Court Clarifies Patent Eligibility Criteria for Biochemical Inventions
In a landmark judgment, the Madras High Court brought significant clarity to the nuances of patent eligibility under the Indian Patent Act, 1970, (the Act) particularly concerning biochemical inventions.
In the case, Novozymes v Assistant Controller of Patents and Designs revolved around patentability of phytase variants with enhanced thermostability.
The Assistant Controller of Patents and Designs (Controller) had initially refused Novozymes’ patent application, invoking Sections 3(d) and 3(e) of the Act which address non-patentability of known substances without significant efficacy enhancement and mere admixtures, respectively. Novozymes challenged this decision, leading to an in-depth examination of these provisions in the context of biochemical substances.
Novozymes argued that Section 3(d) of the Act applies only to “pharmaceutical substances”, relying on precedents like Novartis AG v Union of India. Further, invoking the principle of ejusdem generis (of the same kind), Novozymes contended that the generic expression “and other derivatives of known substance” in Section 3(d) should be limited to derivatives of chemical substances only and not be extended to biochemical substances. Moreover, Novozymes asserted that their invention met the enhanced efficacy requirement through improved thermostability, and that Section 3(e) applies solely to independent claims.
In response, the Controller interpreted “known substance” in Section 3(d) broadly, including both pharmaceutical and biochemical substances. They insisted that enhanced efficacy required proof of improved enzyme activity. Furthermore, the Controller upheld Section 3(e), emphasizing the need for synergy in compositions.
Section 3(d) – Clarifying Applicability to Biochemical Inventions – The Court meticulously examined the two judgements relied by Novozymes and expanded the interpretation of Section 3(d) of the Act, extending its applicability to biochemical substances beyond pharmaceuticals and agrochemicals. The Court emphasized that “enhancement of efficacy” assessment should align with principles set in Novartis’ Supreme Court judgment, avoiding prescribing a one-size-fits-all numerical benchmark for efficacy. Instead, it upheld a flexible approach, evaluating efficacy based on a product’s function, purpose, or utility. This inclusive and nuanced perspective led the Court to validate Novozymes’ phytase variants with improved thermostability, ultimately overturning the Controller’s refusal and granting claims 1-7.
Scope of Section 3(e) – Scope of Applicability – The Court also addressed the applicability of Section 3(e), and further clarified that this section’s applicability is not confined to compositions of known ingredients or limited to independent claims. Thus, the Court upheld the Controller’s decision to deny claims 8 – 11, citing the absence of evidence that the composition offered more than the sum of its parts.
The ruling encourages a flexible approach to patent eligibility assessments in the biotechnology sector. It recognizes the diverse nature of substances, fostering innovation. The reaffirmation of Section 3(e) raises patent eligibility standards, promoting stronger evidence of synergy in compositions. This decision shapes a balanced patent evaluation landscape, impacting current and future innovations.
Disobeying interim injunction seen as Contempt of Court
In the case, Pfizer Inc & Ors. v Triveni Interchem Private Limited & Ors, the Delhi High Court (Court) came down heavily on Triveni Interchem Private Limited and Triveni Chemicals (together referred as Triveni) after Triveni was found guilty of “wilful” and “contumacious” contempt of the Court for disobeying an interim injunction against Pfizer Inc (Pfizer).
Consequently, the Court ordered Triveni to pay Pfizer, INR 2 crores (~USD 2,40,000) as damages within two weeks, failing which the contemnor shall be imprisoned for two weeks in Tihar Jail.
In 2021, Pfizer filed a case against Triveni, accusing them of infringing on Pfizer’s patent for a drug called Palbociclib, a breast cancer medication. The Court granted an ad interim injunction to Pfizer, restraining Triveni from various actions related to the patent-infringing product Palbociclib. These actions included making, selling, distributing, advertising, exporting, or importing Palbociclib or any pharmaceutically acceptable salt of it. Triveni was also instructed to remove all references to Palbociclib from its websites and third-party platforms, like IndiaMART. Sometime in July 2022, Pfizer again found the infringing products by Triveni to be available on IndiaMART in a new packaging (on the same impugned link as per suit and on a new link).
In 2022, Pfizer responded by filing a contempt application against Triveni for violating the Court’s injunction order. The Court found Triveni in contempt of the 2021 injunction and directed Triveni to provide an explanation for the altered packaging. In response, Triveni submitted affidavits; however, these affidavits lacked essential information as required by the Court’s instructions. Parallelly, the infringing products were still available for sale on another e-commerce platform called Connect2India.
In December 2022, the Court held Kamlesh Singh, guilty of wilful disobedience and contempt of the Court’s injunction order and moved the case to the sentencing phase in January 2023. However, once again Triveni’s affidavits filed on January 17, 2023, were found to be inadequate. Further, the affidavits claimed to have dealt with Palbociclib only in July 2022, contradicting their previous statements in the September 2022 affidavit and their statements before the Court in December 2022. Triveni argued that their January 2023 affidavit showed compliance with the Court’s orders, hence no further action or property attachment was necessary against them. The Court was left to assess these conflicting submissions and the continued disregard for its injunction.
The Court, relying on the principles of contempt, as previous precents in Samee Khan v Bindu Khan, and Citigroup Inc. v Citicorp Business & Finance Pvt. Ltd. observed the following:
- Contradictory Submissions: The Court noted Triveni’s inconsistent statements, initially admitting to advertising the patent-infringing product and later claiming they only dealt with it once.
- Insincere Apology: The Court was skeptical about Triveni’s claim of limited involvement with the drug and found their apology insincere, as Triveni did not provide a complete account of their dealings with the drug.
- Unbelievable Actions: The Court found it unbelievable that Triveni would advertise Palbociclib without possessing any stock of the product, which was deemed contrary to established trade norms.
Based on these observations, the Court concluded that Triveni had engaged in “wilful and contumacious disobedience” to the injunction order issued and imposed a fine of INR 2 crores (~USD 2,40,000) on Triveni. Triveni was given two weeks to pay this amount to Pfizer. Failure to comply within the stipulated timeframe would result in Kamlesh Singh (Director of Triveni Interchem Private Limited) being detained in a civil prison for two weeks, in accordance with the established legal principles.
Court Rules on SEP Infringement and Licensing Dynamics
In the landmark case of Nokia Technologies OY v Guangdong OPPO Mobile Telecommunications Ltd. & Ors., the Supreme Court of India addressed a crucial issue concerning the alleged infringement of Standard Essential Patents (SEPs) post the expiry of a licensing agreement.
This case was significant in the realm of intellectual property rights, particularly in the context of adhering to and interpreting FRAND (Fair, Reasonable, and Non-Discriminatory) commitments.
The dispute originated when Nokia Technologies OY (Nokia) accused Guangdong OPPO Mobile Telecommunications Ltd. (Oppo) of using three of its SEPs integral to mobile communication technologies, beyond the expiration of their licensing agreement in 2021. The contention arose after Oppo’s sales in India skyrocketed following the expiration of a licensing agreement between the two companies. Nokia alleged that Oppo continued to use its patented technology without requisite consent, prompting Nokia to seek legal recourse.
Meanwhile, Oppo had approached a Chinese court to fix a FRAND rate for Nokia’s SEPs, indirectly acknowledging the use of the patents in question.
Nokia’s demand for a pro-tem deposit from Oppo was based on the royalties outlined in their 2018 agreement. Oppo, however, argued this demand lacked legal basis, asserting that it contravened FRAND principles and cited the Indian Patent Act, 1970, particularly sections that allow challenging patent validity despite existing license agreements.
In July 2023, a divisional bench of the Delhi High Court directed Oppo to deposit 23% of its Indian sales revenue post the 2018 agreement’s expiry. This ruling was grounded in the interpretation of the obligations of SEP implementers during negotiation phases, as per the framework of FRAND. This ruling came after the Court determined that Oppo had been utilizing Nokia’s technology without proper authorization. Oppo subsequently challenged this judgement in the Supreme Court.
The Supreme Court also refused to stay the Divisional bench’s decision. This ruling emphasized the necessity for SEP implementers to provide adequate security during licensing disagreements.
Furthermore, the Supreme Court granted Oppo a grace period of 10 days to submit an affidavit of compliance with the order. This gesture underscores the Court’s willingness to provide reasonable opportunities for resolution and adherence to legal directives. Following the Supreme Court’s ruling, counsel for Oppo and Vivo (part of Oppo’s parent company) expressed willingness to comply with the Indian FRAND rate set by the Indian court, preserving their right to appeal.
For the tech industry and legal community, this case serves as a guide in balancing patent rights with licensing duties, setting a benchmark for future SEP disputes and negotiations.
On January 24, 2024, both Nokia and Oppo released press statements declaring agreements for cross licensing, thus setting this three-year long patent battle.
Court Overturns Patent Refusal Due to Inadequate Obviousness Evaluation
In Kuraray Co. Ltd. and Mebiol Inc. v The Assistant Controller of Patents & Designs, The Patent Office, the Madras High Court ruled in September that the Assistant Controller of Patents & Designs’ (Controller) refusal order lacked merit due to insufficient reasoning.
Kuraray Co. Ltd. and Mebiol Inc. (appellants), filed a patent application for an invention titled, “film for plant cultivation”, which related to a process involves using polyvinyl alcohol film (PVA film) of specification in plant cultivation. The Controller rejected the application. The Court specifically found the Controller’s reasoning insufficient in providing the obviousness of the subject matter, based on the information available in the claimed closest prior art, a single citation.The Court cited a precedent from the case, Agriboard International v The Controller of Patents and Designs; underscoring three key principles for evaluating obviousness: analyzing the invention disclosed in the prior art, assessing the invention disclosed in the application, and determining how the subject invention would be perceived as obvious by a person skilled in the art.Notably, the Court specified that if the identified prior art addresses a different problem, it would not lead a person skilled in the art to arrive at the claimed invention based on said document.Ultimately, the Court ruled in favour of the appellants, Kuraray Co. Ltd. and Mebiol Inc, overturning the refusal decision and allowing the appeal, subject to further amendments to the claims.
Court assesses lung cancer drug patent infringement by the company.
In Chugai Seiyaku Kabushiki Kaisha and Hoffmann-La Roche AG v Frensenius Kabi Oncology Limited and Fresensius Kabi India Private Limited, the plaintiff, Chugair Seiyaku Kabushiki Kaisha (CSKK) sought a permanent injunction against Fresenius Kabi Oncology Limited (FKOL) and Fresensius Kabi India Private Limited for infringing its Indian patent protecting Alectinib, an oral drug used to treat a certain type of non-small-cell lung cancer.
CSKK and its exclusive licencee, Hoffmann-La Roche, contended that, in May 2021, FKOL imported Alectinib and exported Alectinib hydrochloride. CSKK further contended that an independent online investigation revealed various online listings of FKOL for a generic version of Alectinib on the Pharma Compass and Chemical Book websites.