The recent past has seen a few blogposts on how public interest is factored in (or isn’t) by courts. A post looking at public interest as viewed in interim injunctions for pharma cases was posted here, and another post looking at public interest in the pandemic context was posted here. We’re very pleased to bring to our readers another post focusing on this public interest element, which among other aspects also puts forward some thoughts on how it could perhaps be (re?) formulated.
This post is authored by Victor Vaibhav Tandon and Devvrat Joshi. Devvrat is a litigation associate at Saikrishna & Associates. He regularly advises clients and represents them in courts of law on issues pertaining to intermediary liability, data privacy, and media and entertainment laws. He is also part of the core litigation team dealing with cases on patent infringement. Victor is an academician turned lawyer. He is also a registered Patent Agent and holds a Ph.D. in patent law. After teaching as a faculty in a prominent NLU, he joined Saikrishna and Associates where he is part of a team dealing with pharmaceutical patent and SEP litigations. He continues to teach as a visiting faculty for PGDIPR courses in ILI and ISIL. Victor has also previously written for us here. The views and opinions expressed in this article are of the authors’ alone in their personal capacity
Back to the Drawing Board: Indian Courts’ Tryst with Public Interest Principle in Pharmaceutical Patent Infringement
Authors: Victor Vaibhav Tandon & Devvrat Joshi
Recently, India and South Africa made submissions to the WTO seeking a pro tem waiver of rules governing certain IPRs including patents to, inter-alia, ensure affordable and adequate access to diagnostic kits, medicines and vaccines needed to combat the SARS-CoV-2 pandemic, a development that once again brought to light the uneasy relationship that IPRs, especially patents, generally tend to have vis-a-vis access to knowledge goods. Much of this uneasy equation, including the tussle between the inventor’s interest and public interest, is well documented in patent literature. Quite unsurprisingly, the struggle to balance these competing interests is reflected in the application of the public interest principle in patent law by the Indian courts, especially when it comes to pharmaceutical patents. To be fair (to, inter-alia, Roscoe Pound!), there is a constant tug of war between two societal interests- one, suitably incentivizing the innovators in any society by what currently appears to be the best mode of doing so- the patent system and the other, ensuring that consumers have a real and meaningful access to innovations. Naturally, each society would like to (and should) fix this equilibrium as per its own specific technological and socio-economic realities.
Courts, where this equilibrium is frequently tested, have a rather daunting task on their hands. In fact, at the time of writing this piece, the Delhi High Court had pronounced its judgment in Indoco Remedies Ltd. v. Bristol Myers Squibb Holdings Ireland Unlimited Company & Ors. (see SpicyIP’s coverage here) wherein it categorically observed that public interest in itself is not a sufficient ground to grant interlocutory relief in favour of the generic manufacturer. It is, however, important to highlight that, per the judgment, the appellants (generic manufacturer) had failed to provide any reasonable evidence supporting their public interest claim. However, subsequently in the Dapagliflozin dispute (SpicyIP coverage here), a Single Judge of the Delhi High Court took into consideration the public interest elements of the price difference as well as the nature of the disease, to hold that the scales of balance at the threshold stage would weigh in favour of the generic manufacturers/defendants.
The three-factor test of interlocutory relief
As far as grant of interlocutory relief is concerned, it is well entrenched in Indian jurisprudence that the same depends on the applicant demonstrating the following three-factor test:
- That there is a prima facie case, i.e. if the case were to go to trial solely on the evidence presented at the time of hearing the application, the applicant would be entitled to a permanent injunction (see American Cyanamid Co. vs. Ethicon Ltd.);
- That if the application is not granted, irreparable and non-compensable harm would be caused to the applicant;
- That the balance of convenience is in favour of the applicant, i.e. severe inconvenience would be caused to the applicant if the injunction/interim injunction is not granted, but no such inconvenience would be caused to the non-applicant/defendant.
The four-factor test in pharmaceutical patent infringement
In addition to the three-factor test, when it comes to patent infringement, Indian courts have rightly recognised that public interest is an important consideration. Unfortunately, instead of giving the public interest principle (as regards affordable and adequate access to users) its due place, especially in a developing country like India, the courts have simply positioned it as the fourth factor. In our view, and as elaborated later, public interest ought to play an autonomous role at the threshold stage of determining interim injunctions, especially in pharmaceutical patent litigations, instead of being reduced to an auxiliary factor used to merely tilt the scales of balance or acting as a tiebreaker.
It therefore follows, from the courts’ positioning of public interest as a fourth factor, that the onus should be on the plaintiff (often the patentee) to satisfy the court that the grant of an interim injunction does not harm or prejudice public interest. However, in practice, this onus rarely falls on the plaintiff. Fulfilment of the three-factor test is deemed to be sufficient. Resultantly, public interest has been reduced to a tool frequently wielded by the defence (often the generic manufacturer) to argue that the fourth factor is not in the plaintiff’s favour and thereby appeal to the conscience of the court to seek refusal of grant of an interim injunction. Interestingly, public interest is not an effective defence in itself either, as the defendant has to first satisfy the threshold test of ‘credible challenge’ to the validity of the asserted patent(s).
The march of law
In 2008, the Delhi High Court, in the Roche v. Cipla series of single judge and division bench decisions, observed that particularly in cases of lifesaving drugs, public interest is a critical factor. What also emerged from Roche v. Cipla is the concept of ‘credible challenge’ i.e. the defendant, in order to avoid interim injunction, has to at the threshold and without exception, demonstrate a credible challenge to the validity of the patent concerned. This position has been fortified by way of the judgments in Bristol-Myers Squibb v. JD Joshi, Bristol-Myers Squibb Company & Anr. v. Ramesh Adige, Bristol-Myers Squibb Company & Anr. v. D. Shah and Novartis v. Cipla.
In Novartis v. Cipla, the Delhi High Court made a pivotal observation that the ground of public interest is not one which can be said to belong to the traditional rules of grant or refusal of interim injunction, thereby tendering due recognition to the nonpareil nature of the public interest principle. Nevertheless, the courts in general have shown a disinclination to wield the power of public interest principle. Interestingly, in the appeal filed by Glenmark against Merck challenging the decision of the Division Bench of the Delhi High Court wherein injunction was granted in favour of the patentee (Merck), the Supreme Court granted a limited stay on the operation of the Division Bench judgment by permitting Glenmark to sell existing stock of its generic product. The Apex Court observed that its primary focus was on balancing the patentee interest on one hand against the public interest in the other.
Reformulating the principle of public interest
It is clear that public interest, as it stands today in the Indian jurisprudence, is an etiolated principle in theory as well as in practice, and rendered subservient to the satisfaction of the three-factor test and/or the ‘credible challenge’ test. To be fair, an interim injunction cannot and should not be denied to the patentee in every single case of infringement of a pharmaceutical patent for that would defeat the very purpose of granting patents and would essentially leave the innovator companies without any real right. But public interest cannot be subservient to patent rights either. It therefore should have a greater role to play in deciding patent disputes in India, at least in the domain of pharmaceutical patents.
A simple reading of the Statement of Object & Reasons of the Patent Act, 1970 reveals public interest as the cornerstone of patent law. A similar understanding is reflected in Articles 7 (“Objectives”) and 8 (“Principles”) of the TRIPS Agreement (to which India is a signatory) which recognise that protection of intellectual property rights must be “conducive to social and economic welfare” and “promote public interest in sectors of vital importance to their socio-economic development”. Undoubtedly, patent law is designed to balance competing interests– the monopoly rights of the patentee and the public interest in availing the consequent benefit from grant of such monopoly rights. Moreover, a first principle understanding of patent law makes it unequivocally clear that the role of public interest is to act as a check on any potential abuse of this monopoly right. Its purpose is straightforward – ensuring that the consumers are not deprived of the benefits of the patented creation by way of availability, accessibility or affordability. In fact, the monopoly rights granted under patent law are in lieu of the patentee working its invention and ensuring that the benefits thereof reach the public. In fact, Franz Xaver, Glaverbel and Sandeep Jaidka have expressly recognised that mere non-working of the patent by the patentee is in itself a sufficient ground for refusing interim injunction as such squatting is to the detriment of the public.
Admittedly, ‘public interest’ is an extremely broad term, and it is therefore the court’s duty to define its scope, application and its limitations. A situation of clear and overwhelming public interest, backed up by prima facie proof that the patentee is failing to meet such public interest in the immediate foreseeable future, should in itself be a sufficient ground for the non-grant of interim injunction.
As for the matrix of public interest, the factors of price difference between the innovator drug and the generic version, actual working of the patent in India and the on-ground accessibility (both in terms of quantitative availability and affordability) are critical considerations. The conduct of the patentee, an aspect often overlooked, should also be of paramount consideration, especially with respect to the filing of its working statement (Form-27). While the issue of working statement, unfortunately, stands diluted by the Patents (Amendment) Rules, 2020 (see SpicyIP’s coverage here and here), there is no reason why the same should not be looked at by the courts of law in an incisive manner in as much as it reflects the admitted conduct of a patentee. The working of an invention in India for the betterment of the society (and therefore in public interest) lies at the heart of the Indian patent law and was one of the key concerns of the Ayyangar Report that led to the enactment of the Patent Act, 1970. Any innovator not working its invention is essentially failing to discharge its public duty and this can lead to calamitous consequences for the general public (hence, public interest) because no one else can enter the market either during the subsistence of the patent. This is quite distinct from the consequences that patentee can suffer for non working under the compulsory licensing regime. Further, perhaps, the Courts should not restrict invocation of public interest to cases of life-threatening diseases alone. After all, at the end of the day, the law must not be so tractable as to be rendered unstable. But at the same time, it cannot take such a rigorous, unaccommodating and textualist stance that the broader end goal of public benefit is not met.