Delhi High Court
Sugen Inc. & Ors. vs A. Rao & Anr. on 19 March, 2013
Equivalent citations: AIR 2013 (NOC) 366 (DEL.), 2013 (2) ADR 121
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 19th March, 2013 + IA No.11625/2012 (of the plaintiffs u/O 39 R-1&2 CPC) & IA No.17014/2012 & IA.No. 18679/2012 (both of the defendants u/O 39 R-4 CPC) in CS(OS) No.1866/2012 and Counter Claim 25/2013 SUGEN INC. & ORS. ..... Plaintiffs Through: Mr. C.R. Andhyarujina & Mr. V.P. Singh, Sr. Advs. with Mr. Pravin Anand, Mr. Soumik Ghosal & Mr. Aditya Gupta, Advs. versus A. RAO & ANR. ..... Defendants Through: Mr. C. Mukund with Ms. Firdouse Wani, Ms. Ekta Bhasin & Mr. Ravi Kumar, Advs. CORAM :- HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW RAJIV SAHAI ENDLAW, J 1. The three plaintiffs viz. Sugen Inc., Pfizer Inc & Pfizer Products India Pvt. Ltd. have instituted this suit against the two defendants i.e. defendant No.2 NATCO Pharma Ltd. and its President (Research & Development) & Additional Director Mr. A. Rao, for injunction from making, selling, distributing, advertising, exporting any product infringing the subject matter of Indian Patent No.209251. The said patent is for the drug "SUTENT" for CS(OS) No.1866/2012 Page 1 of 20 treatment of gastrointestinal stromal tumors and advanced renal cell carcinoma. 2. Vide ex parte ad-interim order dated 22.06.2012, which continues to be in force, the defendants were restrained from infringing the said patent of the plaintiffs. 3. The defendants have contested the suit by filing the written statement and the defendant No.2 has also filed a counter claim for revocation of the said patent. 4. While the applications aforesaid for interim relief and for vacation of the ex parte interim relief were pending consideration, the patent aforesaid was revoked by the Assistant Controller of Patents & Designs vide order dated 24.09.2012 in post-grant opposition filed by M/s Cipla Ltd. (not party to the present suit). W.P.(C) No.6361/2012 was filed by the plaintiffs impugning the said order. Vide ad interim order dated 08.10.2012 therein M/s Cipla Ltd. was restrained from taking any steps for marketing its drug in violation of the said patent. M/s Cipla Ltd. filed LPA No.695/2012 against the said order but which was dismissed on 12.10.2012. M/s Cipla Ltd. then filed SLP(C) Nos.34504-34505/2012 and the Supreme Court vide interim CS(OS) No.1866/2012 Page 2 of 20 order dated 08.11.2012 stayed the operation of the orders dated 08.10.2012 and 12.10.2012. 5. In the aforesaid state of affairs, when these applications came up for consideration before this Bench on 09.11.2012, the ex parte order dated 22.06.2012 in favour of the plaintiffs was ordered to be kept in abeyance till 26.11.2012, subject to final outcome of the proceedings aforesaid before the Supreme Court. 6. The Supreme Court granted the SLPs which were converted into Civil Appeals No.8479-8480/2012 and which were disposed of vide order dated 27.11.2012, setting aside the order dated 24.09.2012 of the Assistant Controller of Patents & Designs of revocation of the parent, for the reason of being in violation of the principles of natural justice and remanded the matter back to the Assistant Controller of Patents and Designs for decision afresh. 7. In view of the aforesaid order of the Supreme Court, vide order dated 10.12.2012 in this suit, the ex parte order dated 22.06.2012 was restored. CS(OS) No.1866/2012 Page 3 of 20 8. The Assistant Controller of Patents and Designs, after re- consideration of the matter on remand by the Supreme Court, has again vide order dated 11.02.2013 revoked the patent. 9. In view of the aforesaid development, when the applications came up before this Court on 13.02.2013, the counsel for the defendants sought revocation of the ex parte order contending that the same was on the strength of patent which has been revoked. On request of the counsel for the plaintiffs, the matter was adjourned to 21.02.2013 and thereafter to 28.02.2013. 10. On 28.02.2013, detailed arguments were heard from the counsels and the order also partly dictated. It was the contention of the counsel for the plaintiffs on that date that the plaintiffs had filed W.P.(C) No.1068/2013 impugning the order dated 11.02.2013 of revocation of patent and which writ petition had been disposed of vide order dated 20.02.2013 relegating the parties i.e. the plaintiffs and M/s Cipla Ltd. to the statutory remedy of appeal before the Intellectual Property Appellate Board (IPAB) and restraining M/s Cipla Ltd. from, till then, commencing marketing of its drug. It was further CS(OS) No.1866/2012 Page 4 of 20 argued that upon the IPAB being approached by the plaintiffs on 26.02.2013, the following order has been passed: "This is an appeal against an order passed in post grant opposition revoking the patent. This is the second round of litigation. On 20.02.2013, the Hon'ble High Court of Delhi had passed an order directing the parties to appear before us on 26.02.2013 i.e. today and that since the respondent herein
had not commenced marketing the drug, the status quo shall continue till today. The learned senior counsel appearing for the appellant prays for stay of the revocation of the patent. The learned senior counsel appearing for the respondent submits that they are not ready with the pleadings and some time may be granted. It is the apprehension of the appellant that the patent will be removed before we hear the stay petition after the respondent makes the reply ready. Both the senior counsel agreed to argue the stay petition on 25.03.2013. Until then, the impugned order shall be kept in abeyance only as regards removal of the patents from the register. This order is passed more on consent and will not be cited by the appellant against the respondent in the civil proceedings pending between them. The matter posted for hearing on 25.03.2013."
11. It was further the contention of the counsel for the plaintiffs that since the IPAB had kept the order of revocation in abeyance as regard the removal CS(OS) No.1866/2012 Page 5 of 20 of patent from the Register, the patent remains and the interim injunction in force could not be vacated for the reason of the patent having been revoked.
12. The question which was thus framed in the order of 28.02.2013 was, whether on account of the patent remaining on the Register under the order dated 26.02.2013 of the IPAB, it could be said to subsist so as to justify continuation of the ad interim order in this suit restraining the defendants from infringing the same.
13. On the request of the counsel for the plaintiffs, the matter was adjourned on that date to 04.03.2013 when the senior counsels for the plaintiffs and the counsel for the defendants were heard further and order reserved.
14. Mr. C.R. Andhyarujina, Senior Counsel for the plaintiffs has argued:
(i) that the defendant did not oppose the patent, neither on the pre-grant nor post-grant;
(ii) that the grant of patent is under Section 43 of The Patents Act, 1970 read with Rules 88 and 95 of The Patents Rules, 2003;
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(iii) that Section 67(1) requires a Register of patents to be maintained containing all particulars affecting the validity or proprietorship of the patents and an extract from the Register of patents certified by the Controller of Patents & Designs is under Section 67(5) admissible in evidence;
(iv) that similarly all assignments, transmissions of patent are also required to be registered under Section 69 and Section 72 requires the Register to be open to public- thus anybody wanting to know about the patent looks into the Register of patents - axiomatically since IPAB had restrained removal of the patent from the Register, anyone inspecting the Register would treat the plaintiffs as the proprietor of the said patent;
(v) that an order of the IPAB, under Section 117D (2) of the Act, is required to be communicated to the Controller of Patents & Designs and who is to give effect to the said order by amending entries in or rectifying the Register in accordance with the order - thus for revocation to be CS(OS) No.1866/2012 Page 7 of 20 effective, the Register of Patent has to be rectified and which the IPAB has restrained;
(vi) that it will be a strange consequence that while M/s Cipla Ltd. on whose post-grant opposition revocation has been ordered would be bound by the order dated 26.02.2013 of the IPAB, the defendants who are a stranger to the said proceedings would not be.
(vii) that even otherwise, in the facts aforesaid, when the application of the plaintiffs for interim relief in the appeal against the order of revocation preferred to the IPAB is to be heard after a few days on 25.03.2013, it is in the fitness of things that this Court also waits till then and does not proceed on the premise that the patent stands revoked.
(viii) that the order of the IPAB is an order in rem and as per the order dated 26.02.2013, the revocation is not effective.
(ix) that in the aforesaid state of affairs, the observations of the Division Bench of this Court in judgment dated 20.04.2012 in LPA No.561/2010 titled Dr. Snehlata C. Gupte Vs. CS(OS) No.1866/2012 Page 8 of 20 Union of India to the effect that the date of the decision of the Controller of Patents & Designs is the determining event and entering of the same in the Register, a ministerial act, would be of no relevance;
(x) that rejection of patent is not by order but by correction of the Register and which has not happened; and,
(xi) that heavens are not going to fall if the interim order is continued for some more time and the defendants will not suffer any prejudice as they have never marketed their drug till now.
15. Mr. V.P. Singh, Senior Counsel also appearing for the plaintiffs has invited attention to para 32 of Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd. 2001 PTC 541 (SC) to contend that the principles of public interest also have to be applied in matters relating to drugs which are poison but upon being cautioned that the said observations are in the context of confusing trade names and that the principles of public interest if were to be applied in the present case may entail comparing the price of the drug of CS(OS) No.1866/2012 Page 9 of 20 the plaintiffs and the drug of the defendant and which may not be in favour of the plaintiffs, did not press the said argument.
16. The counsel for the defendants has argued:
(i) that though the plaintiffs have filed a suit for injunction against M/s Cipla Ltd. also but there is no interim injunction therein in favour of the plaintiffs and the IPAB also has expressly refrained the plaintiffs from using the order dated 26.02.2013 in the said suit - it is strange that while M/s Cipla Ltd. is not restrained, the defendants are;
(ii) that the plaintiffs are wrong in contending that the defendants are strangers; the defendants have also in this proceeding applied for revocation of the patent and which is permissible under the law;
(iii) that in matters relating to patents of drugs, interim injunctions have been refused even while returning finding on infringement;
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(iv) that the plaintiffs are also wrong in contending that the defendants have never marketed their drug; they have marketed their drug prior to the ex parte order of injunction as well as in the interregnum when the ex parte order was kept in abeyance;
(v) that in fact today the cause of action for the suit for injunction on the basis of patent which has since been revoked, has disappeared and the suit itself is liable to be dismissed and for which purpose IA No.18678/2012 has been filed by the defendants. Reliance is placed on Shipping Corporation of India Ltd. Vs. Machado Brothers (2004) 11 SCC 168 laying down that the suit which become infructuous owing to the subsequent events should not be kept pending only for the sake of continuing the interim order;
(vi) attention is also invited to the judgment dated 15.07.2010 of the Single Judge in W.P.(C) No.3516/2007 titled Dr. (Miss) Snehlata C. Gupte supra, also holding that the entering of CS(OS) No.1866/2012 Page 11 of 20 the patent in the Register is a ministerial act subsequent to the grant of patent;
(vii) attention is invited to:
(a) A.P.S.R.T.C. Vs. State Transport Appellate Tribunal AIR 1998 SC 2621 holding grant of permit to be different from issue of permit which is only a ministerial act not to be equated with grant of permit.
(b) Edukanti Kistamma Vs. S. Venkatareddy (2010) 1 SCC 756 also laying down grant of the permit to be determinative and issuance on the basis of such determination to be a ministerial act;
(viii) attention is invited to Section 142 and the First Schedule to the Rules prescribing the fee for renewal and to Section 53(2) of the Act to contend that the patent ceases to have effect on expiration of the period prescribed for payment of renewal fee and without even removal from the Register; CS(OS) No.1866/2012 Page 12 of 20
(ix) attention is next invited to Section 60 and Section 62(2) to contend that no proceeding for infringement of a patent is to be prosecuted between the dates when the patent has ceased to have effect and the date of publication of the application for restoration of patent;
(x) attention is next invited to Section 25(4) of the Act to contend that it is the order of revocation of the patent which revokes the patent and not the ministerial act of removal of the patent from the Register;
(xi) that the plaintiffs are not entitled to the discretionary reliefs of interim injunction for the reason of having impleaded the President (Research and Development) & Additional Director of the defendant No.2 company as the defendant No.1 so as to avoid detection of the suit by the defendant No.2 and to obtain ex parte injunction behind its back.
(xii) Reliance in this regard is placed on Micolube India Ltd. Vs. Maggon Auto Centre 2008 (36) PTC 231 (Del.), Hindustan Lever Ltd. Vs. Lalit Wadhwa 2007 (35) PTC 377 (Del.) CS(OS) No.1866/2012 Page 13 of 20 laying down that employees and officers of companies are not necessary and proper parties in such suits and their impleadment is bad; and
(xiii) it is contended that even the Supreme Court by staying the earlier order restraining Cipla Ltd. from marketing its drug had indicated that once the patent had been revoked, no other pharma company could be so restrained.
(xiv) Reliance is placed on A.R. Safiullah Vs. A. Sowkath Ali 2012 Law Suit (Mad.) 907 where, relying on Shree Chamundi Mopeds Ltd Vs. Church of South India Trust Association (1992) 3 SCC 1 it was held that the order of revocation of patent is not wiped out even on grant of stay thereof and the patent, during the said period, cannot be said to be still alive.
17. I have weighed the rival contentions.
18. I am unable to take a view, that a patent once revoked remains non- existent and unenforceable till the order of revocation is set aside, notwithstanding the order of stay of revocation in the Statutory appeal CS(OS) No.1866/2012 Page 14 of 20 provided against the order of revocation or in writ remedy available thereagainst. To hold so, would amount to making the said remedies infructuous and ineffective. It cannot be lost sight of that we have a multi- layered adjudicatory process, perhaps to eliminate the human error in decision making, and the order of an adjudicatory fora at the bottom of the pyramid, if stay thereof is granted by a fora where appeals / remedy against such order lie, has the effect, till the said stay lasts, of consequences as if the said order does not exist. It cannot further be lost sight of that patent is a limited period right, effective from the date of application and not grant, and further that the IPAB and the writ courts are unable to dispose of the appeal etc. against the order of revocation immediately. If it were to be held that notwithstanding the interim order of stay of revocation, the patent remains un-enforceable, it would allow the patent to be infringed in the interregnum, making the appeal/writ remedy infructuous. I am unable to read Shree Chamundi Mopeds Ltd to be holding to the contrary.
18. However in the present case, the IPAB, though stay of order of revocation was sought, has not granted such a stay and has only directed the order of revocation to be kept in abeyance as regards removal of the patent from the Register. The question which thus arises is, whether for the reason CS(OS) No.1866/2012 Page 15 of 20 of the patent remaining on the Register but without any stay of order of revocation, can the patent be said to be enforceable. The judgments of this Court, already noticed while recording submissions, unequivocally hold the recordings on the Register to be a ministerial act and the rights being otherwise governed by the grant. Not only am I bound by the said judgments but am also wholly in agreement „Patent‟, in Section 2(1)(m) of the Act is defined as meaning a patent for any invention „granted‟ under the Act and not as „entered‟ on the Register. Thus it is the „grant‟ and „revocation‟ thereof which confers rights and not the „entry‟ in the Register. I may notice that the Trade Mark Act of 1958 defined a trade mark as recorded on the Register and which led to the ambiguity whether invalid or a lapsed entry in the Register was enforceable. The legislature has removed the said ambiguity in the 1999 Act by providing that the trade mark should not only be recorded but also valid. However the position in the Patents Act, in defining the patent is unambiguous. Though while defining patentee in Section 2(1)(p), it is the person for the time being entered on the Register but in the absence of a grant or in the event of revocation thereof, there can be no patentee. I am unable to find Section 117D (2) also as, notwithstanding order of revocation, perpetuating any rights in the grantee CS(OS) No.1866/2012 Page 16 of 20 till the implementation of the said order by removal of the patent from the Register. Such an interpretation would confer powers in the officials entrusted with the task of making entries in the Register, over and above the powers of the Authorities conferred with the power of grant and revocation, and cannot be accepted.
19. Thus, in the absence of any order of the IPAB of stay of the order of revocation, we have to proceed on the premise that the order of revocation stands.
20. It is not the contention of the plaintiffs that they are entitled to restrain the defendants de hors the patent.
21. The plaintiffs however want this Court to treat the patent as still alive, because appeal against the order of revocation is pending consideration before the IPAB. Mere pendency of an appeal, it is the settled position in law, does not amount to stay of operation of the order appealed against. It is for this reason only that the plaintiffs sought interim stay from IPAB but which was not granted on 26th February, 2013. When IPAB has not granted interim stay, this Court which is not hearing the revocation matter, cannot CS(OS) No.1866/2012 Page 17 of 20 pass an order having the effect of there being an interim stay of the order of revocation.
22. The plaintiffs are entitled to continuance of the interim injunction only against the infringement of the patent and once the patent has been revoked, the interim stay in this suit cannot be continued on the grounds as raised, of it being just, fair and equitable to await the final decision on the revocation of the patent. It cannot be lost sight of that ex parte ad-interim injunction was granted to the plaintiffs only on the strength of its patent and in the absence thereof the plaintiffs had no right to even maintain the suit. When the basis on which ex parte interim relief was granted has disappeared, I see no justification for continuing to restrain the defendants. The arguments of „heavens are not going to fall‟ are not found applicable to sustain the injunction. Moreover, this court is exercising a jurisdiction where the Courts hands are bound by the CPC and whereunder interim relief cannot be sustained on mere equity, without the other ingredients of prima facie case, irreparable injury and balance of convenience being satisfied. Judicial notice can also be taken of the fact that the appeals before the IPAB may take considerable time for disposal. It cannot also be lost sight of that though the plaintiffs had on 26.02.2013 sought interim stay of the order of CS(OS) No.1866/2012 Page 18 of 20 revocation of patent and which interim stay if had been granted would have meant the grant of patent to the plaintiffs continuing in force but the said relief was denied to the plaintiffs. What has been granted to the plaintiffs is on the asking of the plaintiffs themselves and I cannot in the same read an order which the IPAB has refused. Thus the order of the IPAB of keeping the order of revocation in abeyance for the limited purpose of removal of the patent from the Register can by no stretch of imagination be read as an order of stay of revocation.
23. I am also of the opinion that if the IPAB on 25.03.2013 or on any subsequent date grants stay of revocation or sets aside the order of revocation, it would be open to the plaintiffs to seek injunction against its infringement. If the defendants in the interregnum launch or market their drug, they would be doing so at their own risk and costs and it is not an argument in law to continue the interim order which in law cannot be continued awaiting the order of IPAB which itself has refused to grant stay of the order of rejection of the patent.
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24. Though the defendants have also sought dismissal of the suit but I have at this stage intentionally not taken up the said application owing to the matter before the IPAB listed on 25th March, 2013.
25. Resultantly, IA.No.11625/2012 of the plaintiffs for interim relief is dismissed and the ex parte order dated 22nd June, 2012 stands vacated. Axiomatically, IA.No.17014/2012 and IA.No.18679/2012 stand allowed.
26. List for consideration of other pending applications on 13th May, 2013.
RAJIV SAHAI ENDLAW, J MARCH 19, 2013 „gsr‟ CS(OS) No.1866/2012 Page 20 of 20