Sugen Inc. & Ors. vs A. Rao & Anr.
2013 Latest Caselaw 1331 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 19th March, 2013

+      IA No.11625/2012 (of the plaintiffs u/O 39 R-1&2 CPC) & IA
       No.17014/2012 & IA.No. 18679/2012 (both of the defendants u/O
       39 R-4 CPC) in CS(OS) No.1866/2012 and Counter Claim 25/2013


       SUGEN INC. & ORS.                                 ..... Plaintiffs
                     Through:           Mr. C.R. Andhyarujina & Mr. V.P.
                                        Singh, Sr. Advs. with Mr. Pravin
                                        Anand, Mr. Soumik Ghosal & Mr.
                                        Aditya Gupta, Advs.

                                     versus
       A. RAO & ANR.                              ..... Defendants
                          Through:      Mr. C. Mukund with Ms. Firdouse
                                        Wani, Ms. Ekta Bhasin & Mr. Ravi
                                        Kumar, Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1.     The three plaintiffs viz. Sugen Inc., Pfizer Inc & Pfizer Products India

Pvt. Ltd. have instituted this suit against the two defendants i.e. defendant

No.2 NATCO Pharma Ltd. and its President (Research & Development) &

Additional Director Mr. A. Rao, for injunction from making, selling,

distributing, advertising, exporting any product infringing the subject matter

of Indian Patent No.209251. The said patent is for the drug "SUTENT" for



CS(OS) No.1866/2012                                                 Page 1 of 20
 treatment of gastrointestinal stromal tumors and advanced renal cell

carcinoma.


2.     Vide ex parte ad-interim order dated 22.06.2012, which continues to

be in force, the defendants were restrained from infringing the said patent of

the plaintiffs.


3.     The defendants have contested the suit by filing the written statement

and the defendant No.2 has also filed a counter claim for revocation of the

said patent.


4.     While the applications aforesaid for interim relief and for vacation of

the ex parte interim relief were pending consideration, the patent aforesaid

was revoked by the Assistant Controller of Patents & Designs vide order

dated 24.09.2012 in post-grant opposition filed by M/s Cipla Ltd. (not party

to the present suit).   W.P.(C) No.6361/2012 was filed by the plaintiffs

impugning the said order. Vide ad interim order dated 08.10.2012 therein

M/s Cipla Ltd. was restrained from taking any steps for marketing its drug in

violation of the said patent. M/s Cipla Ltd. filed LPA No.695/2012 against

the said order but which was dismissed on 12.10.2012. M/s Cipla Ltd. then

filed SLP(C) Nos.34504-34505/2012 and the Supreme Court vide interim


CS(OS) No.1866/2012                                                Page 2 of 20
 order dated 08.11.2012 stayed the operation of the orders dated 08.10.2012

and 12.10.2012.


5.     In the aforesaid state of affairs, when these applications came up for

consideration before this Bench on 09.11.2012, the ex parte order dated

22.06.2012 in favour of the plaintiffs was ordered to be kept in abeyance till

26.11.2012, subject to final outcome of the proceedings aforesaid before the

Supreme Court.


6.     The Supreme Court granted the SLPs which were converted into Civil

Appeals No.8479-8480/2012 and which were disposed of vide order dated

27.11.2012, setting aside the order dated 24.09.2012 of the Assistant

Controller of Patents & Designs of revocation of the parent, for the reason of

being in violation of the principles of natural justice and remanded the

matter back to the Assistant Controller of Patents and Designs for decision

afresh.


7.     In view of the aforesaid order of the Supreme Court, vide order dated

10.12.2012 in this suit, the ex parte order dated 22.06.2012 was restored.




CS(OS) No.1866/2012                                                Page 3 of 20
 8.     The Assistant Controller of Patents and Designs, after re-

consideration of the matter on remand by the Supreme Court, has again vide

order dated 11.02.2013 revoked the patent.


9.     In view of the aforesaid development, when the applications came up

before this Court on 13.02.2013, the counsel for the defendants sought

revocation of the ex parte order contending that the same was on the strength

of patent which has been revoked.        On request of the counsel for the

plaintiffs, the matter was adjourned to 21.02.2013 and thereafter to

28.02.2013.


10.    On 28.02.2013, detailed arguments were heard from the counsels and

the order also partly dictated. It was the contention of the counsel for the

plaintiffs on that date that the plaintiffs had filed W.P.(C) No.1068/2013

impugning the order dated 11.02.2013 of revocation of patent and which

writ petition had been disposed of vide order dated 20.02.2013 relegating the

parties i.e. the plaintiffs and M/s Cipla Ltd. to the statutory remedy of appeal

before the Intellectual Property Appellate Board (IPAB) and restraining M/s

Cipla Ltd. from, till then, commencing marketing of its drug. It was further




CS(OS) No.1866/2012                                                  Page 4 of 20
 argued that upon the IPAB being approached by the plaintiffs on

26.02.2013, the following order has been passed:


       "This is an appeal against an order passed in post grant
       opposition revoking the patent. This is the second round of
       litigation. On 20.02.2013, the Hon'ble High Court of Delhi
       had passed an order directing the parties to appear before us
       on 26.02.2013 i.e. today and that since the respondent herein

had not commenced marketing the drug, the status quo shall continue till today. The learned senior counsel appearing for the appellant prays for stay of the revocation of the patent. The learned senior counsel appearing for the respondent submits that they are not ready with the pleadings and some time may be granted. It is the apprehension of the appellant that the patent will be removed before we hear the stay petition after the respondent makes the reply ready. Both the senior counsel agreed to argue the stay petition on 25.03.2013. Until then, the impugned order shall be kept in abeyance only as regards removal of the patents from the register. This order is passed more on consent and will not be cited by the appellant against the respondent in the civil proceedings pending between them. The matter posted for hearing on 25.03.2013."

11. It was further the contention of the counsel for the plaintiffs that since

the IPAB had kept the order of revocation in abeyance as regard the removal

of patent from the Register, the patent remains and the interim injunction in

force could not be vacated for the reason of the patent having been revoked.

12. The question which was thus framed in the order of 28.02.2013 was,

whether on account of the patent remaining on the Register under the order

dated 26.02.2013 of the IPAB, it could be said to subsist so as to justify

continuation of the ad interim order in this suit restraining the defendants

from infringing the same.

13. On the request of the counsel for the plaintiffs, the matter was

adjourned on that date to 04.03.2013 when the senior counsels for the

plaintiffs and the counsel for the defendants were heard further and order

reserved.

14. Mr. C.R. Andhyarujina, Senior Counsel for the plaintiffs has argued:

(i) that the defendant did not oppose the patent, neither on the

pre-grant nor post-grant;

(ii) that the grant of patent is under Section 43 of

The Patents Act, 1970 read with Rules 88 and 95 of The

Patents Rules, 2003;

(iii) that Section 67(1) requires a Register of patents to be

maintained containing all particulars affecting the validity or

proprietorship of the patents and an extract from the Register

of patents certified by the Controller of Patents & Designs is

under Section 67(5) admissible in evidence;

(iv) that similarly all assignments, transmissions of patent are

also required to be registered under Section 69 and Section

72 requires the Register to be open to public- thus anybody

wanting to know about the patent looks into the Register of

patents - axiomatically since IPAB had restrained removal

of the patent from the Register, anyone inspecting the

Register would treat the plaintiffs as the proprietor of the

said patent;

(v) that an order of the IPAB, under Section 117D (2) of the

Act, is required to be communicated to the Controller of

Patents & Designs and who is to give effect to the said order

by amending entries in or rectifying the Register in

accordance with the order - thus for revocation to be

effective, the Register of Patent has to be rectified and which

the IPAB has restrained;

(vi) that it will be a strange consequence that while M/s Cipla

Ltd. on whose post-grant opposition revocation has been

ordered would be bound by the order dated 26.02.2013 of

the IPAB, the defendants who are a stranger to the said

proceedings would not be.

(vii) that even otherwise, in the facts aforesaid, when the

application of the plaintiffs for interim relief in the appeal

against the order of revocation preferred to the IPAB is to be

heard after a few days on 25.03.2013, it is in the fitness of

things that this Court also waits till then and does not

proceed on the premise that the patent stands revoked.

(viii) that the order of the IPAB is an order in rem and as per the

order dated 26.02.2013, the revocation is not effective.

(ix) that in the aforesaid state of affairs, the observations of the

Division Bench of this Court in judgment dated 20.04.2012

in LPA No.561/2010 titled Dr. Snehlata C. Gupte Vs.

Union of India to the effect that the date of the decision of

the Controller of Patents & Designs is the determining event

and entering of the same in the Register, a ministerial act,

would be of no relevance;

(x) that rejection of patent is not by order but by correction of

the Register and which has not happened; and,

(xi) that heavens are not going to fall if the interim order is

continued for some more time and the defendants will not

suffer any prejudice as they have never marketed their drug

till now.

15. Mr. V.P. Singh, Senior Counsel also appearing for the plaintiffs has

invited attention to para 32 of Cadila Health Care Ltd. Vs. Cadila

Pharmaceuticals Ltd. 2001 PTC 541 (SC) to contend that the principles of

public interest also have to be applied in matters relating to drugs which are

poison but upon being cautioned that the said observations are in the context

of confusing trade names and that the principles of public interest if were to

be applied in the present case may entail comparing the price of the drug of

the plaintiffs and the drug of the defendant and which may not be in favour

of the plaintiffs, did not press the said argument.

16. The counsel for the defendants has argued:

(i) that though the plaintiffs have filed a suit for injunction

against M/s Cipla Ltd. also but there is no interim injunction

therein in favour of the plaintiffs and the IPAB also has

expressly refrained the plaintiffs from using the order dated

26.02.2013 in the said suit - it is strange that while M/s

Cipla Ltd. is not restrained, the defendants are;

(ii) that the plaintiffs are wrong in contending that the

defendants are strangers; the defendants have also in this

proceeding applied for revocation of the patent and which is

permissible under the law;

(iii) that in matters relating to patents of drugs, interim

injunctions have been refused even while returning finding

on infringement;

(iv) that the plaintiffs are also wrong in contending that the

defendants have never marketed their drug; they have

marketed their drug prior to the ex parte order of injunction

as well as in the interregnum when the ex parte order was

kept in abeyance;

(v) that in fact today the cause of action for the suit for

injunction on the basis of patent which has since been

revoked, has disappeared and the suit itself is liable to be

dismissed and for which purpose IA No.18678/2012 has

been filed by the defendants. Reliance is placed on Shipping

Corporation of India Ltd. Vs. Machado Brothers (2004) 11

SCC 168 laying down that the suit which become

infructuous owing to the subsequent events should not be

kept pending only for the sake of continuing the interim

order;

(vi) attention is also invited to the judgment dated 15.07.2010 of

the Single Judge in W.P.(C) No.3516/2007 titled Dr. (Miss)

Snehlata C. Gupte supra, also holding that the entering of

the patent in the Register is a ministerial act subsequent to

the grant of patent;

(vii) attention is invited to:

(a) A.P.S.R.T.C. Vs. State Transport Appellate Tribunal

AIR 1998 SC 2621 holding grant of permit to be

different from issue of permit which is only a

ministerial act not to be equated with grant of permit.

(b) Edukanti Kistamma Vs. S. Venkatareddy (2010) 1

SCC 756 also laying down grant of the permit to be

determinative and issuance on the basis of such

determination to be a ministerial act;

(viii) attention is invited to Section 142 and the First Schedule to

the Rules prescribing the fee for renewal and to Section

53(2) of the Act to contend that the patent ceases to have

effect on expiration of the period prescribed for payment of

renewal fee and without even removal from the Register;

(ix) attention is next invited to Section 60 and Section 62(2) to

contend that no proceeding for infringement of a patent is to

be prosecuted between the dates when the patent has ceased

to have effect and the date of publication of the application

for restoration of patent;

(x) attention is next invited to Section 25(4) of the Act to

contend that it is the order of revocation of the patent which

revokes the patent and not the ministerial act of removal of

the patent from the Register;

(xi) that the plaintiffs are not entitled to the discretionary reliefs

of interim injunction for the reason of having impleaded the

President (Research and Development) & Additional

Director of the defendant No.2 company as the defendant

No.1 so as to avoid detection of the suit by the defendant

No.2 and to obtain ex parte injunction behind its back.

(xii) Reliance in this regard is placed on Micolube India Ltd. Vs.

Maggon Auto Centre 2008 (36) PTC 231 (Del.), Hindustan

Lever Ltd. Vs. Lalit Wadhwa 2007 (35) PTC 377 (Del.)

laying down that employees and officers of companies are

not necessary and proper parties in such suits and their

impleadment is bad; and

(xiii) it is contended that even the Supreme Court by staying the

earlier order restraining Cipla Ltd. from marketing its drug

had indicated that once the patent had been revoked, no other

pharma company could be so restrained.

(xiv) Reliance is placed on A.R. Safiullah Vs. A. Sowkath Ali

2012 Law Suit (Mad.) 907 where, relying on Shree

Chamundi Mopeds Ltd Vs. Church of South India Trust

Association (1992) 3 SCC 1 it was held that the order of

revocation of patent is not wiped out even on grant of stay

thereof and the patent, during the said period, cannot be said

to be still alive.

17. I have weighed the rival contentions.

18. I am unable to take a view, that a patent once revoked remains non-

existent and unenforceable till the order of revocation is set aside,

notwithstanding the order of stay of revocation in the Statutory appeal

provided against the order of revocation or in writ remedy available

thereagainst. To hold so, would amount to making the said remedies

infructuous and ineffective. It cannot be lost sight of that we have a multi-

layered adjudicatory process, perhaps to eliminate the human error in

decision making, and the order of an adjudicatory fora at the bottom of the

pyramid, if stay thereof is granted by a fora where appeals / remedy against

such order lie, has the effect, till the said stay lasts, of consequences as if the

said order does not exist. It cannot further be lost sight of that patent is a

limited period right, effective from the date of application and not grant, and

further that the IPAB and the writ courts are unable to dispose of the appeal

etc. against the order of revocation immediately. If it were to be held that

notwithstanding the interim order of stay of revocation, the patent remains

un-enforceable, it would allow the patent to be infringed in the interregnum,

making the appeal/writ remedy infructuous. I am unable to read Shree

Chamundi Mopeds Ltd to be holding to the contrary.

18. However in the present case, the IPAB, though stay of order of

revocation was sought, has not granted such a stay and has only directed the

order of revocation to be kept in abeyance as regards removal of the patent

from the Register. The question which thus arises is, whether for the reason

of the patent remaining on the Register but without any stay of order of

revocation, can the patent be said to be enforceable. The judgments of this

Court, already noticed while recording submissions, unequivocally hold the

recordings on the Register to be a ministerial act and the rights being

otherwise governed by the grant. Not only am I bound by the said

judgments but am also wholly in agreement „Patent‟, in Section 2(1)(m) of

the Act is defined as meaning a patent for any invention „granted‟ under the

Act and not as „entered‟ on the Register. Thus it is the „grant‟ and

„revocation‟ thereof which confers rights and not the „entry‟ in the Register.

I may notice that the Trade Mark Act of 1958 defined a trade mark as

recorded on the Register and which led to the ambiguity whether invalid or a

lapsed entry in the Register was enforceable. The legislature has removed

the said ambiguity in the 1999 Act by providing that the trade mark should

not only be recorded but also valid. However the position in the Patents Act,

in defining the patent is unambiguous. Though while defining patentee in

Section 2(1)(p), it is the person for the time being entered on the Register

but in the absence of a grant or in the event of revocation thereof, there can

be no patentee. I am unable to find Section 117D (2) also as,

notwithstanding order of revocation, perpetuating any rights in the grantee

till the implementation of the said order by removal of the patent from the

Register. Such an interpretation would confer powers in the officials

entrusted with the task of making entries in the Register, over and above the

powers of the Authorities conferred with the power of grant and revocation,

and cannot be accepted.

19. Thus, in the absence of any order of the IPAB of stay of the order of

revocation, we have to proceed on the premise that the order of revocation

stands.

20. It is not the contention of the plaintiffs that they are entitled to restrain

the defendants de hors the patent.

21. The plaintiffs however want this Court to treat the patent as still alive,

because appeal against the order of revocation is pending consideration

before the IPAB. Mere pendency of an appeal, it is the settled position in

law, does not amount to stay of operation of the order appealed against. It is

for this reason only that the plaintiffs sought interim stay from IPAB but

which was not granted on 26th February, 2013. When IPAB has not granted

interim stay, this Court which is not hearing the revocation matter, cannot

pass an order having the effect of there being an interim stay of the order of

revocation.

22. The plaintiffs are entitled to continuance of the interim injunction only

against the infringement of the patent and once the patent has been revoked,

the interim stay in this suit cannot be continued on the grounds as raised, of

it being just, fair and equitable to await the final decision on the revocation

of the patent. It cannot be lost sight of that ex parte ad-interim injunction

was granted to the plaintiffs only on the strength of its patent and in the

absence thereof the plaintiffs had no right to even maintain the suit. When

the basis on which ex parte interim relief was granted has disappeared, I see

no justification for continuing to restrain the defendants. The arguments of

„heavens are not going to fall‟ are not found applicable to sustain the

injunction. Moreover, this court is exercising a jurisdiction where the Courts

hands are bound by the CPC and whereunder interim relief cannot be

sustained on mere equity, without the other ingredients of prima facie case,

irreparable injury and balance of convenience being satisfied. Judicial

notice can also be taken of the fact that the appeals before the IPAB may

take considerable time for disposal. It cannot also be lost sight of that

though the plaintiffs had on 26.02.2013 sought interim stay of the order of

revocation of patent and which interim stay if had been granted would have

meant the grant of patent to the plaintiffs continuing in force but the said

relief was denied to the plaintiffs. What has been granted to the plaintiffs is

on the asking of the plaintiffs themselves and I cannot in the same read an

order which the IPAB has refused. Thus the order of the IPAB of keeping

the order of revocation in abeyance for the limited purpose of removal of the

patent from the Register can by no stretch of imagination be read as an order

of stay of revocation.

23. I am also of the opinion that if the IPAB on 25.03.2013 or on any

subsequent date grants stay of revocation or sets aside the order of

revocation, it would be open to the plaintiffs to seek injunction against its

infringement. If the defendants in the interregnum launch or market their

drug, they would be doing so at their own risk and costs and it is not an

argument in law to continue the interim order which in law cannot be

continued awaiting the order of IPAB which itself has refused to grant stay

of the order of rejection of the patent.

24. Though the defendants have also sought dismissal of the suit but I

have at this stage intentionally not taken up the said application owing to the

matter before the IPAB listed on 25th March, 2013.

25. Resultantly, IA.No.11625/2012 of the plaintiffs for interim relief is

dismissed and the ex parte order dated 22nd June, 2012 stands vacated.

Axiomatically, IA.No.17014/2012 and IA.No.18679/2012 stand allowed.

26. List for consideration of other pending applications on 13th May,

2013.

RAJIV SAHAI ENDLAW, J MARCH 19, 2013 „gsr‟