Merck Sharp and Dohme Corporation v Glenmark Pharmaceuticals (2015)

Summary

"The appellant – Merck Sharp & Dohme (hereafter 'MSD') – is aggrieved by the dismissal of its application for an ad interim injunction restraining the respondent/defendant Glenmark Pharmaceuticals" "from using its patented product Sitagliptin (Indian Patent No. 209816, hereafter 'the patent' or 'the suit patent')." "Glenmark was on caveat: the learned Single Judge heard the parties at the first hearing." "The learned Single Judge rejected the injunction application." (para 1) In appeal the Bench recorded that "It is clarified by counsel for the respondent that the merits of the interim relief application can be gone into and decided finally by this Court." (para 11) "MSD alleged in its suit that it commercially markets Sitagliptin as a phosphate monohydrate salt ('SPM'), under the commercial name 'Januvia'" and "Glenmark markets a drug under the commercial name 'Zita', which is SPM." (para 31) Glenmark's challenges included "the Markush plea" and that "the claims in this patent do not disclose SPM or the Sitagliptin free base, but only Sitagliptin Hcl" (para 34).

The Bench held that "the Sitagliptin free base is prima facie disclosed, claimed and thus covered by the suit patent" (para 56), that "Section 3(d) does not work backwards" (para 56), and that "Glenmark cannot produce Sitagliptin Phosphate without producing Sitagliptin first and thus infringing MSD's patent", so that "prima facie infringement of MSD's patent is established" (para 79). On the equities it found that "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" (para 82) and that "The balance of convenience thus clearly lies in favour of MSD." (para 86) It held "that the order of the learned Single Judge dismissing the application for grant of an interim injunction is liable to be and is set aside. The interim injunction claimed for by the plaintiff MSD in IA 5167/2013 is granted." (para 89) "The appeal is allowed in the above terms. Parties shall bear their own costs." (para 90)

What the court decided

1. Procedure. Decision at the first hearing. "it cannot be overemphasized that in patent disputes, an ex-parte or even an in limine decision (i.e at the threshold stage) of an interlocutory application should be avoided." "A safer approach - one dictated by caution and circumspection, would be to deny relief in the first hearing if there is the slightest doubt, but set down the application for hearing at the earliest opportunity even while requiring some semblance of formal disclosure by the defendant." (para 29)
2. The three-factor inquiry. "In such cases, while considering the grant of ad interim injunctions generally, the Court must determine whether first, the claimant may, prima facie, succeed in its claim, secondly, whether MSD" ("Merck Sharp & Dohme") "will suffer irreparable injury if the injunction is refused, and finally, determine the balance of convenience between the parties." (para 30)
3. No presumption of validity. "At the outset, the Court notes that although the patent has been granted in this case, its validity cannot be presumed. The Act envisages revocation of patents based on subsequent opposition, and the patentee cannot claim immunity from defending the validity of the patent." (para 36) Of Bishwanath Prasad Radhey Shyam v Hindustan Metal Industries (1978): "Though that case concerned a presumption at the stage of final judgment, the principle applies equally to interim hearings. This was implicit in the decision of this Court in" Franz Xaver Huemer v New Yash Engineers (1996) "and has been made explicit in cases across the country", including "the Madras High Court in" V. Manicka Thevar v Star Plough Works (1964) "and the Calcutta High Court in" Hindustan Lever v Godrej Soaps (1996). (paras 36–37)
4. Construction and coverage. "Construction of the patent by this court, to verify its coverage is fundamental. This coverage depends on the nature of the claims made (and enabling disclosures specified) by MSD in its 'Complete Specification' under Form 2 of the Act. The words used to describe the claims – as read by a person of ordinary skill in the art –determine the breadth of the monopoly granted by the patent" (para 38)
5. Enabling disclosure. "The Court notes that mere claims, without an enabling disclosure, cannot be sustained. The patent must – as a quid pro quo for the grant of monopoly – enable a person of ordinary skill in the art to work the invention as claimed. This crucial principle was considered by the Supreme Court in" Novartis v Union of India (2013) (para 46), and "The court consequently, has to inquire into whether the Sitagliptin free base and further SPM" ("phosphate monohydrate salt") "were disclosed sufficiently for a sustainable patent claim." (paras 46–47)
6. The addressee of a specification. "Those to whom the above claims, examples and schemes are directed are not judges, ably assisted by lawyers; they are 'persons of ordinary skill in the art'." "While reading a patent claim, therefore, the Court must not reinvent the wheel and mandate disclosures of techniques and product rehearsed in the industry already, but only examine what is new in the invention and how to arrive there from the state of the art." (para 48)
7. Disclosure of the free base. "In this case, from known compounds, prima facie, the Sitagliptin free base is disclosed." "Two, the Court has to look to the invention in this case, and not read the claims literally." "In this case, the active therapeutic component is the Sitagliptin free base" "and not the attaching phosphate, Hcl or other carriers." "the active therapeutic ingredient remains the Sitagliptin free base, and that product is sufficiently disclosed in Form 2 filed by MSD." (para 50) "In this case, prima facie, a reading of the Form 2 filing on its own terms, indicates that the Sitagliptin free base is disclosed and claimed." (paras 50–51)
8. Best method and the phosphate salt. "It is clear that SPM was not specifically disclosed in the suit patent, apart from a generic reference as a pharmaceutically acceptable salt." "The Court notes that if SPM is a 'better' formulation than the HCL salt, and it was known at the time of the filing of the patent (as MSD claims), it must have been disclosed under Section 10(4)(b). It was not; whilst the precise chemical structure and reaction for reaching the HCL salt was detailed, SPM was not." "In such a case, the case could tilt against MSD as regards the coverage of SPM in the patent." "To put it the other way, it is not patent that Section 10 (4)(b) stood breached, disentitling MSD for interim relief." (para 54)
9. Objective claim construction. "The Court at the same time, notes that the claim construction to determine the coverage in the suit patent is to be determined objectively on its own terms with regard to the words used by the inventor and the context of the invention in terms of knowledge existing in the industry. The subsequent abandonment of a patent for SPM cannot remove what is patented earlier" "nor can it include something that was excluded earlier. The motives for abandonment – since MSD claims that it abandoned the claim due to Section 3(d) of the Act – play no part in the claim construction." (para 55)
10. Section 3(d) and later applications. "Section 3(d) does not work backwards, such that two independent patent claims are to be construed in reference to each other. Each claim is regulated by its own terms, subject to the statutory prescriptions of inventive step and industrial applicability." "A patent is construed by reference to the words used by the inventor, and not her subjective intent as to what was meant to be covered" "Merely because an inventor applies for a later patent – that is already objectively included in a prior patent, but which the inventor subjectively feels needs a separate patent application – does not mean that it is taken to be at face value." "This Court is furthermore also cautious of using either Section 3(d) or the abandonment of a subsequent patent application to read into the terms of a prior application which has to be construed on its own terms." (para 56)
11. Markush claims. "The suit patent does claim all pharmaceutically acceptable salts of Sitaglptin, and is undoubtedly a 'Markush' claim." "Patents cannot be construed so broadly so as to risk granting the patentee an unduly broad monopoly, but equally, one must not construe them narrowly and risk allowing competitors pick the closest imitation and frustrate the monopoly." "The answer – the via media – lies in determining the context of the industry involved, the nature of the technical contribution and whether the crux of the invention is reflected in the combinations claimed." (para 59) "a Markush patent may be invalid if the ambiguity is writ large, or the patent can itself be valid, but in case of infringement, the question may arise whether the Markush claim also covers a particular combination." (para 60) "Accordingly, prima facie the Markush patent in this case sufficiently discloses the active ingredient and to that extent is valid." "the question whether the suit patent sufficiently discloses a particular combination (out of the billions it claims to cover) may arise on a case to case basis, on considering whether the combination has a different use, action, function, chemical structure or value as to take it out of the coverage." (paras 59–61)
12. Industrial application of an active ingredient. "Section 2(1)(ac) defines the phrase 'capable of industrial application' as an invention capable of being made or used in an industry." (para 66) "That carrier, however, is not the crux of the invention, but only an inert component that does not add value to the therapeutic or medical value, which is the true core of the invention." (para 67) "As long as Sitagliptin is recognized to have a therapeutic effect in humans, it is practically applicable, even if it is not commercially successful due to an ineffective carrier" "In such cases of pharmaceutical compounds, if the function of the compound is disclosed, and that function is useful in the medical industry, it is industrially applicable." (paras 66–69)
13. Later-published art. "It is well-established that prior art is judged with reference to material that is made, published or made public on the priority date of the suit patent. EP 1406622 – published later in time – is not prior art for the suit patent." (para 71)
14. Section 8 and Indian applications. "the Court notes that Section 8 only mandates the disclosure of patent applications outside India and not within" (para 75). "Given that failure to comply with Section 8 leads to the substantial consequence of revocation under Section 64(1)(m), the words must be given their literal meaning." "This Court is aware that a contrary view was taken by a Division Bench of this Court in" F Hoffmann-La Roche v Cipla (2009) "In the opinion of this Court, this reading does not emanate from Section 8." (paras 75–76)
15. Section 8 at the interim stage. The Bench recorded that "a recent Division Bench ruling in Maj. (Retd.) Sukesh Behl v Koninklijke Phillips Electronics (FAO 16/2014, decided on 07-11-2014) has again re-inforced the discretionary element consequent upon a patent applicant's failure to comply with Section 8" and held: "An important element in this discussion is that at an interlocutory stage, when the Court merely takes a broad look at the prima facie nature of the case, rejection of the claim for temporary injunction on the basis of such facial understanding regarding non-disclosure of Section 8 would be drastic. The possibility cannot be entirely ruled out, in cases where breach of the provision is patent and manifest." "The non-disclosure of 5948/DELNP/2005 (Sitagliptin Phosphate Monohydrate), 1130/DELNP/2006 (Sitagliptin Phosphate Anhydrate), 2710/DELNP/2008 (Sitagliptin plus Metformin) is thus prima facie insufficient, in the opinion of this Court, for revocation under Section 64(1)(m)." (para 76)
16. X-ray diffraction data. "first, the view of the Division Bench does not imply that disclosure of the XRD" ("X-ray Diffraction Pattern") "is mandatory such that it results in invalidity or revocation of the patent, as Glenmark claims. Such an interpretation would be tantamount to the impermissible addition of a separate ground for revocation under Section 64(1); and secondly, whilst XRD may be relevant in various cases to determine the nature of complex compounds and compare the infringing drug with the patent in question, there is no universal rule that XRD must be disclosed in all cases as a matter of rule" "Reading of complex scientific documents in interim hearings is not the Court's forte, and it would be wise to exercise extreme caution." (para 78)
17. Infringement through the free base. "Accordingly, a case for the infringement by Glenmark – through its product Zita – is established since it uses the Sitagliptin free base as the active component in its chemical formulation." "Glenmark's explanation that it uses a different process to produce the infringing article is facially unconvincing." "Glenmark cannot produce Sitagliptin Phosphate without producing Sitagliptin first and thus infringing MSD's patent. This is irrespective of whether Sitagliptin phosphate and Sitagliptin are same and are claimed in a single patent." "Whether MSD secured a patent for Sitagliptin Phosphate - but was denied, could not have been a rationale for denying the inventive step involved in its granted patent, in India." "The use of Sitagliptin without authorization clearly amounted to infringement - as noted earlier, expressly enjoined by Section 48 (a)." (para 79)
18. The limits of the interim inquiry. "In the usual course, the Court benefits from a full trial with pleadings and expert evidence, especially in matters as complicated as pharmaceutical patents; these are absent today, and so, in attempting to mimic that exercise in determining whether a prima facie case exists, we must not conduct some sort of" "mini-trial" "The conclusions thus remain in some part tentative." "the other two factors – balance of convenience and presence of an irreparable injury – become all the more important." (para 80)
19. Discretion and equitable principles. "At one extreme, neither mathematical rules nor fixed formulae can provide the answers; on the other, discretion is not synonymous with the absence of demonstrable and intricate reason." "courts must dig deeper and introduce greater nuance in their analysis by reference to constantly evolving equitable principles." (para 81)
20. Public interest and access. "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." (para 82) Of the Roche case the Bench recorded that the Court, "noting that the price differential was about 300% in relation to a life-saving drug (one which treated lung cancer), held that balance of convenience did not lie in favour of grant of injunction", and held: "Here, no such startling consequences are discernible. Diabetes is more of a lifestyle disorder, which requires management and treatment." (paras 82, 84)
21. Integrity of the patent system. "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." "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." (para 85)
22. Price erosion and irreparable harm. "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." "Importantly, prices may not recover after the patentee ultimately prevails" "The victory for the patentee therefore should not be pyrrhic but real." (para 85)
23. Balance of convenience. "Learned senior counsels appearing for MSD had stated that it would compensate Glenmark for loss of earnings if the suit were to be dismissed. Thus this arrangement not only ensures that Glenmark will – if successful – be able to return to the market without any handicap, but moreover, it will be compensated at market value for the period for which it was excluded. The balance of convenience thus clearly lies in favour of MSD." (para 86)
24. Clearing the way. "However, if a defendant is aware that there may be a possible challenge to its product, but still chooses to release the drug without first invoking revocation proceedings or attempting to negotiate, that is surely a relevant factor." "This does not mean that Glenmark's right to question the validity of the patent in an infringement is affected, but the manner of challenge is a relevant factor against it at the interim stage." Recording Bajaj Auto v TVS Motor (2008) among others, the Bench noted that "the fact that the patentee was already dealing in the market on the basis of the patent weighed in as a factor in granting the interim injunction." (para 87)
25. Combining the three factors. "Ultimately, the Court must look to the combination of the three primary factors. A strong case can in some instances offset an equal balance of conveniences between parties. In this case, MSD has established a prima facie case of infringement, an interim arrangement that secures the interests of both parties and which maintains the public interest involved is available, which also ensures that the possibility of irreparable harm to the patentee is removed." (para 88)
26. Procedure. Injunction on terms. "The interim injunction claimed for by the plaintiff MSD in IA 5167/2013 is granted", with directions that MSD file "an affidavit undertaking" to "compensate Glenmark for the damage or loss caused, including but not limited to loss of earnings", that "Glenmark shall file a detailed account of its earnings", that "the defendant Glenmark is permitted to sell the products in question which are already in the market", and that the Single Judge "shall also endeavour to appoint a technical expert in consultation with parties under Section 115 of the Patents Act for better appreciation of the technical nature of the evidence." (para 89) "The appeal is allowed in the above terms. Parties shall bear their own costs." (paras 89–90)

What the court did not decide

"This Court notes that there is a serious technical dispute here that is to be tried." "The Court does not (and indeed, cannot) go into these questions, where guess work and speculation would be the only guiding factors. Nor can the Court, at this stage, decide the question of whether or not Section 3(d) of the Patent Act" "would have been attracted." (para 53) "This Court cannot today answer whether a person skilled in the art would have known the phosphate salt as an obvious alternative such that its specific disclosure was not needed." (para 54) "The Court is currently not proceeding on the basis that the suit patent also additionally discloses SPM" ("phosphate monohydrate salt"), and "that question is left open." (para 61)

Subsequent treatment

• Appealed — On Glenmark's petition for special leave, the Supreme Court on 15 May 2015 continued its interim order with modifications, permitting the sale of existing stocks of Zita and Zitamet and directing that the trial be expedited. The suit was decreed in Merck's favour on 7 October 2015.
• Followed — In Cipla v F Hoffmann-La Roche (2015) the Division Bench held that "In a recent decision in FAO (OS) No.190/2013 Merck Vs. Glenmark the Division Bench held that claim construction to determine the coverage in the suit patent has to be determined objectively on its own terms" (para 66), and reproduced paras 55–56, including that "Section 3(d) does not work backwards" (para 95).
• Followed — In Allergan v Controller of Patents (2023) the Delhi High Court held that "The principle was enunciated, with even greater precision, in the judgement of the Division Bench of this Court authored by S. Ravindra Bhat, J. (as he then was)", reproducing para 48 (para 36); and in Bristol-Myers Squibb v BDR Pharmaceuticals (2020) that without an injunction "the plaintiffs would suffer an irreparable loss as held by the Division Bench of this Court Merck Sharp and Dohme corporation & Anr." (para 47).