Patent "Perception": A Contemptuous Natco?

For the longest time, Cipla ranked as our leading poster child for the debate on patents and access to affordable medicines. It took on the multinational drug majors at the drop of a hat and was credited with slashing prices of HIV medications to a small fraction of their prevalent rates. Yusuf Hamied, Cipla's maverick leader, tellingly notes in a recent interview that:
 

“We had taken the lead to provide affordable medicine for AIDS and I think the time has now come — 10 years later — when we do a similar thing for cancer. I’ve done more humanitarian work than Gates and Buffett put together.”
 

The tables began turning early this year, when another Indian generic company, Natco filed India's first post TRIPS compulsory licensing application seeking to slash the patented prices of Bayers' patented anti cancer drug, Nexavar. In the wake of the compulsory licensing decision, Natco catapulted to prominence as our national hero; a bold pharmaceutical company that refused to cave in to international pressure or to bed foreign partners, but insisted on pioneering the delivery of cheaper and more affordable drugs through a new "compulsory licensing" route. All good so far, particularly on the perception front.
 

It now turns out that Natco may have committed a fatal legal blunder. Three years ago, it was taken to court by leading US drug major, BMS (Bristol-Myers Squibb) who alleged that Natco had plans to make and sell generic versions of Dasatinib, an anti cancer drug sold by BMS under the brand name "Sprycel". BMS, which had been selling Dasatinib in India since 2006, specifically alleged that Natco had filed applications to market the drug with the DCGI. Natco's response to the court was: No, we have no intention of making or selling this drug!
 

I extract verbatim from its written statement (para 29) to the court: "It is denied that the Defendants intend to launch a generic version of Dasatinib under the name Dasanat." 

  

In June 2012 however, Natco flooded with the market with Dasanat, prompting BMS to file another application pressing for an injunction before the Delhi High Court. BMS succeeded and the court noted in pertinent part that: "The Defandant shall be bound by their statement taken by them in their written statement, particularly in paras 26, 27 and 29."
 

(ps: para 29 of the Natco's written statement effectively states that it has no intention of launching a generic version of Dasatinib). 

A further injunction was granted on 22nd June 2012 with the court restraining Natco from "manufacturing and selling the product which infringes the plaintiffs patent in any manner". Despite these two orders, Natco continued to sell Dasanat, prompting BMS to file a contempt petition before the court. Natco is yet to file its response to the contempt petition, which is slated to come before the court tomorrow. Foolhardy seems a mild term for such a reckless legal strategy!
 

The "patent" angle was dealt with only perfunctorily by most reports on this drug tussle, which appear to have focussed more on Natco gaining permission to market a generic version of Dasatinib from the Uttarakhand state authorities. Coming close on the heels of a Parliamentary committee report that severely indicted our government for making a mockery of the drug regulatory regime, these news items naturally raised issues of forum shopping and routine exploitation of regulatory loopholes by drug companies. However, for anyone with a basic understanding of India's "federal" drug regulatory regime (where regulatory superintendence is shared by both the Centre and the State), what Natco did on the regulatory front was perfectly legal.
 

Our law permits pharma companies to shop around for the weakest state regulator and procure permission. And Natco may have picked Uttarakhand ("Land of the God's") for a variety of reasons, including its proximity to the spectacular Himalayas, a lush green landscape (resplendent with grass and all that) and a spiritually electrifying air that lured many a seeker in the past, including the Beatles, Bob Dylan, Cat Stevens, Timothy Leary, Allen Ginsberg and Robert Thurman, a leading Buddhist scholar in his own right, but more popular for having sired a lethal weapon that killed Bill, Uma Karuna Thurman.
 

Our law clearly states that if a company wishes to manufacture a drug in any state, it must gain state regulatory permission from that state and cannot rely on DCGI (the central regulator) permission alone. So nothing really out of the ordinary for Natco to have secured this approval from Uttarakhand's drug regulatory authority.
 

However, the tricky issue here is one of "patents", given that the relevant drug (Dasatinib) is under patent (Patent Number 203937 dated April 12, 2010) and an infringement suit against Natco is pending before the Delhi High court. A suit in which Natco explicitly stated that it had no intention of marketing a generic version of Dasatinib. And a suit in which two interim orders were passed, effectively prohibiting Natco from marketing any copy of Dasatinib.
 

Natco challenged the validity of BMS' patent before the court well on several grounds including the fact that the patent is allegedly obvious, violates section 3(d), is insufficiently described, has no utility and that the patentee suppressed vital patent information from the Indian patent office, rendering the patent susceptible to revocation under section 8. I have not studied the case in detail to assess whether or not Natco is likely to succeed on this count. 

However, the merits of the case notwithstanding, Natco appears to have taken a strong beating on the perception front. It was imprudent of Natco to have averred in court that it had no intention of launching a generic version of BMS' patented drug. Given its subsequent conduct in flooding the market with Dasanat, this effectively amounts to perjury, a serious offence. It might have simply stated in its reply to BMS that the patent was invalid (which it did in its written statement to the court) and/or that its product does not infringe the patent.
 

Even more imprudent was Natco's insistence on continuing sales, despite the injunction. As with many of us, courts and judges come blessed with egos and don't take too kindly to contempt. Highly unfortunate that a company that played a terrific hand a couple of months ago and won international acclaim by pioneering the use of compulsory licensing is now at the receiving end; with the court likely to perceive it as a contemptuous corporation that took it for a ride. As many litigating lawyers will readily attest: "Aaja meri gaadi mein bait jha" is not a particularly popular line with our judges.
 

ps: For those interested in tracking this patent infringement suit (Suit No: CS (OS) 2279 of 2009), details are available on the Delhi High Court website, though the latest orders are yet to be uploaded.
 

pps: image from here.

Of Compulsory Licences, a Few Good Men and Patent "Teachings"

Some months ago, the Indian Patent Office handed down what must rate as one of the most significant IP decisions of this decade (and perhaps the last several as well).  A decision that elicited as many supporters, as it did critics. Reputed economics professor, Arvind Panagariya went so far as to state:

"It is said that only God and a few good men and women run India. One such man is P H Kurien. For readers unfamiliar with his name, Kurien was India's Controller General of Patents, Designs & Trade Marks until March 12, 2012. On March 9, 2012, just three days before he left office, he issued the first-ever compulsory licence in India for the manufacture of a drug still under patent. The licence authorized Indian company Natco to manufacture drug Naxevar for which Bayer, a German multinational company, holds the patent. This was an act of major significance for India's health." 

Predictably, the US government was up in arms; and a US government official first proselytized on how India needs to be "taught" IP and international norms, before recanting and admitting that India was well within its legal rights (under TRIPS) to issue compulsory licenses, a legal tool that the US itself resorts to time and again, albeit through its courts. 

With the TRIPS opposition effectively being shown the door, the US queasiness at India's compulsory license is now exposed for what it really is: an admission of its own vested "national" interest. Nothing wrong with pursuing national interest, except that other countries ought to be accorded the same freedom, much in line with the Biblical commandment: "Do unto others as you would have them do unto you"!

Just as patents allegedly fuel inventive genius, many believe that campaign contributions fuel US policy; and often times, the link between campaign donors and the pursuit of US national interest is only as strong as the alleged nexus between Iraq and the Al Qaeda (some argue that the hidden nexus may be found in the letter "Q"). India should therefore politely let the US know that it does not take too kindly to internal interference with its domestic policy, particularly when the matter is sub-judice before an appellate tribunal (IPAB). And if India's voice is not strong enough, it must solicit the support of China, Brazil and others at the receiving end of strong US interference. 

Indeed, all of these technologically proficient developing countries must come together and issue a strong statement denouncing that bully of an instrument that goes by the name of Special 301, or better still, decide to ignore it altogether. 

As this Mint and Economic Times piece note, India's compulsory licensing decision is likely to spur other countries to resort more aggressively to such measures. And this perhaps is the biggest worry of the US and other developed nations that house the leading drug majors. China has been cited as an example of a country that ramped up its compulsory licensing provisions in the wake of the Indian provision. Given that most of China's recent amendments pertained to procedural issues (with the substantive grounds for issuing licenses remaining largely the same), this is only partly true. Along with Shan Kohli, I will explore this issue in more detail in a future post.

Spicy IP Tidbit: Patent Office publishes List of Applications deemed as Traditional Knowledge

The regular readers of Spicy IP would no doubt be aware of the controversies surrounding the so-called “confidential” status accorded to Traditional Knowledge and relating information (for previous posts, see here). There have also been instances where RTIs have been filed with CSIR in order to obtain information about the Traditional Knowledge Digital Library project (TKDL) (see here and here). 

However, there is some welcome news for those, who share our penchant for transparency to the greatest extent possible in every aspect of the public domain in general and IP in particular. The official Indian Patent Office Website has put up a list of all the applications that are pending and belong, as per the judgment exercised by the Patent Office, to the category of Traditional Knowledge. The list contains, in its present form, the application number, date of filing, the publication date, the title of the invention and the name and address of the applicant. In case of any discrepancy, one has been asked to contact delhi-patent@nic.in for correction/clarification.

This action on the part of the Patent Office no doubt appears to be promising in terms of promoting greater transparency. It’s also likely to help the applicants to know whether or not their inventions are being deemed as TK and accorded associated privileges.

Internet Association Lobby formed

In what is bound to change the terms of negotiations of internet related legislation, 4 of the largest internet companies have come together with other undisclosed companies to form the Internet Association Lobby. The four are Google, Facebook, Amazon and Ebay, led by former (US) Congressional staffer Michael Beckerman. 

While the coming together of these 4 super-heavyweights is potentially scenery changing, the only common ground that I can see is net-neutrality and of course the stronger possibility for tax-breaks now.   

Net-neutrality, essentially preserving a free and open internet, guarantees a level playing field for all websites and technologies without discrimination to types of content or applications. As I see it, the primary issue with not ensuring net-neutrality is that it removes the first-time-ever completely level playing field that society has access to. You can read more about net-neutrality here. 

Given that policy makers have made a habit of misunderstanding technology and society's interaction with it, it would seem to be a positive step to finally have a strong lobby comprised of the industry members. I'm mostly referring to US policies here, which of course have a direct fallback on the rest of the world. To be fair though, it seems like efforts are being made to educate policy makers with the ins and outs of the internet, sometimes even humorously by making them take part in online popularity contests! 

Coming back to the The Internet Association though, there is one major concern that comes to mind and which should be guarded against if possible. 

The thought of even just Google and Facebook together immediately takes my mind to privacy concerns. Zuckerberg has shown little regard to customer's privacy concerns and Google has often come in the spotlight for compiling user data. Throw in Amazon's store along with it's ever-growing services section, and the thought of sharing data between companies is bound to come up. 

We'll just have to wait, hope for the best and see how it plays out. 

New Leadership at SpicyIP

In an earlier post, I expressed my desire to step down from the leadership of SpicyIP. This decision (over which I procrastinated for several months) stemmed from a variety of reasons, the most significant of which was  my extensive involvement with a whole host of projects around legal education (most pertinently, an access to education project for underprivileged students, titled IDIA). 

I therefore thought it better to hand over leadership to someone with more bandwidth to handle the onerous task of managing a blog that had set out very ambitious goals for itself and more importantly, boasted a very demanding readership. Also, it was important that the blog receive a fresh infusion of ideas from a new leader.

I am very pleased to announce that both Rajiv Kumar Choudhry and Swaraj Paul Barooah have agreed to undertake this onerous responsibility and will be leading the blog (as joint Editors in Chief) from now on. The earlier leadership team (comprising me, Sumathi and Prashant) will take a backseat. Sumathi expressed her desire to leave the blog altogether, since her current professional engagement has very little to with IP; and she does not expect a significant future engagement with IP. Her departure is a huge loss for the blog, as she played a vital leadership role and was responsible for pointing us to the latest case laws that we often blogged about.

Prashant, our most prolific blogger by far, will leave soon for his LLM to Stanford law school. After much persuasion, he's agreed to post from time to time, despite the pressures of an LLM and a new country and culture.

As for me, I will continue to post on topics close to my heart. I will also continue in my role as chief mentor to the blog. 

I want to take this opportunity to thank many of you who wrote to me in response to my earlier post. Your encouraging words and support mean a lot to all of us here and I hope all of you will join me in welcoming Rajiv and Swaraj to the leadership of this blog. They are very committed to the goals of this blog and have already been instrumental in shaping the future of the blog in significant ways. Rajiv has helped throw more light on patent office decisions and comes with an excellent background in patent law and practice, both in India and the US. Swaraj brings in a keen academic (and dare I say philosophical bent) and has been instrumental in filling a huge void of the blog, namely tracking international developments around IP. 

We couldn't have found a better team to lead the show. I hope you will offer them the same level of support that you offered me. And that you will continue to engage with the blog at a constructive level and help us improve. We are also hoping that many more of you will come forward with guest posts from time to time. We really need a strong infusion of guest posts, particularly from practitioners. So if you have any smart legal opinions that you've rendered to clients and cashed your checks, we'd encourage you to share those opinions with the wider community of readers. Our blog philosophy on sharing which I hope you will also endorse (through your conduct) owes much to the inimitable GB Shaw: "If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas."

Madras Bar Association fights to save independence of key tribunals from the 'babus' of the Central Govt.

Image from here

The ToI and the legal news website Law et. al. have both reported on a public interest litigation filed by the Madras Bar Association before the Supreme Court challenging the constitutionality and administration of several tribunals.

The Supreme Court has issued notice to the Union of India on the petition. Given the scope of the relief prayed for in the petition, the case has the potential to both streamline and revolutionize the increasingly powerful and unwieldy tribunal system in India. At stake is the very idea of judicial independence in India. Over the last few years judicial independence in this country has been slowly but steadily encroached upon by the Executive, especially the powerful civil service bureaucracy based in Delhi. What started off with the creation of administrative tribunals, eventually resulted in a whole range of functions being transferred from the High Courts to tribunals which were gradually becoming retirement havens for the civil service bureaucrats in powerful Ministries of the Central Government.   

A copy of the writ petition (WP) which is available with us and which can be downloaded from here raises two issues which are discussed below in order of importance:

(i) The first issue pertains to the constitutionality of the qualification criteria for members of the following tribunals: Competition Commission of India (CCI), Competition Appellate Tribunal (COMPACT), Telecom Disputes Settlement & Appellate Tribunal (TDSAT), Central Information Commission (CIC), Securities Appellate Tribunal (SAT) and lastly the Central Administrative Tribunal (CAT);

(ii) The second issue pertains to the independent and efficient administration of all judicial tribunals in India and in specific it seeks enforcement of the orders of the Supreme Court in its earlier precedents ranging from the Chandra Kumar case to the more recent R.Gandhi case where the Supreme Court struck down portions of the National Company Law Tribunal;

Both issues are discussed in greater detail below:

(i) The constitutionality of the qualification criteria for the members of the above tribunals: One of the prevalent trends in almost all of the latest tribunals be it the CCI, COMPACT, TDSAT, CIC, SAT or CAT is that almost all of them are staffed to the hilt with bureaucrats. Originally, when CAT was formed to resolve service related disputes within the Central Government, the Administrative Tribunals Act, 1985 brought in for the very first time (I think!) the post of an ‘administrative member’ (also sometimes referred to as the ‘technical member’) on a two member bench which would also be staffed by a ‘judicial member’ (who necessarily had legal qualification or experience as a lawyer or a judge). The ‘administrative member’ was not required to be a person with legal qualifications or experience. Instead the administrative member was defined in terms of civil servants with experience as bureaucrats at the Secretary level. The purported idea was to bring in people with subject-matter expertise. The hidden motive however was to provide post-retirement havens for bureaucrats.

In the landmark case of L. Chandra Kumar v. Union of India, a bench of seven judges of the Supreme Court was urged to hold the practice of appointment of administrative members as unconstitutional since they had no understanding or experience of the law. Unfortunately, the Supreme Court declined. I’ve extracted the relevant portion of the Supreme Court’s judgment below:

“96. We are also required to address the issue of the competence of those who man the Tribunals and the question of who is to exercise administrative supervision over them. It has been urged that only those who have had judicial experience should be appointed to such Tribunals. In the case of Administrative Tribunals, it has been pointed out that the administrative members who have been appointed have little or no experience in adjudicating such disputes; the Malimath Committee has noted that at times, IPS Officers have been appointed to these Tribunals. It is stated that in the short tenures that these Administrative Members are on the Tribunal, they are unable to attain enough experience in adjudication and in cases where they do acquire the ability, it is invariably on the eve of the expiry of their tenures. For these reasons, it has been urged that the appointment of Administrative Members to Administrative Tribunals be stopped. We find it difficult to accept such a contention. It must be remembered that the setting-up of these Tribunals is founded on the premise that specialist bodies comprising both trained administrators and those with judicial experience would, by virtue of their specialised knowledge, be better equipped to dispense speedy and efficient justice. It was expected that a judicious mix of judicial members and those with grass-roots experience would best serve this purpose. To hold that the Tribunal should consist only of judicial members would attack the primary basis of the theory pursuant to which they have been constituted.”    

With the above ruling, the Supreme Court opened the doors for the creation of more such tribunals staffed by bureaucrats, with or without judicial members. For instance TDSAT is required to be headed by a retired Supreme Court or High Court judge but the other two members can be ‘technical members’. Same is the case with SAT & COMPACT. In the case of other tribunals like the CCI & CIC there is no requirement for any judicial members and the Government may appoint any member who fits the qualification criteria laid down in the parent legislation.

The WP filed by the Madras Bar Association describes in painful details the qualifications and previous employment history of all the ‘technical members’ appointed to these tribunals. It is no surprise that 95% of these appointments consist of ex-bureaucrats who do not even have a law degree. In the case of TDSAT, there was a retired Army General on the list! Most interesting is the fact that it is usually the powerful bureaucrats who are appointed to such tribunals, the most prevalent examples being ex-Secretaries of the Ministry of Finance or Corporate Affairs or DoPT; also the Chairpersons of either the Central Board of Direct Taxes (CBDT) or the Central Board of Excise and Customs (CBEC) and also Deputy Comptroller and Auditor Generals (CAG). Further the list of qualification and job experience of these bureaucrats dispels any notion of ‘specialist tribunals’ that the Supreme Court seemed to have harboured in the Chandra Kumar case. For instance, of the two members of the Competition Appellate Tribunal, one was an ex-Secretary of the Department of Personnel & Training (IAS), while the other was an ex-Deputy CAG from the Indian Audit & Accounting Service (IA&AS). How exactly do either of these members have any expertise in Competition Law? In the Central Information Commission, some of the Commissioners are apparently hiring ‘legal consultants’ to help them out with the law.

The Madras Bar Association’s simple yet elegant argument against such qualification criteria, has been to point out the fact that most of the persons currently sitting as members of these tribunals are in fact not even qualified to practice before these tribunals under the Advocates Act, 1961. The petition argues that the ‘equal protection’ doctrine of Article 14, which does allow for reasonable classification, requires a nexus between such classification and the aim of the legislation. In the case of legislations, which create a particular qualification criteria for persons who can be appointed to the tribunals, the qualification criteria in question has to bear some kind of rational nexus to the purpose of the tribunal which is to adjudicate competing arguments between practitioners qualified to appear before the tribunal. In such a case, it is obvious that the member of the tribunal should at the very least be as qualified as the practitioner who is appearing before him. In most cases only lawyers are qualified to practice law and hence only they can be appointed to tribunals. There are some exceptions, for instance, if Chartered Accountants (C.A.) can appear before the ITAT, they can obviously be allowed to sit as members of ITAT.

Therefore unlike the Supreme Court’s rather wobbly criteria in L. Chandra Kumar, the Madras Bar Association has provided the Supreme Court with a rock-solid argument to expel all the bureaucrats from tribunals which should rightfully be staffed only by lawyers.  

(ii) The administration and efficiency of tribunals in this country: This limb of the writ petition relies in large part on past precedents of the Supreme Court along with reports of the Law Commission and other similar bodies. I’ve briefly listed out the arguments as follows:

(a) Bringing all tribunals under one Ministry: From the judgment of Chandra Kumar to the more recent R. Gandhi judgment, the Supreme Court has time and again directed the Ministry of Law & Justice to bring the administration of all tribunals under its umbrella. Presently most tribunals are provided administrative support by the ‘parent’ ministry which greatly impedes their independence. For instance, the Securities Appellate Tribunal is provided administrative support by the Ministry of Finance. Despite these directions being given to the Ministry of Law and Justice back in 1997, we are yet to see any action on this front. The WP lists out the entire range of tribunals along with their ‘parent’ ministries. As a result of no streamlined mechanisms to take care of these tribunals, they are terribly administered, especially when it comes to appointment. More often than not, the Central Government makes appointments only when a person files a writ petition before a High Court. This has been the experience in the case of the CLB, IPAB, CIC and countless other tribunals.   

(b) Judicial Impact Assessment: One of the key points made by Justice Sridevan in her report to the Madras High Court on the functioning of the IPAB, was that the Central Government had not carried out any ‘judicial impact assessment’ to assess the resources that would be required by the IPAB after it was created. She points out that the Supreme Court in the Salem Bar Association case had urged the central government to carry out such studies while enacting new legislations which had the effect of creating new workload for existing courts or even new tribunals themselves. The Madras Bar Association points out to an absolutely brilliant report submitted by the ‘Taskforce on Judicial Impact Assessment’ (Vol. 1 & Vol. 2). This Committee was set up by the Law Ministry on the directions of the Supreme Court in the Salem Bar Association case and was staffed by the likes of Dr. Madhav Menon & Dr. Mohan Gopal. Unfortunately, the report was never implemented. Such studies are of paramount importance since some tribunals like the Debt Recovery Tribunals (DRT) are simply collapsing under the weight of their backlog. The DRT has a staggering backlog of 37,616 cases involving a sum total of Rs. 11,3081.43 crores (Rs. 11,3081,43,00,000). It is a wonder that the banking system has not collapsed. Other tribunals hardly have the infrastructure to operate. Some like the IPAB have no space, others like TDSAT function from Hotel Samrat, while the CCI operates from the premises of a private building. Sovereign functions of the state must be discharged from buildings owned by the sovereign.  

(c) Uniformity in retirement ages and service conditions: The writ petition details the arbitrary and random retirement age and service conditions of different tribunals. There is absolutely no logic in the manner in which Parliament has been setting the retirement ages, term of office and other service conditions for most tribunals. Even the Law Commission in the report no. 232 makes strong recommendations on streamlining the retirement ages of different tribunals. The petition by the Madras Bar goes much further and specifically asks for implementation of the SC’s direction in the R. Gandhi case on the point of term of office. The biggest problem with most tribunals is that they prescribe a term of either 5 or 7 years with little possibility of re-appointment and a retirement age of either 62 or 65 years. As a result of such short terms, most lawyers are reluctant to even apply for the positions at these tribunals as a result of which bureaucrats usually rule the roost.

(d) Administrative Staff: One of the other critical problems being faced by tribunals is the lack of a dedicated administrative staff. More often than not these officers are on deputation from the Central Government for a period of say 3 to 5 years. This prevents them from developing an expertise in case management and judicial administration and also it gives the Central Government excessive power in controlling the kind of officers it sends for deputation to tribunals.

Conclusion: The Madras Bar Association has had a rich history in protecting judicial independence of courts and tribunals in India. In particular, its distinguished members such as Senior Advocate Mr. Arvind P. Datar have been at the forefront of this crusade against the assault on the judicial independence of the tribunal system. This is the third such petition filed by the Madras Bar Association in the last decade. The first was the challenge to the National Company Law Tribunal, which was successful to a large extent in the R. Gandhi case, the second was a challenge to the National Tax Tribunal, which to the best of my knowledge has been pending before the Supreme Court for the last 5 years and the third is the present petition. Apart from these challenges the IPAB has been challenged before the Madras High Court, while the National Green Tribunal (NGT) has been challenged before the Supreme Court. If the Supreme Court has any sense of priority, it will consolidate all these cases and hear them with the same speed with which it heard the Vodafone Tax dispute and the Reliance gas dispute.

APEDA discloses legal expenses on ‘Basmati’ – Rs. 7,62,00,000 and counting;

Finally, after much coaxing and at least one appeal, the Agricultural and Processed Food Products Export Development Authority (APEDA) has disclosed its legal expenses on protecting and registering the phrase ‘Basmati’ as a ‘trademark’ and as a ‘geographical indication’. The response can be viewed over here. 

As per APEDA’s reply, “An amount of Rs. 7.62 crores (Rs. 7,62,00,000) has been paid to M/s K&S Partners as aggregate professional fee from 1995-96 to 2011-12 (upto 31.3.2012) towards protection of intellectual property vested in Basmati rice in Indian and foreign jurisdiction”. 

This money has supposedly been spent on the following legal actions: 

“(i) Indian trademark actions – over 350; 

(ii) Foreign trademark actions – over 200 in over 50 jurisdictions worldwide; 

(iii) One patent revocation matter in the USA; 

(iv) Proceedings before the G.I. Registry in Chennai for registration of Basmati rice as a G.I.” 

In an earlier RTI (accessible over here) when we had asked APEDA for information on steps taken by them to protect ‘basmati’ in foreign jurisdictions we were offered only “65 pages” of “concluded actions”. How do 200 actions fit into 65 pages? 

In any case, as is obvious, APEDA has spent quite the ‘bomb’ on protecting ‘basmati’ and yet we are no closer to seeing ‘Basmati’ registered as a G.I. despite it being 13 years since India enacted the Geographical Indication Act, 1999. This is particular tragic since ‘basmati’ has already been declared ‘generic’ in the U.S.A. (View the FTC document over here) There is a danger of the same happening in the E.U. 

I’m very curious to know about these 350 Indian actions and 200 foreign actions to protect ‘basmati’ and that will the subject of my next RTI application.

20th Century Fox Film Corporation v. Zee Telefilms Ltd. & Ors.

This recently decided case involves a TV show, Time Bomb, produced by Zee Telefilms in 2005. The Plaintiffs alleged that this was a copy of their acclaimed show 24. The case was filed in 2005 and seems slightly dated since none of these shows are on air anymore. It is also quite puzzling to see the court deciding  on whether an interim injunction should be granted nearly 7 years after the suit was first filed in 2005.

In this suit the Plaintiffs have brought a copyright infringement claim against the Defendants along with an order  to hand over possession of the infringing copies and all other incriminating material including the original script and all plates for production of  the serial Time Bomb. The Plaintiffs have also sought an interim injunction restraining the Defendants from telecasting their serial. The case was before the Delhi High Court.

The court in its rather long winded and detailed judgment which includes a very detailed comparison of both TV shows came to the conclusion that Time Bomb was not a copy of 24. Something which most of us who’ve seen and liked 24 would be very relieved to hear!

Interesting Legal Points


The court had some interesting points to consider in this case:

• One of the contentions of the Plaintiff was that the format of the show had been copied. One of the unique features of the 24 is the real time format where the entire season tracks events in the life of the protagonists over one day. The court had to decide whether there could be any copyright in the format of a show. 
• The court held that though, there is no copyright protection for an idea, concept, principles or discovery, there may be a valid copyright in an original form of expression of an idea or concept. A mere outline or theme is not copyrightable since it is only an idea, but a distinctive treatment of a plot or theme is copyrightable as a literary work or as a dramatic work. 
• However the court held that in this case the 24 hour real time format was not copyrightable, they based this on several other shows and movies cited by the Defendants which also had similar formats. On the basis of this the court held that the techniques/format especially in use of digital clock, use of split screens and adoption of concept of “Real Time” were not unique to the Plaintiff’s serial. Further, these were enabled by use of modern technology and advanced camera and editing techniques therefore the Plaintiffs have no copyright in them.
• The Plaintiffs alleged a similarity between the story line 24 and Time Bomb. They contended that the ‘concept and feel’ of the show had been copied. The court held that what really mattered was the qualitative difference between the two shows. On that basis they held that the story line of the Plaintiffs serial was substantially different from the story line of the Defendant’s serial “Time Bomb”. They based this on the rushes of both serials which they watched and compared.
• The court observed that in such cases it is difficult to determine the difference between idea and expression.  It is difficult to determine where idea ends and expression begins. There is no final and exact way of determining what a copy is, or what a copy of the expression is, or what a copy of the idea is, or what a copy of the idea is only. Therefore copyright judgments such as this one should be read in light of their facts and circumstances.

Conclusion

It will be interesting to see if this case encourages similar suits from foreign film makers/tv show producers etc. after all there is no dearth of tv shows/movies in India which have been ‘inspired’ from the West. However if the length of time lapsed from the date of filing to the final decision in this case is anything to go by, it will result in a pyrrhic victory.

We had earlier blogged about a similar controversy in relation to the Bollywood movie, Partner and Hitch. However the present case is the first to be decided on this issue.

One of the contentions the Plaintiffs repeatedly relied on in their pleadings was that similarity in the expression of an idea should be based on the impressions of an average reasonable viewer, I’m quite sure the average viewer of 24 in India was hardly ever aware of the existence of Zee TV’s short lived show Time Bomb!

A face-off in the offing between the Delhi High Court and the Customs Board?

Continuing from my earlier post on the order of the Delhi High Court in the L.G. case, I would like to point out an interesting trend where orders of the Delhi High Court especially those of Justice Manmohan Singh, pertaining to the IPR (Imported Goods) Enforcement Rules, 2007 are being skilfully countered by one Mr. Satish Kumar Reddy, Director at the Central Board of Excise and Customs (CBEC). (Rest assured he is in no way related to me.)

(i) Samsung case: This little face-off between Justice Singh and Director Reddy can be traced back to Justice Manmohan Singh’s order in the Samsung case where he interpreted the Trade Marks Act, 1999 to come to the conclusion that parallel imports were forbidden under this particular legislation. The judgment was the subject of considerable controversy, we carried a guest post on it over here and several lawyers privately confided in me that they were extremely wary of the interpretation preferred by Justice Singh. In the very next case before the Customs Commissioner, in the Dell case (we blogged about it over here), this interpretation preferred by Justice Singh was ignored by the hearing officer on the grounds that Justice Singh’s order had been stayed by a Division Bench of the Delhi High Court. A few months after the Samsung and Dell cases, Director Satish Reddy issued a Circular on behalf of the CBEC clarifying, for the Customs Commissioners, the position on ‘parallel imports’ with respect to various IP legislations. ‘Circulars’ are basically executive instructions which clarify the government’s position regarding superior legislations or rules. (We had blogged about that circular over here.) 

Although the circular make no mention of Justice Singh’s judgment in the Samsung case, it instructs the Customs Commissioners to apply the IPR (Imported Goods) Enforcement Rules, 2007 to only cases of ‘false marking’ and not in cases of genuine goods being imported into the country. In a manner of speaking this particular Circular appears to have instructed all Customs Commissioners to ignore Justice Singh’s judgment in the Samsung case and not interfere in cases of ‘parallel imports’.

The above was the first face-off between Justice Singh and the Customs Board.

(ii) The first order in the L.G. case: The second case is the L.G. case which I had blogged about earlier today. The first ex-parte order in this case was passed by Justice Manmohan Singh wherein he had interpreted the IPR (Imported Goods) Enforcement Rules, 2007 to come to the conclusion that Customs Commissioner could not decide whether any imports were infringing a patents.

As pointed out in my earlier post on the first order (accessible over here), this interpretation was completely off the mark as the rules were clear on the point that Customs officers can decide such infringement and they have done so in the past especially in the Ramkumar case. Justice Singh had come to this conclusion on the basis of a CBEC ‘circular’ which had merely cautioned Customs Commissioners while deciding whether imports were causing patent infringement. 

In pertinent part the clarification had stated the following “While it is not difficult for Customs officers to determine Copyright and Trade Marks infringements at the border based on available data/inputs, it may not be so in the case of the other three violations, unless the offences have already been established by a judicial pronouncement in India and the Customs is called upon or required to merely implement such order. In other words, extreme caution needs to be exercised at the time of determination of infringement of these three intellectual property rights.” How Justice Singh came to the conclusion that this clarification impliedly restrained Customs Commissioners from deciding patent infringement cases is simply beyond me. Moreover, his judgement misses the point that circulars cannot be contrary to statutory rules and his analysis should have been confined to the rules. 

(iii) Circular No. F. No. 26000/1/2012-OSD(ICD): A ‘circular’ was issued by Director Satish Reddy at the CBEC post the first ex-parte order of Justice Singh in the L.G. case. (The circular can be accessed over here). In this Circular dated 27^th March, 2012 the Director makes specific reference to Justice Singh’s initial ex-parte order and explains in detail as to why the initial order appears to be flawed. Whatever is your opinion about Customs Officers, you have to admit that the Director’s interpretation of the law in this particular Circular is excellent. He points out in relevant part the obvious flaws in Justice Singh’s order especially the use of a Circular to negate statutory rules. In pertinent part the Director states “Further, a Circular cannot nullify provisions of an Act and Notification issued under the Act. Circulars are issued to clarify the legal provisions and to bring in uniformity in implementation. They are not intended to alter the scope or meaning of the existing statutory provisions.”

And then comes the crowning statement “In view of the foregoing, the order dated 30th November, 2011 of High Court of Delhi, in the matter of CS (OS) No. 2982/2011 – L.G. Electronics India Pvt. Ltd. does not appear to be proper in law. Since, the aforesaid order of the Hon’ble Delhi High Court would have wider ramifications on the interpretation of Para 4 of Circular 41/2007 dated 29th October, 2007, the jurisdictional Chief Commissioner has been directed to defend the case by filing appropriate reply / review application against the order.”

The Circular concludes with directions to all Customs Officers to continue deciding even patent infringement cases under the Rules while the relevant department filed an appeal against Justice Singh's order. Personally I think it is unconstitutional for customs authorities to perform any kind of adjudicatory role but for this position to be changed the Govt. must either amend the rules or the judiciary must strike down the rules as unconstitutional. In either case, I bow down to the officer in question for having the guts to call the Delhi High Court on its obvious fault. 

(iv) The second order in the L.G. case: Justice Singh was obviously not very happy with how the Director had so casually brushed aside his original order. Hence in his order dated July 13^th, 2012 which I had covered today on this blog over here, Justice Singh passes the following strictures against Director Satish Reddy

“Clearly and plainly, the actions of the custom authority/ defendant No. 2 to indulge into such action giving its own interpretation to the rules and circulars contrary to the court’s interpretation once the orders of this court are in force is not merely wrongful, illegal, actuated by malice but also is an utter disrespect to the orders of this court.”

He goes on to state “The malafides of the defendant No. 2 is apparent when in the teeth of the orders of this court, the commissioner of customs are giving instructions to the fields to further continue to interdict the consignments on the basis of infringement of the patent without any fetters. The said circular states that the earlier circular nowhere curtails the powers and the customs are free to do what they are empowered under the customs act which amounts to passing its own judgment and dictate contrary to the courts orders which are in force without waiting for the orders of this court. The said circular dated 27th March, 2012 appears to have been issued by defendant no.2 is illegal and was issued in order to frustrate the orders passed by courts. Thus, even formal parties, let them remain as parties to the suit in view of their such conduct.”  

Once again, I think Justice Singh has got it all wrong. As I explained above, ‘Circulars’ are executive instructions and the executive is at liberty to modify them as deemed necessary. In this case if the Director was of the opinion that Justice Singh’s order was untenable in law, he has every right to give his explanation for the same and order the Department to file an appeal or review. Moreover the Director has been very careful while disagreeing with Justice Singh, in that he states that the Order ‘does not appear’ to be proper in law. Decisions to appeal against judicial orders are made routinely in all government departments and I don’t see why Justice Singh had to pass strictures against the Director.

Conclusion: In conclusion I can only hope an appellate court sets aside the strictures in Justice Singh’s latest order. These strictures were unwarranted and in my opinion an abuse of judicial power. Moreover, how exactly will a Division Bench of the Delhi High Court rule on this matter? Will they side with their brother judge or the Customs Officer? 

Patentability of Computer Software Programs in India

In my previous post about the Samsung-Apple patent war in the tablet and smartphone market, I ranted about the curse of patents in the industry and how Judge Richard Posner, of the U.S. Court of Appeals expressed his disdain for patents in the industry as well.

Thus, I thought it may be useful to examine the issue of software patents in India - to lay down the present law on the subject. Thus, in the following paras, I will briefly examine whether software patents are allowed in India and the recent proposed changes to the policy and its eventual outcome.

The Indian Patent Act as of now still excludes only ‘computer programs per se’ from patentability. The issue of whether computer programs tied to certain hardware can be patented is a controversial one. In 2004, the President of India promulgated the Patents (Amendment) Ordinance (on December 27, 2004). The Ordinance split the sub-section 3k into two- sub-section 3(k) and 3(ka). The excluded subject matters as originally contained in Sub-section 3(k) were provided in the new Sub-section 3(ka). It included 'a mathematical method or a business method or algorithms'. The amended Section 3(k) read as follows:

"(k) a computer programme per se other than its technical application to industry or a combination with hardware".

This would have allowed computer software in combination with hardware to have fallen within the scope of patentability. However, the 2004 Patent Ordinance was rejected by the Parliament in 2005 and hence the expansion of the definition as contained in the Ordinance, did not find mention in the Patent (Amendment) Act of 2005.

Thus, it is clear that the interpretation that "computer programme per se" excludes "a computer programme that has technical application to industry" and "a computer programme in combination with hardware" is wrong. By rejecting the 2004 Ordinance wording, Parliament has clearly shown that "technical application to industry" and "combination with hardware" do not make a computer programme patentable subject matter.

One may also refer to the recently released Manual of Patent Office Practice and Procedure (2011) which clarifies ambiguities in respect of patentability. Even the manual does not provide for patentability of computer software in combination with hardware. The text in the Manual is reproduced below.

 f. If the claimed subject matter in a patent application is only a computer programme, it is considered as a computer programme  per se and hence not patentable. Claims directed at‗computer programme products‘ are computer programmes  per se stored in a computer readable medium and as such are not allowable. Even if the claims, inter alia, contain a subject matter which is not a computer programme, it is examined whether such subject matter is sufficiently disclosed in the specification and forms an essential part of the invention.

Source: MANUAL OF PATENT OFFICE PRACTICE AND PROCEDURE (As modified on March 22, 2011) Page 91 onwards, available at <http://www.ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure%20-%20pdf/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure.pdf>

Thus, the law as it stands now reverts to the original position of excluding computer program per se from patentability and does not provide an exemption for a computer program in combination with hardware.

Samsung v. Apple - Let the Patent Games Begin

While the patent wars between the various smartphone and tablet manufacturers (Apple, Samsung, Motorola, Google) have been raging for a while, there are a few recent stories that deserve a quick mention for being plain hilarious to downright ridiculous.

SAMSUNG v. APPLE IN THE U.S.

One might remember the order of a U.S. District Court late last month that granted Apple a preliminary injunction against Samsung for the sale of the Samsung Galaxy 10.1 tablet. Judge Koh remarked that there was enough evidence that Samsung copied the 'look and feel' of Apple's iPad to stop the sale of the Samsung tablet. It's interesting to note however that the injunction does not cover the Samsung Galaxy Tab 2 10.1 (which is rumoured to have been specifically designed to beat Apple's patent infringement claims strategy) which is its current flagship product. 

That covers tablets. But with smartphones bringing in the bulk of revenue these days, Apple's patent strategy isn't limited to the larger form factor alone. The same judge in late June 2012, also granted an injunction against Samsung's Nexus phone. While the U.S. Court of appeals has accepted Samsung's request for an expedited appeals hearing in that case, the issue is far from settled and Apple's lawyers have been busy trying to prevent the phone's  sales in the U.S.

Let's keep in mind the fact that the actual U.S. trial for the patent infringement suit being filed by Apple against Samsung is set to begin on July 30th. It is interesting to note that Judge Koh has held the results of the pre-trial injunction hearings to be of 'little value' in the actual trial. Thus, despite Samsung's recent string of losses in the injunction battle, it is unlikely to be prejudiced if it can advance suitable evidence that it did not infringe Apple's patents.

SAMSUNG V. APPLE IN THE U.K.

Perhaps Samsung can take the assistance of a U.K. court order on the same issue to demonstrate that it didn't in fact infringe Apple's patents in designing its flagship tablet and smartphone. But this will come at the cost of prestige, unfortunately.

In a ruling sure to excite the typical Apple fanboy, a U.K. judge held Samsung to not be infringing Apple's product patents on the iPad since the Galaxy products were 'not as cool' as Apple's. While Apple can take solace in the fact that its core marketing strategy - the 'cool quotient', appears to have been noticed by the sitting judge, in a legal suit, this was of little value since the judge dismissed the patent infringement claim for precisely this reason. So it put Apple in quite a unique situation, to say the least.

Add to this the fact that Apple has been asked to publish an ad in British newspapers as well as its website that Samsung did not copy the design of the iPad, and it becomes clear that the road to humiliation for Apple has not yet ended. 

WHO LET THE PATENT DOGS OUT?

In all this mess, one begs the question - where does the consumer fit into all this? What if I just don't enjoy Apple's products but want a device with a similar form factor and functionality. With injunctions being passed every few weeks and on flagship products nonetheless, there is every reason to believe that the consumer is the victim in such petty patent suits.

There does however appear to be a voice of reason in all this. And it comes from none other than Judge Richard Posner, a a judge on the Court of Appeals for the Seventh Circuit, senior lecturer for the University of Chicago Law School, and author of dozens of books on law and economics. One will recall how he threw out the case between Apple v. Motorolla and refused to grant an injunction, criticising it as a suitable remedy in such cases. The fundamental patent claims in that suit surrounded heuristics, UI elements and wireless technology. 

Judge Posner made some very relevant observations in the his June 2012 ruling by stating that while he understood why companies such as Apple and Google need to rely on patents to enhance their market share in a briskly mushrooming market, he was unconvinced that we 'really needed patents in most industries today'. This was most certainly targeted towards the smartphone and tablet industry that has been witnessing a surge in patent litigation involving trivial functionalities. As Posner himself notes, it is grossly unfair that sales of a particular Motorola phone are completely banned merely because it contains a video streaming feature similar to one patented by Apple.

In a world where simple features such as 'slide to unlock' are considered patentable and are grounds for broad sweeping injunctions, one begins to wonder whether tablets will need to be circular in the future, in order to avoid a patent war.