Novartis Ag And Ors. vs Ranbaxy Laboratories Ltd.
2014 Latest Caselaw 4235 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                  Pronounced on: 8th September, 2014
+       I.A. No. 17139/ 2014 (Order XXXIX Rules 1 and 2 CPC) in
        CS (OS) No. 2703/2014

        NOVARTIS AG AND ORS.                                              ..... Plaintiffs
                                  Through:       Mr. Gopal Subramaniam, Senior
                                                 Advocate with Mr. Sunil Gupta,
                                                 Senior Advocate and Ms. Mamta Rani
                                                 Jha, Advocate, Mr. Manish Mishra,
                                                 Advocate and Ms. Shilpa Arora,
                                                 Advocate.
                                  versus

        RANBAXY LABORATORIES LTD                                        ..... Defendant
                                  Through:       Mr. P.Chidambaram, Senior Advocate
                                                 with Ms. Prathiba M. Singh, Senior
                                                 Advocate and Ms. Saya Choudhary
                                                 Kapur, Advocate, Mr. Saurabh Anand,
                                                 Advocate and Mr. Ashutosh Kumar,
                                                 Advocate.
        CORAM:
        HON'BLE MR. JUSTICE G.P. MITTAL
1.

The instant suit for permanent injunction, restraining infringement of

Indian Patent 212815, rendition of accounts, delivery up, etc. has been

filed by the Plaintiffs against the Defendant with the allegations that

Plaintiff no. 1 is a company incorporated under the laws of

Switzerland, having its registered office at Lichtstrasse 35, 4056,

Basel, Switzerland. Plaintiffs no. 2 and 3 are the companies

incorporated in India.

2. Plaintiff no. 3 is marketing pharmaceutical products containing the

active pharmaceutical ingredient (API) Vildagliptin (subject matter of

the suit patent), under co-marketing agreement with Plaintiff no. 2 and

is therefore, adversely affected by the threatened infringing activities

complained of in the suit.

3. The Plaintiffs claim that pharmaceutical products emanating from the

Plaintiffs and sold under their famous brands are internationally

known for their superior and high quality. Plaintiff no. 2 markets in

India Vidagliptin and Vildagliptin + Metformin Hydrochloride in

combination under the brands GALVUS and GALVUSMET

respectively. Similarly, Plaintiff no. 3 is marketing in India

Vidagliptin and Vildagliptin + Metformin Hydrochloride in

combination under the brands VYSOV and VYSOV-M respectively.

4. The Plaintiffs claim to have patented compound Vildagliptin, which

treats Type 2 Diabetes Mellitus (T2DM) under Patent No. 212815.

5. The Plaintiffs state that Defendant has included Plaintiffs patented

compound Vildagliptin in the list of API on its website, namely,

http://www.ranbaxy.com/products/api-search. The Plaintiffs allege

that the Defendant has not yet launched the earlier said product and

there is an immense threat that the Defendant may launch

Vildagliptin in the market any time. The Plaintiffs claim that in

addition to the product Patent No. 212815, Plaintiff no. 1 is also the

proprietor of a number of other patents and patent applications,

protecting specific aspects of Vildagliptin. Plaintiff no. 1 holds a

process patent for the manufacture of Vildagliptin vide Patent No.

229761. In addition, Plaintiff no. 1 holds three patent applications

pending before the Indian Patent Office, namely 2669/CHENP/2006,

9707/CHENP/2012 and 2045/DELNP/2008 related respectively to

Vildagliptin formulations and Vildagliptin and Metformin

Hydrochloride formulations. The application 2669/CHENP/2006 has

been rejected by the Indian Patent Office and appeal against the

rejection is pending.

6. The Plaintiffs have described the causes of Type 1 and Type 2

Diabetes Mellitus and the effect of GALVUS and GALVUSMET for

treatment of Type 2 Diabetes Mellitus. The Plaintiffs also claim that

these medicines are marketed at affordable prices to the Indian

patients.

7. It is the case of the Plaintiffs that Plaintiff no. 1 launched Vildagliptin

globally in the year 2007 under the trade name 'GALVUS' and

Vildagliptin with Metformin Hydrochloride in the year 2008 under its

trade mark 'GALVUSMET' and 'EUCREAS'.

8. The Plaintiffs have further mentioned the sales figures of 'GALVUS'

and 'GALVUSMET' in India and in the world to be about Rs.

915,030,275/- and Rs. 1,334.485,745/- respectively and 577 and 707

million dollars respectively.

9. The Plaintiffs state that Vildagliptin works by inhibiting the DPP-4

enzyme, which leads to better control of glucose level in diabetic

patients. It is stated that Plaintiff no. 1 was the first Pharmaceutical

Company to invent and begin the development of DPP-4 inhibitor

(Vildagliptin is the first developed gliptin).

10. In paras 30 to 33 of the plaint, the Plaintiffs have described the claims

of the suit patent and the structure of the compound which

corresponds to Vildagliptin.

11. It is the case of the Plaintiffs that extensive research and development

into anti-diabetic compounds was carried out by the Plaintiffs before

the invention of Vildagliptin to test its ability to inhibit the DPP-4

enzyme and for their potential to be further developed as

pharmaceutical products for treatment of Type 2 diabetes. The

Plaintiffs have given the details of the potency and duration of the

effect of Vildagliptin.

12. It is the case of the Plaintiffs that the Plaintiffs were surprised to

receive copies of caveat filed by the Defendant in various jurisdictions

including Delhi High Court on 18.08.2014. The caveat did not

mention any subject matter of the apprehended dispute such as

trademarks, patents, copyright or design. It is alleged that considering

that the Plaintiffs have off-late taken action against various generic

pharmaceutical companies for infringement of their patents pertaining

to Vildagliptin, the Plaintiffs accessed the Defendant's website to

investigate if there is any indication to the Defendant proposing to

launch Vildagliptin. It is stated that the Plaintiffs were surprised by the

Defendant's website which displays Vildagliptin under the API

product category as 'Anti-diabetic drug' without any regulatory status.

On making survey, the Plaintiffs did not come across any information

that the Defendant had either begin manufacturing or infringing

Vildagliptin in an API form or in pharmaceutical products containing

Vildagliptin either alone or in combination with any other compound.

Plaintiff no. 2 also engaged services of an independent research firm,

namely, Strategic Analysis India Pvt. Ltd. (SAI) to conduct the

research and survey of the Defendant in order to ascertain whether the

Defendant has launched or commenced business in relation to

Vildagliptin in API form. The survey report dated 26.08.2014

confirmed that although there is yet no manufacture, launch or sale of

Vildagliptin either in API form or pharmaceutical products containing

Vildagliptin alone or Vildagliptin in combination with any other

compound by the Defendant, yet it proposes to do so. Thus, the

Plaintiffs filed the instant suit and sought ad interim injunction.

13. Mr. Gopal Subramaniam, the learned Senior Counsel appearing for the

Plaintiffs claims ad-interim injunction against manufacture, import or

sale of active pharmaceutical ingredients, pharmaceuticals products,

compounds or formulations containing Vildagliptin or Vildagliptin in

combination with any other compound or API or in any other form so

as to infringe Indian Patent No. 212815 of Plaintiff no. 1.

14. In support of his contention, the learned senior counsel for the

Plaintiffs has referred to various orders passed by this Court in various

suits granting injunctions against manufacture, import, sale or dealing

in pharmaceutical compound, product compound or formulation or

combination containing Vildagliptin including the order dated

11.11.2013 in I.A. No. 17706/ 2013 passed in CS (OS) No. 2138/ 2013,

titled Novartis AG & Ors. v. Zee Laboratories Ltd.; order dated

05.03.2014 in I.A. No. 4156/ 2014 passed in CS (OS) No. 646/2014,

titled Novartis AG & Ors. v. Wockhardt Ltd.; order dated 16.04.2014

in I.A. No. 6754/ 2014 passed in CS (OS) No. 1051/ 2014, titled

Novartis AG & Ors. v. Alembic Pharmaceuticals Ltd.; order dated

16.04.2014 in I.A. No. 6760/ 2014 passed in CS (OS) No. 1053/ 2014,

titled Novartis AG & Ors. v. Bajaj Helathcare Ltd.; order dated

28.07.2014 in I.A. No. 6760/ 2014 passed in CS (OS) No. 1053/ 2014,

titled Novartis AG Ors. v. Bajaj Helathcare Ltd. and various other

similar orders passed by the Madras High Court.

15. Referring to Merck Sharp and Dohme Corporation & Anr. v.

Glenmark Pharmaceuticals Ltd., 2013 (54) PTC 452 (Delhi), the

learned senior counsel states that the Plaintiffs patented produce

cannot even be used by the Defendant with other formulations unless

the combination works in a way materially different from the way the

Vildagliptin works.

16. The learned senior counsel referring to Wander Ltd. & Anr. v. Antox

India Pvt. Ltd. 1990 Supp. SCC 727 has urged that in view of

established patent which is valid up to 8th December, 2019, the

Plaintiffs have a good prima facie case and the balance of convenience

also lies in favour of the Plaintiffs as the Defendant has not yet

commenced production. The learned senior counsel refers to paras 8

and 9 of Wander Ltd. & Anr., where the Supreme Court held as

under:-

"8. The point for consideration is whether there is a prima facie case on which Antox could be held entitled to

restrain Wander Ltd. and Alfred Berg from manufacturing and marketing goods under the trade name "Cal-De-Ce" and whether on considerations of balance of convenience and comparative hardship a temporary injunction should issue. The corollary is that even if the injunction sought by Antox is refused, that does not, ipso facto, entitle Wander Ltd. and Alfred Berg to manufacture and market the goods if they are not otherwise entitled to do so under the relevant laws regulating the matter.

9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated

"...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the „balance of convenience‟ lies."

The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but

what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."

17. Grant of ad interim injunction is strenuously opposed on behalf of the

Defendant by Mr. P. Chidambaram, learned Senior Counsel for the

Defendant. The learned Senior Counsel has urged that the Defendant

may be granted a short adjournment to file a written statement and the

relevant documents so that the matter can be argued at length.

18. The learned Senior Counsel for the Plaintiffs, however, presses for a

statement by the Defendant that the impugned pharmaceutical product

shall not be launched till the next date or in the alternative an interim

protection be granted by the Court till the application is heard after

completion of pleadings. Mr. P. Chidambaram, learned Senior

Counsel for the Defendant submits that the Defendant is not prepared

to make a statement as the interim orders sometime continue for a very

long period. The learned Senior Counsel has urged that the Defendant

has already filed a Revocation Petition before the Intelligence

Intellectual Property Appellate Board, seeking revocation of the

impugned suit patent on 11.08.2014, under Sections 64 (1) (d), 64 (1)

(f), 64 (1) (j), 64 (1) (k) and 64 (1) (m) the Patents Act, 1970.

19. It is urged that the suit patient vide claim no. 3 seeks to monopolise a

metabolite of a previously known compound (example 47 of

WO98/1998), which is impressible in law as a metabolite is formed as

a result of the natural processes such as digestion which occurs in

human/ animal bodies.

20. The learned senior counsel urges that the Defendant intends to market

Vildagliptin in crystalline (Form A). The learned senior counsel urges

that the Plaintiffs by patent application no. IN4530/DELNP/2007

dated 13.06.2007 applied for patent of crystalline form of Vildagliptin.

However, the said application having been abandoned, the product

under the said application has fallen into public domain. It is,

therefore, open to a third party to deal with it in any manner

whatsoever and thus, the Plaintiffs cannot claim any rights qua

crystalline Form A of Vildagliptin.

21. It is urged that since the Plaintiffs cannot claim monopoly qua

crystalline Form A of Vildagliptin, its production will not amount to

infringing patent no. IA212815.

22. Referring to F. Hoffmann - LA Roche Ltd. and Anr. v. Cipla Ltd., 2009

(40) PTC 125 (Delhi), Mr. P. Chidambaram has urged that the

Plaintiff has withheld information about abandoning application

IN4530/DELNP/2007 dated 13.06.2007 from this Court and this being

a material concealment, will disentitle the Plaintiffs to the

discretionary relief of injunction. The learned senior counsel for the

Defendant heavily relies upon summary of conclusions given in paras

85 (iii) and (iv) of the said judgment which are extracted hereunder:-

"85. To summarise our conclusions:

(iii) In an application seeking ad interim injunction in a suit for infringement of patent, it would be incumbent on the plaintiffs to make a full disclosure of the complete specification of the product whose patent is claimed to have been infringed. The plaintiffs will also have to disclose to Court the x-ray diffraction data of the product, particularly if it is a pharmaceutical drug. The plaintiffs have to make an unequivocal disclosure that the patent they hold covers the drug in question; whether there are any other pending applications seeking the grant of patent in respect of any derivatives or forms of the product for which they already hold a patent and the effect of such applications on the suit patent.

(iv) The failure by the plaintiffs to disclose the complete specification of the product and the facts concerning the pending applications for Polymorph B led to the learned Single Judge not having the occasion to consider if in fact the suit patent covered Tarceva. Had these facts fully disclosed in the plaint and the entire specification of the patent held by the plaintiff together with X-ray diffraction data of Tarceva and Erlocip filed along with the plaint, it is possible that the plaintiff may have had difficulty in

showing that the patent held by it (No. 196774) covered Tarceva as well."

23. I have perused the record and given my thoughtful consideration to the

respective contentions raised on behalf of the parties.

24. It is established from the host of documents placed on record that the

Plaintiffs were granted product patent no. 21285 in respect of

compound Vildagliptin on 14.12.2007, effective from 10.12.1998.

Thus, application for this patent was in public domain for the last

sixteen years and no objection whatsoever has even been raised by the

Defendant. It is only on 11.08.2014 that the Defendant has filed a

revocation petition (although the learned senior counsel denies the

Plaintiffs having received any notice of the revocation petition).

Another objection raised at this stage against protecting the Plaintiffs

by an interim injunction is that the compound which may be launched

by the Defendant is different from the API Vildagliptin. The learned

senior counsel on behalf of the Defendant urges that the Plaintiffs own

application IN4530/DELNP/2007 dated 13.06.2007 which itself

speaks volumes that crystalline form of Vildagliptin is different from

API Vildagliptin and therefore, the Plaintiffs cannot claim any

proprietary right therein, the same being in public domain as the

application was abandoned.

25. The learned senior counsel for the Plaintiffs urges that other

application for direct compression formulation and process for

Vildagliptin in new crystalline form was made by the Plaintiffs before

the grant of the suit patent. It is urged that a party having a patent in

respect of a particular compound cannot be prevented from applying

for improved process of the same compound as it is already the

proprietor of the patent. Application IN4530/DELNP/2007 dated

13.06.2007 was abandoned after the suit patent was granted as the

Plaintiffs' purpose of obtaining a patent was achieved.

26. First of all, I shall deal with the contention whether there was

concealment of a material fact by non-disclosure of the abandonment

of application IN4530/DELNP/2007 dated 13.06.2007 so as to

disentitle the Plaintiffs from grant of injunction on the basis of the

observations of the Division Bench in F. Hoffmann - LA Roche Ltd.

In the said case, the Plaintiffs did not have any registration of

Polymorph B application. In fact, the Plaintiffs had filed the

application for registration of the same under no. IN/PCT/2002/00507

which was opposed by the Defendant. The application was rejected on

the ground that it did not qualify the requirement of section 3 (d) of

the Patents Act, 1970. The said order of rejection passed by the

Controller of Patents was not challenged by the Plaintiffs before the

Appellate Board. These facts were not disclosed by the Plaintiffs

while filing the suit.

27. As against this, in the instant case, the second application

IN4530/DELNP/2007 dated 13.06.2007 was made by Plaintiff no. 1

while the application in respect of the suit patent was pending. The

certificate in the suit patent was issued by the Controller of Patent only

on 14.12.2007. Thereafter, the second application is stated to have

been abandoned and therefore, at this stage it cannot be said that non-

disclosure of the application no. IN4530/DELNP/2007 dated

13.06.2007 amounted to concealment of a material fact.

28. I have earlier referred to the various orders (para 15) passed by the

Delhi High Court in various suits and by the Madras High Court in

two cases where the suit patent was protected. Some of the Defendants

in the earlier mentioned suits included multinational companies. The

fact that the Defendant now in the year 2014 has applied for the

revocation of the suit patent prima facie shows that the Defendant

wants to launch the compound patented in the suit patent. The balance

of convenience also lies in preserving the status quo as the Defendant

is yet to launch Vildagliptin, though the Defendant says that the same

is in crystalline form.

29. In view of this, the Defendant is hereby restrained by itself or through

its assigns in business, licensees, agents, distributors and dealers from

manufacturing, selling or offering for sale either through its website

www.ranbaxy.com or by any other means directly or indirectly

dealing in active pharmaceutical ingredients (API), compounds or

formulations containing Vildagliptin or Vildagliptin in combination

with any other compound as may amount to infringement of Indian

Patent No. 212815 of the Plaintiffs.

30. The observations made above are only tentative and shall not be

treated as an expression on the merits of the case as pleadings of the

parties are yet to be completed.

CS (OS) No. 2703/2014

31. The Defendant will file the written statement along with documents, if

any relied upon by it within two weeks.

32. The Plaintiffs will file replication /rejoinder within two weeks

thereafter.

33. List before the Joint Registrar for completion of pleadings and

admission/ denial of the documents on 13.10.2014.

34. List before the Court for hearing the application under Order XXXIX

Rules 1 & 2 CPC on 28.10.2014.

(G.P. MITTAL) JUDGE

SEPTEMBER 08, 2014 vk