High Court grants Injunction in Novartis v. CIPLA for Indacaterol Patent

NOVARTIS AG & ANR. v. CIPLA LTD.

Deciding the fate of application for temporary injunction under Oder XXXIX Rules 1 and 2 of the Civil Procedure Code, in an infringement suit instituted by Novartis, the High Court of Delhi granted temporary injunction against generic drug maker Cipla Ltd restraining it from using, manufacturing, importing, selling, offering for sale, exporting, directly or indirectly dealing in Active Pharmaceutical Ingredient (API), pharmaceutical products, compound or formulation containing Indacaterol, specifically its Maleate salt, namely Indacaterol Maleate alone or in combination with any other compound or API or in any other form as may amount to infringement of Indian Patent No.222346 of Novartis.

FACTS OF THE CASE

Onbrez, chemically called Indacaterol, is used to treat breathing problems associated with chronic obstructive pulmonary disease (COPD). The patent for Indacaterol was in favour of Novartis. Earlier in November 2014, Cipla had launched a low cost generic version of Onbrez against which Novartis instituted a suit for permanent injunction restraining infringement of patent no.222346 granted under The Patents Act, 1970 (‘Act’).

ARGUMENTS OF PARTIES

Cipla sought the revocation of Novartis’ patent under Section 92(3) and Section 66 of the Act alleging that chronic obstructive pulmonary disease has reached “epidemic” proportions and Novartis’ product Onbrez was not available for patients and doctors to prescribe. It was also contended that Novartis’ product was mostly imported and there is no justification for not manufacturing products locally. It was argued that the Court while adjudicating the injunction suit should take into account the working requirement as set forth in Section 83 of the Act. Cipla also contended that their generic version is cheaper and available at almost 1/5th the price of Onbrez. To substantiate its submission of inadequate availability of drugs, Cipla presented data to show that only 0.03% of the requirement of the drug was being fulfilled by Novartis and Lupin Limited. Lastly, Cipla alleged that Novartis was trying to perpetuate its monopoly with multiple patents and continuing to import Onbrez at a lower quantity and a very high price.

In reply, Novartis argued that Cipla’s reliance on Sections 66 and 92(3) of the Act was a tacit admission that the patent in question is otherwise valid and infringed by it. Placing reliance on Telemecanique vs Schneider {2002 (24) PTC 632 (DEL), it was argued that requirement of law is limited to working the patent in India so that the same is available to public at large and if it be so, it is not essential that the patent must be worked by manufacturing the patented product in India. Novartis further submitted that it has fulfilled its requirement, responsibility and obligation under the Act to supply the patented drug according to the demand; however, it also showed its willingness to supply any amount of patented drug if any deficiency could be shown. As regards, the argument of price, Novartis the research and development leading to Indacaterol entailed a huge financial investment and risk involving billions of USD and other resources. Novartis argued that Cipla could sell its drug a little cheaper as it has not invested huge sums in Research & Development and in clinical trials demonstrating the efficacy and safety of the drug.

OBSERVATIONS OF THE COURT

The court largely relied on the judgment in F. Hoffmann-La Roche Ltd. vs Cipla Ltd and observed that the patent right is absolute monopoly position where a patentee can prevent any person misusing the patent from manufacturing the project or arrive at the product through a process which is subject matter of patent. The court observed that it would never encourage the infringement in view of the exclusive and statutory rights granted under section 48 of the Act. It was also observed by the court that in case of infringement, it is not incumbent upon the Plaintiff to show that it had suffered commercial loss. The court found that the Plaintiff was able to establish a case of prima facie valid patent on record and no serious challenge was made and addressed by the Defendant before Court on the basis of prior art. Therefore, the submission of invalidity of patent was set aside.

Further, the court also observed that the Defendant has not filed any expert affidavit in order to show that the impugned drug launched by the Defendant does not infringe the suit patent of the Plaintiff. On the other hand, the Plaintiffs had filed on record the analysis of Defendant’s product on the basis of an expert opinion, showing that the Defendant’s product contained Indacaterol, which confirms infringement. The court also observed that the Plaintiffs were not expected to flood the market with Indacaterol without reasonable demand. Medical practitioners have various options of drugs to choose from including that of the Defendant. Addressing the argument of the Defendant that the Plaintiff is not manufacturing the drug in India, the court observed that the requirement of law is limited to working the patent in India so that the same is available to public at large. It is not essential that the patent must be worked by manufacturing the patented product in India.

The court further observed that merely citing grounds and conditions for compulsory licensing do not absolve the defendant to infringe the registered patent. Therefore according to the court, the grounds which are available for the person interested while seeking an application for the compulsory licensing or revocation of the patent on the ground of non working of the patent could be urged before the relevant authority which will consider the matter and cannot be imported as a matter of defence to the suit for infringement as the civil court hearing and the suit for infringement cannot transgress within the domain of the authority/ controller/ central government which are distinct functionaries having their powers and considerations specifically defined under the specific provisions of the Act.

CONCLUSION

The judgment is well reasoned and reflects a balanced approach in cases where the compulsory licensing and infringement issues are to be decided. As court rightly pointed out the grounds of compulsory license are no defense in infringement suit and a patent which is prima facie valid must be protected.

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