Cipla Limited vs Novartis Ag & Anr
2017 Latest Caselaw 1294 Del

        THE HIGH COURT OF DELHI AT NEW DELHI
%                                Judgment delivered on: 09.03.2017

+      FAO(OS) 21/2015 & CM Nos.731/2015, 1288/2015, 2090/2015

CIPLA LIMITED                                        ...    Appellant
                                    versus

NOVARTIS AG & ANR                                    ...    Respondents
Advocates who appeared in this case:-
For the Appellant  : Mr P. Chidambaram, Mr Abhishek Manu Singhvi and
                     Ms Prathibha M. Singh, Senior Advocates with Ms Bitika
                     Sharma, Ms Namrita Kochhar and Mr Harshit Saxena
For the Respondent : Mr Gopal Subramaniam and Mr CS Vaidyanatham, Senior
                     Advocates with Mr Hemant Singh, Ms Mamta Jha, Dr Shilpa
                     Arora, Mr Talha and Ms Anusha

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA

                                JUDGMENT

BADAR DURREZ AHMED, J

1. The present appeal is directed against the judgment and/or order

dated 09.01.2015 delivered by a learned Single Judge of this Court in

IA 24863/2015 which was an application under Order XXXIX Rules 1 and

2 of the Code of Civil Procedure, 1908. That application was filed in

CS(OS) 3812/2014 which, in turn, had been instituted by the respondents/

plaintiffs. The suit filed by the respondents was one for permanent

injunction restraining infringement of patent No. 222346 granted under the

Patents Act, 1970 (hereinafter referred to as ‗the said Act') in favour of the

respondent No.1/plaintiff No.1. The suit was also for rendition of

accounts/damages, delivery-up etc. The respondent No.1 is a Swiss

company and the respondent No.2 is an Indian company. The appellant, of

course, is also an Indian company.

2. The entire controversy is with regard to ‗INDACATEROL' in

respect of which the respondent No.1 holds the said patent. The said

respondents market the said ‗INDACATEROL' under the name

‗ONBREZ'. ‗INDACATEROL' is a bronchodilator and provides

symptomatic relief to persons suffering from chronic obstructive pulmonary

disease (COPD).

3. The appellant launched its drug ‗UNIBREZ' in October, 2004.

However, a suit was filed by the respondents on 09.01.2015 which was

ultimately disposed of on the appellant's undertaking to change the brand

name of the drug from ‗UNIBREZ' to ‗INDAFLO'. That was an

infringement of trade mark action.

4. The respondents do not manufacture ‗INDACATEROL' in India. In

fact, the drug is manufactured by the respondent No.1 in Switzerland and is

imported into India and marketed by Lupin pursuant to an agreement dated

22.03.2012.

5. The appellant is aggrieved by the fact that the learned Single Judge

has restrained the appellant from, inter alia, using, manufacturing,

importing, selling any pharmaceutical products etc. containing

‗INDACATEROL' or ‗INDACATEROL Maleate', alone or in combination

with any other compound or Active Pharmaceutical Ingredient (API),

which may amount to infringement of the respondent No.1's patent No.

222346. However, this injunction has been granted until the determination

by the competent authority of the pleas raised by Cipla for seeking the

compulsory licence, if so filed. In case no such application for compulsory

licence is filed, the learned Single Judge directed that the injunction would

continue during the pendency of the suit. The learned Single Judge also

directed that in case the appellant filed such an application and the same

was decided in favour of the appellant, it could move an application for

modification etc. of the impugned order dated 09.01.2015.

6. The learned counsel for the appellant submitted that by virtue of the

impugned judgment and/or order, the appellant cannot market

‗INDACATEROL' in India. It was also submitted that the respondents do

not manufacture ‗INDACATEROL' (ONBREZ) in India. Only small

quantities are imported catering to a negligible number of patients. Thus,

according to the appellant, the respondents are not working the patent in

India and consequently, they are not entitled to an injunction.

7. It was contended that Section 48 of the said Act describes the rights

of patentees. However, it begins with the words ―subject to the other

provisions contained in this Act‖. Referring to the said expression, the

learned counsel for the appellant submitted that the said rights of patentees

under Section 48 would be subject to other provisions in the Act, including

Section 83 of the said Act. Section 48 and Section 83 of the said Act are

reproduced herein below:-

―48. Rights of patentees.--Subject to the other provisions contained in this Act and the conditions specified in section 47, a patent granted under this Act shall confer upon the patentee --

(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India;

(b) where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not

have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India:‖

―83. General principles applicable to working of patented inventions.--Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely;--

(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;

(b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article;

(c) that the protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations;

(d) that patents granted do not impede protection of public health and nutrition and should act as instrument to promote public interest specially in sectors of vital importance for socio-economic and technological development of India;

(e) that patents granted do not in any way prohibit Central Government in taking measures to protect public health;

(f) that the patent right is not abused by the patentee or person deriving title or interest on patent from the patentee, and the patentee or a person deriving title or interest on patent from the patentee does not resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology; and

(g) that patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.‖

8. It was submitted that the general principles applicable to the working

of patented inventions stipulated in Section 83 would govern and sit over

the rights of patentees indicated in Section 48 of the said Act. By virtue of

Section 48 of the said Act, a patentee has the exclusive right to prevent

third parties, who do not have his consent, from the act of making, using,

offering for sale, selling or importing for those purposes the product in

India (in this case ‗INDACATEROL'). But, according to the learned

counsel for the appellant, this right would be subject to the fact that the

patent is worked in India on a commercial scale; that the patent is not used

by a patentee merely to enjoy a monopoly for the importation of the

patented article; that the grant of the patent does not impede protection of

public health and nutrition and that the objective of making the benefit of

the patented inventions available in India at reasonably affordable price to

the public is fulfilled. In this context, it was submitted that the respondents

did not manufacture ‗INDACATEROL' in India and even the importation

was of very small quantities. Thus, the said drug ‗INDACATEROL',

which was vital for COPD patients, was not available to large sections of

the public in India. It was submitted that the non-availability was further

aggravated by the fact that the price of the respondents' ‗INDACATEROL'

was exorbitant as compared to ‗INDACATEROL' manufactured, supplied

and sold by the appellant. It was submitted that while 10 tablets of the

respondents' drug were sold for Rs 677/-, 10 tablets of the appellant's drug

were priced only at Rs 130/-. In other words, the price of the respondents'

product was five times that of the price of the appellant's product.

9. It was also contended on behalf of the appellant that in the grant of

an injunction, one of the considerations, which is regarded as the fourth

aspect (in addition to prima facie case, balance of convenience and

irreparable harm and injury), was that of public interest. Reliance was

placed on the decision of a Division Bench of this Court in the case of F.

Hoffmann La Roche Limited and Another v. Cipla Limited: 2009 (40)

PTC 125 (Del) (DB). In that decision, the Division Bench of this Court

while dealing with the issue of public interest, inter alia, observed as

under:-

―81. This Court is inclined to concur with the learned single Judge that in a country like India where question of general public access to life saving drugs assumes great significance, the adverse impact on such access which the grant of injunction in a case like the instant one is likely to have, would have to be accounted for. Erlocip is the Indian equivalent produced by the defendant in India as a generic drug manufacturer. It is priced at Rs.1600 per tablet. Even if this does not make it inexpensive, the question of greater availability of such drug in the market assumes significance.

82. In the considered view of this Court, while it may be possible to distinguish the judgment of the US Supreme Court in E Bay as relating to a case of permanent and not temporary injunction, the traditional four factor test identified in the said judgment does assume relevance even at the stage of grant of an interim injunction. Given the nature of the drug, in the instant case, which admittedly is a life saving one, the fourth test identified in E Bay that the grant of an injunction should not result in the public interest being ―disserved‖ would be relevant.

83. The judgments relied upon by the plaintiffs underscore the approach of determining these questions on a case by case basis. Whether indeed the public interest in the availability of the drug to the public at large is outweighed by the need to encourage research in the invention, would obviously differ from case to case and depend on a host of factors. This Court finds no ground to differ with the reasoning or the conclusions

arrived at by the learned Single Judge on this aspect after an analysis of all the relevant factors.‖ (underlining added)

10. In order to substantiate the allegation that the respondents were

importing ‗INDACATEROL' in very small quantities, the following chart

was referred to:-

Year Total Quantity No. of patients Total Qty Deficiency Imported marketed 2008 Nil Approx. 1-1.2 Nil 100% crore (based on 1991 census) 2009 Nil Approx. 1-1.2 Nil 100% crore (based on 1991 census) 2010 Nil Approx. 1-1.2 Nil 100% crore (based on 1991 census) 2011 Nil 1.5 crore Nil 100% (based on 2001 census) 2012 53144 Units 1.5 crore 5567 Units 99.96% 2013 53865 Units 1.5 crore 5655 Units 99.96%

It was submitted that based on the above table, as one unit translated to 30

tablets, which was one month's supply, the figure of 53,000 divided by 12

(12 months in a year) would come to a figure of a little over 4,000. Thus,

according to the appellant, only about 4,000 patients would get the benefit

of the drug ‗INDACATEROL' as against 1.5 crore patients. Thus, it was

submitted that public interest would not be served if an injunction were

allowed to remain against the appellant. We may, at this juncture, however,

note that the figure of 1.5 crore patients suffering from COPD is contested

by the respondents.

11. A reference was also made to Article 7 of the TRIPS agreement,

which reads as under:-

―Article 7: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.‖ (underlining added)

12. Similarly, a reference was made to the following extract from the

Doha Declaration:

―4. We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all....‖ (underlining added)

13. And, a reference was made to India's submissions during the GATT

negotiations. The relevant extract of which is as under:-

―Standards and Principles concerning the availability, scope and use of Trade Related Intellectual Property Rights (Communication from India, MTN.GNG/NG11/W/37, dated 10.07.1989) ...Working of Patents

9. The experience of developing countries would clearly point to four basic facts: firstly, patents are seldom worked in developing countries, even when it is techno-economically feasible to do so. Secondly, the working of the patent in the host country leads to saving of scarce foreign exchange (which is a major constraint to the economic development of developing countries) and the lowering of prices of products particularly in critical sectors such as food, pharmaceutical, agro-chemicals and the like. Thirdly, without the working of the patent, there can hardly be any transfer or diffusion of technology and the promotion of industrial activity in the host country.....‖ (underlining added)

Various articles were referred to in an attempt to demonstrate that the total

burden of COPD in India had more than doubled to about 14.84 million

(approximately 1.5 crores) in 2011 from 6.45 million in 1971. All these

submissions were made in the context of the public interest argument

coupled with the alleged non-working of the patent by the respondents in

India.

14. Another decision referred to by the learned counsel for the appellant

was that of Franz Xaver Huemer v. New Yash Engineers: 1996 PTC (16)

(DB) 232, wherein a Division Bench of this Court had, inter alia, observed

as under:-

―15. In England, it has been accepted more than a century ago that a patentee who does not put his patent for use by the public is not entitled to temporary injunction. In Plympton v. Malcolmson, (1875) LR 20 Eq 37, the plaintiff who claimed to be owner of a patent sought interim injunction to restrain the defendant from making, selling or using an article which was alleged to be an infringement of the plaintiff's patent. The plaintiff's patent was dated 25-5-1865 and the plaintiff filed the bill in 1875 to establish the validity of his patent and to restrain the defendant (who obtained patent on 7-5-1874) from infringing the plaintiff's patent. There was no evidence of actual user of the plaintiff's patent except of recent date. Refusing injunction on the ground of non-user, Sir George Jessel M.R. observed -

―When a patentee comes to this Court for interim protection on the ground of previous enjoyment, he must show that there has been actual public user of his patent. In this case, there is no evidence of actual user for any number of years.‖‖

xxxx xxxx xxxx xxxx

―19. In 1886 it was initially held by Blodgett, J. in Hoe v.

Knap, (1886) 27 F 204, (212) (CC N.D. 111) that a patentee "is bound either to use the patent himself or allow others to use it on reasonable or equitable terms". In Ewart Mfg. Co. v. Baldwin Cycle-chain Co. (1098) 91 Fed 262 (CCP D, Mass) the Circuit Court also declared that where the patentee refused to make the device available for himself or for others was not within the spirit of the Constitution. Under the Constitution, the

reason for granting the patent was the desire to promote progress of science and the useful arts, by encouraging authors and inventors. "Patents suppressed were entitled to scant recognition at law, though necessarily to some, but to none whatever is equity".‖

xxxx xxxx xxxx xxxx

―27. In his book 'The United States Patent System' (1956), Chapter VIII) relating to 'Suppression of Patents', Floyd L. Vaughan, refers to what Mr. R.H.F. Palgrave, stated in his Dictionary of Political Economy (III, 76). He stated that the granting of a patent may be a hindrance to industrial life of the patentee, who through want of energy or want of means, neglects to work his invention, while others, who would be willing and able to do so, are afraid of infringing his rights. Reference is made to Mr. William Robinson's. The Law of Patents For Useful Inventions (65-67) wherein he said that the expectation that the patentee will use his invention is implied in the infringement laws, which protect the legal monopoly of the patentee throughout the entire period during which his monopoly extends. The Corollary of this protection is that the patentee must develop his invention. These views suggest that if the patentee releases his inventions into the market, it will help in further research, improvement and development of better technology. Floyd L. Vaughan finally says (p. 259) that the US laws allow foreigners to take out patents in US merely for the purpose of reserving the US as a market for their patented products; If there is suppression, it will prevent manufacture in US in spite of more favourable factors for production in US.

28. In our opinion, what was said about unused foreign patents and their adverse effect in US, equally applies to foreign patents registered in India but not used.

29. For the above reasons, the plaintiff who has registered patents in India in 1984 but has not used them in India cannot,

in equity, seek temporary injunction against the respondent. Points 1 and 2 are decided accordingly.‖ (underlining added)

15. The decision in the case of Glaverbel S.A. v. Dave Rose and Ors.:

2010 (43) PTC 630 (Del) is that of a Single Judge. Bard Peripheral

Vascular, Inc. v. C.R. Bard, Inc.: 670 F.3d 1171 which was a decision of

the US Court of Appeals for the Federal Circuit was referred to for the

argument that instead of an injunction, royalty may be a substitute. It was

also contended on the part of the appellant that the view of the learned

Single Judge that the Civil Court could not apply the principles of Section

83 was wrong. It was submitted that while considering the question of

grant of an injunction, the general principles set down in Section 83 would

also come into play and the Civil Court ought to consider those principles.

16. In sum and substance, the argument on the part of the appellant was

that public interest was an important aspect while considering the question

of grant of an injunction particularly with regard to a drug of the nature of

‗INDACATEROL' which could be a virtual life saver for patients suffering

from COPD. The public interest element is also evident from the vast

difference in the price structure of the appellant's drug, vis-a-vis, the

respondent's drug which was five times more expensive than that of the

appellant. The factum of non-working of the patent in India would also be a

serious issue to be considered with respect to the grant of an injunction

based on the patent held by the respondents. It was also submitted that the

rights of a patentee declared in Section 48 of the said Act were subservient

to the general principles stipulated in Section 83 thereof.

17. On the other hand, it was submitted on behalf of the respondents that

the fact that they did not manufacture the product in India did not mean that

the patent was not being worked in India because sufficient quantities of

imports were made which would serve the needs of the patients suffering

from COPD. It was also denied by the respondents that the extent of

COPD patients was to the tune of 1.5 crore. It was submitted that enough

imports were being made which would satisfy the requirements of the

COPD patients for ‗INDACATEROL'. It was, therefore, submitted that it

was not a case of public interest being disserved in case an injunction was

granted. It was also submitted that prima facie the learned single Judge had

held the patent to be valid and that has not been challenged, at least not

seriously, by the appellant. Therefore, the respondent is entitled to the

benefit of Section 48 of the said Act which clearly entitles it to the

exclusive right to prevent third parties, who do not have its consent, from

the act of making, using, offering for sale, selling or importing

‗INDACATEROL' in India. It was also submitted that the right of

patentees under Section 48 was in no manner reduced or circumscribed by

the provisions of Section 83, as the latter provision fell under an entirely

different Chapter and had an entirely different objective.

18. It was also submitted that the effectiveness and novelty of

‗INDACATEROL', which was a new chemical entity, is already

established. In COPD, the air sacs in the lungs are damaged and, therefore,

such damage is irreparable. However, the obstruction can be managed.

The obstruction in the respiratory system occurs, inter alia, because of

inadequate dilation. Such inadequate dilation is treated by drugs known as

‗Agonists. INDACATEROL is one such dilator and is a ‗Beta Agonist'. It

functions differently from other inhaled bronchodilators. In the case of

INDACATEROL, one dose in the morning is sufficient to manage the

patient for 24 hours and it is extremely fast acting in the sense that it

provides relief within five minutes. The other inhaled bronchodilators have

very short term effects. There is no doubt that INDACATEROL as a drug

is of extraordinary utility and quality and that the inventiveness and

usefulness of the drug is prima facie established. It was, therefore,

submitted that the fact that the appellant manufactured and marketed

‗INDACATEROL' and ‗INDACATEROL Maleate', is prima facie

indicative of the infringement on the part of the appellant.

19. It was, therefore, submitted on behalf of the respondents that, while

public interest considerations may be a relevant factor in certain

circumstances such as in the case of life saving drugs, it cannot by itself

outweigh the rights of a patentee in the case of infringement of the patent as

provided under the said Act. It was further submitted that the only

argument that has been raised on the part of the appellant is that Section 48

is subject to Section 83 and, therefore, the argument of public interest

would override the rights of a patentee under Section 48 of the said Act. It

was submitted that Section 48 is undoubtedly subject to the other

provisions contained in the Act but, Section 83 would have no relevance

insofar as the rights of the patentees under Section 48 are concerned. The

two provisions operate in entirely different fields. Section 83, according to

the learned counsel for the respondents, also begins with the words

―without prejudice to the other provisions contained in this Act‖ which

would imply that it is without prejudice to all the other provisions in the

Act which includes Section 48. Secondly, it was submitted that the

provisions of Section 83 are not in respect of the rights of the patentees, but

to the powers to be exercised by the controllers and other authorities as

conferred on them by Chapter XVI of the said Act which relates to

Working of patents, Compulsory Licences and Revocation. Therefore, the

element of public interest, which is sought to be introduced by the appellant

through the route of Section 83 of the said Act, would not, in any way,

impinge upon the rights of the patentees which includes the rights of the

respondent in respect of patent No.222346, under Section 48 of the said

Act. It was also submitted on behalf of the respondents that the statistics

said to have been provided by the appellant with regard to the extent of

COPD patients in India is not reliable. References were made to certain

articles to suggest that COPD does not include an asthma-like respiratory

symptom or chronic bronchitis and, therefore, the number of patients

suffering from asthma or chronic bronchitis cannot be considered as part of

COPD patients. We may point out at this juncture itself that there are also

articles which may tend to indicate that chronic bronchitis is a part of the

COPD spectrum and can be considered as surrogate for COPD. However,

we need not enter into this controversy and only observe that the number of

COPD patients is large.

20. It was also contended that the conduct of the appellant was mala fide.

In this context, it was submitted that the appellants not only infringed the

respondent's patent, but had also attempted to pass off its INDACATEROL

Maleate's inhalation powder under the trademark ―ONBREZ‖ which was

an imitation of the respondent's trade mark ―UNIBREZ‖. As pointed out

above, it led to the filing of a trademark infringement suit [CS(OS)

3356/2014] in which the appellant undertook not to use the mark

‗UNIBREZ' any further and the suit was decreed in those terms by the

order dated 17.11.2014. It was also pointed out that the appellant had

submitted an application under Section 66 of the said Act on 22.10.2014

seeking revocation of the patent on the ground of public interest. And,

shortly thereafter, it launched its INDACATEROL.

21. In the context of the rights of a patentee and whether imports

constitute working of the patent, the learned counsel for the respondents

placed reliance on a Division Bench decision of this court in the case of

Telemecanique & Controls (I) Limited v. Schneider Electric Industries

SA: 2002 (24) PTC 632 (Del) (DB). Specific reliance was placed on the

following paragraphs:-

―30. It has to be appreciated that undoubtedly patent creates a statutory monopoly protecting the patentee against any unlicensed user of the patented device. Thus once a violation is established in case of a registered patent, subject of course, to the patent being used, it will not be permissible to contend that the said patentee is not entitled to an injunction. A monopoly of the patent is the reward of the inventor. It is also to be appreciated that law of the patent is slightly different from the law of copyright and trademark as the patent is granted only for a period of 14 years. It is also relevant to note that in the agreement of technical services dated 28.11.94 there is no mandate for the appellant to provide technical information to the appellant in respect of the manufacture of any other items but the only requirement is that the same can be done if terms and conditions are agreed upon between the parties. If the respondent would have provided D2 range of products to the appellant it would have been entitled to royalty in terms of Clause 6.4 of the said agreement. It is thus difficult to believe, as stated above, that there could be a license to copy and that is a major factor which has weighed with us in deciding the present appeal. It may also be added that Section 83 of the Patent Act, 1970 falls under Chapter XVI dealing with the working of patents, compulsory licenses, licenses of right and revocation. Section 83 by its wording refers to the exercise of powers conferred by the said Chapter and thus in view of there being exploitation of the patent in the country by sale of product by the respondent the public is getting the product and is not deprived of its benefit.

31. We would also like to note that while making submissions in rejoinder Mr. Arun Kathpalia, learned counsel for the appellant, sought to make submissions that in view of Section 83 read with Section 90(d) of the Patents Act, 1970 the patent has to be worked out in India by manufacture and not by

import. Mr. Kathpalia sought to rely on the commentary of Terrel on the Law of Patent, 13th edition chapter X para 10.07, 10.09, 10.10, 10.13, 10.14 and 10.17. Mr. Kathpalia submitted that same principles would apply in respect of the Indian law and thus in the absence of definition of commercial scale, natural and ordinary meaning should be given to the expression. He submitted that in terms of the said treaties the general principles set out are that a patentee must manufacture the product in that country and it should not also be mere improvements. We have, however, considered this aspect aforesaid and have come to the conclusion that there is no force in the submission of the appellant.‖ (underlining added)

22. It was also submitted that the decision in E Bay (supra) on the point

of public interest was based on the statutes as they existed in the United

States. This is not the case in India. With regard to the decision in

Hoffman La Roche (supra), it was submitted that injunction was refused

because a prima facie case itself was not made out and there was a credible

challenge to the validity of the patent. This was coupled with the fact that

there was public interest involved because it was a life saving drug. In the

present case, the situation is entirely different and, therefore, injunction

cannot be refused. It was further submitted that in Novartis AG and

Another v. Mehar Pharma and Anr: 2005 (30) PTC (Bom), injunction had

been refused because validity of the patent itself was in question. The

decision in Baer v. UoI: WP 1323/2013 decided on 15.07.2014 was also

not applicable as that was a case of compulsory licensing. The decision in

Franz Xaver Huemer (supra) was also distinguishable as that was a case of

non-user and the patent not having been worked at all and for that reason

injunction had been refused. The facts in the present case are different.

Advanced Cardiovascular Systems v. Medtronic Vascular: 579 F.

Supp.2d 554(D. Del.2008) was a case of prior licencing arrangements.

Thus, it was submitted that none of the cases cited on the part of the

appellants came to their aid.

23. A cross-objection (CM No.2090/2015) had also been filed on behalf

of the respondent by way of challenge to paragraphs 86 and 132 which

limited the injunction until the compulsory licencing was granted.

24. It was reiterated that manufacturing in India is not necessary for the

working of a patent. The respondents have patents in several countries and

this does not mean that they have to manufacture in each country. All that

is required is that the manufacturing facilities must be capable of supplying

worldwide depending on the demand. The manufacturing facility of the

respondent in Switzerland was a state-of-the-art facility and was capable of

meeting the demand in India. INDACATEROL was being imported

through Lupin and marketed in India to satisfy the needs in India and,

therefore, there was no requirement for manufacturing the said product in

India. It was also submitted that public interest elements are already

incorporated in the said Act, such as in Section 66 where a patent could be

revoked if it was contrary to public interest. Furthermore, Section 84

provides for compulsory licence where, again, the element of public interest

is indicated. Section 85 of the said Act also provides that where a

compulsory licence had been granted and after two years thereof, if the

patent had not been worked in India or did not serve the public interest, the

patent could be revoked. It was, therefore, submitted that for all these

reasons, the injunction granted by the impugned judgment ought not to be

disturbed.

25. After considering the submissions advanced by the learned counsel

for the parties and examining the relevant papers, we are of the view that

the injunction granted by the learned single Judge ought not to be disturbed.

The reasons for this are the following:-

First of all, there is no credible challenge to the respondent's patent

No.222346. Therefore, prima facie, the respondent is straightaway entitled

to an injunction in view of the rights available to it as a patentee under

Section 48 of the said Act;

Secondly, although Section 48 is subject to the other provisions contained

in the Act and the conditions specified in Section 47, this would only have

relevance where the other provisions of the Act impinge upon the

provisions or the rights of the patentees under Section 48. Section 83 is not

one such provision. Section 83 itself is without prejudice to the other

provisions in the said Act and, therefore, is also without prejudice to the

provisions contained in Section 48 of the said Act. Moreover, Section 83

falls in an entirely different Chapter which deals with the Working of

patents, Compulsory Licences and Revocation. Section 83 deals with the

general principles and, in fact, enjoins the authorities under the Act, who

exercise powers conferred under Chapter XVI to have regard to the general

considerations specified in sub-clauses (a) to (g) thereof. The

considerations, inter alia, being that patents are granted to encourage

inventions and to secure that the inventions are worked in India on a

commercial scale and to the fullest extent that is reasonably practicable.

Another consideration is that the patents do not impede protection of public

health and nutrition and should act as an instrument to promote public

interest in sectors of vital importance for socio-economic and technological

development of India. Another consideration to which due regard has to be

had is that patents are granted to make the benefit of patented inventions

available at reasonably affordable prices to the public. But, all these

considerations to which regard has to be had, are directed towards the

authorities, who exercise powers conferred under Chapter XVI. Those

powers, include the grant of compulsory licences under Section 84, the

revocation of patents by the controller for non-working of the patents after

the grant of a compulsory licence under Section 85 and other incidental

proceedings. It is immediately clear that the provisions of Section 83 do

not curtail or circumscribe the rights of the patentees under Section 48,

except in the backdrop of compulsory licences and ancillary issues;

Thirdly, we are of the view that it is not at all necessary that for a patent to

be worked in India, the product in question must be manufactured in India.

As pointed out in Telemecanique (supra), a patent can be worked in India

even through imports. All that is to be seen is that the imports are of a

sufficient quantity so as to meet the demands for the product. This is of

particular importance in the case of pharmaceutical products. From the

presentation of data before us both by the appellant and the respondent in

the shape of articles, etc, we cannot make a definitive conclusion as to

whether the extent of imports is not sufficient for meeting the demands of

COPD patients in India. This would be a matter of evidence which can

only be thrashed out in the course of a trial. We may also point out that

apart from INDACATEROL, there are other drugs which deal with the

management of COPD which are also available in the Indian market.

INDACATEROL also does not fall in the category of a life saving drug,

such as a cancer medicine. We have also noted the submission made on

behalf of the respondents that sufficient quantities are being imported into

India in order to serve the needs of the COPD patients;

Fourthly, even though the question of public interest may be a factor in

considering the grant of an injunction, it is only one of the factors which

needs to be kept in mind. In any event, in the present case, we do not feel

that the appellant has even made out a case that public service would be

disserved by the grant of an injunction. On the other hand, the respondents

have established a prima facie case in that that patent is valid and,

therefore, there is no credible challenge to the validity of the patent. The

balance of convenience is also in favour of the respondent. We are also of

the view that in case an injunction is not granted in the circumstances, the

respondents would suffer irreparable injury as their rights under Section 48

would be seriously impaired in a manner which cannot be restituted by

damages. Because of the aforesaid conclusion, we are also not inclined to

uphold the cross-objections of the respondents in CM No.2090/2015.

26. In view of the foregoing discussion, no interference with the

impugned judgment and / or order is called for. The appeal is dismissed.

There shall be no order as to costs.

BADAR DURREZ AHMED, J

SANJEEV SACHDEVA, J MARCH 09, 2017 SR/dutt