A successful academic intervention before the Supreme Court in the Novartis - Glivec patent case

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As the arguments in the now epic Novartis case draw to a close before the Supreme Court of India, I’m glad to report that the bench, consisting of Justice Alam & Justice Desai, gave Shamnad a patient and receptive hearing in his role, as an amicus curiae or ‘academic intervener’ in Supreme Court parlance. 

As our readers may remember, Shamnad had filed an intervention application before the Supreme Court last year in order to provide academic assistance to the Court in what is probably the most important IP case to be decided by the Supreme Court in its history. This was a relatively unconventional move as academics in India do not usually file such interventions and from what I’ve been told Shamnad’s intervention was the first of its kind. His arguments before the Supreme Court continued over two days and one lawyer who witnessed the arguments wrote to me saying “Court 5 is expected to be packed on account of this unconventional academic approach. His arguments (as expected) were logical, uncluttered, and with a delightful sprinkling of anecdotes and examples. Including quoting Ogden Nash.” The same lawyer also informs me that “This is a first of its kind academic intervention in over 60 years, and one that has had such impact. Honestly, with so little knowledge among us counsel on specific areas of law (IP, IT, GI, Competition) such steps must be encouraged.” 

I second those views. Academics in India are usually cloistered in their classrooms and conference rooms. I hope we have several more of such interventions, especially since we now have a breed of brilliant young academics in India and for its part the Supreme Court appears to be very receptive to the idea. 

The arguments made during the intervention

I’ve posted below the links to the summary and written submissions made by Shamnad to the Supreme Court. I’m not going to get into describing the arguments, lest I lose some in translation but it should suffice to say that Novartis is not going to be too happy with some of the conclusions that Shamnad has drawn in this case, especially the conclusion that “Therefore, under the present set of facts and the evidence filed, the new form does not cross the section 3(d) hurdle.” To translate that into simple English – given the evidence on record, Novartis should not be granted a patent for Glivec. 

At the same time the activist community & generic drugs industry are going to be less than happy with Shamnad’s emphatic conclusion that excessive pricing cannot be a ground to revoke a patent on the grounds that it offends Section 3(b) of the Patents Act, 1970 which in itself bars certain patents on the grounds of public order or morality. In pertinent part, Shamnad’s summary states “Does the claimed new form violate section 3(b), owing to the high price of patented drug? No, section 3(b) only applies when the commercial exploitation of the invention itself is barred by public order or morality.” 

Well, I think it is safe to say that Shamnad is not going to win a popularity contest conducted amongst the litigants in this case but as an academic it is a privilege and honor to lose such popularity contests. 

The ‘summary’ and the ‘written submissions’ are available below: 

(i) Summary; 

(ii) Written Submissions (Part I); 

(iii) Written Submissions (Part II).

SpicyIP Weekly Review (November Week 3)

With the country celebrating Diwali on 13 November, there have been a spate of public and Court holidays and as a result a much quieter week on the IP front.

Prashant started us off by doing this very interesting analytical post on the treatment of patients with Hepatitis C with Pegasys. Questioning the small percentage of patients who actually could afford the high price of the drug, Prashant suggests that the business model of innovator companies may need to be reassessed to suit the Indian market.

Rajiv then gave us data of the 97 decisions by the Controller at the Indian Patent Office in October 2012 highlighting a couple he thinks may interest our readers. This is usually my favourite post to read every month since Rajiv reproduces all this data which gives us an insight into emerging trends at the Patent Office.

Prashant also brought us the breaking news in the new big ticket pharma litigation between Cipla and Pfizer over the Sunitinib patent. In an SLP filed by Cipla in the Supreme Court, the Supreme Court has stayed the order of the Delhi High Court which restrained Cipla from selling a generic version of the Sunitinib patent. In what appears to be a huge procedural gaffe - no notice of the SLP was provided to Pfizer despite being on caveat. This promises to be an exciting battle and one that we will continue to track on the blog.

The highlight this week I think is Mathew's post discussing the recent IPAB decision on the geographical indication application for the Payyanur ring. As our readers have undoubtedly already seen, the IPAB decision discusses the standing of parties filing as "producers" under the Geographical Indications Act. GI holders and applicants should definitely examine the decision in case they haven't already.

Shamnad closes out the week by inviting our readers to what promises to be an outstanding conference to be held on November 27 & 28, 2012. The conference focuses on a very relevant topic 'The Copyright Amendments, 2012: A fair balance?'. For more details, do look at Shamnad's post here, and Sai's earlier post about the event here.

International Developments

Globally, IP has been in the news for several reasons. But Google has a big role to play in the first three highlights.

IP licensing just got a lot more interesting. The RAND licensing cases have exploded and are all over the news. The case Apple v. Motorola concerns fixing of royalty for Motorola's patents that are licensed under RAND terms which Apple believes are unreasonably high. A week ago, the solution-oriented Judge in the Apple v. Motorola case cancelled the trial "with prejudice" once it became apparent (much to her frustration) that Apple would not abide by the decision if they believed that the royalty fixed by the Court was too high. Now it appears that the parties are exploring alternative resolution methods such as negotiation and arbitration. This article rather ambitiously believes that if successful, this will end all licensing disputes. A tall claim especially since the Microsoft v. Motorola trial litigating similar licensing terms just got underway in front of a packed courtroom.

In a strange twist of fate, karma seems to be catching up with publishing houses. Usually the defendants in litigation with freelance authors about re-publication rights, publishing authors are lobbying to have Google pay for the reproduction of news articles in the face of steeply declining sales. Like the other wrangles that Google has managed to get itself into (and out of) over the years, this will definitely be an interesting spat to watch out for.

Google remaining in the news: The bi-annual publication of the Google Transparency Report is out. Apart from data on removal of copyrighted data in accordance with DMCA take-down provisions, the Report also published very interesting data about requests from governments seeking user data. With cloud services already converging with privacy and security concerns, it may interest our readers to know that USA and India (in that order) have made the most requests of this nature.

There has been a repeat of a curious decision in the US Fed. Circuit Courts (2d Circuit). After a remand of the Transocean v. Maeserk in 2010, Transocean II has come out with a stunning case stating that in some cases secondary indicia of obviousness may weigh greater than primary indicia. The decision has come out a few days ago, but this blogger shamefully admits that she has not had a chance to analyse it yet. Our friends at Patently-O however, have a handy analysis that you may want to read.

One of our nerdier bloggers has kindly pointed me in the direction of what is being dubbed "The Patent Prom" i.e. the Santa Clara University Software Patent Conference which had the who's who of the patent world in the USA discuss issues and possible solutions to the problem of software patents. A short recapitulation can be found here. 

Last but definitely by no means the least (pun intended), Least Developed member Countries  of the WTO (led by Haiti) are seeking an indefinite extension from becoming TRIPS compliant. Going by the limbo India is currently stuck in, it will be interesting to see how this proceeds.

That's the roundup for this week. Let us know if we've missed something. We look forward to receiving comments about any of our posts and/or the international highlights.

Madras High Court rules against ‘safe-harbour’ for ISPs – a victory for copyright owners

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The Hinduand Medianama, have both recently reported on a judgment of the Madras High Court in the copyright infringement lawsuits filed by the copyright owners of ‘Dhammu’ & ‘3’ against 15 Internet Service Providers (ISPs). These are the lawsuits which led to the entire blocking of file-sharing websites on the suspicion that these websites were being used to distribute pirated copies of the newly released movies. Outraged internet users had responded to these orders by hacking the websites of the Madras High Court and several other institutions. Some ISPs like Airtel were fined by consumer courts for interrupting services to their customers.

The Madras High Court, acting on a subsequent petition by the ISPs, modified its initial ex-parte order to allow ISPs to block only specific links and not entire file-sharing websites. We have blogged about these orders of the Madras High Court over hereand here. The present judgment of the Madras High Court can be accessed over here.

The present judgment was the result of a plea by the ISPs to dismiss both lawsuits or alternatively to vacate both interim injunctions in their entirety. Justice Chandru of the Madras High Court declined to grant any of these prayers by the ISPs and the lawsuits and the interim injunction stand as of now. The judgment is very interesting since it is one of the first Indian lawsuits to discuss the legality of John Doe orders, their ‘qua timet’ nature and most importantly it is the first judgement on the applicability of the ‘safe-harbour’ provisions in Section 79 of the Information Technology Act, 2001 to ‘Internet Service Providers’ in the case of copyright infringement. Justice Manmohan Singh of the Delhi High Court had delivered last year the first judgment on the applicability of the Section 79 ‘safe harbour’ to online content providers like MySpace. (Amlan has discussed the MySpace judgment over here)

Also interesting in the present case was the fact that the Plaintiffs were represented by Advocate Arun Mohan who appears to have argued the case by himself against a battery of Senior Advocates who were representing the ISPs. It is rare to see young lawyers like Arun, who is about 28 years, to take on Senior Advocates in the High Court and it is even rarer to see them win.

Getting down to the main issues in the present case:

(i) Section 79 of the Information Technology Act, 2001: The crux of this case was whether or not the ISPs would be covered under the ‘safe-harbour’ provided in Section 79 for network service providers. ISPs like the BSNL and Bharti-Airtel also argued that they were bound by the terms of their licence to provide uninterrupted internet access to all their service providers and that they could not exercise any editorial control over what their users did or did not access.

Justice Chandru of the Madras High Court shot down this argument on the grounds that it was bound to give a literal interpretation to the law and if it were to extend the ‘safe-harbour’ provision in Section 79 of the IT Act to ISPs for copyright infringement it would render null and void the ‘proviso’ to Section 81 which was inserted via an amendment to the Act in 2008. The ‘proviso’ reads as follows “Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957 or the Patents Act, 1970.”

Further, Justice Chandru appears to have been significantly influenced by Justice Manmohan Singh’s order in the Myspace case since he has cited Jusitce Singh’s order liberally.

The final conclusion of the Court was as follows “In view of the above discussion, I find that there is no impact of provisions of Section 79 of IT Act (as amended on 2009) on the copyright infringements relating to internet wrongs where intermediaries are involved and the said provision cannot curtail the rights of the copyright owner by operation of proviso of Section 81 which carves out an exception cases relating to copyright or patent infringement.”

(ii) The legality of qua timet actions: A ‘qua timet’ action, is one where a lawsuit is filed in anticipation of an alleged wrong. Normally a lawsuit can be filed only after an alleged wrong has taken place and not in anticipation of a wrong. Once again, Justice Chandru liberally quotes from Justice Manmohan Singh’s judgement in the MySpace case to rebut the ISPs.

(iii) The non-joinder of essential parties: The ISPs had also sought dismissal of the lawsuits on the grounds that the plaintiffs had not impleaded the actual websites which were hosting the infringing content. Once again, Justice Chandru liberally quotes from Justice Manmohan Singh’s judgement in the MySpace case to rebut the ISPs.

(iv) The legality of ‘John Doe’ orders: In his judgment, Justice Chandru upholds the legality of the concept of John Doe orders on the basis of a Delhi High Court order in the case of ESPN Software India Private Ltd. Vs. Tudu Enterprise and others in C.S.(OS)No.384 of 2011. The Plaintiff had cited this case and also argued that the requirements of naming the defendants under the Code of Civil Procedure be waived. In pertinent part the Plaintiffs argued “The CPC provides that under Order 7 Rule 1, the plaint shall contain the name, description and place of residence of the defendants so far as they can be ascertained. In this case, the violators are many in number, the plaintiffs could not identify each and every one.”

My problem with this aspect of the order is that the ESPN order by the Delhi High Court was an ex-parte order – it was passed on the first day without hearing any of the defendants. Such orders have zero precedential value and at the very least the Madras High Court should have provided a much more detailed reasoning to uphold the concept of John Doe order instead of placing reliance on the ESPN order.

An update on the MySpace appeal before the Delhi High Court: Justice Manmohan Singh’s judgment in the MySpace case was appealed last year by MySpace. The hearing of the appeal was adjourned on several occasions since MySpace and Super Cassettes were interested in settling the matter. This is not all so surprising since Super Cassettes appears to have licensed its music to Youtube and clearly there is a right price for Super Cassettes. In any case, in an order dated 12^th September, 2012 the Delhi High Court records that all efforts at a compromise have failed and that the appeal against the denial of the interim injunction will be heard in January, 2013. At the same the Delhi High Court has also ordered that the main trial be expedited.

Interestingly, the order (available over here) also records that a third party, represented by Advocates Shewtasree Majumdar & Eashan Ghosh, is seeking to intervene in the appeal. The identity of the third party is not revealed in the order.