Delhi High Court

Fmc Corporation & Anr. vs Natco Pharma Limited on 19 May, 2021

$~6 & 7 (original)
* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 17th May, 2021
Decided on: 19th May, 2021

I.A. 5801/2021 in
+ CS(COMM) 69/2021

FMC CORPORATION ..... Plaintiff
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr. Sanjay Kumar,
Ms.Arpita Sawhney, Mr. Arun Kumar Jana,
Mr. Harshit Dixit and Ms. Priyansh Sharma,
Advs.

versus

BEST CROP SCIENCE LLP & ANR. ..... Defendants
Through: Mr. Gopal Subramanium,
Senior Advocate with Dr. Shilpa Arora,
Mr.Sidharth Chopra, Ms. Sneha Jain,
Dr.Amitavo Mitra, Dr. Victor Vaibhav
Tadon, Ms. Shruti Jain, Ms. Hima Lawrence
and Mr. Jayavardhan Singh, Advs.

I.A.5816/2021 in

+ CS(COMM) 611/2019

FMC CORPORATION & ANR. ..... Plaintiffs
Through: Mr. Sandeep Sethi, Sr.Adv.
with Mr. Sanjay Kumar, Ms. Arpita
Sawhney, Mr. Arun Kumar Jana, Mr.Harshit
Dixit and Mr. Priyansh Sharma, Advs.

versus

Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021
Digitally Signed I.A.5816/2021 in CS(COMM) 611/2019 Page 1 of 15
By:SUNIL SINGH NEGI
Signing Date:19.05.2021
22:29:48
NATCO PHARMA LIMITED ..... Defendant
Through: Mr. J. Sai Deepak with Mr.G
Nataraj, Mr.Avinash K Sharma and Mr.R.
Abhishek, Advs.

CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR

% JUDGMENT

1. This order disposes of IA 5801/2021 in CS (Comm) 69/2021
and IA 5816/2021 in CS (Comm) 611/2019.

2. Both these suits, instituted by M/s FMC Corporation, allege
infringement, by the defendants, of Indian patents IN 201307 ("IN
307") and IN 213332 ("IN 332"), held by the plaintiff. Of these, IN
307 is a product patent and IN 332 is a process patent. The plaints
allege that the defendants are intending to launch Chlorantraniliprole
("CTPR"), which is specifically covered and disclosed in IN 307 and
IN 332, held by the plaintiff. The proposed action of commercially
manufacturing and launching CTPR would, therefore, according to the
plaint, infringe IN 307 and IN 332. The plaint, therefore, prays for a
permanent injunction against the defendants from dealing in any
product which could infringe IN 307 or using any of the processes
claimed under IN 332.

3. The defendants' case, in opposition to the case set up by the
plaintiff, is that CTPR stands covered by IN 204978 ("IN 978"),
which is a genus/Markush patent held by the plaintiff. The plaintiff

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has, in response, contended that, even if CTPR is covered by IN 978,
it is not disclosed therein. As against this, the defendants contend,
relying on the judgment of the Supreme Court in Novartis AG v.
U.O.I. 1, that coverage in the genus patent is sufficient and that the
Supreme Court has specifically disapproved dichotomizing coverage
and disclosure.

4. Detailed arguments have already been advanced before me over
the course of several hearings, by both parties, on this nuanced issue,
regarding the distinction between coverage and disclosure in the
genus/Markush patent and whether coverage sans disclosure would be
sufficient to invalidate the subsequent specie patent(s), i.e. in the
present case, the suit patents IN 307 and IN 332. The defendants
question the very validity of the suit patents, IN 307 and IN 332,
contending that, once CTPR stood covered by IN 978, no separate
patents could be issued specifically claiming CTPR. They contend that
a person ordinarily skilled in the art could easily derive CTPR from
the moeities disclosed in IN 978, without having to resort to any
inventive step in that regard. In view thereof, the very validity of IN
307 and IN 332, according to the defendants, is highly questionable
and, by seeking to base their claim on the said patents, the plaintiff is
attempting to "evergreen" the Markush patent IN 978, even beyond its
tenure.

5. IN 978 expired on 20th March, 2021, and the suit patents IN 307
and IN 332 are due to expire in August, 2022.

1
(2013) 6 SCC 1
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By:SUNIL SINGH NEGI
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22:29:48
6. The basic premise, on which these applications are based, is
that, as IN 307 and IN 332 are ab initio invalid patents and as IN 978
has expired, the defendants are now entitled to launch their CTPR
product in the market.

7. At the time of issuance of notice in CS(Comm) 611/2019 on
14th November, 2019, the statement of Mr. Sai Deepak, learned
counsel for the defendant, was thus recorded:

"2. Mr. J. Sai. Deepak, learned counsel for the defendant
states upon instructions that the defendant has applied for
regulatory approval for manufacturing and marketing the
product, which the plaintiff alleges infringes the suit patent, in
September 2019. He states that approval usually takes 6 to 18
months to be processed. Consequently, it is further stated that
there is no likelihood of commercial launch of the product
prior to March, 2020. Recording the aforesaid statement, it is
unnecessary to pass an ad-interim order at this stage. Mr. J.
Sai Deepak also states for the record that the defendant has
applied to the Intellectual Property Board for revocation of
the suit patent IN 201307."

8. Effectively, therefore, the defendant seeks to resile from its
statement as recorded on 14th November, 2019, citing changed
circumstances as the justification thereof. Similar relief is sought in
IA 5816/2021 in CS (Comm) 611/2019.

9. I have heard, at length, learned senior counsel, Mr. Gopal
Subramanium, for the applicant in I.A. 5801/2021 and Mr. J. Sai
Deepak, learned counsel for the applicant in I.A.5816/2021.

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By:SUNIL SINGH NEGI
Signing Date:19.05.2021
22:29:48
10. Mr. Subramanium initially invited my attention to paras 25 and
26 of CS (Comm) 69/2021, which read thus:

"25. In fact during the prosecution of the application
corresponding to the suit patent IN 201307 in the US, a
Declaration was filed at the United States Patent and
Trademarks Office (USPTO) comparing compounds
disclosed in the suit patent with the closest, specifically
disclosed compounds in IN'978. A copy of the said
declaration is annexed with the list of documents filed with
the present plaint.

26. The said Declaration mentions tests conducted with the
compounds of the selection invention (i.e. suit patent IN'307)
and a comparison with the closest compounds disclosed in
IN'978. In the tests, all the new compounds of the suit patent
(IN'307) showed unexpected and unpredictable superior
insecticidal activity compared with the closest compounds
disclosed in IN'978. CTPR is not specifically disclosed in
IN'978. A person skilled in the art would not arrive at CTPR
from Formula 1 of IN'978 without human intervention and
ingenuity on account of extensive, thorough and undue
experimentation or hindsight knowledge. Nonetheless, CTPR
is in the class of anthranilamides within the scope of the
numerous compounds included in the Markush Formula
disclosed and claimed in the IN'978 patent."

11. Mr. Subramanium, emphasises the concluding sentence in para
26 of the plaint in CS (COMM) 69/2021, which admits that CTPR "is
in the class of anthranilamides within the scope of the numerous
compounds included in the Markush formula disclosed and claimed in
the IN'978 patent". Once this has been admitted by the plaintiff, and,
IN 978 has expired, Mr. Subramanium would seek to contend that
there can be no justification to further restrain his client from
manufacturing and selling its CTPR product. Over the course of past
year and a half, Mr. Subramanium submits that his client has acquired

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By:SUNIL SINGH NEGI
Signing Date:19.05.2021
22:29:48
all statutory clearances for the manufacture and launch of its CTPR
product.

12. CTPR, points out Mr. Subramanium, is an agricultural
insecticide, which is specifically used during the kharif season, which
is due to come to an end in July, 2021. If, therefore, the defendant is
not permitted to manufacture or sell its CTPR product, it would lose
its entire business for this year and would be denied the right to
exploit the IN 978 patent even after it has expired.

13. Mr. Subramanium also emphasises the aspect of public interest,
by stating that the product of his client is priced 25% lower than the
product of the plaintiff.

14. In these circumstances, submits Mr. Subramanium, the interests
of justice would justify permitting the defendant to manufacture and
sell its CTPR product, against which the defendant is prepared to
maintain the accounts and is also willing to secure the damages of ₹ 2
crores, mentioned in the plaint, by way of an adequate security such as
a bank guarantee. He, submits, that the principles of balance of
convenience and irreparable loss, viewed in the backdrop of the fact
that farmers would have access to the CTPR product at much lower
rates, would, in Mr. Subramanium's submission additionally justify
the prayers in this application.

15. Appearing on behalf of the applicant in I.A.5816/2021 in CS
(Comm) 611/2019, Mr. J. Sai Deepak initially drew attention to para 6
of the plaint in CS (Comm) 611/2019, in which the plaintiff has
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By:SUNIL SINGH NEGI
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22:29:48
admitted that "the suit patents have been licensed and/or sub-licensed
by the Plaintiffs to Syngenta Ltd., Syngenta Crop Protection AG; E.I.
Du Pont de Nemours and Company, and the Scotts Company LLC".
As such, submits Mr. Sai Deepak, the plaintiff has already licensed the
suit patents, for exploitation by others. What, essentially, the plaintiff
is interested in, therefore, according to Mr. Sai Deepak, is money in
the form of the license fee, which the plaintiff would earn. In such
circumstances, submits Mr. Sai Deepak, the considerations of public
interest and balance of convenience would justify allowing the
defendants to release their product in the market, for which purpose
Mr. Sai Deepak places reliance on paras 35.5, 35.6, 36 and 36.2 of a
recent judgment dated 2nd November, 2020, of this Court in Astra
Zeneca AB v. Intas Pharmaceuticals Ltd.2 which are reproduced
thus:

"35.5 What persuades me to decline injunction, in addition to
what I have stated above, is also the fact that in this case
damages if proved at trial, appear to be compensable. The
defendants have averred that the plaintiffs have, possibly,
licensed their rights under the suit patents to two entities i.e.
Sun and Abbott. The packaging of the products of the drug
sold through these entities is indicative of this aspect. The
plaintiffs, however, for reasons best known to them have not
placed on record the agreements arrived at with these entities
in support of their plea. Therefore, it has to be inferred that
the said entities are licensees.

35.6 Besides this, the plaintiffs also aver that they are
importing their drug into the country. Therefore, the plaintiffs
seek to monetize their invention. Thus, at the end of the trial,
if they were to succeed, they could be granted damages, if
proved, under the law. Thus, as long as a mechanism can be

2
2020 (84) PTC 326
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put in place for securing the recovery of damages by the
plaintiffs, it would, at this stage, balance the interest of the
parties. [See: Dynamic Manufacturing, Inc. vs. David A.
Craze, and Miller Industries, Inc., 1998 WL 241201].

36. The parties have also advanced submissions on the
aspect concerning public interest. The plaintiffs have
submitted that the quality of the drug could be an issue. The
plaintiffs have also contended that the drug sold by them is
priced reasonably.

****

36.2 Clearly the difference in prices of drugs ranges between 250% to 350%. Therefore, as is apparent, if defendants were allowed to manufacture and market their drugs, it would be far cheaper. Concerns as to quality, at this juncture, appear to be a self-serving argument. The concerned statutory authority can, in my view, adequately deal with this issue if and when such a situation arises."

16. Mr. Sai Deepak has further adverted, at length, to the course of hearings in the present proceedings, in an effort in submitting that the plaintiffs have been guilty of unduly protracting the proceedings by filing misconceived applications. He submits that, even at the stage of rejoinder, the plaintiffs have delayed the matter, thereby subjecting the defendants to needless prejudice. Mr. Sai Deepak professes to exhibit greater generosity than Mr. Subramanium, by undertaking, on instructions, to furnish a bank guarantee for ₹ 5 crores, even though the damages computed in the plaint are only to the tune of ₹ 2 crores. Mr. Sai Deepak has also placed reliance on Section 144 of the CPC, whereunder the plaintiffs could always seek restitution at a later stage. He submits that no further justification exists, to restrain the defendants from exercising their legitimate rights by exploiting the

Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 genus patent IN 978 and releasing their CTPR products in the market.

17. Arguing for the plaintiff/non-applicant, Mr. Sandeep Sethi, learned Senior Counsel submits that, were the present applications to be allowed, IA 2084/2021 in CS (Comm) 69/2021 and IA 15352/2019 in CS (Comm) 611/2019, preferred by the plaintiff under Order XXXIX Rules 1 and 2 of the CPC would be rendered infructuous. Apropos the equities of the case, Mr. Sethi submits that the defendants never filed any pre or post grant opposition to the suit patents or sought to challenge the suit patents by any other means known to law, except a belated revocation petition before the IPAB. He submits that damages can never constitute adequate recompense for infringement or violation of validly held patents, especially pharmaceutical patents and relies, for this purpose, on the following passages from Merck Sharp and Dohme Corpn. v. Glenmark Pharmaceuticals 3:

"82. Addressing these principles in the circumstances of the present case, the Court notes six equitable principles that come into play in this case and must be considered. First, and this principle is now well established in Indian jurisprudence, the Court must look at the public interest in granting an injunction, as access to drugs, especially one for a condition as prevalent as diabetes, is an important facet of the patent regime. Here, the price difference between the commercial products sold by Glenmark and MSD is not so startling as to compel the court to infer that allowing Glenmark to sell the drug, at depressed prices would result in increased access.

Permitting Glenmark to operate would not necessarily result in lowering of market prices. Importantly, whilst lower prices may result from competition amongst two competitors, no allegation has been made that MSD today sells its drugs at a relatively high price that hinders access to the drug. MSD has reduced its price by 1/5th from the United States, which shows

(2015) 63 PTC 257 Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 some receptivity to the Indian market; Glenmark has not disputed this submission.

85. This leads us to the second principle, which is whether the Court can overlook the public interest in maintaining the integrity of the patent system itself, so that a legitimate monopoly is not distorted. As this Court noted in Bayer Corporation v. Cipla, Union of India (UOI), 162 (2009) DLT 371

"[i]f, after a patentee, rewarded for his toil - in the form of protection against infringement - were to be informed that someone, not holding a patent, would be reaping the fruits of his efforts and investment, such a result would be destructive of the objectives underlying the Patents Act.".

The Court must be mindful - especially in a case where a strong case of infringement is established, as here - there is an interest in enforcing the Act. It may be argued that despite this no injunction should be granted since all damages from loss of sales can be compensated monetarily ultimately if the patentee prevails. This argument though appealing, is to be rejected because a closer look at the market forces reveal that the damage can in some cases be irreparable. This in turn leads to the third principle, which is where an infringer is allowed to operate in the interim during the trial, it may result in a reduction in price by that infringer since it has no research and development expenses to recoup - most revenue becomes profit. The patentee however can only do so at its peril. Importantly, prices may not recover after the patentee ultimately prevails, even if it is able to survive the financial setback (or "hit") during the interim, which may take some time. The victory for the patentee therefore should not be pyrrhic but real. This irreparable market effect in cases of a sole supplier of a product has also triggered the decisions in Smith Kline Beecham v. Generics, (2002) 25(1) IPD 25005 and Smithkline Beecham Plc (2) Glaxosmithkline UK Ltd. v. Apotex, [2003] EWCA Civ L37, where in granting an interim injunction, it was held that damages would not be an adequate remedy for the plaintiff since it was the sole supplier of the product. New entrants to the market would be likely to cause its prices to go into a downward spiral, and Smith Kline's Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 prices may not recover even if it wins eventually. Equally, granting the injunction would not prejudice Glenmark to an equal extent since - if the suit is dismissed - it may return to a market that is largely variable."

As such, submits Mr. Sethi, these applications merit outright dismissal.

18. In a short rejoinder, Mr. Sai Deepak points out that Merck Sharp & Dohme Corpn.3 was noticed by the Coordinate Bench of this Court in AstraZeneca2. He further draws my attention to paras 35.1 and 35.3 of the decision in AstraZeneca2.

19. Having heard learned Senior Counsel Mr. Subramanium and learned Counsel Mr. Sai Deepak at length, I am unable to convince myself that any case, for grant of the prayers in these applications, exists.

20. To my mind, the entire issue is something of a no-brainer. The extensive reliance, by learned Counsel, on the fact that IN 978 has expired on 20th March, 2021 is neither here nor there. The plaintiff does not allege infringement, by the defendants, of IN 978. The plaintiff alleges infringement of IN 307 and IN 332. It is not in dispute that IN 307 and IN 332 are still alive, and would expire only in August, 2022.

21. Equally, the reliance, by Mr. Subramanium, on the acknowledgement, in para 26 of the plaint in CS(COMM) 69/2021, that CTPR is in the class of anthranilamides within the scope of the Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 numerous compounds included in the Markush Formula disclosed and claimed in IN 978 cannot advance the case of the defendants in these applications. This acknowledgement does not, in any manner, discountenance the case of the plaintiff. Even as per Mr. Sai Deepak, the plaintiff has specifically pleaded that CTPR is not disclosed in IN

978. According to the plaintiff, even if CTPR were to be regarded as covered by IN 978, in the absence of disclosure, mere coverage would not invalidate the specific suit patents issued for CTPR i.e. IN 307 and IN 332. Whether mere coverage of CTPR in IN 978 - assuming such coverage exists - would, in the absence of disclosure of CTPR in IN 978, be sufficient to invalidate the suit patents IN 307 and IN 332, is a matter for consideration and decision in the applications filed by the plaintiff under Order XXXIX of the CPC, which are presently at the stage of rejoinder. This Court cannot, obviously, in these applications, prejudge that issue and, indeed, Mr. Subramanium very fairly stated that the defendants were not requiring the Court to do so.

22. It is not - and, indeed, it cannot be - disputed that, were these applications to be allowed, nothing substantial would survive for consideration in IA 2084/2021 and IA 15352/2019, filed in these suits under Order XXXIX of the CPC. Once allegedly infringing products are in the market, there can obviously be no stay against the infringement and even if any stay were to be granted, the exercise would be fundamentally chimerical in nature. It is also a well settled position in law that damages are entirely insufficient as panacea for the holder of a valid patent, which is infringed by another. Intellectual property has its own sanctity. The prejudice caused even by a single Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 day's infringement of intellectual property is, in principle, incalculable. It is fundamentally incongruous, therefore, to suggest that, even while the applications for injunction, preferred by the plaintiff in the suits under Order XXXIX of the CPC, are being heard by this Court and are, in fact, at the stage of rejoinder, the defendants should be allowed to launch the allegedly infringing CTPR products.

23. The decision in AstraZeneca2 can hardly help the defendants. Paras 35.5, 35.6, 36 and 36.2 of the said decision are only in the nature of residual findings, after a detailed examination of the merits of the case, in the preceding paragraphs. This Court has not, in the said decision, permitted release of allegedly infringing pharmaceutical products in the market even while the prima facie merits of the application under Order XXXIX of the CPC was under consideration before it, as is the prayer in the present case. I also find substance in the reliance, by Mr. Sethi, on paras 82 and 85 of the judgment of the Division Bench of this Court in Merck Sharp & Dohme Corporation3, which emphasized the fact that in cases of alleged infringement of pharmaceutical patents, damages are poor solace.

24. I posed a specific query to Mr. Sai Deepak as to how, if this Court were to find that there was, prima facie, infringement of the plaintiff's suit patent by the defendants and that, therefore, a prima facie case for grant of the relief in IA 2084/2021 and IA 15352/2019, filed by the plaintiff under Order XXXIX of the CPC existed, any meaningful order could be passed, if the defendants were to be allowed to release the allegedly infringing CTPR products in the

Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 market in the interregnum. Despite attempting to answer the query with the considerable legal acumen at his command, I am constrained to observe that no satisfactory response was forthcoming. Rather, Mr. Sai Deepak, with characteristic candour, acknowledged that it was not his case that damages were adequate recompense for a plaintiff who had suffered infringement of its intellectual property. Once this position is admitted, there can be no reasonable justification for permitting the defendants, even while the arguments in the plaintiff's applications under Order XXXIX of the CPC are at the stage of rejoinder, to allow the defendants to release the allegedly infringing CTPR products in the market, thereby effectively rendering the applications under Order XXXIX of the CPC infructuous.

25. In view thereof, I am of the opinion that no case for grant of the prayer for permitting the defendants to release their allegedly infringing CTPR products in the market, can be said to exist at this stage.

26. Learned Senior Counsel Mr. Subramanium and learned counsel Mr. Sai Deepak, pray towards the conclusion of the proceedings that, even if this Court were not inclined to allow the prayers in these applications, the IA 2084/2021 and IA 15352/2019 be set down for conclusion of arguments in rejoinder on a date convenient to the Court and as expeditiously as possible. The record reveals that arguments in rejoinder have been advanced by the plaintiff in these applications, on 21st January, 2021, 3rd February, 2021, 15th February, 2021 and 22nd February, 2021. The issue involved in the case is serious, far-reaching Signature Not Verified I.A.5801/2021 in CS(COMM) 69/2021

By:SUNIL SINGH NEGI Signing Date:19.05.2021 22:29:48 and justifies an expeditious disposal, especially as it involves pharmaceutical patents. Accordingly, list on 25th May, 2021 from 2:15 to 4:30 pm and on 28th May, 2021 from 2:15 to 3:15 pm, for conclusion of the rejoinder submissions of the plaintiff. Submissions in surrejoinder, if any and subject to the discretion of the Court, would be entertained from 3:15 pm to 4:30 pm on 28th May, 2021. It is made clear that these times would be adhered to, by the clock, with no further time to either side whatsoever. Once submissions are concluded, both parties would be at liberty to file their respective written submissions after exchanging copies with each other, within the time that would, at that stage, be stipulated in that regard.

27. With the aforesaid observations, these applications stand disposed of.

C. HARI SHANKAR, J MAY 19, 2021 ss/r.bararia/kr

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