Valgancyclovir Hearings and the Need for More Transparency

Post grant opposition hearings in the "Valgancyclovir" patent matter were held between 15th June and 18th June, 2009 before Assistant Controller, SP Subramaniam (no, the famous singer with a similar sounding name hasn't switched professions yet.. this is an altogether different person with more of a scientific than an artistic bent).

For those interested in a background to this opposition, see this summary by Lawyers Collective.

The parties to the opposition involved Roche (the patentee, represented by Pravin Anand of Anand and Anand) and the following opponents:

i) Cipla (represented by Majumdar and Company)
ii) Bakul Pharma (represented by Majumdar and Company)
iii) Matrix Labs (represented by Feroz Ali)
iv) Indian Network for People Living with HIV/AIDS (INP+ (represented by Anand Grover)
v) Tamilnadu Networking People with HIV/AIDS (TNNP+ (represented by Anand Grover)
vi) Ranbaxy (represented by Lakshmikumaran of Lakshmikumaran and Sridharan)

Quality of Opposition Decisions?

With this stellar line up, one hopes that the final order will be a well reasoned one. In an earlier post, we mulled the likelihood of sound decisions coming out of the customs office, if such office were the beneficiary of an "adversarial" process, in which high caliber attorneys participated. Given that the patent office has significantly greater institutional competence in dealing with patent matters (unlike the customs office), it is more likely that an adversarial process will lead to better quality decisions.

Unfortunately, it may be a while before we get such a "sound" decision in the Valgancyclovir case. The matter was not really "heard", as several opponents alleged that the affidavit evidence filed by Roche (about 1000 pages in all!) was taken on record without intimating them. As a result of this, they claimed that they did not think it necessary to file any reply to Roche's evidence.

Two of the opponents also contended that the affidavits filed by Roche were not properly notarised. As for the first objection, the patent office stated that Roche's evidence had been taken on record. However, in order to offset any inconvenience to the opponents, the office offered more time to the opponents to file their replies.

As for the second objection, it is not clear if the patent office will treat the improper notarisation as a substantive error, meriting a dismissal of Roche's evidence or as a mere technical error that could be corrected.

Likely Delays?

In the light of these delays, one wonders if the proceedings are likely to be completed within 8 weeks time (from date of filing of rejoinder affidavit by patient groups), as directed by the Supreme Court of India. The Supreme Court order permitted patient groups to take part in the post grant opposition proceedings, as an exception, without delving into whether or not they had locus standi to do so.

It is not clear as to who would benefit from the delay. On the one hand, since the patent has already been granted, any delays in the post grant proceedings would benefit Roche. On the other other, since Roche has a pending patent infringement suit against Cipla and no injunction has been granted to restrain Cipla, any delays would benefit Cipla, as they are free to introduce generic versions of their drug in the interim. As to whether they have done so in practice is not known to me.

Post Grant Opposition: Proposal for Reform

Under section 25 (3) and (4) of the Patents Act (and the corresponding rules), the opposition procedure is to be conducted in the following manner:

i) The Controller constitutes an opposition board, to whom copies of the opposition and the reply (by patentee) are forwarded. The Board is to consist of 3 members and the Controller appoints one of them as Chairman. Based on the written submissions, the Board forms an opinion, which is then communicated to the Controller. This opinion of the Board is not communicated to the parties or the public.

ii) The Controller reviews the opinion of the Board and offers an opportunity for hearing to the parties concerned. He/she then issues a final decision which is then communicated to the parties. This decision is then appealable to the IPAB (Intellectual Property Appellate Board).

The above process appears to be an unduly long winded and inefficient one. Wouldn't it be far simpler to constitute a Board (with 2 Controllers and one examiner) to review the matter once and for all? In other words, the Board reviews the written submissions and also hears the parties. At the end of this consolidated process, a decision issues. Given that Controllers do not anyway examine patent applications in the first instance, couldn't we make better use of their talents during opposition proceedings?

I recommend that the Board consist of two controllers and not one for the reason that if the Board were to be otherwise (consisting of 1 Controller + 2 Examiners), we might have no possibility of dissent, as examiners might tend to defer to the Controller.

A two stage process, with an initial review and opinion by the Board and a denovo review of this by the Controller, seems a waste of time and resources. And to this extent, a Board that reviews the post grant opposition at the first instance and issues the final decision as well might make for a quicker and more efficient process.

Secondly, the post grant process needs to be conducted in a manner that provides against any sort of bias. For one, the Board should not consist of any examiner or Controller that was in any way involved with the prosecution of the patent at any of the earlier stages. The patent rules provide for this, but are worded to apply only to examiners: it should be amended to extend to Controllers as well.

Secondly, it would be far better to have the opposition decided by an office that is different from the granting office. In other words, if the Chennai office granted the patent, the opposition must be reviewed and decided by the Mumbai office. Given the possibility of officers within a single office being close to one another, one cannot rule out the possibility that a Controller from Chennai may be disinclined to overrule the earlier grant of the patent by his fellow officer from the same office. Given that most of us are susceptible to what is commonly termed a "confirmation bias", one must provide for a variety of measures to retain the independence and objectivity of officials who decide patent oppositions.

Thirdly, and perhaps most importantly, the opinion of the Board to the Controller must be made public. In the pegasus post grant opposition, Deputy Controller, Madhusudhanan went out of his way to not only mention that he disagreed with the Board, but also to spell out their opinion and why he disagreed with it. It is a very well reasoned decision and I will bring you a separate post on this shortly.

Need for More Transparency

Can we hope for this sort of transparency with other Controllers that decide post grant proceedings? Wouldn't it be far better if our CG, PH Kurian issues an order stipulating that all such opinions shall be made public? In fact, this was one of the requests in our petition calling for more patent information to be made public. We collected more than 250 signatures and we want to thank our many readers for their continued support to this cause.

Having begun the "transparency" mission in 2006, I am still singing the same song...not least because of my firm firm belief that greater transparency is the one of the most effective ways in which we can hope to improve the functioning of the Indian patent office.

IP Vacancies: Nokia (India) is Hiring Patent Professionals

Three lucrative positions have opened up with Nokia (India). Since Nokia's R&D in India has witnessed significant growth in recent years, the company is now seeking patent professionals that can help capture and protect Nokia's innovation from India.

Salaries will be commensurate with the best in the industry.

The JD's are below and the person (s) selected will work out of Bangalore. For those interested in any of these positions, please send your CVs to spicyip[at]gmail.com.

PATENT ENGINEER / IPR SPECIALIST

Roles & responsibility

1. Identifying and evaluating inventions - will take care of the IPR process from when the invention is first reported until patent is granted
2. Managing allocated patent portfolio will involve collaborating with inventors, technical experts and external patent attorneys
3. Patent creation responsibilities will cover one or more of the following technology fields: signal processing e.g. audio, speech and video codecs, Broadcasting, PoC, UPnP, Operating Systems, Middleware
4. Will work together with R&D professionals in a multicultural team.

Eligibility

1. Bachelors or masters in engineering & familiar with some of the above mentioned technology areas
2. Experience in technical writing
3. Familiarity with the standardization work of 3rd Generation Partnership Project (3GPP), 3GPP2, IETF, ETSI or OMA is an added advantage
4. Experience in patenting issues


PATENT PROFESSIONAL

Role & Responsibilities

1. Will be working with R&D engineers to uncover valuable inventions and teaching them how to identify their own inventions, and to protect those inventions
2. Identifying and evaluating inventions - you will take care of the IPR process from when the invention is first reported until it is granted as a patent.
3. Managing allocated patent portfolio will involve collaborating with inventors, technical experts and external patent attorneys
4. Patent creation responsibilities will cover one or more specific areas of User Interface technology, as well as helping to harvest innovation in any technology area relevant to India R&D
5. Will be working in a multicultural team

Eligibility

1. Degree-level qualification in science or engineering
2. Considerable experience (2-3 years) of working as an IPR professional
3. Qualification as an Indian, US or European patent attorney
4. Experience in technical writing

IPR ASSISTANT / IPR ADMINISTRATOR

Roles & Responsibilities

1. Will participate in implementing and improving patent filing and prosecution activities in India, working with local, global and multiple team influence.
2. The IPR Administrator is expected to solve IPR related administrative problems independently and in cooperation with internal and external interest groups, such as other IPR personnel, inventors, as well as internal and external patent attorneys
3. Acts as a point of contact to IPR related enquiries in particular for the Indian inventors and external patent attorneys, seeking and sharing information
4. Includes training and guiding inventors and IPR personnel in India

Requirements

1. Two (2) or more years of experience as IPR administrator, preferably in a law firm or company internal patent/prosecution environment
2. Good understanding of patent processes in different jurisdictions, particularly India
3. Excellent organization and prioritization skills, as well as ability of collaboration and networking in multicultural and global environment
4. Excellent communication skills in English, both written and verbal
5. Must be able to work at intermediate to advanced level in Microsoft Office (excel in particular), internet and other like technologies.
6. Knowledge of IPR management tools is an advantage.

INTA Roundtable on “Trademark Valuation, Portfolio Audits and Due Diligence”

In keeping with the increased focus on IP issues, the International Trademark Association (INTA) is conducting two Roundtables on “Trademark Valuation, Portfolio Audits and Due Diligence” during July, in New Delhi and Mumbai.

The Roundtables will cover the following issues:

• How to value a brand
• Why trademark registrations are an important part of the process.
• How to conduct a Trademark Audit of existing applications/registrations.
  

The attempt is to provide trademark owners and other interested parties with valuable insight on how to develop and enhance business and brand value. Moreover, the Roundtable is the perfect vehicle to network and trade thoughts with peers, compare and learn new strategies, and address common issues and challenges facing the trademark and intellectual property community.

New Delhi

Date: July 8, 2009

Venue: Yantra I,

The Park Hotel,

15, Parliament Street,

New Delhi: 110 001.

Tentative Agenda: The tentative agenda and list of speakers is available here.

Please note that the speakers vary as per location.

Mumbai

Date: July 10, 2009.

Venue: The Lounge,

Rampart Row Banquets,

30 K, Dubash Marg,

Kalaghoda,

Mumbai: 400023.

Tentative Agenda: The tentative agenda and list of speakers is available here.

Please note that the speakers vary as per location.

The details of Pricing and Registration for both the Roundtables are as follows:

The Roundtable reservations are accepted on a first-come, first-served basis. Given the nature of the Roundtable and the importance given to interpersonal interaction, the standard limit of the session is 30 registrants.

The registration fee is US $ 40.00 per person and includes tea and a buffet luncheon. The fee is nonrefundable upon confirmation of this registration by INTA. If you are unable to attend you may send a substitute.

Online credit card payment is the only acceptable method of payment.

Register for New Delhi on July 8.

Register for Mumbai on July 10.

The INTA has also recently concluded its 131^st Annual Meeting in Seattle. For those interested, IPKAT carries a detailed report on the same.

Ramkumar Patent Saga: Customs Orders Stayed by Madras Court

In earlier posts, we referred to three customs orders (from Delhi, Chennai and Mumbai) which were adverse to Ramkumar's patent claim against dual SIM importers such as Samsung and Hansum India.

SpicyIP is now given to believe that the orders by the Mumbai and Chennai commissioners were challenged by Ramkumar in a writ petition and have been stayed by the Madras High Court. We're not sure about the Delhi Customs order and if any of you have information on this, please let us know.

We haven't seen the writ petitions or the stay orders yet, but are informed by sources that the writ petitions question the ability of Customs officials to decide issues of patent infringement. Paradoxically, this was the same issue that was raised by Samsung in the writ petition filed before the Delhi High Court, which was subsequently withdrawn.

I'm not entirely sure what the effect of the stay would be? As noted in earlier posts, most of the customs orders merely find that the importers do not infringe Ramkumars patent. And they then go on to ask Ramkumar to pay demurrage and warehousing charges. The stay would presumably absolve Ramkumar of pauying such charges for the moment? Does it have any other impact? Perhaps it might also impact the seriousness with which the Madras High Court (deciding the infringement issue) will view the customs orders? In any case, one hopes that this stay order by the Madras High Court is a well reasoned one, unlike the cryptic ex parte restraining order by the Madras High Court earlier.

But this stay does raise two interesting jurisdictional issue? If customs does not have jurisdictional competence to decide patent issues, can it block allegedly (patent) infringing goods at all? Ought it not to ask the patentee to obtain an order from the court declaring that there has been an infringemnt before it seizes the allegedly infringing goods?

Secondly, Ramkumkar has actively submitted to the jurisdiction of the customs authorities by arguing before them. Can he now challenge their jurisdictional competence? Can any of our readers point us to interesting precedent in this regard?

Ramkumar Patent Case: New Delhi Customs Favours Samsung

Following Mumbai and Chennai, the New Delhi Customs Commissioner too found against Ramkumar in one of the most heated patent disputes this year.

In an order dated 8th June, 2009, JP Kundu, Asst Commissioner of Customs found that

"From the foregoing facts, it is clear that the claim made by Shri S Ramkumar is vexatious, because the impugned goods are covered by prior art declared by him and are not infringing the patent granted to him. Demurrage and other warehousing charges arising due to suspension of clearance are liquidated amounts and are to be borne by the Patent Holder."

The grounds underlying the above decision are broadly the same as that adopted by the customs commissioners in Chennai and Mumbai. The Delhi Commissioner stresses that the essence of Ramkumar's invention is a dual sim phone that enables "simultaneous communication". In all the prototypes and allegedly infringing products submitted to him, he finds that none of them enable "simultaneously communication", though they might have dual SIM sockets and more than one SIM lodged in the phone.

Reading the three customs order, I couldn't help but notice that they are far more well reasoned than many of the IP orders that come out of our courts. Leaving me to wonder: perhaps I was hasty in once concluding that customs should not be deciding patent matters at all? Given the nature of the adversarial legal system in our country and the oft perceived intelligence of bureaucrats (customs commissioners are IRS officers?), wouldn't they be upto the task of writing well reasoned patent judgments? Can't we rely on counsels to furnish sophisticated arguments that would then make for more well informed orders? Or are customs officials just institutionally incompetent to decide such disputes?

Scrabble and the Copyright Design Interface: A 3-D Issue?

In a previous post, we highlighted section 15(2) of the Copyright Act and its application to the Mattel vs Aggarwalla case, involving the online version of the famous word game, "Scrabble". The wordings (no pun intended) of section 15 (2) leave much to be desired; it is no wonder then that its "tortuous" language has been the subject of intense litigation for several years now.

In two very analytical posts, Sai pointed to some of the interpretational issues thrown up by section 15(2)?

Recently, an appellant bench of the Delhi High Court reviewed section 15(2) and sought to tease out some of the interpretational anxieties faced thus far. The bench clubbed two appeals which raised the section 15(2) issue: Mattel Inc vs Jayant Aggarwalla and Microfibers vs Girdhar.

In order to appreciate this ruling, consider the facts of the Mattel vs Aggarwalla case. Mattel claims a copyright in their "Scrabble" board. They also claim copyright in the underlying drawings which were used to create the board in the first place.

Section 15 (2) reads as below:

"Copyright in any design, which is capable of being registered under the Designs Act, 1911, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been produced more than fifty times by an industrial process by the owner of the copyright or, with his licence, by any other person."

Mattel claims that although the copyright in the Scrabble board may have expired (since it was produced more than 50 times), copyright in the drawings still subsist. And they could sue the Aggrawala brothers on the basis of this copyright. The court responds to this argument as below:

1. Although a copyright in the drawing continues to subsist, a copyright in the design article itself (board) would cease under section 15. In this regard, it bears noting that while a stand alone drawing is copyrightable, it will not, ipso facto, merit design protection. Rather, it has to be applied in some way to an article to merit design protection. It must also be remembered that a design registration is specific to the classes of goods in respect of which it is registered.

Illustratively, consider a 2-D picture of Lord Ganesha. The picture merits copyright protection. But unless such picture is translated to a 3-D embodiment (eg. a bottle shaped as Lord Ganesha or a even a stuffed toy of Lord Ganesha), it will not merit design protection.

2. Based on the above framework, Mattel would continue owning copyrights in their 2-D drawings and can prevent a third party from reproducing these drawings. However, they cannot prevent someone from creating the Scrabble board itself. The conversion of the 2-D drawing to an article (board) that had already been produced 50 times by Mattel would be exempt from copyright infringement under section 15 (2).

Art vs Commerce

To this extent, section 15(2) waters down the rights of a copyright owner to prevent the 3-D reproduction of a 2-D work under section 14. Unfortunately, the court does not expressly articulate this watering down of section 14. This is not to suggest that such watering down is impermissible. In fact, section 14 itself states that it is subject to other provisions in the copyright act, and this presumably includes section 15 as well.

Further, as the court rightly states, interpreting section 15(2) to permit copyright enforcement against the design article itself would render the section otiose. The court attempts to gauge Parliamentary intention in this regard and notes that Parliament did not intend design registrable works to be protected by an extended copyright term protection (60 years when compared with the 15 years that a design entitles one to).

To this extent, the court suggests a distinction between a work of art and a work of commerce i.e the moment a work of art is applied industrially to an article, it ceases to enjoy copyright protection and is only entitled to a (lesser term) design protection. I'm not entirely sure if this distinction between a work of art and a work of commerce is a conceptually sustainable one. Isn't most art today commercial--waiting to be converted into industrial articles of some sort?

Web Designs?

On a more technical note, one has to ask: is the online reproduction of the Scrabble board exempt from copyright infringement under Section 15(2)?. Or would this amount to nothing more than a mere online reproduction of the 2-d drawing of Mattel's board? Or would this online board be capable of design registration in its own right?

Let us assume that Mattel creates an electronic scrabble board that can be played online? Could they have registered this online board as a design? If so, in which class? And if such class is "X", whereas the physical board is registered under "Y" class, would section 15(2) apply? Or is section 15(2) restricted to only those articles (and the class in which they are registered) which have been produced more than 50 times by Mattel? Interesting questions to ponder over.

Scrap the Designs Act?

Section 15(2) also throws up some tricky policy issues:

Do we need a separate design regime at all? Wouldn't most designs qualify as 'works of artistic craftsmanship" under the Copyrights Act? If the aim is to provide for a lesser term of protection for such artistic works that are industrially exploited, why not just bring all designs within the scope of the copyright act and stipulate that the moment a work is industrially exploited, it will merit only a 15 year protection and not 60 years (like normal copyrights)? This will also save valuable resources of the government that is now being expended in administering a design regime. And more importantly, will save us from the unfortunately worded section 15(2).

nb: The post benefited from discussions with Sai Krishna Rajagopal, to whom I am very grateful. Any errors in this post are however entirely mine.

Incentivising the IITs: Firms step up

Finally joining the bandwagon, IITs across the country that have 850+ patents to their name have decided to tie up with investors for their inventions, reports Business Standard.

As is well known, these institutes have over decades produced the finest individuals who have led from the front in their own fields (including our very own recent IP authority Sai :-) ) and often indulge in research. But as the article in BS states, “Indian universities still lack the capability to raise funds for innovation. A majority of large universities globally have a Technology Licensing Officer who works towards raising commercial investment in the development of innovation.” Recognizing the need to incentivise research, these institutes are now considering offers from companies such as UK’s Imperial Innovation and American based Intellectual Ventures to help market and license their patents.

While IIT Bombay and Delhi have already entered into such agreements, several other IITs have received and are already in talks recognizing the amazing potential such associations. Apart from the above mentioned licensing of patents and the facilitating the filing of patents, this new initiative will also encourage the IITs to undertake open inventions i.e. research and innovation in knowledge gap areas.

It is also reported that an immediate result of this new alliance is that the number of patent disclosures has radically increased. As reported by BS, the disclosures from IIT Bombay has significantly doubled with higher rates in the offing predicted.

Basic research by this blogger online has shown that similar initiatives have been encouraged and undertaken across the world in the West, and even developing countries such as Ethiopia. However, an interesting point that the report highlights which needs especial underscoring is that Government funded research to institutes such as China (and even the USA) has also encouraged innovation and the number of patent disclosures.

Perhaps with this beginning, there is an incentive for the finest faculty and students in the country to undertake further research and gain the much needed IP protection because of a well deserved investment.

Manupatra Annual Essay Competition 2009

Scarce few in the legal community need to be reminded of the significance that Manupatra has attained till date as the provider of invaluable service including but not confined to a comprehensive repository of legal information, case-laws and assorted matters. Since 2004, Manupatra has become involved in organizing a much-acclaimed Annual Essay Competition for law students with an aim to encourage and promote creative thinking and knowledge of legal understanding and research amongst the student community. The time has now come for the sixth consecutive version of this competition, which seeks to reproduce and even improve upon the considerable success of the fifth version that had seen participation from over 1100 students from 140 different colleges in 2008. Apart from cash prizes worth Rs 100,000/-, Manupatra also compiles the best entries received in course of the competition in a publication titled Anthology D'essai.
Following is the list of topics for the 2009 Annual Essay Competition:
1. Maintaining Confidentiality/Trade Secrets and Related Employment Issues in a Migratory Workforce
2. Holding Search Engines Liable - Opening a New Front in the War against Copyright Infringement
3. Is Judicial intervention in Arbitration justified
4. Do we need Gender Biased Laws: Domestic Violence Act
5. Legalizing Abortion in India
6. Right of Negative Voting

The economic incentives include lucrative prizes such as the following:
1st Prize: Rs 20,000/-
2nd Prize: Rs 15,000/-
3rd Prize: Rs 10,000/-
4th Prize: Rs 7,500/-
5th Prize: Rs 5,000/-
Prize for Best Essay from First Year student’s batch: Rs 10,000/-
There will also be an award for the university from which the winning entry comes as well for the university from which the maximum entries are received. Certificates will be given to all participants.
The jury panel for the competition will include renowned names such as Ms Prathiba Singh, the managing partner of Singh and Singh Associates, Ms Jaishree Jaisinghani Vyavaharkar, an associate from the law firm of Baker & McKenzie, London and Sajan Poovayya, the Chairman of FICCI and the partner of Poovayya and Co.
Any full-time law student in any degree college/ law school in India /Srilanka/ Pakistan/Bangladesh is eligible to participate in the competition, for which the deadline for submission is 31st August 2009. The medium of essay must be ENGLISH.
The essay must be typewritten and double spaced on A4 sized white paper with numbered pages. It must be a maximum of 3000 words [excluding foot notes] and must be accompanied by an abstract containing the title and the word count of the essay as well as a brief synopsis thereof.
Entries have to be sent at:
Email: essay@manupatra.com
Post: Essay Competition, Manupatra , B-37 Sector 1, NOIDA, 201301, U.P
For more Information log on to: www.manupatra.com/essay

Troubling times for Indian Generic Companies

Seizure at Frankfurt

A consignment of about 3 million pills of Amoxicillin, representing about 76,000 courses of treatment for a range of bacterial infections, were stopped at the Frankfurt airport on May 5th, on the suspicion that they might be infringing upon the trademark of a brand-name antibiotic. These drugs were on their way to Vanuata, a small LDC comprised of an archipelago of 83 islands. On May 20th, GSK attested that the seized drugs are not in violation of their trademark. A few days later, the consignment was finally released.

Indeed, as Latha Jishnu points out in the Business Standard, there could not have been a trademark violation as amoxicillin is an international non-proprietary name. An INN, or the generic name given to a pharmaceutical substance is meant to prevent confusion by providing a standard name for pharmaceutical substances. It is globally recognised and is public property.

While this is the first such seizure in Germany, it is creating fear of an EU-wide position on generic drugs as products which are to be looked upon with suspicion. According to the response from the Dutch government to HAI's freedom of information request, of the 17 seizures by the Dutch custom authorities, 16 were from India and 15 of these were headed to developing countries. None of these were headed from or to Netherlands. IP-Watch has reported that certain Indian officials believe that there is a pattern in the seizures, and that it indicates a 'well thought out strategy' on the part of IP enforcement authorities. As reported there,

"These random seizures seriously impact our ability to service the healthcare needs of people living in developing countries in a timely manner, forcing us to consider re-designing our entire supply chain to avoid any transit through European territories," said Sune Sveningsen of Missionpharma, which had supplied the drugs stopped in Germany.

While this may seem like a slightly 'conspiration-alistic' point of view to take, it bears noting that some of the grounds on which the seizures were made have included substandard drugs, patent violations and even drug trafficking. Indeed, the scare is bound to, if it hasn't already, pressurise generics into changing their transit routes since they may feel a need to bypass ports where their goods would be confiscated, leading in turn to a rise in costs of the drugs.

The EU is continuing to enforce its controversial Regulation 1383 despite the fact that India has already spoken up strongly against this TRIPS-plus measure (See previous posts on this). The EC, in fact, has failed to send information as per India's request to provide details of all drug consignments seized by custom authorities, with the only information available coming from the above mentioned report made available to HAI. The TRIPS which does not require 'in-transit' goods to be examined by border protection, also only requires mandatory measures at the border for instances of copyright-infringing pirated goods and counterfeited trademarks. There are some who believe that this regulation came about in the first place due to heavy lobbying by Big Pharmaceutical Companies, and go on to say that the purpose behind these regulations are in fact to increase their own monopolies under the guise of counterfeit checks meant to impose barriers for and eventually frustrate generic companies.

In a statement to the TRIPS Council recently, India has stated protested sharply against these seizures and the EU regulations causing them. It marked the EC's belief that generic products are synonymous with potentially dangerous substances. India also reminded the EC of the concept of territoriality, stating that soveriegn functions of the country of destination, such as ensuring health and safety of their citizens, should be exercised by that country itself. India urgently called for a review of Regulation 1383 so as to bring it in conformity with the TRIPS agreement, in letter and in spirit. (the text of India's intervention is available here) Brazil and India, complained that the EU was confusing legitimate generic medicines with counterfeits as well as undermining poorer countries ability to acquire low cost medicine. The EU maintained their position of trying to cut down on the 'fast growing and dangerous' problem of counterfeits in developing countries, without addressing the fact that they were undermining the destination countries' authority in the process.

Incidentally, this is not the first time that India is bringing this up at the TRIPS Council. In fact, at a prior meeting, along with India, the destination country of a shipment which had been seized - Brazil, protested the ex-officio actions of the Dutch authorities, stating that the prerogative to act was theirs and theirs alone.

This is prompting India to 'seriously contemplate' filing a case before the Dispute Settlement Board of the WTO, so as to find a permanent solution to this. The government is trying to collect information from the parties affected in order to get a more complete picture before they take it up at the WTO.

Indian pharmaceuticals facing trouble in US as well

In the meanwhile, while there has been plenty of attention on the custom seizures in Europe, Seema Sapra points out in her blog , another startling statistic that has come from the further west. According to the US Customs and Border Protection Agency, India has become the 2nd highest in terms of IPR seizures at the American border in the last year.China topped the list again by accounting for nearly 81% of all the IPR seizures, while India and Hong Kong followed next with 6% and 5% respectively. This is quite a jump from 2007 where India contributed to less than 1%, however, there has also been a jump of 38.6% in the overall value of the custom seizures since then, with the monitory value going from $196.7M in 2007 to $272.7M in 2008. Custom seizures from India in 2008 were valued at 16,258,368 and more than 99% if these goods are pharmaceuticals. This is quite a shocking statistic considering that the global percentage of pharmaceutical products seized is only 10% of the total goods, up from 6% in 2007. Pharmaceuticals are 5th in the list of goods seized, behind "Footwear" and "Handbags/Wallets/Backpacks" with 38% and 11% respectively. Comparatively, only 7% of China's goods are pharmaceutical products. The statistics can be found here.


Meanwhile.. Unhealthy competition?

As per a recent article in TOI, the National Agency for Food and Drug Administration and Control (NAFDAC) of Nigeria has issued a press statement stating that a large consignment of fake anti-malarial generic pharmaceuticals labelled `Made in India' were, in fact, found to have been produced in China. There have been suspicions of this for some time by the Indian Government, but this is the first time that proof has come up. Reproducing relevant bits of the article:

"India's High Commissioner in the Nigerian capital of Abuja, Mahesh Sachdev, had earlier written to then commerce secretary GSK Pillai, alerting him to the large seizure: ``While this is a case of a Chinese company exporting fake `Made in India' labelled medicines which has been accidentally exposed, it is unlikely to be an isolated incident. Indeed there is no reason for Nigeria to be the only country to be receiving such consignments.''

His letter went on to say:``Fake foreign-made generics carrying `Made in India' label can do tremendous harm to our interests. It not only dents our image and takes our legitimate market share, it also erodes the distinction between generic and fake medicines that we have been campaigning for at WHO and WTO''.

Sachdev in his letter said that he had spoken to the director-general of NAFDAC Dr Paul Orhii who said that the Nigerian preference for generics made such cases of fake drugs more common. He expressed NAFDAC's determination to curb circulation of substandard fake medicines.

However, Dr Mira Shiva of the Initiative for Health Equity and Society (IHES) told TOI that both India and China being large manufacturers of generics, multinational firms would look to discredit the two countries and label their drugs as substandard, so that they would have greater access to the African markets. She warned against the two countries trying to run each other down before ascertaining the full facts in the case to rule out any orchestration, but added that India ought to be more careful to ensure the quality of the drugs exported as well as sold domestically. "

As pointed out by the High Commissioner, taken in light of India's case at the WTO on the seizures, it is all the more detrimental for India that the line between generic medicines and fake medicines is being becoming a fine one. With the Afro-Indian counterfeit debate gaining more importance (See the excellent work done by the Afro-IP blog in this regard), this is not a matter which is likely to fade away easily. In fact, the Indian government has already launched a mission for brand promotion of the Indian Pharmaceutical industry in Africa, so as to convince the African nations of the safety and standards of Indian generic products, as well as to show that India too has launched an offensive against spurious medicines. (See press note here)

Design v. Copyright- Need for a Clear and Rational Distinction- II

In the last post, I had given a prelude to the controversy surrounding s.15 of the Copyright Act stating that (1) anything that is an “artistic work” under the Copyright Act cannot be protected under the Designs Act, 2000 and (2) a work which is capable of being registered as a design under the Designs Act, 2000 would not be entitled to protection of any kind from either the Copyright Act or the Designs Act, 2000 so long as it remains unregistered.

On the face of it, these conclusions seem straightforward but how does one decide if a particular work is an “artistic work” or a “design”? This question needs to be answered clearly because there is a possibility of someone wrongfully claiming protection for the work under the Copyright Act as an artistic work if he has failed to register it under the Designs Act, 2000. Therefore, a clear point of segregation is necessary to prevent mischief of this nature.

Further, under the existing framework, if a work is decidedly an artistic work under the Copyright Act, does it remain within the purview of the Act even after it has been applied to an article by an industrial process for over 50 times? The answer prima facie appears to be in the affirmative because there does not seem to be anything either in the Copyright Act or the Designs Act, 2000 to suggest cessation of the copyright in the artistic work.

This stands in contrast with the UK Designs Act which stipulates that once an artistic work has been applied industrially, it loses copyright protection and is to be governed only by the Designs Act. Notwithstanding the absence of such a provision in the Designs Act, 2000, a purposive approach can be taken here to argue that copyright in an artistic work ceases to exist the moment it is applied to an article by an industrial process because firstly, copyright under the Copyright Act gives the owner the right of reproduction, 2D or 3D and not application to an article; and secondly, if the owner is allowed to continue enjoying the copyright, it would mean he gets to exclude others from applying the work to articles for the entire term of the copyright as opposed to a shorter term prescribed under the Designs Act, 2000.

This defeats the very purpose of the Designs Act, 2000 which governs the application of a work to industrially produced articles; consequently, a purposive construction of the 2000 Act would lead us to conclude that copyright in an artistic work ceases to subsist when it is industrially applied over 50 times (or even once?) to an article. This means that in effect the 1911 Act and the 2000 Act remain the same (barring subtle differences) in their intent.

To answer the question of a test for what constitutes an artistic work and what is a design, let us return to the discussion on the judgment of the Single Judge in Microfibres v. Giridhar, the facts of which were discussed in the last post. The Judge, rather the Court, undertook an analysis of the interplay between the relevant provisions of the Copyright Act (s.2(c), s.15), the Designs Act, 1911 and that of 2000.

The first issue as part of the analysis before the Court was if there existed copyright in the work of the plaintiff to begin with. The plaintiff’s contention that his work was protected as an artistic work under the Berne Convention was dealt with and the Court observed that since registration was not a condition precedent to the existence of a copyright in the work, lack of registration with respect to certain works of the plaintiff was not a relevant factor to be considered.

The plaintiff then contended that s.2(c) of the Copyright Act did not indicate that the intent behind the work was to be considered before according copyright protection to it as an artistic work; in the view of the plaintiff, originality was the essential prerequisite which if satisfied led to the vestation of copyright in the work. It was further submitted that rearrangement of old material too could lead to an original work.

The defendant’s counter to these points are worth reading because the above arguments could have been accepted in the absence of the Designs Act, but where there exists a separate legislation for the protection of designs, it becomes necessary to have a basis for distinguishing an artistic work from a design.

The defendant pointed out that the arguments of the plaintiff were based on the premise/assumption that the work in question was an artistic work, but such premise was never justified or explained. Since the very premise of the plaintiff’s submission was under question, it had to be answered before proceeding to other issues. The defendant argued that the impugned work had to be considered a design for the purpose of its creation was application on upholstery fabrics using an industrial process. In other words, what was being suggested was that anything which is created for the purpose of application on an article using an industrial process was the subject-matter of the Designs Act and not the Copyright Act.

According to the defendant, the only possible category the work could fall under, in the Copyright Act, was a “painting” under s.2(c), but this required the work to have an independent existence i.e. the sole purpose of its creation must not have been for application on an article by an industrial process. The question which comes to one’s mind is, does this proposition mean that anything which has an independent existence (and hence treated as an artistic work) has to be deemed unworthy of application by an industrial process? Conversely, does this mean that the sole criterion by which a design is treated as one, is its inability to stand on its own feet? The former question was answered earlier in this post using a purposive approach.

As for the converse, the argument put forward by the defendant has to be examined. According to the defendant, since a design does not contribute to the functional features of the product, is merely ornamental and is intended to provide only a visual appeal, it follows that it is incapable of having an identity of its own. Therefore, according to the defendant, the floral design of the plaintiff which conformed to these requirements was not an artistic work, but a design.

This line of argument was sought to be buttressed by the decision of the Privy Council in Interlogo v. Tyco Industries, where it was held that the whole purpose of the design legislation was to protect works which did not have independent artistic merit and assumed significance only on application to an article.

I feel that this point of the Privy Council does have merit in it for the following reasons; the difference between the right given to a copyright owner and a design right owner is of critical importance here. A copyright owner can prevent others from reproduction of the work itself whereas a design right owner can prevent others from applying the design to articles, but not for reproduction of the design itself which points to the fact that designs derive their identity only in conjunction with the articles they are sought to be applied to, which is not the case with a copyrighted work. Also, the presence of a classification for goods in the Designs Act and the absence of one in the Copyright Act only goes on to support this proposition.

To this extent, the submission of the defendant sounds reasonable, but does the logic explained above apply to the floral designs in question? I am not sure if one can say that floral designs are incapable of having an identity of their own. That apart, a further point made on behalf of the defendant is capable of being misinterpreted; here I reproduce para 53 of the judgment:

"The defendants contended that the legislative intent behind the repealed Designs Act, 1911 and coming into force of the new Designs Act, 2000 remained the same and the exclusion of 'artistic work' in the definition in the new Designs Act, 2000 is only clarificatory and was intended to exclude only artistic work pure and simple such as paintings, sculptures and works of art."

Broadly speaking, this submission might be correct, but there are subtle yet critical implications of the repeal of the 1911 Act and the promulgation of the 2000 Act which I had attempted to bring out in the last post, saying that under the erstwhile Act i.e. 1911 Act, copyright came into existence in the design as an artistic work upon its creation and subsisted until it was registered or had been manufactured by an industrial process for less than 50 times.

However, under the current Act of 2000, there exists no copyright or any monopoly of any kind in a design (if it satisfies the definition of a design) until it is registered and that it remains an orphan so long as it remains unregistered. This logic seems to have received the endorsement of the Court in the case of Samsonite Corp. v. Vijay Sales in which it was observed thus:

“If they (the impugned works) were designs and had not been registered under the Designs Act, they were not subject to copyright protection.

This was reiterated in AGA Medical Corporation v. Faisal Kapadi as follows:

“This Court on a consideration of the matter and more particularly the meaning of copyright and the definition of 'design' in the Designs Act is, prima facie, of the view that the plaintiff does not have a subsisting copyright under the Copyright Act, firstly; because it is capable of being registered under the Designs Act though it has not been so registered…”

Applying this logic to the facts of the instant case, the Court ruled that in such cases, the object behind the work could not be lost sight of in deciding if a work was an artistic work or a design. The second factor was the ability or otherwise of the work to hold its own. The Court ruled that since the object of the floral designs was its application to the upholstery fabric i.e. industrial use, the first condition had been satisfied. The Court then proceeded to conclude, without sufficient elaboration, that the design was incapable of having an independent existence.

On the basis of these conclusions, the Court ruled that the work of the plaintiff would fall under the Designs Act, 1911 and since it had been produced for more than 50 times, copyright in the work had ceased to exist. Further, as there was no registered design in respect of the work, there was no valid claim in favour of the plaintiff.

As Mihir had rightly asked, I am not sure of the wisdom of using the object behind the work as a guiding light in deciding its status. Here’s a hypothetical to explain why; the author of a work may not have intended to commercially produce the work which means it could be treated as an artistic work, subject of course to its ability to have an identity of its own. Subsequently the author may assign to another person the right to apply the work industrially for less than 50 times.

If the thumb rule to decide if a particular process is an industrial process is the 50-time rule, then does this mean that the work remains an artistic work despite the object of the use of the work undergoing a change? Also, should'nt we be distinguishing between the object behind the creation of a work and the object of its subsequent use?

The point which one is trying to convey here is that a hierarchy of values is necessary if one is to decide which is the more objective criterion and which ought to come first- the object or the stand-alone capacity of the work.

Even when it comes to the question of an independent identity, the Court did not elaborate sufficiently on what would accord a work such an identity because only then would it be possible to separate an artistic work from a design.

The alternative to the “object test” and to do away with this confusion would be to use the object of the Designs Act and stipulate that any work, be it an artistic work or a design, if applied to an article for commercial purposes using an industrial process even once, would immediately fall within the ambit of the Designs Act. Therefore, if the author/owner of an artistic work intends to apply the work to an article, he has to register it under the Designs Act or stand to lose his copyright if it is applied to an article but remains unregistered.

In the next post, we shall discuss the judgment of the Division Bench on this case.

South Africa's Bayh Dole Regulations

While India is awaiting parliamentary consideration for its own Bayh Dole Bill, another developing country, South Africa has just come out with Draft Rules (available here) for its own version of this IP legislation. The new Rules as well as the new Act itself, which was initially circulated in some secrecy, is sparking a debate between two sides. One side is claiming that it is unconstitutional, that it may stifle innovation and that it breaches WHO commitments. While the other side is saying that it promotes research by providing incentive and providing funds. Sounds familiar? (for simplicity's sake, the US, SA and Indian versions of the Bayh Dole legislation will be referred to as USBD, SABD and IBD respectively)

SpicyIP has already carried a series of posts on the IBD and the similar debate that it had sparked. The main problem being (aside from the secrecy in which it was initiated), in short, to re-iterate from a previous post,

"The Indian bill, much like its US equivalent is premised on the assumption that intellectual property rights are the best way to drive innovation. The more IP, the better for innovation. There is plenty of literature that casts strong doubt on this lopsided view."

For those joining us late, the USBD was introduced in 1980 to promote the patenting of publicly funded research by Universities and licensing to private firms. The assumption was that this commercialisation would add more incentive in the form of economic growth, for research in sciences. Indeed, as Mr Harry Thangaraj has pointed out (in this article) , it has facilitated and incentivised the translation of research into essential goods and services. At the same time however, without the appropriate safeguards, there is the danger of it not protecting public interest as it should.

Looking at the SABD, critics are worried about several factors.
Firstly, that the patent-centric commericialization nature of the Bill underestimates and is hostile towards Open Source and Open Processes. They point out that several crucial decision making posts are in the hands of bureaucrats. These include boards which are required to impose reviews at the national and international level before approving of open approaches. Worries are voiced about the tendency of such a board to shift focus from public interest, to a more business like profit-oriented approach.

IPWatch points out that the SABD is also in opposition to many of the recently adopted WHO provisions on global strategy and plan of action on public health, innovation and intellectual property. The global standard is set on becoming more focused on open access of resources on public health. This goes hand in hand with regional, national and international collaborations and knowledge transfer, including methods such as patent pools, open licensing, open access to research publications and data, etc. These efforts would face severe road blocks with the SABD and the National IP Management Office (NIPMO) formed under it which is responsible for assessing decisions about IP protection on inventions and innovations made by Universities. Eve Gray, on IP-Watch has stated that the Act “casts its wide net to include potential IP and patent protection in any legislation in the world,”. Databases, research methods, business processes, software and collaborative research ventures will be subject to scrutiny by NIPMO to ensure that publicly funded research is kept in South Africa, she said. The WHO plan of action doesn't exclude the parallel traditional patenting, though it does include safeguard measures to ensure that public health goals are not lost in the process. Eve Gray, in her blog, puts forward the suggestion that it would perhaps be appropriate for "for public health departments in our universities and their researchers to submit a request to the DST for the withdrawal of the Regulations for further consideration of the issues at stake by all the government departments that might be involved in this potentially embarrassing clash. "


In a well written piece jointly written by several prominent US based academics (So AD, Sampat BN, Rai AK, Cook-Deegan R, Reichman JH, et al) the authors have examined the effect that mimicking a Bayh-Dole legislation would have on developing countries. They note that there seems to be a wide-spread belief that the USBD was a factor in spurt in research and development that came with the growth in the economy over the last 20-30 years. The paper challenges this belief stating that the role of the USBD was very overstated, and in fact, that a significant share of the academic patents and licenses which resulted in commercial products, could have been effectively transferred by being placed in the public domain or licensed non-exclusively. They also shoot down the belief that it acts as a revenue generating mechanism for laboratories as studies show that most labs barely manage to even break-even. According to the article, the head of the technology licensing office at MIT (and former President of the Association of University Technology Managers) notes that “the direct economic impact of technology licensing on the universities themselves has been relatively small (a surprise to many who believed that royalties could compensate for declining federal support of research)… [M]ost university licensing offices barely break even”

They also delve into the necessary safeguards, such as ensuring exclusive licensing is limited only to cases where it is necessary for commercialisation, transparency, govt access, etc. Read their paper here for more details.

Meanwhile, on the other side, there are those who support the legislation. As reported in IPWatch, Yasmin Forbes, Microsoft’s South Africa national technology officer, stated that it represents 'sound public policy'. There were also those who stated that the concerns pointed out by the SABD's critics are overstated and that the SABD, rather, will drive innovation and economic growth. However, regardless of which side one is on, there is the fact that much of these issues, which are now arising with the Rules, are substantive issues which should have been discussed before the SABD was enacted. Hopefully a statement that will not have to bear re-iteration with the IBD.

Patents, Public Interest and Pricing

In M.C. Jayasingh v. Mishra Dhatu Nigam Ltd. & Ors. the division bench of the Madras High Court dismissed an appeal filed by the Appellant - Plaintiff against the decision of a Single Judge disallowing the interlocutory application of the Plaintiff.

The facts in brief are as follows: The Appellant – Plaintiff had filed an infringement suit against the Respondents – Defendants on the ground that the latter were infringing his patents for prosthesis, more specifically, Custom Mega Prosthesis - Knee Joint Prothesis (subsequently referred to as ‘CMP-KJP’). The prosthesis, made of titanium alloy or medical grade stainless steel, were manufactured and marketed by the Appellant as CMP – KJP and were used in limb salvage surgery.

In his infringement claim, the Plaintiff - Appellant stated that for manufacturing prosthesis he use to purchase titanium from the First Respondent - Defendant, Mishra Dhatu Nigam Limited (MIDHANI), who is the sole producer of titanium products in the country. Issues arose when, after a passage of time, the First Respondent refused to supply titanium alloy to the Appellant and post this refusal the First Respondent, in partnership with the Second Respondent, Apollo Hospitals, began to manufacture and sell prosthesis, marketed as “Apollo Midhani Prosthesis” to hospitals, including Apollo Hospitals. The Appellant became aware of the First Respondent’s alleged infringing activities through a newspaper report on such limb salvage surgeries conducted by doctors of Second Respondent, wherein it was stated that they purchased the prosthesis from the First Respondent.

Furthermore, the Appellant also contended that he had been supplying CMP-KJP to the Fourth Respondent, namely, Cancer Institute (W.I.A.), Regional Cancer Centre, Adayar, Chennai. However, in spite of the fact that limb salvage surgery is continued in the Cancer Institute, all of a sudden, the Fourth Respondent stopped the placement of order for the prosthesis virtually without any reason. Thus, presumably the institute was manufacturing and producing the concerned invention internally.

On these grounds, the Appellant contended that Respondents 1 to 4 were making, using, selling and distributing the patented CMP including CMP-KJP by infringing his monopoly rights and asked for an injunction against the Respondents.

The Respondents in turn challenged the validity of the patent and claimed that the prosthesis used by them was dissimilar to that of the Appellant’s. They further contended that their prosthesis was significant improvement over the Appellant’s version and was also more affordable. It is pertinent to note that the stated price difference was significant, the Appellants’s prosthesis cost Rs. 1,36,000/-, as against the First Respondent's rate of Rs.39,200/-. Respondent No. 1 also argued that it was his titanium implants which made prosthesis, earlier available only in super speciality hospitals, affordable for the common man.

As stated earlier, the Single Judge dismissed the application for temporary injunction filed by the Appellant and the matter was being heard by the division bench on appeal.

The division bench applied the three parameters of (1) Prima Facie case (2) Irreparable Injury and (3) Balance of Convenience to the facts at hand and concluded that the Appellant failed to satisfy any of the criteria.

As regards prima facie case the court held that each CMP-KJP was made as per the specifications and requirements of the patient. Hence, the fact that the Appellant has patent over one model of CMP – KJP cannot entitle him to claim protection over variations of such model. Moreover, on examining the two models, the judges stated that the two models were visually dissimilar and functional similarity alone does not establish a prima facie case. It was stated that, “… since the products of the appellant and the First Respondent were not appearing similar or identical at the initial stage of the proceedings …. Given the fact that the products of the Appellant and also the First Respondent have their own uniqueness vis-a-vis the requirement of the particular patients, a mere functional similarity does not lay a strong ground for granting interim injunction.”

The fact that the bench decided the issue of prima facie case on visual similarity is rather unusual, given the fact that functional elements normally are predominant factors in deciding patent infringement suits. On the other hand, visual comparisons are more of a copyright and design parameter to determine infringement. However, their reasoning was probably directed by the public interest involved and the fact that a determination on the basis of functional similarity would grant the Appellant a very wide patent.

Next as regards balance of convenience the court opined that, “considering the relevance of prosthesis to those who are in need of the same as a life saving equipment, its cost effectiveness and the functional advantage of a customised titanium made prosthesis, ... the balance of convenience [is not] in favour of the Appellant to grant the interim injunction.”

Lastly, the court also held that the Appellant did not satisfy the criteria of irreparable injury. They stated that, “the affidavit of the Appellant was bereft of any details with regard to the loss suffered and likely to be suffered by the appellant on account of the supplies by the First Respondent.”

On these grounds the court dismissed an appeal for an interim injunction.

The case is interesting given the emphasis laid on the public interest involved in access to prosthesis and the same being used as a ground to conclude that ‘balance of convenience’ tilted in favour of the Respondents, because of their ability to provide access to medicine to the public at large at an affordable price.

Furthermore, the question is, whether there a trend catching up in the judiciary wherein the ‘public interest’ factor is used to tilt the balance and decide an injunction application. This approach was also seen in the tarceva patent case, dealt with in earlier posts.

Finally, a rather disturbing trend in the judgment is that the judges kept confusing the intellectual property involved. Though concerned with patents, they spoke about infringement of copyright and design rights. Given the fact that they possibly confused standards applicable in deciding the existence of a prima facie case, the confusion in terms of the intellectual property being dealt with is rather undesirable.

SpicyIP would like to thank Sandeep Rathod for bringing this case to our attention. Also, I would like to thank Shamnad for his suggestions and inputs on this post.