Defences of public interest in patent infringement

The second onslaught of covid-19 infections finds generic drug manufacturers putting patented drugs onto the market, hoping that courts will not grant temporary injunctions because of the importance of public interest. The Delhi High Court in Bayer v Cipla, recognised the public interest element to deny an injunction, but in a later decision, Merck v Glenmark, the same high court, analysing Bayer v Cipla, and the basis of public interest, issued an injunction. In 2017 in Novartis v Cipla, the Delhi High Court held that merely referring to the public interest provisions of section 83 of the Patents Act, 1970 (act), as a general principle to contend that an injunction should not be granted, is not a persuasive argument. In the recent case of Indoco Remedies Ltd v Bristol Myers Squibb Holdings, the Delhi High Court ruled that there must be evidence to support the public interest argument in order to persuade a court to refuse a temporary injunction to the patentee.

In principle, public interest can be decisive in determining whether interim injunctions are to be granted or denied, particularly in pharma patent cases. Following the Cipla judgement, defendants in interim injunction applications frequently raised the traditional three-factor test of serious issues to be decided, irreparable harm caused and the balance of convenience, with the added factor of public interest.

In the US the public interest argument does not automatically lead to the grant or refusal of an injunction. In Pfizer, Inc v Teva Pharmaceuticals USA, Inc, the Court of Appeals for the Federal Circuit held that price differential alone did not allow the infringement of a valid patent. The court cited an earlier case that, “selling a lower priced product does not justify infringing a patent”. The relevant statutory framework did seek to make low cost, generic drugs available to the public, but it did not do so by entirely eliminating the exclusionary rights conferred by pharmaceutical patents. The framework did not encourage or excuse the infringement of valid pharmaceutical patents. An argument that there existed a shortage of goods, particularly pharmaceuticals, a main argument in the Indoco Remedies case, was held to be entirely artificial and unsupported by evidence.

Without credible evidence of a shortage or widespread harm to the public, an unsupported claim that an infringer is entitled to the unauthorised use of a patent would allow abuse of the public interest defence. Courts are aware of this and are vigilant to allow relief for infringing activity only in where there is genuine public interest. This remains so, despite emotional pleas that the patent was infringed for the public good in times of a pandemic. The court in Novartis v Cipla, rightly ruled that merely to raise the public interest provision in section 83 as a matter of general principle without providing proof is not a strong argument. There are other public interest provisions in the act that are available to the courts such as section 66 which allows a patent to be revoked if it is contrary to public interest. Section 84 provides for the grant of compulsory licences where the public interest would be well-served.

Public interest may be a factor in refusing an injunction, but it is not the only one. Where, for example, the patentee has not itself worked on the invention, the courts are reluctant to grant an injunction. Defendants would be better advised to seek declarations of non-infringement, revocations or compulsory licences under the act to safeguard the public interest, rather than manufacturing products in the face of likely or actual injunctions. In the Indoco Remedies case, the court observed that “if, in full awareness of the injunction orders, the [infringer] did so, it did so at its own peril”. A refusal to grant an interim injunction to a properly aggrieved patent holder would turn the jurisprudence on its head. The case is a warning to those who infringe patents in the expectation that courts will subsequently find in their favour if they raise defences of covid-19 public interest.

It is clear that the courts are alive to the possible abuse of the public interest defence, and are careful to balance the public interest in general and the interests of the section of the public for which the monopoly is allowed under the patent.

DPS Parmar writes about the applicability of the defense of public interest while deciding an application for interim injunctions in pharmaceutical patent infringement cases. Published in India Business Law Journal.