5TH B.

KRISHNA MEMORIAL NATIONAL IPR MOOT COURT COMPETITION, 2013

MOOT PROBLEM BEFORE THE INTELLECTUAL PROPERTY APPELLATE BOARD, CITY OF NEPU. REPUBLIC OF BHARANASIA OA/1/2013/P/NEPU BETWEEN 1. Cheers Global Inc. AND 1. Controller of Patents, the Union of Bharanasia 2. Association Against Gene Abuse Appellant .Respondent .Intervening Respondent

BEFORE THE HIGH COURT OF SAHARASHTRA Criminal Petition No. 1/2013 BETWEEN 1. Cheers Global Inc. AND 1. Association Against Gene Abuse 2. Controller of Patents, Union of Bharanasia 3. Steve Lassange ..Respondents ..Petitioner

a) This hypothetical problem is conceived and prepared by Mr. Sunil B. Krishna and Mr. R. Muralidharan. b) The authors assert the moral right to be identified as the creators of this fictional legal educational tool. The authors would encourage Law Schools to use the Problem either as study material or instructional tool after due acknowledgement to the authors. c) The authors acknowledge the assistance they received from Mr. Vinodkumar D. Kotabagi, Advocate and Ms. Dilfrina Vakharia, Patent Assistant, in formulating this Moot Problem. d) To the knowledge of the authors, there is no similar proceeding pending anywhere in the world. The problem is purely hypothetical and fictional. Any similarity with situations or names is purely coincidental and unintentional. e) One speaker shall argue on the matter pending before the IPAB, City of Nepu and the other speaker on the matter pending before the High Court of Saharashtra. Page 1 of 7

5TH B. KRISHNA MEMORIAL NATIONAL IPR MOOT COURT COMPETITION, 2013

1.

Dr. Sampath Madhavan is a well known Entomologist and Cytogenetician based in the City of Nepu, located in the Union of Bharanasia. Bharanasia is a Sovereign Nation located in South Asian Region. Its Constitution, Laws, Institutions and Social Ethos are substantially similar to that of the Union of India.

2.

Dr. Sampath Madhavan was a Scientist in Cheers Bharanasia Inc., which is a company registered under the laws of Bharanasia, and substantially owned and controlled by Cheers Global Inc.

3.

Cheers Global Inc. is registered under the laws of Federation of Pandora whose constitution, laws and social ethos are substantially similar to that of United States of America. It is among the top 200 in the Global Fortune 400 List.

4.

During 1975, Dr. Sampath Madhavan, did extensive research on a unique insect, Drosaphila-Mannargudi (hereinafter referred to as DM). The said insect has a life span of just 12 hours, i.e., between sun rise and sun set. DM starts reproduction within 3 hours after its birth. Both the sexes mate at least thrice with different partners within their limited reproductive lifespan of 6 hours. Dr. Sampath Madhavan, who studied the insect between 1975 to 1985, found that a naturally occurring flavoprotein, which he named as Kuchela Flavin (hereinafter referred to as KF), is the protein responsible for the unusual and increased reproductive abilities of DM. Cheers Global Inc., had a corporate policy agreement whereby all the inventions were assigned to a subsidiary company listed in the Stock Market of Pandora. Hence, Cheers Global Inc., took the product patent for the purified version of KF. The product patent for KF expired in the year 2005. Many derivatives and combination of KFs were patented between 1985 to 1995 and most of these patents are expected to expire in 2015. These patents are valid for most of the territories including Bharanasia.

5.

KF received approval for veterinary and human use by Pandora Federal Drug Agency (hereinafter refferd to as the FDA) FDA during 1980 after extensive field
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5TH B. KRISHNA MEMORIAL NATIONAL IPR MOOT COURT COMPETITION, 2013

trials. Very soon, Bharanasia also granted approval for both human and veterinary use. The FDA, based on the data generated during clinical trials, concluded that the KF can be used as a food additive. This increases general immunity and promotes overall well being. KF also increased the palatability of substances which are usually non-palatable to organisms. For example, slaughter house and fish waste can be converted into edible cattle feed by appropriate treatment with KF. In fact, the veterinary use of KF constituted 90% of market demand and the human use was just 10%. Clinical Trials for use of KF Derivatives as an infertility medicine for human were under way. 6. However, this molecule found its way to the ultimate human consumers system (even vegetarians) in residual traces in the range of 30 ppm to 32 ppm through the animal products they consume. As a side effect, FDA noted that KF advances the onset of puberty not only in human beings, but also in rodents, reptiles and other pests as all of them consume residues of KF. This in turn was reflected by their

increased populations in areas where KF consumption was high. Laboratory testing done with higher doses of KF on mammalian models did not aid as an immune booster but instead showed a reduced immune response to respiratory disorders acquired by microbes and allergens. Further, a few of the animal models showed higher rate of susceptibility to skin disorders such as ringworm and scabies. 7. Kapadapuram is district adjoining the City of Nepu. The District has well documented medical records of its inhabitants since 1970. During the 1970s and 1980s, the incidence of malnutrition and infant mortality in Kapadapuram was relatively high. However, after the permission was granted for veterinary and human use of KF, a flourishing dairy and poultry industry came up, which substantially improved the quality of human life in Kapadapuram District. Infant mortality and child malnutrition declined due to the increased availability of dairy and poultry products to citizenry. The health record of Kapadapuram indicated that during the 1980s, the average age at onset of puberty was 15 years for boys and 14
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5TH B. KRISHNA MEMORIAL NATIONAL IPR MOOT COURT COMPETITION, 2013

to 16 years for girls. Health studies indicated that during the 1990s ,because of the increased consumption of KF traces in food products, the onset of puberty occurred earlier i.e 14-15 years for boys and 13-14 years for girls, However, other nutrition specialists pointed out that this was nothing alarming or unusual , considering that better nutrition will have an impact on fertility 8. Dr. Steve Lassange, a scientist working on the KF, focused on the Nano-particle application of the KF molecule. Usually, after drying and in the final form before actual application, KF molecules were in the thickness of 100 to 1000 microns. The KF particles are at this range, left a much higher residual content of KF in the ultimate food products. Dr Steve Lassange found that either by dissolving the dry powdered KF in a solvent and subjecting it to electro spray drying; or colyophilizing the KF with enzymes and further suspending them in a solvent; the particle size of the KF is reduced to a thickness of 500 mille microns to 1 micron and the residual amounts of KF in the food products was reduced to 24ppm to 26ppm.. Due to the reduced particle size, the requirement for the addition of the KF molecule to animal feed dropped from 3.6 grams per kilo ton of animal feed to 2.8 grams. It was also found that the residual trace in the final product was substantially less by at least 14%. Hence, it enabled the dairy industry to meet the stringent standards of low residual content of KF in the ultimate food products. However, the animal trials conducted by the independent research agencies on the Nano-particle application, voiced a suspicion that in this state, KF will increase the overall fertility and sexual activity of the animals even more than the form of KF known under prior art and granted patents. 9. Dr. Steve Lassange, an employee of Cheers Bharanasia Inc., duly assigned his invention to Cheers Bharanasia Inc., who in turn assigned it to Cheers Global Inc., who had made a first application in the Union of Bharanasia on 1st December 2006 and followed it with Patent Cooperation Treaty (hereinafter referred to as PCT) Applications around the world on 30th October 2007. In view of the skepticism
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raised by a section of the society regarding the possible misuse of Nano-particle KF as an instrument of bioterrorism, the Controller of Patents wrote to the Central Government about the possible biological impact it can have on the environment and defense of Bharanasia. Hence, the Central Government directed Cheers Global Inc. to keep the invention, a secret and prohibited further disclosure of the specification details. The Secrecy Direction to that effect was issued by the Central Government on 1st January 2008. The Patent Office duly communicated the Secrecy Directions, shortly thereafter. 10. Dr. Steve Lassange believed in free expression and very often spoke in public gatherings on issues which his company was pursuing. Aggrieved by his conduct, the Cheers Global Inc. terminated his employment contract, despite his substantial research accomplishments. However, Cheers Global Inc. and its subsidiary Cheers Bharanasia Inc. directed Dr. Steve Lassange to maintain absolute confidentiality about the invention that he made in the course of contract of employment. Contractually, Dr. Steves employer had such a right in their favour. Soon after the termination of employment, the product with nano particulate KF was launched in the worldwide market by Cheers Global Inc. in June 2008. Dr. Steve Lassange became a teacher and researcher. He participated in a seminar in the City of Nepu where in response to a seminar proceeding, on 10th January 2010, he spoke extensively about Nano-particle application of KF. Dr. Lassange informed the attendees of the seminar about the conventional use of electro spray drying in formation of protein nano particles and the particular chemical constituents required for making KF nano particles. He also elaborated on the adaptation of the process of co-lyophilization used for the preservation and restoration of old books, ledgers and documents being used to create protein nano particles. During the seminar proceedings, he also divulged that the use of certain catalysts,surfactants and solvents that enable the final composition to remain in the Nano particle form. He stated that the problem of achieving a stable composition of the active ingredient in nano form was overcome by using the solvent at a certain temperature
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range. Most of his comments substantially revealed the contents of the patent specification in respect of which a secrecy direction had been issued. Since the Seminar was telecast live to highly specialized global audience, the information received a lot of publicity. 11. In the meantime, during December 2009, Pandora and European Patent offices published the Nano-particle KF Patent Application and these publications were received in Bharanasia through internet as well as through regular publications. Hence, Cheers Global Inc. sought review of Secrecy Directions as provided under the law. In view of the information available in public domain of Bharanasia through foreign Patent Publications, Cheers Global Inc. sought lifting of Secrecy Directions and filed Form-18 with prescribed fee, seeking examination. The

Controller directed the first examination of the Patent application. The Examiner objected to grant of the Patent for the following reasons: a. The commercial exploitation of invention will cause serious prejudice to human, animal or plant life or environment (Sec.3 (b) of the Patent Act). b. The product by process claim wherein Cheers Global Inc. seeks to monopolize a Nano particle of a public domain molecule, a new form of a known substance is prohibited by Sec. 3 (d) application. c. On receipt of Secrecy Directions from the Bharanasian Patent Office, Cheers Global Inc. ought to have instructed the Patent offices around the world not to publish the specifications. Their failure to do so is a violation of Secrecy Direction and patent should not be granted. 12. The Controller of Patents, after hearing the parties, in a considered order, upheld the objections of the Examiner on all the grounds. As against this order, the Cheers Global Inc. has filed the appeal before IPAB, City of Nepu.

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13.

In the meantime, the Association Against Gene Abuse (hereinafter referred to as AAGA) petitioned the Controller of Patents and the Central Government seeking permission to prosecute Cheers Global Inc. for violation of Secrecy Directions. The Controller of Patents fixed a hearing to determine whether the alleged violation warrants a prosecution. Show cause notices were issued. AAGA sought to participate in the hearing. On the date of hearing, the lawyers were on strike. Hence, Authorised Signatory of the Cheers Global Inc. sought an adjournment on this ground. However, the Controller of Patents rejected the adjournment application and granted sanction for the prosecution of Cheers Global Inc.

14.

Cheers Global Inc. has filed a Criminal Petition before the High Court praying for quashing of the Private Complaint proceedings, and stating that since Dr. Steve Lassange violated existing contractual terms to remain silent, he can be prosecuted and Cheers Global Inc. should be exonerated. Dr. Steve Lassange fled the jurisdiction of Bharanasia, settled down in a South American country, followed the issue and commented on the issue regularly in his hugely popular blog, Mirchi Hot IP. He was neither served nor represented in the trial, though included as a party.

15.

Both the matters are listed for final disposal.

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