News from a sister publication

While JIPLP focuses primarily on intellectual property and practice, that discipline shades into other areas of law and practice -- and the broad interests and versatility of JIPLP's editorial board members reflect this. A first-rate example can be found in Christopher Stothers (Arnold & Porter), a founder-member of the JIPLP editorial board and also a contributor to a sister publication, the Journal of European Competition Law & Practice (JECLAP), which reflects his deep and continuing interest in competition issues. Issue 3 for 2012 contains his freshly-published note, "Copyright Owners Cannot Require Satellite Broadcasters to Impose Territorial Restrictions on the Use of Decoder Cards", this being a note on Football Association Premier League v QC Leisure/Karen Murphy v Media Protection Services, ECJ Joined Cases C-403/08 and C-429/08, 4 October 2011. The abstract reads as follows:

The Grand Chamber of the European Court of Justice has held that it is anticompetitive for the Football Association Premier League (FAPL), when licensing the broadcasting of football matches by satellite, to require its licensees not to supply decoder cards so as to enable access to the broadcasts in EU Member States outside their exclusive territories.

Details of JIPLP's own case note on the same topic, authored by a five-person team from Herbert Smith, can be found here, and Enrico Bonadio's analysis of the Advocate General's Opinion in the same reference can be read in full here.

Pre-filing disclosure of an invention is found to be in breach of equitable doctrine of confidence

Author: Saadat Nisar (Calleja Consulting Limited)

Threeway Pressings Ltd, UK Intellectual Property Office, BL O/124/12, 20 March 2012

Journal of Intellectual Property Law & Practice (2012), doi: 10.1093/jiplp/jps083, first published online: May 25, 2012

The disclosure of an invention did not constitute prior art and should be disregarded when it was made in breach of confidence within the six-month grace period up to the date of filing of the patent application.

Legal context

Broadly, this case raised three questions. First, was there an implied confidentiality agreement between the company and one of its directors who disclosed the invention before filing the patent application? Secondly, could this disclosure be deemed sufficient to anticipate the invention? Thirdly, could the disclosure be disregarded, based on the equitable doctrine of confidence?

Facts

Philip Stanley, Richard Perry, Paul Watkins and William Ford formed a company in 2006 for the design and development of an invention, an ‘Evacuation chair’, which envisaged a dual purpose arrangement for transporting a person downstairs. The product was to be manufactured by Threeway Pressings Ltd (‘TPL’). TPL applied for a patent for this invention. Ford, who was a TPL director, submitted observations under Section 21 of the UK Patents Act 1977. He alleged that, about two months before the filing of the application, the invention was disclosed to, among others, Staffordshire County Council in a meeting on 15 March 2007. As such, it lacked novelty and was not therefore patentable. Mark Crosby, the former Principal Access Officer for Staffordshire County Council filed observations supporting Ford's claim. Ford also initiated but withdrew proceedings under Section 8 of the Patents Act, claiming entitlement to the application as the true inventor.

TPL contended that there was an implied agreement that Ford would keep the invention confidential before the filing of the patent application. It placed reliance in this context on a declaration made by Stanley, indicating that the reason for non-signing of a non-disclosure agreement was the lack of agreement on financial matters rather than on the issue of confidentiality. In the same declaration, Stanley mentioned that Stanley, Ford and Watkins had all considered the issue of confidentiality for the project. There were also statements by Chadwick, Perry and Stanley on the record of the entitlement proceedings showing the existence of an implied non-disclosure agreement between Ford and TPL.

Unconvinced, the IPO examiner construed Stanley's statements to mean that, once the invention was in a suitable form to be presented to customers, this could be done without breaching confidence. According to the examiner, since Ford presented it in a sales meeting, it implied that the invention was suitable to be presented and entailed no requirement of maintaining confidentiality. Moreover, there was no evidence to suggest that Ford had agreed to keep the invention confidential before filing the patent application, or that any such arrangement was ever discussed with him. Further, the examiner observed that TPL was likely to have the knowledge of the meeting of 15 March 2007 as it provided diagrams and photographs of the invention to Ford and made no effort to prevent him from making the alleged disclosure. Accordingly, the examiner rejected TPL's case that there existed an implied non-disclosure agreement between the parties, finding the invention to be anticipated and therefore invalid for lack of novelty. TPL challenged this decision before the hearing officer, but declined a formal hearing and the matter was decided on paper.

Analysis

The hearing officer held on the evidence that the alleged disclosure took place. He noted that Ford had full knowledge of the invention (as accepted by TPL in one of its letters) and that the drawings supplied by Crosby were very similar to those forming part of the application. He also noted that the disclosure took place in a sales meeting, implying that it should be deemed sufficient on the balance of probabilities to anticipate the invention. Further, in the absence of a signed agreement and with no evidence to suggest that the terms of the agreement were agreed in any other way, the hearing officer concluded that the contractual obligation of confidence had not been breached.

The hearing officer, however, viewed the matter through another angle. He invoked the equitable doctrine of confidence in this case, under which an obligation of confidence may exist in certain circumstances, even though there is no contractual relationship between the parties. Referring to an earlier case (Coco v A N Clark (Engineers) Ltd [1969] RPC 41), he noted that the three elements necessary to establish breach of confidence under the doctrine are: (a) the information must have the necessary quality of confidence about it; (b) the information must be imparted in circumstances that attract an obligation of confidence; and (c) there must be an unauthorized use of that information to the detriment of the party communicating it.

The information in this case pertained to an invention and its disclosure before filing of the patent application could not only invalidate the application, but also allow someone else to apply for the patent. As such, the hearing officer found that the disclosed information possessed the necessary quality of confidence about it and first element of the doctrine was satisfied.

The hearing officer also observed that, at the time when Ford and his associates possessed information about the invention, they were likely to be fully aware that its disclosure, prior to the filing of a patent application, would harm the interest of a prospective applicant. This gave rise to an implied obligation of confidence upon Ford and his associates in accordance with the second element of the doctrine. In this regard, the hearing officer also considered a letter from Ford stating that he and Watkins were led to believe that a patent would be filed in January 2007, which prompted them to discuss the invention with potential clients and suppliers in February 2007. In the hearing officer's opinion, this submission lacked merit as Ford and the others should have acted diligently to ensure that the application had actually been filed before making the alleged disclosure. He explained that their belief that the application had been filed in January 2007 was not enough to discharge them from the obligation of confidence.

The hearing officer found that it was obvious to Ford and his associates that the disclosure, if made before the filing of the patent application, would prevent the applicant/inventor from obtaining the patent. In his view, this was sufficient to prove the third element of the doctrine.

Consequently, Ford was held to be under an equitable obligation not to disclose the invention prior to the filing of the patent application, which he breached. As the disclosure took place within the six months period immediately preceding the date of filing of the application, the hearing officer held that it should be disregarded under Section 2(4) of the Patents Act. As such, the invention was not found to be lacking novelty. With these observations, the case was remitted to the examiner.

Practical significance

The decision made it clear that, in the case of a confidentiality agreement, its scope and whether it was breached is determined by the law of contract. However, in the absence of a confidentiality agreement, a party may still be under an equitable obligation to maintain confidentiality in certain circumstances. The hearing officer found that someone possessing information constituting details of an invention, knowing that a patent could be obtained in respect thereof, would automatically be under an equitable obligation not to disclose it till after the filing of the patent application. The real effect of this decision is that in all patent matters where the parties lack any express or implied non-disclosure agreement, it would still be possible to argue that the invention was disclosed in breach of confidence. As such, it would be possible to disregard the disclosure in view of Section 2(4) of the Patents Act, provided that it was made in the six-month period immediately before the date of filing of the patent application. Thus this decision would facilitate patent applicants in meeting the novelty requirement.

Congratulations to a distinguished contributor

Over the past few years, readers of the Journal of Intellectual Property Law & Practice have often had the opportunity to appreciate the talents and the energy of Eddy Ventose, whom the jiplp weblog profiled back in 2010.

The journal has just learned that Eddy has been promoted to Professor in the Faculty of Law, in the University of the West Indies (UWI) Cave Hill Campus, with immediate effect. This makes Eddy -- at 35 years of age --  the youngest person ever promoted to a personal professorship in UWI's history (and incidentally in the shortest period of time from start to finish).

JIPLP is delighted to share this news with its readers and wishes Eddy all good fortune in his new status as Professor of Intellectual Property and Public Law. Eddy's promotion is also welcome recognition for the respect in which JIPLP is held, since it is in this journal that so much of Eddy's outstanding publishing record has been established.

Some bits and pieces

First, a quick reminder for subscribers to the printed version of JIPLP: the June 2012 issue (contents here) has already been dispatched and should be with you by now, all things being equal.

Secondly, if you are submitting material for publication in JIPLP, can I strongly encourage you to take a look at least one recent issue before doing so, and to consult the Contributor Guidelines. It will save someone a lot of work at a later stage -- and that someone may well be you!  In particular

• JIPLP notes on cases, statutes and other recent development, which we call Current Intelligence notes, must be submitted in accordance with the template which has been in use since the journal was launched in 2005.  We regret that this template is so widely unpopular with authors -- but it is extremely popular with readers. If you want to please yourself rather than your readers, there are other journals out there which may be delighted to publish it, but we put our readers' interests first since we exist for them, not vice versa.
  
• Footnotes are for references, not for cut-and-pasted extracts from your own or someone else's research. Also, they really do belong at the foot of the page. JIPLP doesn't do bibliographical lists of references at the end of each article. What's more, since footnotes are for specific guidance of readers, if you're citing a book -- particularly if it's a multi-volume work -- please let us know which volume you are referring to and which page or paragraph.
  
• Each article has a title and is likely to contain headings, sometimes subheadings and very rarely anything of a lower order than that.  We do not number paragraphs and their subdivisions, so references such as "see paragraph 3.4.ix(b).IV above" and suchlike have no place in a JIPLP article.
  
• Before you garnish your submitted piece with italicised quotes, underlined headings, italicised bold Gothic text and so on, bear in mind that someone has to take them all out again before the piece goes for setting.  This takes time and effort and has to be paid for. 

Thanks so much for your cooperation!

I may have driven a BEETLE motor car: but I won't be using a BEATLE wheelchair!

Author: Sally Cooper (Trade Mark Attorney)

You-Q BV v OHIM with Apple Corps Ltd intervening, Case T-369/10, General Court (Eighth Court), 29 March 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps076, first published online: May 15, 2012

Does your mark have an enormous reputation (emphasis supplied) stretching over more than 40 years? And would the relevant public (emphasis supplied) be attracted by the very positive image of freedom, youth, and mobility associated with your mark? If so, your mark is THE BEATLES (or just BEATLES) and you have, in the General Court of the European Union, succeeded against a company attempting to register the mark BEATLE by relying on the reputation of your marks.

Legal context

A business seeking to oppose a trade mark application filed at OHIM has a number of grounds on which it can rely, particularly those set out in Article 8 of the Community Trade Mark Regulation 207/2009 under ‘Relative grounds’ which invoke the circumstances where ‘earlier marks’ prevail. For marks with a reputation, Article 8(5) protects against marks on goods identical or similar where (third part of Article 8(5)) ‘… the use without due cause of the [opposed] trade mark would take unfair advantage of, or be detrimental to, the distinctive character or repute of the [opponent's] earlier trade mark’. This judgment is exclusively concerned with the application of Article 8(5).

Facts

Apple Corps Ltd (‘Apple’) was incorporated in 1963 as (according to Wikipedia) a sensible diversion of income arising to the band that came from Liverpool and took the name THE BEATLES. Apple has extensive protection for BEATLES and THE BEATLES as word marks and stylized marks both at OHIM and on Registers of Member States. But none of these registered rights extends to goods in Class 12 (eg ‘Vehicles; apparatus for locomotion by land, air or water; wheelchairs’). So the attempt by a Dutch company to register BEATLE (in the form of a word in a particular font with no additional graphic material) for a list of goods in Class 12 being ‘[wheelchairs/scooters] specially made for [sick and] disabled and other persons requiring assistance’ presented a challenge. Apple went ahead with opposition proceedings, providing details of Registrations (and evidence of use) and also relied on its reputation in BEATLES and in THE BEATLES. The Opposition Division found against Apple: the goods for which the Dutch company wanted to register BEATLE were ‘different’ to the goods of Apple's registrations. The Second Board of Appeal went straight to Article 8(5): it accepted that the goods were different but found for Apple. The court confirms the Decision of the Second Board of Appeal.

Analysis

The court's preliminary observations note the primary function of a trade mark is that of an ‘indication of origin’, adding that a mark acts as a means of conveying messages concerning ‘images and feelings … such as luxury, lifestyle, exclusivity, adventure, youth’. The context of these remarks is the court observing that the parts of Article 8(5) are cumulative (failure to satisfy any one part renders the provision inapplicable) and expanding on the last part (the risk that use of a mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier mark). We find ‘image’ returning later in the judgment (see Unfair advantage, below). The court's preliminary observations also emphasize that Article 8(5) protects a mark with a reputation even if the goods of the mark applied for are not similar. The court then analyses Article 8(5).

Reputation

Crucial to the case is previous case law deciding that the reputation of a trade mark must be assessed in relation to the relevant section of the public—which may be either the public at large or a more specialized public (emphasis supplied). The Board of Appeal had found Apple's marks BEATLES and THE BEATLES to have an ‘enormous reputation’ for ‘sound records, video films, films’ and had found the marks enjoying a significant reputation for merchandising products such as toys and games. Moreover (importantly), the Board of Appeal had decided (in this context of ‘existence of reputation’) that the relevant public was the public at large (rather than any more specialised public). Once the court accepts (as it does) the Board's finding that the relevant public is the public at large then it can move on (as it does) to observing that the relevant public overlaps (and encompasses) the more specialized public which is the public concerned with the goods of the mark applied for. The court's conclusion is that the Board of Appeal was entitled to infer that Apple's marks BEATLES and THE BEATLES have a (very substantial) reputation.

Similarity of signs

The court has no difficulty with the Board's finding of the marks being highly similar (visually, phonetically and conceptually). Note is taken of the consumer generally paying greater attention to the beginning of a mark (the ‘s’ at the end of BEATLES and THE BEATLES is not material) and of registration of a word mark protecting the word mentioned (the fact the mark applied for is the word BEATLE in a particular font is not material).

A link between signs at issue

Again, the court refers to previous case law and sets out the need for a certain degree of similarity between the marks (meaning the mark applied for and the earlier marks) by virtue of which the public makes a connection between them, even though it does not confuse them. The court then reviews five factors relevant to such a link:

First, it finds the mark applied for and the earlier marks are highly similar (see above).

Secondly, it accepts the goods are dissimilar but it brings in (see above) that the public at large overlaps (and encompasses) the more specialist public which is the public concerned with the mark applied for.

Thirdly, it finds (see above) that the earlier marks have an enormous reputation.

Fourthly, it finds that the earlier marks have distinctive character.

Fifthly, it sets out that a likelihood of confusion must be taken into consideration (as it satisfies the requirement of a link) but that Article 8(5) does not require the existence of a likelihood of confusion.

The court's conclusion is that there is a link between the marks because the mark applied for and the earlier marks since the mark applied for [BEATLE] will call to mind the earlier marks with a reputation [BEATLES and THE BEATLES] on the part of the relevant public.

Unfair advantage

The court does not upset the Board of Appeal's finding that it had sufficient evidence to demonstrate a serious risk that the mark applied for would take unfair advantage of the repute of Apple's marks (‘free-riding’). This was the basis of the decision of the Board of Appeal. The Board did not examine the separate complaint of detriment to distinctive character (‘dilution’) or repute (‘tarnishment’). The court was clearly impressed by ‘the very positive image’ of Apple's marks (an image of ‘freedom, youth, and mobility’) and it is approval of there being a risk of ‘image transfer’ that underpins the court confirming the Board of Appeal's decision that—while the goods are quite different—the risk of unfair advantage is established.

Existence of due cause

As the Applicant did not succeed in placing before OHIM evidence on due cause, the court confirmed the finding of the Board of Appeal that there was no due cause.

Practical significance

 The court was clearly impressed by the evidence of Apple and the case underscores the importance of preparation and presentation of evidence. Otherwise, it is a case ‘on the edge’ and raises more questions than it provides answers. For example, (a) do we now add to the functions of a trade mark an ‘image function’? (b) The court refers to ‘average consumers’ being the relevant public on the context of determining ‘unfair advantage’—but did it apply this? (c) Will practitioners ever consider ditching evidence on ‘likelihood of confusion’ simply because (as the court observes) it is not a requirement set out in Article 8(5)?

GTI: descriptive or not?

Author: Chris Pett: Dehns Patent and Trade Mark Attorneys, Brighton

Volkswagen AG v OHIM, Case T-63/09, General Court, 21 March 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps079, first published online: May 9, 2012

In a recent decision, the General Court of the European Union rejected an appeal by Volkswagen AG (‘VW’) against a decision by an Office for Harmonisation in the Internal Market (OHIM) Board of Appeal Board (Decision R 749/2007-2 of 9 December 2008), confirming rejection of an opposition filed by VW against an application by Suzuki Motor Corporation to register the words SWIFT GTi as a Community trade mark for goods in Class 12.

Legal context

The Community Trade Mark Regulation (207/2009) provides that a sign shall not be registered as a Community trade mark where, among other things, it is established that there exists an earlier registered trade mark which is registered for the same or similar goods and where, on account of the similarity of the respective marks, there was a likelihood of confusion.

Facts and analysis

VW filed an opposition based on their German registration dating from September 1995 for the mark GTI alone in Class 12, and a similar International registration effective in 14 other now EU territories dating from June 1999. The relevant goods were for all purposes identical.

Suzuki requested proof of use in a number of the territories and VW did provide some evidence. The sufficiency of this was contested in argument by Suzuki, as was the likelihood of confusion. Evidence relating to this and the nature of the mark was also filed.

The Opposition Division at OHIM rejected the opposition, saying that the evidence of use submitted was insufficient to establish genuine use. There was no other decision on the merits of the case.

VW appealed, not least because there was also some dispute about the dates of the relevant use period following an administrative glitch when the Suzuki mark was republished after a correction. Further evidence of use was submitted, as was further argument regarding the likelihood of confusion.

Suzuki had filed strong evidence which not only illustrated the descriptive nature of the VW mark but also showed that marks including the letters GTi were in common use as a descriptive element by numerous car manufacturers in various European countries, including Germany, during the 1980s and 1990s, both before and after the German and other registrations for GTI on which VW had relied.

Ignoring some technicalities regarding the territorial extent of some of the prior rights relied on and the dates of the ‘proof of use’ period, the Appeal Board believed the evidence clearly to show the letters GTI to be a form of technical description (the initials for Gran Turismo injection) widely used in the vehicle trade and endowed only, at the very most, with an extremely low degree of distinctiveness in the perception of the average European consumer. There was no evidence on file to support any specific circumstances affecting the German market. At the levels of both car professional and average consumer, the Appeal Board did not think these initials likely to distinguish Volkswagen cars over those of any other manufacturer. Although the word ‘SWIFT’ did have some descriptive character, they took the view (distinguishing over Case C-120/04 Medion AG v Thomson multimedia Sales Germany & Austria (THOMSON LIFE) [2005] ECR I-8551) that the combination ‘SWIFT GTi’ as applied for by Suzuki was unlikely to cause confusion with GTI alone. The Appeal at OHIM was therefore dismissed.

In the General Court, all aspects of OHIM's Appeal Board decision were reviewed at some length. During the Hearing, Volkswagen additionally claimed (for the first time) that the German public associated the letters GTI principally or even exclusively with them, and that no other manufacturers had recently been selling cars bearing the mark GTI in Germany. However, there was no evidence to this effect in the case and it was now too late to admit any (applying Case T-115/03, Samar SpA v OHIM - Grotto (GAS STATION)).

The General Court agreed with all aspects of the OHIM Appeal Board's decision and dismissed VW's appeal.

Practical significance

The fact that other major car manufacturers such as Peugeot and Citroen had registered and used the initials ‘GTI’ as a descriptive combination with their names before VW applied to register them alone was always going to render the mark prima facie weak and this has proved important to the determination of the case thus far. If the GTI mark alone really had become de facto distinctive of VW through use by them in Germany, evidence to this effect should have been provided. It would then have been a most interesting judgment as to whether the distinctiveness acquired outweighed the descriptive element or vice versa. More attempts at enforcement on the part of VW in Germany might also have assisted. As it was, there was only one instance of enforcement and this was brought after the opposition proceedings had started. If Suzuki go ahead and use SWIFT GTi in Germany, will Volkswagen have a go at them?

INTA and beyond

While the editorial team was attending the International Trademark Association (INTA) Meeting in Washington DC last week, subscribers have been receiving their printed versions of the May 2012 issue. If you've not already received yours, you should do any minute now.

On a personal note, we'd like to thank those of our contributors and subscribers who took time out from their busy INTA schedules to visit the Oxford University Press exhibit booth and give us the benefit of their thoughts and opinions. The ideal situation is one in which the journal's authors, readers and subscribers are more or less the same people with the same interests. That way, we can be confident that -- despite its professional credentials -- JIPLP reflects the values and concerns of a unique, intimate and connected IP community.

India's first compulsory licence over Bayer's patent

Author: Betsy Vinolia Rajasingh (Tamil Nadu Dr Ambedkar Law University, India)

Natco Pharma Ltd v Bayer Corporation—Compulsory Licence Application No 1 of 2011 (Controller of Patents, Mumbai), 9 March 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps075, first published online: May 10, 2012

The Controller of Patents (Intellectual Property Office, Mumbai) has granted the first Indian compulsory licence over Bayer's patent for the cancer drug Sorafenib on grounds of non-fulfilment of reasonable requirements of public with respect to the patented invention, non-availability of the drug at a reasonably affordable price, and non-working of the invention in India.

Legal context

Natco is the first Indian case that has invoked section 84(1) of the Indian Patents Act 1970. Section 84(1) encompasses the law relating to compulsory licensing. Provisions on compulsory licensing, including section 84(1), were enacted by the Patent (Amendment) Act 2002, which replaced earlier compulsory licensing provisions, in order to facilitate Indian patent law's compliance with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) under the World Trade Organization to which India is a signatory.

Section 84(1)(a), (b), and (c), on which the issues contested in Natco are based, authorizes any interested person to make an application to the Controller of Patents following the expiry of 3 years from the date of grant of patent alleging that the patentee has not

• satisfied the reasonable requirement of the public with respect to the patented invention; 
•  made available the patented drug at a reasonably affordable price; or 
• worked the patented invention in India.

In deciding this case, the Controller did not rely solely on the relevant sections of the Act but also referred to the Paris Convention 1883 and TRIPS to establish legislative intent and provide conceptual clarity regarding the Act's compulsory licensing provisions.

Facts

Bayer, a subsidiary of the German pharmaceutical giant Bayer AG, is globally well reputed for the invention and manufacture of innovative drugs. In the 1990s, Bayer invented a drug, Sorafenib (Carboxy Diphenyl Substituted Ureas), which is used for treatment of advanced renal cell carcinoma (kidney cancer) and hepatocellular carcinoma (liver cancer). Sorafenib is not a life-saving drug but a life-prolonging drug, which extends life by 4 to 5 years for kidney cancer patients and 6 to 8 months for liver cancer patients. Bayer initially made a patent application for the drug before the US Patent and Trademark Office in 1999. Subsequently, by way of an international application under the Patent Cooperation Treaty, Bayer's application entered the national phase of registration in India during 2001 and was accorded protection in 2008 as Indian Patent No 215758.

In 2005, Bayer had developed and started marketing the drug internationally under the market name Nexavar. On receipt of regulatory approval for importation, the drug was later launched in India in 2008. The cost of the drug in India for a month's treatment amounted to INR 2,800,428. Citing the high price and the fact that the drug was not fully marketed across India, the Indian generic drug manufacturer Natco Pharma Limited sought a voluntary licence from Bayer in 2010. Natco proposed to manufacture and then market the drug for INR 8,800—a fraction of Bayer's cost for a month's therapy. The request for the voluntary licence was refused. Consequently, once 3 years had elapsed from the date of grant of the patent, Natco applied for a compulsory licence under section 84(1).

Analysis

The principal issues considered by the Controller were based on Bayer's non-fulfilment of the stipulations set out in section 84(1)(a), (b), and (c).

Reasonable requirements of the public

Examining the applicability of section 84(1)(a), the Controller dwelt on the subject of potential patients in India afflicted with kidney and liver cancer and the availability of the drug for their treatment. Placing reliance on the GLOBOCAN 2008 report (a publication by GLOBOCAN Project of the World Health Organization) for data as to the incidence of such cancer in India, which was cited by both Natco and Bayer in their submissions, the Controller concluded that the number of likely patients in India for a year would be significantly higher than Bayer's estimated 8,842 patients. Nevertheless, even if Bayer's figure for patients per year were accepted, the quantity of drugs which Bayer imported in the year 2011 would have only catered to the therapeutic needs of 2 per cent of the assumed 8,842 patients.

The Controller, rejecting Bayer's contention that it met the requirements of the public in tandem with an alleged infringer, Cipla Limited, against which Bayer had previously initiated infringement proceedings in the High Court of Delhi, stated that the onus of complying with the condition prescribed in section 84(1)(a) lies exclusively with Bayer and his lawful licensors, if any.

Accepting Natco's arguments that India's healthcare infrastructure is still in an emergent stage with a large populace belonging to the lower and middle income levels, the Controller affirmed that Bayer's importation of the drug had been in negligible quantities in the years following the patent grant. In addition, the failure to manufacture the drug within India in conjunction with its availability only at certain premier hospitals in metropolitan cities for an excessively high price, indicated Bayer's default in fulfilling the ‘reasonable requirement of the public’ under section 84(1)(a). In this connection, the Controller referred to section 84(7)(a)(ii) and confirmed its applicability to the issue as demand for the drug had not been met to an adequate extent or on reasonable terms.

Reasonably affordable price

Bayer asserted that a ‘reasonably affordable price to the public’ under section 84(1)(b) of the Act implied reasonableness with reference to the general public and the patentee: Bayer, as patentee, had invested substantial capital in research, development, and manufacture of the drug. Rejecting Bayer's claim, the Controller endorsed Natco's view that reasonableness contemplated under the Act refers solely to the public and not to the patentee as well.

Refusing to accept Bayer's assertion that Cipla had made the drug available at a reasonably affordable price of INR 30,000 for a month's treatment, the Controller reiterated the inapplicability of an alleged infringer's costs as a means of determining the affordability of Bayer's drug. Therefore, on the basis of the drug being high-priced, it was declared not reasonably affordable to the Indian public at large.

Worked in the territory of India

The term ‘worked in the territory of India’ is not defined under the Act. Natco had pleaded that the working requirement signified the requirement to manufacture the invention in India. Bayer disagreed: importation of the patented invention would suffice as the Act failed to mention any requisite for manufacturing within India, as was evident from the deletion of the words ‘manufacture in India’ from section 84(7)(a)(ii).

The Controller concluded that the item was deleted and subsequently inserted as a separate ground for grant of a compulsory licence under section 84(1)(c). The intent behind such alteration, he explained, is not as basic as Bayer's proposition, but can be gathered from reading Article 5(A)(1) of the Paris Convention conjointly with Article 27(1) of TRIPS. These provisions suggest that the mere importation of a patented invention does not entail forfeiture of the patent but something of lesser import such as the issuance of a compulsory licence. Moreover, Article 5(A)(2) of the Paris Convention states that the abuse of patent rights, for instance by failure to work the invention, might be prevented by enacting laws on compulsory licensing. Article 5(A)(2), via Article 2(1) of TRIPS which underpins the requirement that member countries comply with provisions of the Paris Convention, is therefore the foundation for compulsory licensing provisions under the Act.

The Controller also relied on section 83 of the Act to decipher the overriding legislative policy behind the provisions relating to compulsory licensing found in section 84. Section 83, in view of preventing abuse of patent rights, mandates restraint on gaining a monopoly by importation, since it can be an impediment to trade and international technology transfer. Applying this rationale in section 83, the Controller established that working in India, as mentioned in section 84(1)(c), essentially means manufacturing in India and not mere importation into India. Further, referring sections 84(6) and 90(2), which disallows a licensor from importing the patented invention but requires manufacturing the same within India in order to work the invention, he emphasized that the same logic must apply to a patentee as well.

Considering that Bayer had manufacturing units in India for drugs, including cancer drugs, yet refrained from neither worked nor even intended to work the invention in India for 4 years following the patent grant, the Controller held that Bayer had failed to comply with section 84(1)(c).

Practical significance

The ruling is a landmark precedent on access to medicines in India as the abuse of patent rights has been checked through the issuance of a compulsory licence for the first time. Given that the most recent cancer drugs are a superior option to traditional chemotherapy treatments, but are so expensive their high cost has put them out of reach of the common man.

A few days after this judgment, Swiss healthcare major Roche Holding AG released the news of its collaboration with an Indian pharmaceutical company to repackage and sell its cancer drugs at a low and affordable cost. Whether this move is a direct consequence is unclear, yet the initiative to make high-cost patented drugs accessible to a larger segment of the public is a welcome sign.

Latest JIPLP -- an Olympic editorial

Just a few days into May, we are delighted to inform our subscribers that the entire June issue is available to them online. Non-subscribers can access the contents of the current issue here and can purchase short-term access to articles and Current Intelligence notes without having to commit themselves to a full annual subscription.

In the latest of JIPLP's new series of occasional Guest Editorials, contributed by members of the JIPLP Editorial Board, Rachel Montagnon (London-based Professional Support Consultant with Herbert Smith LLP) raises some important legal issues relating to the forthcoming London 2012 Olympic Games. The full text of her Guest Editorial reads as follows:

Olympic bias

Since 2005, when London won the Host City contract for this year's Olympics, there has been an intensity of interest in how the London Organising Committee (LOCOG) would go about the protection of the Olympic image and in the detail of the UK Government's legislative attempts to exclude those who would attempt to take advantage of that image, without paying for the privilege.

The eventual economic climate in this Olympic year could not be more different to that prevailing when London edged past Paris to cross the winning line, that July day in Singapore. Yet even then, when in retrospect, one perceives that funding was relatively easy to come by, the IOC and the London bidders did not lose sight of the interests of the existing Olympic partners nor the creation of an attractive investment opportunity for potential sponsors. Part of London's successful bid package was a draft of the strict legislative and regulatory regime proposed to protect the London Games from ambush marketing and thus protect these interests.

The Olympic Games have enjoyed protection for some time, both in the UK and worldwide, via the Olympics association right (OAR): protecting against the associative use of Olympic words, mottos, and symbols—so-called controlled representations. The OAR became part of the UK's IP lexicon via the Olympic Symbol Protection Act 1995. Awkward and well-publicized examples of ambush marketing at past Olympics highlighted the limitations of traditional IP rights, such as trade marks or copyright, prompting the necessity for the OAR but even this was not always enough to prevent non-sponsors piggy-backing on the Olympic feel-good factor. Marketing and advertising executives are a creative bunch and given one set of restrictions, they happily invent their way around them, as Nike's approach to ambush marketing at the 1996 Atlanta Games illustrated (circumventing the restrictions through branded give-away to spectators and the purchase of a building next to the Olympic village which was then converted into an obviously branded Nike centre).

Often contextual references to the Olympics can create associations as easily as the use of specific words or symbols. This is where the current temporary local Olympic right, the London Olympics association right (LOAR), steps in, providing for infringement by the creation of an association in any form. This extends protection in an attempt to plug any gap in restrictions which non-sponsor creative teams may identify. The LOAR's breadth and lack of specificity attempts to get over the unpredictability of ambush marketing and cover every eventuality.

In its early drafts, the London Olympics Bill came down heavily on the side of the Olympic rights holders, proposing that the use of expressions such as ‘London 2012’ or ‘summer games’ should be infringements of the LOAR. However, following a general outcry over the unworkability and apparent unfairness of such a stance, these phrases became, in the eventual London Olympic Games and Paralympic Games Act 2006, merely indicative of infringement, to be taken into account by the courts when considering whether an association has been created with the London Games. Such a relaxation of the Olympic grip may have dismayed sponsors, but it was necessary to maintain a more widespread goodwill in relation to the Games. The English press pack can quickly turn sour when it gets its teeth into restrictions it perceives as unwarranted or unfair to British business.

Despite this, the rights of association in place this summer to protect the London Olympics are some of the most generously drafted IP rights available. Imagine a trade mark right which does not require confusion to be infringed (even with similar marks) combined with a passing off right for which you do not need to show goodwill (this is assumed) or damage and a generous interpretation of ‘misrepresentation’ (that the infringer is connected to you in any sort of contractual or commercial fashion or may just be giving the impression they have provided you with some financial support) and you have got association rights. Context is all; combinations of images could trigger infringement of the LOAR even without the word Olympic featuring anywhere.

Context does not just apply to the advertisement itself; an associative context can be achieved for an otherwise non-associative advertisement, by its proximity to the Games venues. Thus the most recent restrictions to be issued cover advertising and trading within the ‘event zones’ around the Olympic venues (or along then in the case of the marathon) and preclude advertising and trading within these areas immediately before and during events without LOCOG's consent. Even as the London Olympic Games and Paralympic Games (Advertising and Trading) Regulations 2011 (Regulations) were about to be published, new concerns were obviously arising, since one of the last amendments added ‘animals’ to the list of prohibited advertising vectors.

The courts can order erasure, seizure, destruction, and make orders for damages in relation to infringement of the association rights. Those liable (which includes personal liability for anyone managing or responsible for a property on which there is a breach of the regulations or the director or manager of an entity that is in breach), could face an unlimited fine as well as the costs of police and ODA officials in enforcing the Regulations, with their powers of immediate seizure and entry to private land.

The Olympics appears to be seen internationally as a special case, an untouchable organization where protection should not be questioned. Only in March this year, for example, the Generic Names Supporting Organisation Council classed the Olympics with the Red Cross in recommending that names relating to both organizations were accorded protected status and banned from the first round of gTLD applications, although not without a certain amount of dissent from within the GNSO. Certainly, without protection, sponsors would withdraw and the ‘greatest show on earth’ would become unaffordable. Whether the vision of the world coming together to compete peacefully on the sporting stage, uplifting though it may be, is as significant to the well-being of humanity as the Red Cross's contribution has been over the years, is a debatable question. Let's hope the protection granted to the London Olympics is justified come 27 July. The Queen is making do with much less legislative protection for her Diamond Jubilee, but that's another editorial…

JIPLP at the INTA

Members of the JIPLP team will be among those manning the Oxford University Press booth in the Exhibit Hall at next week's International Trademark Association (INTA) Meeting in Washington, DC.(details of the Meeting are here).  If you are attending and would like to discuss JIPLP matters with us, please take this opportunity.  We are looking for contributors of articles and current intelligence notes, reviewers of IP books and also for comments -- however critical, so long as they're constructive -- from our readers.