6.6.4 Provisional measures
As a common-law jurisdiction, Indian courts are vested with extensive discretionary powers to grant interim relief. The usual determinants apply: whether the plaintiff has a prima facie case, where the balance of convenience lies, and to whom irreparable injury is likely if the order is or is not granted. An interim order may subject the plaintiff to conditions, including security. Injunctions can be tailored to suit the remedy.137
In general, interim reliefs can be in various forms, including interim injunctions; Mareva orders or freezing orders; Anton Piller orders, where local commissioners (LCs) are appointed with powers of search and seizure; and directions for keeping accounts. Under Order XXXIX(1)–(2) of the Code of Civil Procedure, 1908 [hereinafter the “Code of Civil Procedure”], patentees may also seek interim and ad interim injunctions. Indian courts have regularly considered the grant of interim injunction orders, Anton Piller orders, Mareva orders, Norwich Pharmacal orders or John Doe orders in fitting cases.
It is usual to seek even ex parte ad interim relief in suits for patent infringement. In some cases, where the patent has been tested multiple times in litigation, courts usually even grant the ad interim injunction ex parte; there is no strict rule. For instance, in the case of SEPs, defendants are usually called upon before the grant of an injunction for a response as to whether they are willing to take a license on fair, reasonable and nondiscriminatory terms.
Irrespective of the outcome of the interim proceedings, the parties (usually the unsuccessful party at the interim stage) usually seek an expeditious trial and final hearing. In fact, in one case where the interim injunction was granted in favor of the patentee (i.e., Merck Sharp and Dohme Corp. v. Glenmark Pharmaceuticals),138 the Supreme Court allowed the sale of the existing stock already manufactured by the defendant and directed a day-to-day trial, saying that this was in the national interest, one that demanded a suitable commercial environment for the immediate resolution and adjudication of contentious commercial cases.139 In that case, due to the intervention of the Supreme Court, the time from the suit’s filing to final judgment was only about 30 months. The trial concluded in a record time of less than 30 days. Final arguments were heard for three weeks, and judgment followed very soon thereafter. The Supreme Court has also issued general directions for such expedited hearings in other patent matters.140
In cases where a patent has been tried and tested in prior litigation, courts have not hesitated to grant interim injunctions, though the defendant may be permitted to exhaust existing stocks along with accounts. Some perceive the Delhi High Court to be quite liberal in granting interim injunctions to patentees, though there have been some instances in which the court has refused interim injunctions owing to the complexity of the invalidity defense. In other cases, the court has crafted alternative arrangements for the interim period. Where an interim injunction is refused, courts almost always direct the defendant to maintain and file accounts.
6.6.4.1 Governing legal standards and burdens
Courts see growing numbers of patent litigation, with a corresponding increase in the grant of injunctions (both permanent and interlocutory). Temporary injunctions are regulated by Sections 94 and 95 and Order XXXIX of the Civil Procedure Code. The substantive law on temporary and perpetual injunctions can be found in Sections 36–42 of the Specific Relief Act, 1963.
The general principles for grant or denial of such interim orders are well known: a prima facie case, the balance of convenience, irreparable injury and public interest factors.141 Indian courts have derived principles following the decision of the House of Lords in American Cyanamid v. Ethicon Ltd,142 though the Supreme Court of India has observed that the relatively diluted standard of “prima facie case” in American Cyanamid will not apply in India.143 Similarly, whereas American Cyanamid suggests that more weight must be attached to patents granted after a detailed examination procedure, Section 13(4) of the Patents Act, 1970, and some judicial precedents in India suggest that this proposition is inapplicable to Indian patent law.144
6.6.4.1.1 Prima facie case
The prima facie case requirement is used to discern whether the plaintiff has a reasonable case on merits. It does not finally or conclusively decide issues of fact. It weeds out frivolous or vexatious claims – ones manifestly without merit. As part of this assessment, courts also assess whether defendants have a credible challenge to the suit patent’s validity.145
Initially, in India, a few judicial pronouncements referred to a six-year rule (i.e., a presumption that there could be an increased probability a patent could be treated as valid on the expiry of six years from the date of grant). The genesis of the six-year rule approach can be traced to the Madras High Court’s ruling in Manicka Thevar v. Star Ploro Works case,146 which was subsequently picked up in other judgments.147 However, none of the provisions of law appears to suggest or support this numerical fixation with six years. The Manicka Thevar case was subsequently held not to be correct law by another division bench of the Madras High Court.148 In F Hoffmann-La Roche Ltd v. Cipla Ltd, a single judge of the Delhi High Court also held that there was no basis for the six-year rule and rejected the application of the said rule in patent cases.149 Thus, one will not find a discussion of any such six-year rule in most recent patent cases across India.
6.6.4.1.2 Balance of convenience and public interest
The second requirement for the grant or denial of an interim injunction is that the balance of convenience must be in favor of granting an injunction. The court, while granting or refusing to grant an injunction, should exercise sound judicial discretion to compare and determine the amount of mischief or injury likely to be caused to the respective parties if the injunction is refused and if it is granted. The court would weigh competing possibilities or probabilities.
In India, public interest has been recognized both as a separate factor and as a factor read into the test for the balance of convenience.150 For instance, the public interest in enabling access to lifesaving drugs (both supply and pricing considerations) has been considered a relevant factor when deciding on an application for an interim injunction.151 Recently, given the influence of comorbidity factors such as diabetes and obesity in the severity of COVID-19 infections, the pricing of antidiabetic medications was considered one of the relevant factors when assessing interim injunction applications.152
The defense of public interest is not a complete exception to a legally valid patent and must not be too broadly interpreted, as it would undermine “the rights granted by the sovereign towards monopoly.”153 The Delhi High Court has recognized that upholding the enforcement of patents is also in the public interest.154 Thus, often, public interest factors are considered along with the prima facie strength of the infringement case or the invalidity defense.155
Public interest forms part of the matrix considered by the court and need not always be a dispositive factor in every case. For instance, in Bayer Intellectual Property GmbH v. Ajanta Pharma Ltd,156 factors such as loss of employment and revenue earned by the state – even in cases where the patented drugs were not of a lifesaving nature – were considered by the Delhi High Court. However, in a subsequent decision, Bayer Intellectual Property GmbH v. BDR Pharmaceuticals International Pvt. Ltd,157 another judge of the same High Court held that the export of non-lifesaving drugs would not qualify under the test of public interest merely due to encouraging economic activity and the country earning foreign exchange revenue.
The Delhi High Court, in Merck Sharp and Dohme Corp. v. Glenmark Pharmaceuticals,158 invoked several equitable principles to guide the exercise of discretion in granting injunctions. These included an assessment of the parties’ conduct, whether the defendant attempted to clear the way by filing oppositions or seeking revocation, and so on.
It is also common for defendants to raise pleas of nonworking of patents or nonfiling of working statements to defend against interim injunctions as part of the balance of convenience and public interest factors. The working requirements under the Patents Act, 1970, are stringent. The legislative history shows that the nonworking of patents by foreign companies was one of India’s most significant concerns when drafting the legislation. In a case concerning a patented respiratory disorder drug, the Delhi High Court, in Cipla Ltd v. Novartis AG,159 held that the mere nonmanufacturing of sufficient quantities in India alone could not result in the denial of an interim injunction. However, defendants are free to apply for a compulsory license in such cases. There is an earlier opposing view suggesting that the nonworking of a patent could lead to denial of injunctive relief.160 The later view in Cipla is now the more prevalent view. Though no compulsory license was granted during the COVID-19 pandemic, in dealing with cases relating to shortages of essential medicines used in the treatment of COVID-19, both the Supreme Court and the High Court have made observations favoring such steps being taken by the Government.161
6.6.4.1.3 Irreparable injury
The third and equally important consideration is the condition of irreparable injury. This refers to the patentee having no other remedy available other than an injunction. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury. Instead, it means only that the injury must be a material one – namely, one that cannot be adequately compensated in damages.
In Merck Sharp and Dohme Corp. v. Glenmark Pharmaceuticals,162 the Delhi High Court recognized that, in cases where the patentee has been the sole supplier of the patented technology, allowing a defendant to enter the market may cause irreparable injury.
6.6.4.2 Other preliminary reliefs
6.6.4.2.1 Local commissioners
Order XXVI(9) of the Code of Civil Procedure provides for the appointment of LCs. Such LCs are appointed upon the establishment of a strong prima facie case. In cases of a patent infringement action, LCs have been appointed by the Indian courts to record evidence.
An order for the appointment of an LC is usually made in patent litigation if, for example, the manufacturing processes need to be ascertained. The LC is then appointed by the court with strict terms and conditions. Typical conditions imposed include:163
- that the LC visits the premises of the defendant or plaintiff, as the case may be;
- that the LC ascertain the manufacturing process being used, including inspection of the raw material registers, excipient data, the quantum of manufacturing and so on;
- that the accounts of manufacture, sales and so on are inspected;
- that the LC visits the Customs authorities to retrieve samples of alleged infringing products;
- permitting the LC to take photographs and videotape the proceedings; and
- permitting party representatives to accompany the LC, including counsel, to render assistance.
At the end of the execution of the commission, a memorandum of proceedings is prepared by the LC, recording the chronology of events that transpired in the commission and the observations of the LC. This is signed by the LC and the parties, and the LC must give copies of the same to each party. Thereafter, a report is filed before the court, giving a full account of the proceedings. Such a report filed by the LC can be read in evidence without the statement of the LC being recorded in terms of Order XXVI(14)(2) of the Code of Civil Procedure. So long as the court can confirm that the report is genuine and authentic, it forms part of the record. Parties may have objections to the contents of the LC’s report, in which case they can file objections. The objections are then adjudicated by the court before the report is fully read as evidence.
The LC so appointed is not performing a judicial act but a “ministerial act.” Nothing is left to the discretion of the LC, and there is no occasion to use judgment or adjudicate the issues involved. The LC only notes details and reports the actual state of affairs. The LC cannot decide the dispute, but their report helps the court in doing so.164 In short, the LC’s report is one of fact-gathering, not adjudication or determination.
6.6.4.2.2 Interim deposits and other ad interim arrangements
The interim injunction stage may become protracted owing to the technical issues surrounding patents. In such instances, and in a fitting case, courts usually put in an ad interim arrangement. In general, courts enjoy extensive discretion to mold the interim relief to suit the circumstances. For example, courts have directed interim deposits by defendants in SEP cases or have directed the submission of bank guarantees or some form of security to secure the plaintiff’s interest.165 In the recent non-SEP case of Communication Components Antenna Inc. v. Ace Technologies Corp.,166 the High Court’s interim direction to secure the plaintiff by way of a deposit of royalties and bank guarantee was upheld by the Supreme Court of India.167
Equally, in such cases of interim deposits, courts have required the patentee to furnish surety bonds for the amount received on a quarterly basis with advance copies.168