Pharmaceutical IP and competition law in India: overview

A Q&A guide to pharmaceutical IP and competition law in India.

The Q&A gives a high level overview of key issues including patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in India: overview.

This Q&A is part of the global guide to life sciences law. For a full list of jurisdictional Q&As visit www.practicallaw.com/lifesciences-guide.

Contents

Patents

1. What are the legal conditions to obtain a patent and which legislation applies? Which products, substances and processes can be protected by patents and what types cannot be patent protected?

Conditions and legislation

The Patents Act 1970 regulates the granting of patents in India and affords protection to both products and processes. The broad conditions that must be satisfied by the applicant for the patent to be granted include that the subject matter of the patent must:

  • Be new.

  • Include an inventive step.

  • Be capable of industrial application.

The subject matter of the patent must not be ineligible under section 3 of the Patents Act. Section 3 provides a list of subject matter that are ineligible for the granting of a patent, for example:

  • A mere discovery that is a new form of a known substance that does not result in the enhancement of known efficacy of that known substance.

  • Inventions that are contrary to public order or morality.

  • Computer programs and algorithms.

Scope of protection

India amended its patent law in 2005 to comply with the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS). The Patents Act provides protection to all products and processes irrespective of the technology to which they relate. The patentability of any particular type of product, substance or process is not prohibited, provided it satisfies the conditions as prescribed under the Patents Act (see above, Conditions and legislation).

 
2. How is a patent obtained?

Application and guidance

An application seeking grant of a patent must be filed before the Indian Patent Office (IPO).

The website (http://ipindia.nic.in/ipr/patent/patents.htm) provides complete guidance and information about application procedure and fees, including jurisdiction of the IPO branches. The website also permits e-filing of patent applications.

Process and timing

The stages in patent processing along with the time line in brief are as follows:

  • Application filing, which takes up to 31 months from the priority date to enter the Patent Cooperation Treaty 1970 (PCT) national phase in India. (The priority date of an invention is governed by section 11 of the Patents Act 1970, which provides detailed guidelines to determine the priority date.)

  • Publication, which is within 18 months of the priority date in the case of non-PCT applications and immediately after 31 months for PCT applications.

  • Request for examination, which is within 48 months from the priority date or the filing date, whichever is earlier.

  • First examination report (FER), which is issued about two years from the filing of the examination request.

  • Grant of patent, a decision of which is reached within 12 months from the date of the issuance of the FER.

Under the latest amendment to the application process, a request for substantive examination has to be filed before the expiry of 48 months from the priority date. The application is published after the expiry of 18 months from the date of filing or priority date, whichever is earlier. The publication of the application can be accelerated by filing a request to the Controller General of Patents, Designs and Trade Marks (Controller General) with the requisite fee.

Every patent application is scrutinised before acceptance to verify the following:

  • Whether the application has been filed in the appropriate jurisdiction.

  • Proof of right to file the application.

  • Whether the application and other documents have been filed in the prescribed format, that is, for example:

    • prescribed forms;

    • requests;

    • petitions;

    • assignment deeds;

    • translation.

  • Whether documents are prepared on the appropriate sized paper, typed in appropriate font with proper spacing and duly signed.

  • Whether abstracts and drawings (if any) have been filed in the proper format.

  • Whether meaningful claim(s) are present in a complete specification.

  • Whether the power of attorney or attested copy of a general power of attorney (if any) is filed.

  • Whether a Form 5 (declaration as to inventorship) has been filed (along with complete specification filed after the provisional or for filing PCT/World Intellectual Property Organization Paris Convention application).

  • Whether the invention has been assigned to another person and Form 6 (claim or request regarding any change in applicant for patent) has been duly filed. If the right is assigned from an individual to a legal entity, the legal entity is invited to pay the balance fees. (Since there is a difference in the fee applicable for an individual and for a legal entity, a balance fee becomes payable for a legal entity when it is assigned a patent right from an individual.)

The IPO is modernising and expanding, and recruited a large number of examiners in 2011. In Nitto Denko Corp v. Union of India (writ petitions pending before the Delhi High Court), the court on 28 November 2013 directed that a committee to be set up, with representatives from the Ministry of Finance and the Department of Industrial Property and Promotion (Ministry of Commerce and Industry) along with the Controller, to provide a report on steps to clear the backlog of patent applications within three years.

The Committee has proposed a number of measures aimed at increasing the speed with which patent applications are examined including increased allocation of funds, significantly increasing the number of examiners and out of turn examination in certain cases. The combination of these factors is expected to reduce the period for the grant of a patent from about five to seven years to an average of two to five years.

 
3. How long does patent protection typically last? Can monopoly rights be extended by other means?

Duration and renewal

The term of a patent is 20 years. A patent can be renewed by paying the appropriate renewal fee, which becomes payable every year after the end of the third year from the patent grant date.

Extending protection

India does not provide for extension of the patent term through supplementary protection certificates (SPCs), data exclusivity periods or through any other means.

However, a proposal for its incorporation was recently considered and rejected by the committee established by the Delhi High Court in the Nitto Denko case.

 
4. How can a patent be revoked?

A patent can be revoked by the Intellectual Property Appellate Board (IPAB) on the petition of any interested person or by the central government, or in a counter-claim (in a suit for infringement of the patent), on any of the following grounds:

  • The invention was claimed in a valid claim of earlier priority date and contained in the complete specification of another patent granted in India.

  • The patent was granted on the application of a person not entitled under the Patents Act 1970 to apply.

  • The patent was obtained wrongfully in contravention of the rights of the petitioner or any person under or through whom he claims.

  • The subject matter of the invention is not an invention within the meaning of the Patents Act or is not patentable under the Patents Act.

  • The invention is not new nor does it involve any inventive step, having regard to what was publicly known or publicly used in India or what was published in India or elsewhere before the priority date of the claim.

  • The invention is not useful.

  • The scope of any claim is not sufficiently and clearly defined or that any claim is not fairly based on the matter disclosed in the specification.

  • The patent was obtained on a false suggestion or representation.

  • The applicant for the patent failed to disclose to the Controller of Patents the information required by section 8 (that is, information on the status of corresponding foreign applications pertaining to the same or substantially the same invention) or provided information that to his knowledge was false in relation to particular material.

  • The leave to amend the complete specification under section 57 (pertaining to application to amend a patent or a patent application) or section 58 (pertaining to an application to amend a patent during infringement or revocation proceedings) was obtained by fraud.

The Delhi High Court has held that despite non-compliance with the requirements of section 8, the court has discretion not to revoke the patent on the peculiar facts and circumstances (F Hoffman La Roche v. Cipla Ltd). This discretion exists by use of the word "may" under section 64 of the Patents Act. The decision is currently under appeal before a Division Bench of the High Court.

Additionally, the provision has been further diluted by the order of the Division Bench of the Delhi High Court in the case of Sukesh Behl v. Koninklijke Phillips Electronics. The court held that the materiality of the information not disclosed as well as the intent of the parties are critical to determining revocation of a patent; thus ruling out an automatic revocation of a patent in the event of non-compliance with the provisions of section 8.

 
5. How is a patent infringed? How is a claim for patent infringement made and what remedies are available?

Conditions for infringement

Under Indian patent law, the patentee is conferred the following exclusive rights:

  • For product patents:

    • making;

    • using;

    • offering for sale;

    • selling; or

    • importing for those purposes that product in India.

  • For process patents:

    • using that process;

    • offering for sale;

    • selling; or

    • importing for those purposes the product obtained directly by that process in India .

Any unauthorised act by a third party infringing upon the patentee's exclusive rights amounts to infringement of the patent. In a landmark decision, the Delhi High Court passed a final decree in the patent infringement suit of Merck Ltd. against Glenmark Pharmaceuticals Ltd. involving the diabetes drug Januvia (Sitagliptin). Further, in November 2015, a two Judge of the Delhi High Court passed a pathbreaking decision settling several important principles of patent law in India. It held that the relevant infringement test is the comparison of the claims of the plaintiff's patent and the Defendant's product.

Further, Indian courts have recognised the "doctrine of equivalents" and have adopted the test of "pith and marrow" of the invention to ascertain infringement. For example, in TVS Motor Company Ltd v Bajaj Auto Ltd, 2009 (40) PTC 689(Mad), it was held that in construing an allegation of infringement, what is to be considered is whether the alleged infringement took the substance of the invention, ignoring the omission of certain parts or addition of certain parts.

Claim and remedies

A claim for patent infringement can be made by filing a civil lawsuit before the District Court or courts superior to the District Court.

The following reliefs are available under the Patents Act 1970 against a patent infringer:

  • Permanent injunction.

  • Damages or an account of profits.

  • Seizure, forfeiture or destruction of infringing goods, or materials and implements predominantly used to create the infringing goods.

  • Litigation costs.

 
6. Are there non-patent barriers to competition to protect medicinal products?

The Indian legal system does not currently have a system of non-patent barriers such as marketing exclusivity or data exclusivity for protection of proprietary medicinal products.

 

Trade marks

7. What are the legal conditions to obtain a trade mark and which legislation applies? What cannot be registered as a trade mark and can a medicinal brand be registered as a trade mark?

Conditions and legislation

The registration of trade marks is governed by the Trade Marks Act 1999 and the Trade Marks Rules 2002. The Trade Marks Act provides the following conditions for the registration of a trade mark:

  • It must be capable of distinguishing the goods or services of the applicant from the goods or services of others.

  • It must be capable of being graphically represented.

  • The trade mark must be inherently distinctive or must have acquired distinctiveness by virtue of its user.

Scope of protection

A trade mark cannot be registered in the following circumstances:

  • Where the trade mark consists exclusively of marks or indications that may designate the kind, quality, quantity, intended purpose, values, geographical origin or time of production of the goods or rendering of the service.

  • Where the trade mark contains obscene or scandalous matter.

  • Where the trade mark contains matter that offends religious susceptibilities or is prohibited under the Emblems and Names (Prevention of Improper Use) Act 1950.

  • Where the trade mark is descriptive of the goods or services for which registration is sought.

  • Where the trade mark is identical or deceptively similar to another prior registered mark.

The commonly used or accepted name of any chemical element or compound for a chemical substance or preparation cannot be registered as a trade mark. Additionally, the International Non-proprietary Names of substances cannot be registered as trade marks.

 
8. How is a trade mark registered?

Application and guidance

An application seeking grant of a patent must be filed with the Registrar of Trade Marks (registrar). The website (http://ipindia.nic.in/tmr_new/default.htm) provides complete guidance and information about application procedure and fees, including the jurisdiction of each of the branch offices. The website also permits e-filing of trade mark applications.

Process and timing

Subsequent to filing and a formalities check (conducted internally), the subject mark is examined within six to eight months, after which an examination report is issued. The applicant has 30 days (extendable on request) to respond to any objections raised. If the registrar is not convinced by the written arguments, a hearing can be arranged to hear oral submissions. If accepted, the application is advertised for opposition by third parties, for a period of three months. Where no opposition is filed, the application proceeds to registration in about two to three years.

 
9. How long does trade mark protection typically last?

Trade mark protection is perpetual although the trade mark must be renewed every ten years. An application for the renewal of a trade mark must be made at any time not more than six months before the expiration of the last registration of the trade mark. A fee of INR5,000 must be paid with the application.

 
10. How can a trade mark be revoked?

A trade mark can be revoked under the Trade Marks Act 1999 (section 57) through a petition for revocation (for removal of the registered mark) made by any person aggrieved by an entry wrongly made or wrongly remaining on the Register of Trade Marks (register).

A trade mark can be revoked on the following grounds:

  • Non-use of the registered mark.

  • Failure to observe a condition entered on the register in relation to the trade mark.

  • Entry on the register made without sufficient cause.

  • Entry wrongly remaining on the register.

  • Error or defect in the entry.

 
11. How is a trade mark infringed? How is a claim for trade mark infringement made and what remedies are available?

Conditions

A trade mark is infringed if any person, other than the trade mark proprietor, uses in the course of trade, a mark that is identical or deceptively similar to the registered trade mark for goods or services for which the trade mark is registered.

Additionally, the following acts are also considered an infringement of trade mark:

  • Use of a mark that is identical or deceptively similar to the registered trade mark where the use of such mark takes unfair advantage of or is detrimental to the distinctive character or repute of the trade mark, even if such use is not for the goods or services for which the trade mark is registered.

  • Use of a mark that is identical or deceptively similar to the registered trade mark as a trade name (or part of it) or as the name of its business concern (or part of it), where such entity is dealing in goods or services for which the trade mark is registered.

  • Use of a mark in advertising that takes unfair advantage and is contrary to honest practice in industrial or commercial matters or is detrimental to the distinctive character or reputation of the registered mark.

  • Use of a mark for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.

Where the distinctive elements of a registered trade mark consists of or include words; the trade mark may be infringed by the spoken use of those words as well as by their visual representation.

Claim and remedies

A claim for trade mark infringement can be made by filing a civil lawsuit before the District Court or courts superior to the District Court.

The following remedies are available in a suit for infringement of a trade mark:

  • Permanent injunction.

  • Damages or an account of profits.

  • Delivery up of the infringing labels and marks for destruction or erasure.

 
12. Outline the regulatory powers and enforcement action against counterfeiting in the pharmaceutical sector.

India does not have specific legislation concerning counterfeits in the pharmaceutical sector. The regulatory powers as well as options for enforcement against counterfeit and/or spurious products falls within existing legislation, including the:

  • Drugs and Cosmetics Act.

  • Patents Act.

  • Trade Marks Act.

  • Customs Act 1962.

  • Intellectual Property Rights (Imported Goods) Enforcement Rules 2007.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in India: overview ( www.practicallaw.com/9-504-6786) .

 

IP and competition law issues

13. Briefly outline the competition law framework in your jurisdiction and how it impacts on the pharmaceutical sector. In particular, the competition authorities and their regulatory powers, key legislation, whether pharmaceutical investigations are common, key recent activity and case law.

The Competition Act 2002, subsequently amended by the Competition (Amendment) Act 2007, governs the law of competition in India. This legislation repealed the Monopoly and Restrictive Trade Practices Act 1969. The objective of the legislation is:

  • To prevent practices having an adverse effect on competition.

  • To promote and sustain competition in markets.

  • To protect the interests of consumers.

  • Ensure freedom of trade carried on by participants in markets in India.

The Competition Act regulates and prohibits anti-competitive agreements which cause or are likely to cause an appreciable adverse effect on competition in India. Such agreements could cover:

  • Determining purchase or sale prices.

  • Controlling or limiting production, supply, and so on.

  • Determining markets.

  • Bid rigging or collusive bidding.

Section 3 of the Competition Act sets out the characteristics for determining such agreements. The Competition Act further prohibits abuse of dominant position (section 5) and regulates combinations (section 5 and 6).

The Competition Commission of India (CCI) (www.cci.gov.in) is the regulatory body set up under Chapter III of the Competition Act. It has objectives to eliminate practices with an adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

The legislation covers a broad spectrum of sectors, including the pharmaceutical industry. Investigations are carried out by the CCI either on its own initiative or based on information received or on reference made to it by the central government, a state government or a statutory authority.

For example, on 11 March 2014 the CCI on its own initiative held the Bengal Chemist and Druggist Association liable for directly or indirectly determining the sales price of drugs, and limiting or controlling the supply of drugs through concerted and restrictive practices in (Case 02 2012, Re: Bengal Chemist and Druggist Association, and Case 01 2013, Re: Reference Case 01 2013, filed under section 19(1)( b) Competition Act 2002, by Dr Chintamoni Ghosh, Director, Drugs Directorate).

 
14. Briefly outline the competition issues that can arise on the licensing of technology and patents in a pharmaceutical context

The Competition Act 2002 regulates any agreement which seeks to restrict and prohibit competition in the market. This includes agreements which attempt to determine or control or restrict or limit prices, customers, fields of use, markets or territories.

Section 3(5) of the Competition Act excludes certain agreements concerning intellectual property rights, such as the right to restrain an infringement or to impose reasonable conditions as necessary to protect rights which have been or may be conferred under, among other things, the:

  • Patents Act 1970.

  • Trade and Merchandise Marks Act 1958 or Trade Marks Act 1999.

Section 140 of the Patents Act itself prohibits certain restrictive conditions and makes any such condition void. The types of agreements covered are a:

  • Contract for or in relation to the sale or lease of a patented article or an article made by a patented process.

  • Licence to manufacture or use a patented article.

  • Licence to work any process protected by a patent.

Section 140 stipulates the following conditions, among other things, for such an agreement to be void:

  • Requiring the buyer, lessee, or licensee to, among other things, acquire an article which is not the patented article, or not made by the patented process, from the seller, lessor, licensor or his nominees (or prohibiting or restricting his right to acquire such an article from a person who is not the seller, lessor, or licensor or his nominees).

  • Prohibiting or restricting the buyer, lessee or licensee from using an article which is not the patented article or made by the patented process, and which is not supplied by the seller, lessor or licensor or his nominee.

  • Prohibiting or restricting the buyer, lessee or licensee from using a process other than the patented process.

  • Providing exclusive grant back, preventing challenges to patent validity, and coercive package licensing.

The Patents Act under Chapter XVI deals with the grant and regulation of compulsory licences. Under section 84, any interested person can apply to the Controller for a grant of a compulsory licence of a patent, after the expiration of three years from the date the patent was granted, on the following grounds:

  • The reasonable requirements of the public with respect to the patented invention have not been satisfied.

  • The patented invention is not available to the public at a reasonably affordable price.

  • The patented invention is not worked in India.

The CCI has been actively adjudicating complaints regarding alleged failure of holders of Standard Essential Patents (SEPs) to negotiate licenses with implementers of such patents on Fair Reasonable and Non-Discriminatory (FRAND) terms. While the CCI ordered its investigative arm to initiate an investigation into such practices, the Delhi High Court, in writ petitions against such orders, has directed that while the investigation may be completed, the investigative arm and the CCI ought not to pass any order or report. Further, in a decision delivered on 30 March 2016, the Delhi High Court observed that the CCI's jurisdiction in patent matters is not ousted by proceedings before the Controller of patents or litigation seeking injunctive relief. The observation of the court was based on the argument that in certain circumstances, an injunctive relief preferred by a patent holder such as a Standard Essential Patent holder may constitute an abuse of his dominant position.

In August 2014, media reports suggested that the CCI may explore the terms of settlement in two patent litigation settlements. The first, between Hoffmann-La Roche Ltd and Cipla Limited, in a dispute which relates to a lung cancer drug, Tarceva. The second was between Merck and Glenmark Pharmaceuticals, relating to the Januvia diabetes pill. Though settlement was not reached in either of the matters, the proposed suo moto scrutiny by CCI is an indication of possible scrutiny under anti-trust law in such settlements.

 
15. Are there competition issues associated with the generic entry of pharmaceuticals in your jurisdiction?

Though there are no decided cases on this issue, settlements in lawsuits pertaining to infringement of pharmaceutical patents may face scrutiny under the competition law especially in cases where they involve a payment by the patentee to the infringer.

 
16. Have abuse of dominance issues arisen in the pharmaceutical sector in your jurisdiction?

On 19 February 2013, the CCI held that the All India Organisation of Chemists and Druggists (AIOCD) had indulged in discriminatory practices in relation to the conditions of purchase and sale of medicines. It was further held that the AIOCD also limited and restricted the market of medicines in Odisha, as there was a restriction on the entry of stockists and wholesalers in the State of Odisha. This also resulted in denial of market access, as no one can enter the market without a no objection certificate from AIOCD (M/s. Santuka Associates Pvt Ltd v All India Organisation of Chemists and Druggists, Organisation of Pharmaceutical Producers of India, Indian Drug Manufacturers' Association and USV Ltd. [2013 CompLR 223 (CCI) ]).

 
17. Have parallel imports of pharmaceuticals raised IP and competition law issues in your jurisdiction?

No issues have yet arisen relating to intellectual property and competition law in relation to the parallel import of pharmaceuticals.

The Patents Act 1970, under section 107A(1), states that the importation of goods which are subject to patent protection in India by any person, from a person who is duly authorised by law to produce or sell or distribute the patented product, is not an act of infringement. This implies that Indian patent law recognises the principle of international exhaustion, provided that the goods originate from a duly authorised person.

 
18. Does a patent or trade mark licence and payment of royalties under it to a foreign licensor have to be approved or accepted by a government or regulatory body? How is such a licence made enforceable?

The government has liberalised its Foreign Technology Agreement Policy. As stated in Press Note 8 of 2008 (issued by the Department of Industrial Policy of Promotion), there is no requirement for prior approval or acceptance by the government for a patent or trade mark licence and payment of royalties.

Section 68 of the Patents Act 1970 requires every assignment or patent licence to be in writing and duly executed. The Indian Patent Office maintains a register containing all records of such assignments or licences, which must be disclosed by the applicant for a patent or a patentee under the Patents Act. This information is open to inspection by the public and certified copies of the entries on the register can be obtained by payment of the prescribed fee.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in India: overview ( www.practicallaw.com/9-504-6786) .

 

Contributor details

Pravin Anand

Anand and Anand

T +91 120 405 9300
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E pravin@anandandanand.com
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Professional qualifications. Lawyer, India, 1979

Areas of practice. Intellectual property law.

Recent transactions

  • Involved in several areas of intellectual property law and practice, including mediation and advisory work.
  • Counsel in the first case in India to recognise moral rights of an artist, the first case on the principles of dilution.
  • Counsel where an Anton Piller order was issued for the first time in India.

Aditya Gupta

Anand and Anand

T +91 120 405 9300
F +91 120 424 3056
E aditya@anandandanand.com
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Professional qualifications. Lawyer, India, 2010

Areas of practice. Intellectual property law.

Aasish Somasi

Anand and Anand

T +91 120 405 9300
F +91 120 424 3056
E aasish@anandandanand.com
W www.anandandanand.com

Professional qualifications. Lawyer, India, 2013

Areas of practice. Intellectual property law.


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