Delhi High Court - Orders
Cipla Limited vs Vifor (International) Limited & Anr on 18 May, 2023
Author: Yashwant Varma
Bench: Yashwant Varma, Dharmesh Sharma
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) (COMM) 104/2023
CIPLA LIMITED ..... Appellant
Through: Mr. Parag Tripathi, Sr. Adv.
with Mr. Adhar R., Mr Afzal
Khan, Mr. Samik Mukherjee,
Mr. Askermadha, Mr. Apur
Tripathi, Ms. Mishika, Mr.
Vishal, Advs.
versus
VIFOR (INTERNATIONAL) LIMITED & ANR. Respondents
Through: Mr. Dayan Krishnan, Mr. Rajiv
Nayar, Sr. Advs. with Ms.
Vaishali Mittal, Mr. Rohin
Koolwal, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
ORDER
% 18.05.2023 CM APPL. 25733/2023 Exemption allowed, subject to all just exceptions.
Application shall stand disposed of.
FAO(OS) (COMM) 104/2023, CM APPL. 25731/2023 & CM APPL. 25732/2023
1. The defendant in CS(COMM)242/2023 has instituted the instant appeal aggrieved by the grant of an ad-interim injunction by the learned Single Judge in terms of an order dated 01 May 2023. As per the order impugned, the learned Judge has directed status quo to be maintained by parties as it existed on 25 April 2023 and the same is to continue till further orders.
2. The plaintiffs/respondents have instituted the suit in question against the appellant for a purported infringement of IN221536 and the intended launch of the appellants‟ product, cipFCM manufactured FAO(OS) (COMM) 104/2023 Page 1 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:26 by BDR Pharmaceuticals1. The appellant claims to have been authorised by BDR to market and distribute the aforesaid drug and pursuant to the agreement with BDR, it is stated to have placed various purchase orders between 10 April 2023 and 18 April 2023.
3. As is noted by the learned Judge, the asserted action of infringement of the patent held by the plaintiffs/respondents forms subject matter of as many as twenty previously instituted suits. The action launched by the plaintiffs/respondents against BDR forms the subject matter of a separate suit numbered as CS(COMM) 505/2022.
4. It appears that when the suit from which the instant appeal emanates came to be transferred to the Court which was hearing all connected and identical matters, an order of status quo was passed on 25 April 2023 with the learned Single Judge specifically stipulating that it would operate only till the next date. It was in the aforesaid backdrop that the application for grant of ad interim injunction appears to have fallen for consideration on that date.
5. As per the case of the plaintiffs/respondents, the suit patent is an old patent and in respect of which it has been constrained to institute as many as twenty suits in which interim orders of protection had been granted. Since the present suit was to be heard along with them, it appears to have been contended that similar interim orders be passed.
6. The prayer for grant of ad-interim injunction was questioned by the appellant who contended that the suit patent is only a process patent and thus no injunction is warranted. It was additionally contended that no injunction operates against BDR and therefore there would exist no justification for the defendants who have only been given the right to market the aforesaid order being injuncted. Upon hearing the submissions addressed by and on behalf of respective 1 BDR FAO(OS) (COMM) 104/2023 Page 2 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:26 parties, the learned Single Judge proceeded to pass an order of status quo observing as under:-
"15. It cannot be denied that the plaintiffs‟ patent is an old patent in the final year of its twenty-year term, which expires on 20th October, 2023. It is also a matter of record that in around twenty suits against infringing parties, various positive orders have been passed protecting the rights of the plaintiffs by different Benches of this Court. The defendant in CS(COMM) 242/2023 is yet to launch its products and though a statement has been made by the counsel for the defendant in CS(COMM) 241/2023 that it has already launched the impugned products, no proof has been filed evidencing that the products have been commercially launched.
16. I do not find merit in the submission of the defendants that since there is no interim injunction against the manufacturer, BDR Pharmaceuticals/the defendant no.3 in CS(COMM) 505/2022, no ad interim injunction should be passed against the defendants in the present suits. Under Section 48 of the Patents Act, 1970, a right has been conferred upon the patentee to prevent third parties from „offering for sale‟ or „selling‟ the infringing products without the consent of the patentee. Therefore, the plaintiffs have a separate cause of action against the defendants in the present suits. Similarly, I do not find merit in the submission of the defendants that since no ad interim injunction has been passed against the defendants in CS(COMM) 198/2023 and CS(COMM) 194/2023, no status quo orders should be passed in the present matters. The plaint in CS(COMM) 198/2023 and CS(COMM) 194/2023 states that the defendants therein had already launched their products at the time of filing the suits.
17. Therefore, taking into account the principles of balance of convenience and the fact that CS(COMM) 505/2022 along with CS(COMM) 198/2023 and CS(COMM) 194/2022 are listed for hearing on the interim application on 2nd May, 2023, I am of the considered view that at this interlocutory stage, status quo as it existed on 25th April, 2023 should continue till further orders. It is ordered accordingly."
7. Appearing in support of the appeal, Mr. Tripathi, learned senior counsel argued that an ex facie examination of the order assailed in the appeal would indicate that the learned Single Judge has failed to return or record any findings with respect to prima facie case, balance of convenience and irreparable loss or injury. Mr. Tripathi submitted that the injunction which had been granted in the other pending suits had come to be passed either ex parte or as a reading of those orders FAO(OS) (COMM) 104/2023 Page 3 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 would indicate without any reasons being recorded on the trinity tests which govern the grant of an injunction. Reference in this regard was made to the order dated 05 April 2022 passed in VIFOR (International) Ltd & Anr. vs. Hetero Healthcare Limited & Ors. [CS(COMM) 210/2022] as well as the order dated 24 March 2023 passed in VIFOR (International) Ltd & Anr. vs. Aishwarya Health Care Private Limited & Ors., [CS(COMM) 167/2023].
8. It was in the aforesaid context that Mr. Tripathi submitted that the aforesaid orders of injunction are being followed and replicated as a matter of rote and thus causing serious prejudice to the appellant. Mr. Tripathi submitted that as in earlier instances the learned Single Judge has clearly failed to bear in mind the imperatives of recording a prima facie satisfaction with respect to the well settled tests which govern the grant of injunction. It was his submission that a bare reading of the order impugned would indicate that the learned Single Judge has merely borne in consideration the singular fact of twenty previous suits being pending and the orders passed thereon.
9. Mr. Tripathi drew the attention of the Court to the following passages as appearing in the decision of Natco Pharma Limited vs. Bayer Healthcare LLC, [2019 SCC OnLine Del 9124] to contend that the Court had clearly and in unequivocal terms emphasized the requirement of an order of injunction showing and evidencing due application of mind and for recordal of reasons in support of the grant. Reliance was placed on the following passages from that decision: -
"21. Matters involving alleged infringement of patents constitute a separate species of litigation. A further sub-species would be those concerning pharmaceutical patents. This is because the law concerning them under the Patents Act 1970 and other related legislation has peculiar elements that would have to be kept in view by the Court. Unsurprisingly, therefore, there is a growing volume of Indian case law dealing with the parameters that should weigh with the Court while examining the case of alleged infringement of pharmaceutical patents. While the parameters that have to FAO(OS) (COMM) 104/2023 Page 4 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 generally be kept in view in all suits where interim injunctions are sought would apply in such cases as well, they would indubitably involve other parameters which have been discussed in a large number of decisions including the decision that both parties have relied upon, Merck Sharp & Dohme Corporation (supra). A further example, illustratively, is the decisions in Cipla Ltd. v. F. Hoffmann-La Roche Ltd. (2009) 40 PTC 125 (DB). The question of challenge to the validity of pharmaceutical patents has also engaged the attention of the Indian Courts at all levels. The need for the principles that would have to be kept in mind while dealing with those contentions, even at the interim injunction stage, hardly need be emphasised. Illustratively, reference may be made to Novartis Ag v. Union of India (2013) 6 SCC 1.
23. The observation of the learned Single in para 14 of the impugned order on the above submission simply reads thus:"The argument of the Defendant is thus not a ground at least till the next date of hearing, for not passing interim orders in terms of Sterlite Technologies Ltd. (supra)" Far from rejecting the submission, the learned Single Judge acknowledges that it would be „a ground for invalidity of the patent‟ and would also be „a ground for defeating the suit‟. However, there is no formation of an opinion of the Plaintiff having made out a prima facie case in its favour for grant of an interim injunction. Even the order in Sterile Technologies Ltd. (supra) incorporated as it were „by reference‟ by the learned Single Judge in the impugned order does not set out any prima facie view. On the contrary, it records in para 9 that „at this stage, it is not possible to form an opinion, even prima facie‟. As regards the other two elements viz., balance of convenience and irreparable hardship, there is no mention of these, even impliedly in the impugned order.
24. Although, there are special features in litigation involving infringement of patents, that still would not obviate the Court dealing with the question of grant of interim injunction to record the three important elements as have been stressed in a large number of decisions of the Supreme Court. While the Court agrees with Dr. Singhvi that it is not necessary that the order granting or refusing interim injunction should expressly state about the above elements but a reading of the order should indicate the forming of an opinion by the Court on the said aspects. A reading of the impugned order does not reflect that the Court has formed such an opinion on the three elements.
25. Again, each case of alleged infringement of patent, particularly a pharmaceutical patent, would turn on its own facts. It is not possible to conceive an „across-the-board‟ blanket approach that would apply to all such cases, where as a matter of routine at the first hearing there would be a grant of injunction in favour of the Plaintiff. The decision in the application of interim injunction has to necessarily indicate the view of the Court on the three elements mentioned herein before and the additional features when FAO(OS) (COMM) 104/2023 Page 5 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 it involves a case of alleged infringement of a patent, and in particular, a pharmaceutical patent. It is not the length of the order or its precise wording that matters. It is necessary, however, that the factors mentioned hereinbefore must be discernible from the order which comes to a conclusion one way or the other regarding grant of an interim injunction.
26. The Court would also like to add here that the impugned order which restrains the Defendant from infringing the suit patent does not lend itself to sufficient clarity. Although the Appellant/Defendant has understood it to mean that the Defendant is restrained from manufacturing, selling its product in the market, it would have helped if the order specified what the Defendant can or cannot do. There is a possibility, given the wording of the impugned order that it might lead to further litigation on whether in fact there has been compliance or not with the said order."
10. It was in the aforesaid light that Mr. Tripathi contended that the ends of justice warrant the impugned order being set aside and the matter being remitted to the learned Single Judge for consideration of the ad interim injunction prayer afresh. It was also Mr. Tripathi‟s submission that as would be evident from the orders passed in the batch of suits of which the learned Single Judge is ceased, there is neither an injunction which operates against BDR nor one which restrains its agents, affiliates or authorized partners generally from marketing, distributing or selling the drug in question. It was argued that even the order of 02 May 2023 passed in VIFOR (International) Ltd. & Anr. vs. Eris Lifesciences Limited & ors., [CS(COMM) 505/2022] would not operate against the appellant since the same would stand confined to fresh agencies and appointments that may be made by BDR post the passing of that order. Resultantly, Mr. Tripathi submitted, while the appellant stands restrained, BDR as well as its various agents against whom injunctions do not operate, are still continuing to distribute and market the drug in question.
11. Opposing the appeal Mr. Krishnan, learned Senior Counsel appearing for the plaintiffs/respondents submitted that the main suit against BDR is actively engaging the attention of the learned Single FAO(OS) (COMM) 104/2023 Page 6 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 Judge and in which arguments have been substantially completed on the application for interim injunction. Mr. Krishnan drew the attention of the Court to the order of 02 May 2023 passed in CS(COMM) 505/2022 in this respect as also to the undertaking furnished by BDR in those proceedings that no further dealers or third-party marketing agencies would be appointed by it. The Court was also apprised that the matter has now been posted for 25 May 2023 and the application for injunction had been heard in great detail by the learned Single Judge as would be evident from the order of 11 May 2023 passed therein.
12. Mr. Krishnan further urged that it would be incorrect for the Court to hold that the learned Single Judge had failed to record reasons and submitted that the impugned order would reflect that the Court had taken into consideration the orders of protection granted in various pending matters coupled with the fact that the appellant was yet to launch its products and had failed to produce any evidence to establish that the products had been commercially launched. It was further submitted that the learned Single Judge had also taken note of the provisions of Section 48 of the Patents Act, 1970 and which empowers the Court to injunct even third parties from dealing with the infringing article.
13. Mr. Krishnan submitted that in any case, this Court while considering an appeal directed against an order passed by a learned Single Judge in exercise of its discretion must bear in mind the well settled principles as were propounded by the Supreme Court in the celebrated decision of Wander Ltd. vs. Antox India (P) Ltd. [1990 Supp SCC 727]. It was his submission that a court of appeal would not be justified in interfering with the discretionary exercise of jurisdiction bearing in mind that the appeal is essentially one on principle and FAO(OS) (COMM) 104/2023 Page 7 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 interference is warranted only if it be shown that the discretion exercised was capricious or perverse. Mr. Krishnan drew the attention of the Court to the following observations as appearing in Wander Ltd.:-
"14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph [(1960) 3 SCR 713 : AIR 1960 SC 1156] : (SCR 721) "... These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Jhanaton [1942 AC 130] „...the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case‟."
The appellate judgment does not seem to defer to this principle."
14. Learned Senior Counsel proceeded further to cite for our consideration a more recent decision rendered by the Supreme Court in Shyam Sel and Power Limited and Another vs. Shyam Steel Industries Limited2 where the following observations were made:-
"36. The learned Judges of the Division Bench of the High Court have taken pains to make a mention of the judgment of this Court 2 (2023) 1 SCC 634 FAO(OS) (COMM) 104/2023 Page 8 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 in Wander [Wander Ltd. v. Antox India (P) Ltd., 1990 Supp SCC 727] . This judgment has been guiding the appellate courts in the country for decades while exercising their appellate jurisdiction considering the correctness of the discretion and jurisdiction exercised by the trial courts for grant or refusal of interlocutory injunctions. In the said case, the learned Single Judge had refused an order of temporary injunction in favour of the plaintiff who was claiming to be a registered proprietor of the registered trade mark. The Division Bench of the High Court had reversed the order passed by the learned Single Judge and granted interim injunction. Reversing the order of the Division Bench of the High Court and maintaining the order of the learned Single Judge, this Court observed thus : (Wander case [Wander Ltd. v. Antox India (P) Ltd., 1990 Supp SCC 727] , SCC p. 733, para 14) "14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) (P) Ltd. v. Pothan Joseph [Printers (Mysore) (P) Ltd. v. Pothan Joseph, (1960) 3 SCR 713 : AIR 1960 SC 1156] , SCR p. 721, AIR p. 1159, para 9 : (AIR p. 1159, para 9) „9. ... These principles are well established, but, as has been observed by Viscount Simon L.C. in Charles Osenton & Co. v. Johnston [Charles Osenton & Co. v. Johnston, 1942 AC 130 (HL)] , AC at p. 138 :
(AC p. 138) "... The law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well-established, and any difficulty that arises is due only to the application of well-settled principles in an individual case".‟ The appellate judgment does not seem to defer to this principle."FAO(OS) (COMM) 104/2023 Page 9 of 12
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27
37. Though the learned Judges of the Division Bench of the High Court have on more than one occasion referred to the judgment of this Court in Wander [Wander Ltd. v. Antox India (P) Ltd., 1990 Supp SCC 727] , they have not even, for namesake, observed as to how the discretion exercised by the learned Single Judge was exercised arbitrarily, capriciously or perversely. In our view, having waited for 8-9 months after the learned Single Judge had passed the order, all that ought to have been done by the learned Judges of the Division Bench of the High Court was to request the learned Single Judge to decide the application for ad interim injunction, which in fact, the learned Single Judge had scheduled to do after three weeks from 2-4-2019. In our view, it was not even necessary for the Division Bench of the High Court to have waited till 24-12-2019 and taken the pains of deciding the application at first instance. It could have very well, in the month of April 2019 itself, done the exercise of requesting the learned Single Judge to decide the application as scheduled."
15. Having heard learned counsels for parties, we are of the considered opinion that the impugned order does not merit interference for the following reasons.
16. As would be evident from a reading of the order assailed in this appeal, the learned Single Judge has taken due notice of the pendency of similar challenges, the identical allegations of infringement in respect of the product in question and the injunctions operating thereon. The Learned Single Judge essentially appears to have borne in mind the requirement of parity being maintained and similar orders of protection being granted against the defendant/appellant. It also clearly appears to have borne in mind the fact that the appellant was yet to launch its products as well as the relevant provisions of the Patents Act, 1970. It is in the aforesaid backdrop that the order of status quo appears to have ultimately come to be framed.
17. However, we do deem it necessary to observe that while granting the injunction, the learned Single Judge does appear to have failed to advert to the three fundamental principles that must govern the grant of injunction at least in explicit terms. As would be evident from a reading of the order impugned, the learned Single Judge does FAO(OS) (COMM) 104/2023 Page 10 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 not appear to have specifically recorded findings on the issue of prima facie case, balance of convenience and irreparable loss. We thus find some merit in the submission of Mr. Tripathi that the learned Single Judge was obliged to return at least prima facie findings on the question of prima facie case, balance of convenience and irreparable loss and injury. The imperative necessity of such a course being followed is essential in order to hold that the grant of injunction was predicated by due application of mind to the rival contentions addressed and the prima facie view or opinion formed by the learned Single Judge on an evaluation of the issues which arise. These are aspects which were duly highlighted by the Division Bench of the Court in Natco Pharma Limited. The Court in Natco Pharma Limited had significantly observed that while infringement actions may be imbued with special features and characteristics, that alone would not be sufficient for a court to ignore the three important elements which govern the grant of injunction and for the order not to evidence and reflect those aspects having been borne in mind.
18. On a prima facie examination of the previous orders passed in pending suits also, we find that no definitive findings on the trinity elements appear to have been recorded. We may only observe that in the aforesaid backdrop, there was clearly a requirement for conclusions being recorded on the question of prima facie case, balance of convenience and irreparable loss rather than previous orders being replicated.
19. We, however, desist from interfering with the order of status quo which has ultimately come to be passed bearing in mind the fact that the batch itself has been put down for consideration by the learned Single Judge on 25 May 2023 and as would be evident from the record, the application for grant of injunction in the suit instituted FAO(OS) (COMM) 104/2023 Page 11 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27 against BDR has been substantially heard. Since the entire issue is presently engaging the attention of the learned Single Judge, it would be inappropriate for this Court to undertake a parallel exercise and rule upon the issues which arise or for that matter undertake a prima facie adjudication of the claims and counter claims of respective parties. That undoubtedly would entail this Court examining the question of grant or refusal of injunction itself upon a due consideration of the entire material which stands placed before the learned Single Judge. In balance, therefore, it would appear to be expedient to grant parties the liberty to address all submissions before the learned Single Judge in the first instance.
20. Accordingly, and for all the aforesaid reasons while we refuse to interfere with the impugned order, we dispose of this appeal with the following directions. Respective parties shall complete their pleadings on I.A. 7816/2023 on or before the next date fixed. The said application shall also be taken up for consideration by the learned Single Judge on the date fixed. The issue of continuance of the order of status quo may be considered by the learned Single Judge bearing in mind the observations made hereinabove.
21. The Court further provides that respective parties shall ensure that no unnecessary adjournments are taken so as to facilitate an expeditious disposal of the application by the learned Single Judge.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
MAY 18, 2023/neha FAO(OS) (COMM) 104/2023 Page 12 of 12 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 24/09/2023 at 13:10:27