Novartis AG v Adarsh Pharma (2004)

Summary

The plaintiffs pleaded that “the first plaintiff invented a particular form of Methanesulphonic acid addition salt of a particular pyrmidineamine derivatives (Imatinib Mesylate in crystal form)” and that “on 27.3.2002, the plaintiff filed an application with the patent office Kolkota for an ‘EMR’” (“Exclusive Marketing Rights”) “for the patent product and ‘EMR’ was granted on 10.11.2003” (para 2). “On the above stated facts, the plaintiffs sought for an injunction and it was accordingly granted ex parte on 20.1.2004” (para 2). The Court held that “construction of Section 24-A and 24-B of the Act primarily arise for consideration at this stage.” (para 6)

The Court held that “search for anticipation by previous publication and by prior claim (Sections 13 and 29 to 34) is not attracted” (para 7), that “the applicant in the patent claim in India; the applicant in the patent claim in Australia and the grantee in Australia must be one and the same. In this case, it stands established.” (para 10), that “the plaintiffs can be treated as one single economic unit” (para 14), and that “going by the prima facie materials, I hold that the article or substance is identical in all the legal documents prescribed under Section 24-B(1)(a) of the Act.” (para 15) “Consequently, I am inclined to make absolute the order dated 20.1.2004 granting injunction as prayed for in all the original applications and as a result thereof, all the original applications would stand allowed as prayed for and all the applications filed to vacate the injunction would stand dismissed.” (para 17)

What the court decided

1. Examination under section 24A. Reading section 24-A(1), “Referring the patent claim for examination under Section 12(1) of the Act stands postponed till 31.12.2004;” and the examination “is for the limited purpose of finding out whether the patent claim is not an invention within the meaning of Section 3 of the Act; and” “whether the patent claim is an invention, for which no patent could be granted in terms of Section 4 of the Act?” “When the reference of the patent claim to an examiner for making his report is confined to the requirements of Sections 3 and 4 of the Act alone, there is no scope, in my considered opinion, for examining the said patent claim on the basis of any of the other provisions of the Act” (para 6)
2. Anticipation at the grant stage. “Though Section 24-A specifically excludes the operation of Section 12(1) of the Act alone, inasmuch as Section 12(1) of the Act provides for an examination under Section 13, it is only logical to hold that consequent to the exclusion of Section 12(1) from the purview of Chapter IV-A, the requirements of Section 13 also stand excluded for the purpose of Chapter IV-A.” “Therefore I hold that search for anticipation by previous publication and by prior claim (Sections 13 and 29 to 34) is not attracted” (para 7)
3. Defences to revocation. “defences available to revoke the patent are also available as defences to revoke the ‘EMR’” (“Exclusive Marketing Rights”), but “Since I have already held that Section 24-A of the Act not only excludes Section 12 but also Section 13 (reasons for the same given earlier), there is no point in saying that the defence enumerated in Section 64(1)(e) can still be pressed into service at this stage to invalidate the ‘EMR’.” (para 7)
4. The same applicant. “Sub-clause (a) of Sub-section (1) of Section 24-B is mandatory in only one aspect namely, the applicant being the same in the patent claim in India and the patent claim in the convention country.” “Who should file an application for an approval to sell in a convention country, is not prescribed in Sub-clause (a) of Sub-section (1) of Section 24-B of the Act.” (para 10)
5. Marketing approval and the Controller. “it is clear that the authority to issue a marketing approval is not an authority under the Patents Act.” “Therefore, once it is clear that the grant of the marketing approval is not within the domain of the Patent Controller, one must necessarily look into the provision of law which deals with that.” (para 11)
6. A single economic unit. “the concept of a single economic unit is an accepted position in law and whether a group of companies constitute a single economic unit, depends on the facts of each case.” (para 13) “On the facts observed by me in that context, I am of the opinion that the plaintiffs can be treated as one single economic unit.” The words of section 24-B(1) mean “that the marketing approval can be obtained by the applicant himself or anybody claiming under him.” (paras 13–14)
7. Identity of the article or substance. “This Court is not an expert to decide the identity of the substance on pleadings and materials alone, in the absence of expert’s evidence. Therefore I hold that, going by the prima facie materials, I hold that the article or substance is identical in all the legal documents prescribed under Section 24-B(1)(a) of the Act.” (para 15)
8. Tests in the convention country. “The very act of the convention country in granting the patent and the marketing approval implies that the same had been granted, after conducting appropriate tests. The contrary can be shown only on evidence during trial.” (para 16)
9. Infringement on prima facie material. “taking into account the statement made at the Bar that the drug marketed by the defendants contains ‘Beta crystals’ though in a lower percentage, it is clear to my mind that there is an infringement, especially when the invention claimed by the plaintiffs is ‘Beta crystalline form of Imatinib Mesylate’.” (para 16)
10. Balance of convenience. “The plaintiffs have an ‘EMR’ valid for a period of five years or till the disposal of the patent claim one way or the other, whichever is earlier and the Statute protects such rights.” “When the Statute protects such rights, in my opinion, the balance of convenience loses its significance, especially when the parties in opposition do not have a legal ground in their favour at this stage.” (para 17)
11. Public interest and section 24D. “As far as public interest is concerned, the Patents Act itself had taken that into account.” “Section 24-D of the Act, in my opinion, is a complete answer to the arguments advanced by Mr. V. Lakshmi Kumaran learned counsel that public interest would be affected, if the ‘EMR’ is to be sustained.” (para 17)
12. A grant of recent origin. “The Statute protects the exclusive marketing right in favour of the grantee for the full period of five years.” Of P. Manickka Thevar v. Star Plough Works, “it is clear from the above that the learned Judge has never said that if the patent is of a recent origin and if it is less than six years old, no injunction at all should be granted.” (para 17)
13. Suppression of facts. “The fact that the second plaintiff invited one or more of the defendants to come to the negotiating table and the challenge to their ‘EMR’ is pending on the Delhi High Court” “would not by themselves amount to the plaintiffs suppressing material facts” (para 17)
14. Disposition. “Consequently, I am inclined to make absolute the order dated 20.1.2004 granting injunction as prayed for in all the original applications and as a result thereof, all the original applications would stand allowed as prayed for and all the applications filed to vacate the injunction would stand dismissed.” (para 17)

Subsequent treatment

• Appealed — The appeal (O.S.A. No. 170 of 2004) was decided by the Division Bench of the Madras High Court on 20 December 2004 in Intas Laboratories v Novartis (2004), (2005) 1 M.L.J. 309. The Division Bench held that “it would not be proper for us to decide the said issue in appeals arising out of interim orders”, and resolved “to eschew any of the findings of the learned Single Judge with reference to the validity of the EMR” (“Exclusive Marketing Rights”) (para 11); “Recording the undertaking”, it said that “we confirm the order of interim injunction dated 28.4.2004 of the learned Single Judge”, directing that the contentions “shall be considered on merits, independently, without any reference to any of the views expressed by the learned single Judge in the order dated 28.4.2004” (para 14). As recorded in Wockhardt v Hetero Drugs (Madras, 8 September 2005), the Division Bench “directed eschew of the findings of the learned single Judge with reference to the validity of EMR” (“Exclusive Marketing Rights”) (para 6); as recorded in Wockhardt v Hetero Drugs (Madras, 25 November 2005), “This decision of the learned single Judge has been confirmed by a Division Bench of this Court” (para 15).
• Not followed — In Novartis v Mehar Pharma (2004) the Bombay High Court held: “I find that the Madras High Court has not properly considered the settled law in the matter of grant of temporary injunction in relation to a patent of recent origin and, therefore, I am not inclined to agree with the view that has been taken by the Madras High Court.” (para 29)
• Followed — In Wockhardt v Hetero Drugs (Madras, 25 November 2005) the Division Bench quoted para 17 of this order (para 15) and held that “When the statute protects such rights and when the parties in opposition do not have a legal ground over the exclusive marketing rights in their favour at this stage, the balance of convenience lies in favour of the appellant.” (para 45)