F Hoffmann-La Roche Ltd v Cipla Ltd (2009)

Summary

The Bench described "This appeal by the Plaintiffs F. Hoffmann-La Roche Ltd. ('Roche') and OSI Pharmaceuticals Inc. ('OSI') is directed against the Judgment dated, 19th March, 2008, passed by the learned Single Judge of this Court dismissing I.A. No. 642/2008" and "declining their prayer for grant of an interim injunction to restrain the Defendant/Respondent Cipla Limited from manufacturing, offering for sale, selling and exporting the drug Erlotinib" (F Hoffmann-La Roche v Cipla (2008); para 1). "The Controller General of Patents, New Delhi granted the said Applicants a certificate bearing Patent No. 196774 dated, 23rd February, 2007 which was subsequently, recorded in the Register of Patents on 6th July, 2007." (para 4) The Defendant's issue in the appeal was "that the specification for the suit patent (i.e. Patent No. 196774 corresponding to U.S.'498) showed that it was in respect of Erlotinib Hydrchloride Polymorphs A+B which was on their own showing an unstable form which could not be administered as such", and "The X-ray diffraction pattern of the tablet Tarceva showed that it corresponded to Polymorph B for which the Plaintiffs did not yet hold a patent." (para 27) "This Court while admitting the appeal by an Order, dated, 22nd April, 2008 did not stay the operation of the impugned Judgment. However, it restrained the Defendant from exporting Erlocip to countries where the Appellants have a registered patent during the pendency of the appeal." (para 25)

The Bench held that "The failure by the Plaintiffs to bring the above facts, to the notice of the Controller of Patents at the time of consideration of their application for patent for the compound of a combination of Polymorphs A and B was not consistent with the requirement of a full disclosure" (para 37), and that "the Plaintiffs ought to have been refused injunction for their failure to make out a prima facie case" (para 47). Assuming a prima facie case, it held that "the grant of a patent to the Plaintiffs for Erlotinib Hydrochloride as a mixture of Polymorphs A and B will not ipso facto entitle them to an interim injunction if the Defendant is able to satisfy the Court that there is a serious question to be tried as to the validity of the patent" (para 54); that "the Defendant has raised a credible challenge to the validity of the patent by raising a serious triable and substantial question that renders it vulnerable to challenge" (para 71); and that "the public interest in greater public access to a life saving drug will have to outweigh the public interest in granting an injunction to the patent holder" (para 84). "The appeal is dismissed with costs quantified at Rs. 5 lacs which will be paid by the Appellants/Plaintiffs to the Defendant within a period of four weeks. The interim Order stands vacated." (para 87)

What the court decided

1. Pending applications before the Controller. The Bench asked: "Should not an Applicant for a patent of a pharmaceutical product be bound to disclose the details of all other applications made by the Applicant for grant of patent of derivatives or forms of such product?" (para 34) It held: "It is perfectly possible that the Controller of Patents might not know, unless his attention is drawn to the fact, of other pending applications concerning the derivatives and forms of the product in question. It is also possible that the pre-grant opposer is not aware of them. Certainly the Applicant would, as in this case, know how many more applications it has filed which are pending consideration. It would know what statements it made in the corresponding patents granted to it elsewhere. This would be relevant not only for the tests of novelty and obviousness but also of efficacy as well." (paras 34, 37)
2. A change of stand. "While this Court is not called upon to comment on whether this flip flop is permissible or tenable, it is plain that the change in stand would admittedly have a direct impact on the question of patentability of either a compound of Polymorphs A and B or of Polymorph B free of Polymorph A. This made the full disclosure by the Plaintiffs of all the facts pertaining not only to the 'umbrella' compound but also the crystal or other forms of the product to the Controller of Patents imperative." "When the Defendant therefore, questioned the validity of Patent No. 196774 on the above ground, it did raise a more than credible challenge." (para 38)
3. Polymorphs and section 3(d). "In other words, Section 3 (d) read with its Explanation is, in the context of pharmaceutical products, an anti-evergreening provision." "From the Plaintiffs' own showing it would not have been possible for the Controller of Patents to have granted a patent in their favour both in respect of Polymorphs A and B as well as Polymorph B. If the compound which was a combination of Polymorphs A and B was an inventive step over its closest prior art (EP'226) then clearly, Polymorph B was only a different crystal form thereof, and would fail the tests of novelty and obviousness. However, the patentability tests do not stop there. Section 3(d) requires the demonstration of enhanced efficacy of the product." "It is hard to imagine that the therapeutic efficacy of a pharmaceutical product could be tested without it even being able to be administered to a sample population." (para 33)
4. Disclosure in the plaint. "This Court holds that 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." "Short of the above details, the Court being approached for the grant of an ad interim relief will be unable to form a view on whether the Plaintiff has made out a prima facie case. Otherwise it would be a case of suppression of material facts that would have a bearing on the question." (para 40)
5. Non-disclosure in the suit. "The Plaintiffs should have been candid and disclosed to the Court that they had filed separate applications for Polymorph B." "The effect of the failure to disclose the complete specification of the product and the facts concerning the pending applications for Polymorph B would be that the learned Single Judge would not have the occasion to consider if in fact the suit patent covered Tarceva." (para 39)
6. Whether the patent covered Tarceva. "In other words, the Court would have had to first be convinced that the Plaintiffs held a patent for the product which was marketed as Tarceva and further that the product of the Defendant had a X-ray diffraction data which matched Tarceva as well as the compound which was a combination of Polymorphs A and B and not Polymorph B alone." (para 41) "Therefore, this Court holds that to the extent that the Defendant has raised a serious doubt whether the Plaintiffs in fact hold a patent for the product sold in the tablet form as Tarceva, the Plaintiffs must be held not to have been able to cross the first hurdle of showing that they have a prima facie case in their favour for grant of an order restraining the Defendant from marketing Erlocip." (paras 41, 43)
7. A patent not commercially exploited. "An off shoot of this argument is that the Plaintiffs are admittedly not commercially exploiting the patent granted in their favour for a compound which is a mixture of Polymorphs A and B, since the tablet form corresponds to Polymorph B of the said compound Erlotinib Hydrochloride. In Franz Xaver Huemer v. New Yash Engineers AIR 2000 Del 23, a Division Bench of this Court held that the patent of a product which is not being commercially utilised cannot be enforced. The Defendant must be held as having been able to demonstrate prima facie that the Plaintiffs are not entitled to enforce Patent No. 196774 as such." (para 42)
8. The later rejection of polymorph B. "Whatever be the outcome in the said proceedings, the fact remains that when the Controller of Patents passed the Order, dated, 6th July, 2007 negativing the pre-grant opposition to Patent No. 196774, none of the facts pertaining to the separate applications for Polymorph B were accounted for." "The Order, dated, 15th December, 2008 also makes no change to the position as regards the failure of the Plaintiffs to make out a prima facie case before the learned Single Judge." (para 46)
9. No presumption of validity. "Given the scheme of Patents Act it appears to this Court that it does contemplate multiple challenges to the validity of a patent. Unlike Section 31 of the Trade Marks Act which raises a prima facie presumption of validity, Section 13(4) of the Patents Act, 1970 specifically, states that the investigations under Section 12 'shall not be deemed in any way to warrant the validity of any patent.'" "The mere registration of the patent does not guarantee its resistance to subsequent challenges. The challenge can be in the form of a counter-claim in a suit on the grounds set out in Section 64." (para 52)
10. A negative right. "Section 48 of the Act also is in the form of a negative right preventing third parties, not having the consent of the patent holder, from making, selling or importing the said product or using the patented process for using or offering for sell the product obtained directly by such process. It is also made subject to the other provisions of the Act. This is very different from the scheme of the Trade Marks Act as contained in Section 28 thereof." (para 52)
11. Inventions for public benefit. "Section 3(d) itself raises several barriers to the grant of a patent particularly in the context of pharmaceutical products. It proceeds on the footing inventions are essentially for public benefit and that non-inventions should not pass off as inventions. The purpose of the legal regime in the area is to ensure that the inventions should benefit the public at large." (para 52)
12. Compulsory licensing and price control. "Under Sections 92 and 92A, the Central Government can step at any time by invoking the provision for compulsory licencing by way of notification." "Therefore, the fact that there is a mechanism to control the monopoly of a patent holder (Section 84 and Section 92) and to control prices (by means of the drug price control Order) will not protect an invalid grant of patent." (para 52)
13. Weight of a multi-layered examination. "The plea of the Plaintiff that since there is a multi-layered, multi-level examination of the opposition to the grant of patent it should accorded the highest weightage, is not entirely correct. The contention that there is a heavy burden on the Defendant to discharge since it has to establish that it has a stronger prima facie case of the Plaintiff is contra indicated of the decisions in the context of Section 13(4)." "Reference may be made to the decisions in Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries AIR 1982 SC 1444; Standipack Pvt. Ltd. v. Oswal Trading Co. Ltd. AIR 2000 Del 23; Bilcare Ltd. v. Amartara Pvt. Ltd. 2007 (34) PTC 419(Del); Surendra Lal Mahendra v. Jain Glazers (1979) 11 SCC 511." Of Helifix Ltd. v. Blok-Lok Ltd. the Bench set out: "Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself." (para 53)
14. Words for the standard. "In the present case, the grant of a patent to the Plaintiffs for Erlotinib Hydrochloride as a mixture of Polymorphs A and B will not ipso facto entitle them to an interim injunction if the Defendant is able to satisfy the Court that there is a serious question to be tried as to the validity of the patent. The use by the learned Single Judge of the expressions 'strong credible challenge', 'arguable case' or that the Defendants claim being not unfounded, cannot be termed as vague and inconsistent since they convey the same meaning in the context of the strength of the Defendant's challenge." (para 54)
15. The credible challenge. "Without indulging in an exercise in semantics, the Court when faced with a prayer for grant of injunction and a corresponding plea of the Defendant challenging the validity of the patent itself, must enquire whether the Defendant has raised a credible challenge. In other words, that would in the context of pharmaceutical products, invite scrutiny of the Order granting patent in the light of Section 3(d) and the grounds set out in Section 64 of the Patents Act, 1970. At this stage of course, the Court is not expected to examine the challenge in any great detail and arrive at a definite finding on the question of validity. That will have to await the trial. At the present stage of considering the grant of an interim injunction, the Defendant has to show that the patent that has been granted is vulnerable to challenge." (para 55)
16. Section 3(d) after 2005. "It is not possible to accept the contention of the Plaintiffs that the Section 3(d) does not bring any significant change to the Patents Act. Not only has the substantive portion of Section 3(d) indicated a change in 2005 but the Explanation which has been added appears to particularly target pharmaceutical products. It discourages evergreening and prevents such derivative or other forms of the already patented product being granted patent unless the derivatives or other forms 'differ significantly in properties in regard to efficacy.'" "However, it appears that the closest prior art does teach the compound for which patent has been granted to the Plaintiffs. Therefore, unless the enhanced efficacy as mandated by Section 3(d) was demonstrated, patent could not have been granted. The Defendant has been able to show that order of the Controller of Patents was arguably deficient on this aspect." (para 60)
17. Grounds not urged before the Controller. "It is perfectly possible that the Controller had no occasion to consider such argument as it was not raised before him. That is perhaps the very purpose of the legislature permitting a challenge by a Defendant to the validity of a patent in answer to an infringement suit, even if such Defendant had not earlier raised an opposition either at pre-grant or the post-grant stages. Therefore, a patent which survives the pre-grant and post-grant challenges can still be made vulnerable on grounds different from the ones raised at those stages. The fact that the challenge is on grounds not urged at those stages, would lend credibility to the challenge. If the challenge is on the same grounds considered and rejected by the Controller of Patents, then of course, the burden on the Defendant to demonstrate credibility of the challenge would be considerably higher degree." (para 65)
18. The Controller's order. The Defendant submitted that "It was not enough for the Plaintiffs to show that the Defendant was unable to 'anticipate' the product in question by starting from the closest prior art EP'226. The Plaintiffs had still to show that it would not have been obvious to the person having ordinary skill in the art." (para 66) The Bench held: "The criticism by the Defendant of the Order of the Controller of Patents is, in the view of this Court, not without merit. The Controller failed to appreciate that the patent was claimed specifically on Example 20 and, therefore, stood on a footing different from that granted to the Plaintiffs in other countries. The point about the credibility of the articles published in the journals being the product of researched sponsored by Plaintiff No. 2 OSI was not even noticed by the Controller of Patents. The entire discussion on the aspect of enhanced efficacy in the Order of the Controller is limited to a mention of these articles." (paras 66, 68)
19. Obiter. Obviousness after KSR. "The decision in KSR International makes a conscious departure from the rigidity in the application of the TSM" ("teaching, suggestion and the motivation to try") "test applied to determine if the invention in question is patentable." (paras 64, 67)
20. Balance of convenience. "Even if it is assumed that they have, in view of the fact that the Defendant has raised a credible challenge that renders the patent's validity vulnerable, the question of balance of convenience does not arise because clearly the Court will not, at the interlocutory stage without the case going to trial, come to the aid of a holder of a patent of doubtful validity seeking to enforce such patent." (para 69)
21. Statements made abroad. "The phrase 'public domain' and 'state-of-the-art' have therefore to admit of a wide scope given the legislative intent in introducing the above definition by the Amendment Act, 2005. It appears that this was introduced in acknowledgement of the fact that a claim by an Applicant for a patent anywhere in the world and the statements made therein, would be relevant for the authority in India determining whether the invention claimed is indeed a new invention." "A statement made by the Applicant while prosecuting a patent application in any country would certainly be a relevant material to be considered." (para 70)
22. Public interest in the Act. "The amendment to the Patent Act, 1970 in 2005 introduced Section 83(e) which states that among the general principles applicable to the working of patented inventions regard shall be had 'that patents granted do not in any way prohibit Central Government in taking measures to promote public health' and under Section 83 (g) 'that patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.'" "The element of public interest is, therefore, not alien to the scheme of the Patents Act, 1970." (para 76)
23. Price and the life-saving drug. "The approach of the learned Single Judge was not inconsistent with the judicial decisions on this aspect." Citing Franz Xaver Huemer v New Yash Engineers (1996), the Bench set out: "Stultification of Defendants investment, loss of employment, public interest in the product (such a life saving drug), product quality coupled with price, or the Defendant being smaller in size, may go against the Plaintiff." (para 77) "Even if the price per tablet is taken to be Rs. 3,200 as claimed by the Plaintiffs, it is a drug which is expensive. It is clearly beyond the reach of many patients suffering from this dreaded form of cancer." (para 80) "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." (paras 77, 80–81)
24. The four-factor test. "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." (para 82)
25. Public interest case by case. "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." "Even while considering this aspect, the Court is conscious that the Defendant has been able to demonstrate prima facie that the Plaintiffs do not hold a patent yet for the drug Tarceva, which is the Polymorph B form of the substance for which they hold a patent. Secondly, the Defendant has raised a credible challenge to the validity of the patent held by the Plaintiffs." (paras 83–84)
26. Procedure. Material pending below. "While this Court is not deciding either the counter-claim or the I.A. 1272 of 2008, it is not possible to accept the plea of the Plaintiffs that the contents thereof, are not relevant for deciding whether the Plaintiffs had made out a prima facie case before the learned Single Judge for grant of injunction in their favour." (para 31) "It is, however, made clear that this Order will not influence the decision of the learned Single judge in the pending application IA No. 1402 of 2008 and the counter-claim of the Defendant in the aforementioned suit." (paras 31, 86)
27. Procedure. Costs. "The appeal is dismissed with costs quantified at Rs. 5 lacs which will be paid by the Appellants/Plaintiffs to the Defendant within a period of four weeks. The interim Order stands vacated. The applications are disposed of accordingly." (para 87)

What the court did not decide

On the change of stand: "While this Court is not called upon to comment on whether this flip flop is permissible or tenable" (para 38). On the rejection of the polymorph B application: "This Court is not aware with the Plaintiffs wish to further pursue its application for grant of patent in respect of Polymorph B by challenging the Order, dated, 15th December 2008 passed by the Controller of Patents. This Court therefore refrains from commenting on the said Order." (para 46) On validity: "At this stage of course, the Court is not expected to examine the challenge in any great detail and arrive at a definite finding on the question of validity. That will have to await the trial." (para 55) On balance of convenience: "In the considered view of this Court, this aspect need not be examined in the present case for more than one reason." (para 69) On the pending applications: "While this Court is not deciding either the counter-claim or the I.A. 1272 of 2008" (para 31).

Subsequent treatment

• Appealed — "The plaintiffs also challenged the said order of the Division Bench before the Supreme Court in Special Leave to Appeal (Civil) No.20111/2009. The said Special Leave Petition was dismissed by order dated 28th September, 2009", the Supreme Court requesting the Single Judge "to conclude the trial as expeditiously as possible without being influenced by any observation made by the Division Bench in the judgment" (F Hoffmann-La Roche v Cipla (2012), para 16).
• Explained — In Cipla v F Hoffmann-La Roche (2015) the Division Bench recorded that "the Division Bench felt that Cipla had done enough to demonstrate a potentially credible challenge to the validity of IN '774, including raising sufficient doubt over whether IN '774 had complied with full disclosure requirements" (para 7), and after trial held the patent valid and infringed.
• Followed — In AstraZeneca v Intas Pharmaceuticals (2020) the Delhi High Court held that "at the stage of preliminary injunction all that the defendant is required to demonstrate is that she/he has made a credible challenge or that the patent is vulnerable and that validity is not vexatious", and extracted the Division Bench's observations (para 19.2).