22 August, 2013

News Alert on India & China

News Alert on India & China

Revocation of patents due to non-compliance of Sec. 8

The Intellectual Property Appellate Board (IPAB) has issued a decision to revoke two of Allergan's patents covering the drugs Ganfort and Combigan used in the treatment of Glaucoma; Indian Patent Nos. 212695 ('695 patent) and 219504 ('504 patent). The IPAB revoked the patents on finding a breach of Section 8 of the Indian Patents Act.

Section 8 stipulates that an Applicant of an Indian patent application is under a continuing obligation during the pendency of the patent application to keep the Controller informed of the status of all corresponding patent applications (including corresponding PCT applications) filed in other jurisdictions for the same or substantially same invention.

The revocation applications were filed by Ajanta Pharma Ltd, a leading Indian drug maker. Ajanta stated in the action against the '695 patent that the respondents had a duty to disclose information as per the requirements of Section 8 but did not provide the application numbers of the applications pending in various countries and the office actions of the US and EP corresponding cases to the Indian Patent Office. The IPAB held that "the violation of section 8 has been clearly made out and we have no hesitation say [sic] applicant succeeds on this ground of revocation".

Ajanta contended in the action against the '504 patent that the respondent failed to disclose to the controller the information relating to the European counterpart of the subject Patent, which was not granted by the EPO. The respondents argued that Section 8(2) spoke of processing of the application in a country outside India and it meant that the patentee's compliance was complete if one foreign application was filed. The Patentee could not be asked to furnish details regarding the proceedings in all countries, contrary to the statute. In this regard, the IPAB reiterated the necessary aspects of fulfillment of Section 8. In particular, the IPAB held that the article "a" in the law cannot be understood to mean only one, but any country. The IPAB commented that Section 8 has been introduced to facilitate examinations and therefore the patentee must be candid and fair. The object of the law is clear disclosure and this must be adhered to. It cannot be dealt with casually and there can be no dilution. The fact that the particulars are available online is irrelevant. The IPAB also held that the law does not state that the failure to furnish the Section 8 details must be deliberate and willful or that the failure must be in regard to material particulars. In fact, the IPAB concluded that the patent deserved to be revoked on this ground alone.

Practice Recommendation: Our practice is to recommend that Applicants' of Indian patent applications disclose details of all corresponding applications and that a regular update be provided to the Indian Patent Office every 6 months during the pendency of the application.

The IPAB decisions can be found here: www.ipab.tn.nic.in/172-2013.htm and www.ipab.tn.nic.in/173-2013.htm

China court bans circulation of trade secrets in milestone ruling

There has been a landmark decision in China, with a Shanghai court issuing China's first ban on the circulation of trade secrets, following an incident with a former employee at Eli Lilly and Co., a US pharmaceutical company. This is the first ruling of its kind under a revised Civil Procedure Law enacted on 1 January 2013.

Eli Lilly and Co. filed a lawsuit in July against a former employee for violating the company's confidentiality agreement. Eli Lilly alleged that the former employee downloaded 21 documents containing company business secrets without authorization. The former employee was legally obligated not to disclose confidential and proprietary information related to the company's marketing strategies during his contract period. Upon termination of employment, the former employee refused to delete or return secret documents to Eli Lilly and Co. Eli Lilly sued for an injunction to prevent the former employee from using and circulating the trade secrets and applied for custody of these secrets to prevent losses before the case hearing opened. Eli Lilly further demanded compensation of 20 million yuan (USD$ 3.3 million).

Judge Liu Junhua ruled in favour of Eli Lilly, adding that the new Civil Procedure Law has filled the gap for protection of trade secrets which will help the plaintiff prevent damages from the secrets being exposed.

The court's ruling will be a precedent for imposing a ban on the circulation of trade secrets nationwide.

This is a positive result to continue to quell the reservations many foreign companies have about doing business in China.

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