendant. And of course, in pharmaceutical cases, such injunctions additionally can deprive the public the ability to access medicines that are often exponentially cheaper and sometimes of a lifesaving nature.

In the second part of this post, we shall examine some possible safeguards against these seemingly erroneous interim orders.

4 comments.

  1. AvatarPraharsh

    A hat tip to Waseem Shuaib Ahmed for pointing us to a judgement by Justice Pratibha Singh (available here: http://images.assettype.com/barandbench/import/2019/05/Bata-India-v.-Chawla-Boot-House_watermark.pdf) where the court held that arraying an unknown person or an employee or Director of an entity as the first defendant in IPR cases to be impermissible in law. The court directed the registry to “seek an undertaking of the Plaintiff in IPR cases where there are multiple Defendants that the Defendant No.1 being arrayed is the main contesting defendant in the Suit.”

    See also the subsequent office order by the High court here: http://images.assettype.com/barandbench/import/2019/05/Office-Order-on-undertaking-from-Plaintiff-in-IP-cases_watermark.pdf

    Reply
  2. AvatarAjay

    Just a curiosity question: Diametrically opposite arguments exists for Patent holder as well. Why should he be deprived of his rights after being the original inventir & later registering his patent as well, just because some defendant is successful in copying the product and launching it. Why should Patentees rights be any less then the defendant?

    Reply
  3. AvatarPraharsh

    Hey Ajay,
    Thank you for highlighting the counter question. However, there are a few notable points here:-

    1) There is no right over interim injunctions, as said, its a discretionary power vested with the courts to maintain equity among the interests of both the parties to the dispute. While we agree that a patentee has a right to institute a suit against an alleged infringer, getting an interim injunction is not a right.

    2) It has been observed in many cases that the court has ruled in favour of defendants, after passing an interim injunction in favor of the plaintiff initially. If we look in retrospect, in such cases, the interim injunction (which would have been granted on Plaintiff’s request) not only affects the business of the defendant but also deprives the public of cheaper alternatives.

    3) In fact we have suggested (in consonance with Prof. Basheer’s argument) that in order for speedy settlement of dispute, the whole stage of interim hearing should be done away with and the matter should proceed to trial straightaway. This will not only ensure availability of cheaper alternatives to the public, at least till the dispute subsists, but will also settle the case in patentee’s favor much sooner than otherwise, if he has a valid case.

    4) As highlighted the post, we aren’t questioning on the right of the patentee to apply for interim injunction but rather commenting upon the clear majority in favor of granting those requests, especially in those cases where a ‘larger public interest’ question is in hand.

    Hope this satisfies your question.

    Reply
    1. AvatarAjay

      Agree on the speedy disposal of cases. Even the National IPR policy of 2017 said specialised benches will be provided but what we got is probably Commercial courts. Also just providing cheaper alternative to public at large should not determine whether an injunction to be granted or not. Rights needs to be balanced and hence public benefit alone cannot be reason enough to allow or disallow injunction. To be fair to all, Fast truck Patent courts, capable to determine outcome in a time bound manner, could only be the way forward if we wish to truly promote culture of Innovation in our country. Or else we have always been a Jugaadu Nation and probably will continue doing the same. It is evident EVM by our number of Patent filings we do. As the commercial incentive to copy someone’s idea and launch is larger then the anticipated punitive or capital punishment in our country for infringing or copying..

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