In patent litigation, a preliminary injunction (“PI/PIs”) is a crucial remedy which allows patent owners to prevent alleged infringements by sale of their patented products while the case is pending before the court. Traditionally, the Courts in India have always chosen a balance-based approach which ensures that both the protection of patent holder and market competition are at equal foo The New Patent Chessboard: Decoding the ‘Credible Challenge’ Standard and Its Strategic Implications
ting. But in recent years, this liberal approach has taken a turn and the Courts have moved towards a stricter approach wherein the defence of invalidity of a patent is only considered to be viable when such challenges have “certain merits”.
From time-to-time, the Delhi High Court through its judgements has played an important role in setting rules and guidelines. These rulings have specifically emphasized that mere registration of patent under Section 7 of the Patents Act, 1970 do not call for a temporary injunction against the alleged duplication, only on the presumption that a patent once registered is a valid one. The trend in recent times is to protect public interest over exclusive rights. These principles were further solidified by the Shimla High Court in 2024, where it denied an injunction, on the basis that the same was also invalidated in China.
As the Courts are becoming more and more cynical about patent claims, the time for patent holders to become prepared for rigorous litigation has come. The shift in the purview of the Indian Courts marks a significant growth in market fairness and accessibility rather than exclusivity, which is particularly true in the case of the pharmaceutical sector.
In this article, we will delve into the evolution of the principle of “Credible Challenge” under the Patents Act, 1970. Firstly, it will explore the approach of Courts in analysing the validity of patents at the interim stage, secondly, it will analyse the balanced approach of exclusivity and public interest harnessing relevant case laws and judicial precedents.
Beyond Mere Allegations: The Credible Challenge Benchmark
A PI in patent cases is not granted automatically upon an application. The Courts have to assess the credibility i.e., they have to check whether the defendants have raised a ‘Credible Challenge’ to the patent. This can significantly reduce the chances of obtaining an injunction. A Credible Challenge means that the defendant has raised a significant question regarding the validity or the enforceability of the patent.
The Delhi High Court in the case of Ten XC Wireless Inc v. Mobi Antenna Technologies clarified that there is no presumption as to the validity of any patent in India even upon its registration. On the other hand, in the United States, where patents are presumed once granted, in India we require Courts to assess the validity event at the interim stage.
A situation of Credible Challenge arises, firstly, when the defendant successfully challenges a patent by demonstrating that it lacks novelty or an inventive step. Secondly, when any previously available information i.e., prior art is available on the subject-matter. Thirdly, when the patent so challenged, does not fall under the purview of Section 2(1)(a)(ac) of the Patents Act, 1970 which defines industrially applicable patents. In order to fulfil this prerequisite, a patent must have practical utility in an industry.
In Boehringer Ingelheim v. Eris Life Sciences, the Shimla High Court ruled that the validity of an Indian Patent must be assessed independently, regardless of the general rule in any alternative jurisdictions such as China and should have a separate and distinct evaluation.
Fair Pricing, Free Markets, and Injunctions: The Legal Interplay
Public Interest plays an important role in PIs, particularly in the pharmaceutical and healthcare sectors, where accessibility of life-saving drugs is crucial. In India, there has been a consistent balanced-based approach with respect to patent rights and wider public interest, especially in cases where affordability and accessibility of medicines are at the stake. While the Patents Act, 1970 does aim to grant exclusive rights to the holder, Courts also consider whether granting an injunction is an appropriate remedy keeping the public interest at stake.
In Bayer Corporation v. Cipla & Ors., the Delhi High Court recognized patent holder’s right to reap the benefits of his or her invention without any undue influence. The Court further acknowledged that allowing a non-patent holder to exploit the invention would also undermine the objectives of the Patents Act, 1970. However, in another case, the Court held that public interest should not be primarily used as a defence against a PI when a strong case of patent is at hand. This shows two sides of the same coin where the Courts have to assess whether a PI should be given or not.
Furtherly, emphasizing more, the Court said that if an infringer is nevertheless allowed to continue their operations in the meantime, market forces will still do a considerable damage to the patentee, for which monetary compensation may not be adequate.
The same was further clarified in the Boehringer Ingelheim’s case, that public interest arguments must be assessed properly against existing patent laws and that the defendant, being a competitor should not claim public interest as a ground to avoid an injunction as the Patents Act already does provide the mechanism of compulsory licensing.
The Validity Dilemma: Are Patents as Strong as They Seem?
The presumption of validity of patents have been a long-ongoing issue in the Indian Patent Litigation. Unlike United States, where patents are automatically presumed once granted, in India, we do not automatically recognize this presumption. Instead, the patent validity is challenged at multiple stages, including opposition proceedings the Patents Office and revocation action before the judiciary.
The Delhi High Court Rules Governing Patent Suits, 2022, reinforces the idea that non-disclosure of prior proceedings related to the same patent-whether in India or abroad can weaken the holder’s case. Courts have to take a strict view of any concealment of facts regarding opposition proceedings, foreign patent challenges, or revocation actions. In F. Hoffmann-La Roche Ltd v. Cipla Ltd., the Hon’ble Court held that the multi-level opposition process available under the Patents Act, 1970 does not create a presumption of validity. The Court further emphasized that the grant of a patent should not guarantee that it will withstand legal examination, particularly when it is challenged on grounds of lack of novelty, incentive step, or even industrial applicability.
A key distinction between vulnerability and validity was seen in the Boehringer Ingelheim’s case, where it was clarified that while a patent may appear vulnerable to challenge at the PI stage, the actual validity of the patent so concerned is a matter which should be decided at the trial. The Court further held that at the interim relief stage, the defendant may not demonstrate the validity of the patent beyond doubt, but should show that the challenge is based on grounds of credibility and also raises substantial questions.
Further, the Courts have also recognized that the grant of patents can act in the favour of the patent holder but does not provide a conclusive proof of validity. The rejection of a corresponding patent in any foreign land should not necessarily weaken such patent in India because patent laws are territorial in their applicability. This was reaffirmed by the Delhi High Court in 2019 where it was ruled that Courts should assess the validity of a patent based primarily on Indian Patent Law and precedents, rather than relying their decisions on the basis of the differently opinionated foreign Courts.
Thus, while patent registration does offer some legal persuasion, it should not guarantee an immunity from revocation or invalidation. The burden of proof is on the patentee to establish a strong prima facie case before the Court while overcoming any credible challenge which may be raised by the defendant.
In summary, it is drawn that the change of judiciary’s approach regarding patent injunctions indicates a rise in the importance of fairness, credibility and public interest. A new concept of a ‘Credible Challenge’ has is being popularized which now means that patent holders cannot just get injunctions automatically when their patent is registered. This developing view suggests the necessity of careful assessment of the validity of the patents on the particular stage of the process and comes up with a more even point of view where the interests of the patent holder and the general public are accounted for.
With Courts becoming stringent on patent claims, in industry such as pharmaceuticals, patent holders are destined to face tougher litigations. This is true especially when the public good (such as affordable medicines) is at risk. Under the Patents Act, 1970, exclusive rights are granted, however, Courts have been quite clear to guard the monopolistic practices that can interfere with market fairness. This evolving standard of ‘Credible Challenge’ is transforming patent litigation in India, demanding for stronger evidence as well as for a clearer understanding of the basis which support both the validity and enforceability of patents.
With the evolution of patent law in India, it is important that the patent holders prepare themselves with corroborations which support the validity of their patent as well as respond to challenges during the pendency of litigation. The “Credible Challenge” is a hallmark which guarantees the fair trial procedure of patents and take into account the benefits of both inventors and society. This change in approach is to avoid unjust monopolies, and at the same time, advance innovation and human compliance in areas such as in pharmaceuticals. In the end, this evolving standard balances the laws of patent in a way that’s fair to all parties, dynamic and able to respond to the society’s needs.
Author: Ayushman Shrivastava, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.