Jacob Schindler

Bayer has failed to block an Indian generic rival from exporting an erectile dysfunction drug in a case that one observer says breaks new ground in considering how to weigh public interest issues relating to the grant or not of patent-based injunctions. The ruling comes ahead of an annual pitched battle over the country’s pharmaceutical patent laws, as well as IAM’s first conference in the country at the end of this month.

The German pharmaceutical maker had sought - and in December last year received - an injunction stopping Ajanta Pharma from manufacturing or selling its product Valif, which Bayer says infringes its patents on a compound called vardenafil. According to Balaji Subramanian over at SpicyIP, the case looks pretty cut and dry: “As far as the Indian market is concerned, it seems fairly clear that Bayer has exclusive rights to manufacture and market the drug.” But on 29th January, the Delhi High Court amended that injunction so that Ajanta is only prevented from selling and distributing the drug in India itself. The court ordered the Indian company to keep accounts of its overseas sales for potential royalty payments, but it can carry on its business otherwise. Ajanta’s successful argument was based on the fact that Bayer was not “working” the patents in India.

The decision appears to have relied on an analysis of the public interest that patent owners – and not just those in the pharmaceutical industry – will likely find alarming. Subramanian’s analysis sums up why:

What’s interesting here is the way in which Justice Gauba conceptualises “public interest”. While Indian courts have historically viewed “public interest” in pharma patent litigation as the interests of the patients who need access to the patented drug, this order denies injunctive relief on the ground that it would lead to “not only loss of employment, but revenue to the state as well”.

Needless to say, there are all sorts of infringers in all sorts of industries that have a lot of employees and pay a lot of taxes to the state. A mobile phone company, for example, might argue that a preliminary injunction banning sale of a key devices would cut into its sales (and the government’s tax revenue) or necessitate layoffs within the country (again denting tax revenues, while potetially putting a higher welfare burden on the state). It might even be that the bigger the infringer, the easier it is to make this argument. We shall see.

The ruling comes ahead of the annual early-Spring tussle over what the USTR will say about India in its Special 301 report. The Indian Pharmaceutical Alliance (IPA) began pressing its case on Friday, arguing that conditions have improved for pharma patent owners over the last year. The group pointed out that proposed patent rules which might have favoured local manufacturers have been dropped since 2016's report. Interestingly, it also sought to throw water on the idea that India’s adoption of stricter “TRIPS-plus” patent policies would produce jobs in the US. The IPA pointed out that the US ITC estimates that India going TRIPS-plus would create “less than 10,000 jobs” in the US in all sectors, and that pharma would only account for a small share of this total. Certainly an interesting argument with a new administration that is focused on creating (or at least appearing to create) jobs.

IPBC India is just two weeks away, and will be held on 28th February in Mumbai. With speakers including Arshad Jamil of Biocon, Babu Padmanabhan of Steer Engineering, Sanjaykumar Patel of B&S Group, and the EPO’s director for pharmaceuticals Dieter Tzschoppe, life sciences issues are sure to get their due.