PHARMACEUTICAL PATENTING IN INDIA - BREAKING MYTHS
F. HOFFMANN-LA ROCHE LTD. AND ORS. VS. CIPLA LTD.
Hoffman-La Roche Ltd. [hereinafter referred to as Roche] filed a suit for infringement of Indian Patent bearing number 196774 [hereinafter referred to as IN ‘774] against Cipla in 2008. The suit patent protected ‘A NOVEL [6, 7-BIS(2- METHOXYETHOXY) QUINAZOLIN-4-YL]- (3-ETHYNYLPHENYL) AMINE HYDROCHLORIDE’ also known as ‘Erlotinib Hydrochloride’ which was licensed to Roche. Roche had been manufacturing ‘Erlotinib Hydrochloride’ as an anti-cancer drug under the brand name ‘Tarceva’ across the world.
The Single judge of the Delhi High Court decided against the interests of Roche with respect to the interim relief claimed by Roche, following which Roche appealed said decision before a Divisional Bench of the Delhi High Court.
The Single Judge primarily held the following:
i. Section 3(d) of the Act –
The Single Judge denied Cipla’s contention that the requirement under Section 3(d) of the Act was unfulfilled as the ‘increased efficiency’ criteria was not met forth. The Hon’ble judge followed the observations of the Controller [in the pre-grant opposition filed against Roche in the prosecution stage] with respect to the therapeutic efficacy of the patented drug and held that the invention cannot be held to be non-patentable under Section 3(d) of the Act. It is pertinent to note herein that the Controller in the above-mentioned pre-grant opposition had accepted the efficacy data submitted by Roche during the course of the pre-grant proceedings. Though the Opponent in the matter objected to acceptance of such data, the Controller rejected said objection and held the same to be sufficient for establishing enhanced therapeutic efficacy of the invention and accordingly granted the patent to Roche.
ii. Balance of convenience & interim relief
While adjudicating the issue of balance of convenience, the Hon’ble Judge took note of the decisions of the Court of Appeal in the matter of Roussel Uclaf vs. G.D. Sarle and Company Ltd. and Cordis Corporation vs. Boston Scientific Corporation.
The Hon’ble Judge took note that a month’s dosage of Tarceva [Roche’s drug] for a patient undergoing treatment for cancer was Rs.1.4 lakh whereas the equivalent cost of Erlocip [Cipla’s drug] would be Rs. 46,000. The Hon’ble Judge denied the relief of interim injunction against Cipla and held that “… as between the two competing public interests, that is, the public interest in granting an injunction to affirm a patent during the pendency of an infringement action, as opposed to the public interest in access for the people to a life saving drug, the balance has to be tilted in favor of the latter. The damage or injury that would occur to the plaintiff in such case is capable of assessment in monetary terms. However, the injury to the public which would be deprived of the defendant's product, which may lead to shortening of lives of several unknown persons, who are not parties to the suit, and which damage cannot be restituted in monetary terms, is not only uncompensatable, it is irreparable. Thus, irreparable injury would be caused if the injunction sought for is granted.”
However, the single judge, being mindful to the losses that may be caused to Roche, directed Cipla to take an undertaking to pay the damages in the event of the suit being decreed and to maintain faithful accounts and file quarterly accounts with the Court along with an annual statement of the sales figures of the impugned drug.
Thereafter, Roche appealed the decision of the Single Judge before a Divisional Bench of the High Court at Delhi.
While discussing the provision of Section 3(d) of the Act, the Divisional Bench luminously noted,
“62. … Section 3(d) assumes that structurally similar derivatives of a known 'substance' will also be functionally similar and hence ought not to be patentable. What is of crucial importance is that this is not a provision that merely bars certain subject matter from patentability. On the contrary, it provides that if the new form of the known substance is found despite a structural similarity to demonstrate a better functionality i.e. 'enhancement of the known efficacy', it would qualify for assessment under Section 2(1)(j) as if it were a new product involving an inventive step and it would thereafter be up to the applicant for the patent to demonstrate the patentability of this substance in accordance with Sections 2(1)(j) and (ja). This provision is not a patent term extension or an evergreening provision but in fact recognizes incremental innovations in pharmaceutical patents. The use of the words 'product' and 'substance' in Section 2(1)(j) and Section 3(d) is therefore telling, in that, the legislative intent appears clearly to demonstrate that all 'substances' may not qualify as 'products' under the Act, where the latter are only those substances that are patent-eligible. In fact, Section 2(1)(ta) provides the bridge between Section 3 and Section 2(1)(j), in that, it defines a 'pharmaceutical substance' as 'any new entity involving one or more inventive steps'. Thus, the discovery of an entity or substance may not involve an inventive step. Insofar as there is no inventive step involved in its formation it is merely a substance even though its structural form may be hitherto unknown. A new chemical entity (NCE) that is structurally dissimilar but functionally similar to an existing chemical entity is thus merely a substance under Section 3(d). If the substance has an added layer of enhanced efficacy then it would be treated as a 'new product' and would be eligible for assessment under Section 2(1)(j) to ascertain whether its formation involved an inventive step. If the new product involved one or more inventive steps, then it would qualify as a pharmaceutical substance. Thus, graphically represented, the same would be:--
The Hon’ble Court further held:
“We understand Section 3(d) as a positive provision that in fact recognizes incremental innovation while cautioning that the incremental steps may sometimes be so little that the resultant product is no different from the original. The inherent assumption in this is that an infringement of the resultant product would therefore be an infringement of the original i.e. the known substance and by no stretch of imagination can Section 3(d) be interpreted as constituting a defence to infringement.”
Conclusively, the Divisional bench held Cipla liable for infringement of the suit patent and consequently, liable to pay damages [to be submitted before the Joint Registrar and decided at a later date] along with costs on INR 5,00,000 [approx. USD 7200].
It is imperative to commend the High Court for intensively and concretely adjudicating issues that had been left vague by the earlier judgments. This well-reasoned judgment also does the essential job of reanalyzing the perspective and purpose of Section 3(d) of the Act.
 I.A. 642/2008 in CS (OS) 89/2008
  F.S.R. 25
 Cordis Corporation vs. Boston Scientific Corporation
 RFA (OS) 92/2012 and 103/2012