02 Nov 2020
Case : Astrazeneca AB & Anr v. Intas Pharmaceuticals Ltd. & Anr. I.A. No. 8826/2020 in CS (COMM) No. 410/2020
Court : Delhi High Court
Bench : Jusrtice Rajiv Shakdher
Decided on : 02 Nov 2020
Sections 146(2), 64, 105, 107, 2(1)(ja), 13 and 14 of the Patents Act, 1970
Rule 131 of the Patent Rules, 2003
Brief Facts and Procedural History
1. The Plaintiffs brought action with respect to two patents- the genus patent i.e. IN 147 and the species patent i.e. IN 625. The Indian genus patent i.e. IN 147 expired on 02.10.2020. The Indian species patent i.e. IN 625 expires on 15.05.2023. The aforementioned patents have corresponding patents in the USA i.e. US 126 [the genus patent] and US 117 [the species patent].
2. The plaintiffs have taken out an infringement action both for IN 147 and IN 625 involving the use of Dapagliflozin (DAPA) which is used worldwide to treat people suffering from type-II diabetes mellitus.
3. The suit actions were filed on 30.09.2020 i.e. two days prior to the expiry of the validity period of IN 147 which, as indicated above, ended on 02.10.2020.
The Issues of the case
Whether the compound-in-issue i.e. Dapagliflozin (DAPA) which, according to the plaintiffs, is covered by IN 147 stands disclosed both, in law as well as on facts?
Whether the Plaintiffs entitled to an injunction on the use of the patents IN 147 and IN 625 by the defendants?
The Observations of the Court
The Honourable Delhi High Court observed that:
1. Section 64 and 105 of the Patents Act, 1970 make it clear that a challenge for revocation of a patent can be laid either at the stage when an application is moved for grant of a patent, albeit, after its publication or after its grant, although, within the time frame provided in the relevant provision or even by seeking revocation by moving the appellate board or by way of a counterclaim in the infringement suit.
2. This implies that the interested third parties can lay a challenge to an invention which is the subject matter of either the patent application or the patent at various stages. Section 13 is a provision which empowers the examiner before whom an application for grant of patent is placed to make investigations to ascertain if a patent is anticipated by previous publication and/or by a prior claim.
3. In this context, sub-section (4) clarifies that examination and investigations required under Section 12 or Section 13 i.e., when the patent crosses the threshold of examination by the patent office, it does not, as per the Statute, warrant its validity. Therefore, irrespective of when the challenge is laid, a person interested can put the patent in jeopardy as per Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries, (1979) 2 SCC 511. But, till the time the patent is invalidated i.e. revoked, the patentee has the right to exclude third parties.
4. The suit patents should not be presumed to be valid just for being old for two reasons. Firstly, there is a period of overlap between the genus patent i.e. IN 147 and the species patent i.e. IN 625. The defendants, in this case, chose to wait till such time the validity period of the genus patent i.e. IN 147 expired. Secondly, the scheme of the Act does not foreclose the right of the defendants in defence to an infringement action to question the validity of the patent. Section 107 of the Act, expressly confers a right on the defendants to raise all those grounds on which the patent can be revoked under Section 64 of the Patents Act, 1970 in their defence in an infringement suit. The judgement in Bristol-Myers Squibb Company and Ors vs. J.D. Joshi and Ors., MANU/DE/1889/2015, support the right of the defendant, as conferred under the Act, to challenge the validity of the patent. The presumption of validity exists only till such time the patent is challenged credibly.
5. In F. Hoffmann-LA Roche Ltd. & Anr. vs. Cipla Ltd., 2009 (110) DRJ 452 (DB) the Court set out the judicial standard which ought to operate at the preliminary injunction stage. The Court stated that the validity of a patent is required to be looked at the stage of the trial. However, at the stage of preliminary injunction, all that the defendant is required to demonstrate is that she/he has made a credible challenge or that the patent is vulnerable and that validity is not vexatious.
6. In the context of the vulnerability of the patents suit, it was observed that the fact that IN 147 has been worked commercially in India is evident from the Form 27 filed by the plaintiffs in fulfilment of the provisions of Section 146(2) read with Rule 131 of The Patent Rules, 2003 and that Dapagliflozin is covered in both the genus patents granted in USA and India i.e. US 126 and IN 147 is not disputable.
7. It was observed that the fact that the plaintiffs have taken out an infringement action both for IN 147 and IN 625 is a sufficient clue that Dapagliflozin is claimed in both suit patents. It thus, seems inconsistent that a patent holder can take out an infringement action for a patent and yet aver it is not disclosed.
8. The defendants’ submission that IN 625 should be revoked on account of prior claims under the provisions of Section 64(1)(a) of the Patents Act, 1970 has substance. The provisions of Section 13(1)(b) of the lend credence to this plea for allowing an examiner to make use of an Indian patent application or an Indian patent which, though published, after the impugned patent bears a priority date which is earlier than the impugned patent. In the present case, IN 147 bears the priority dates 12.10.1999 and 05.04.2000 whereas IN 625 bears 20.05.2002 as its priority date. For the purposes of Section 64(1)(a) this ingredient is sufficient. Therefore, as long as the defendant can establish that the inventions so far claimed in any claim of the complete specification [IN 625] was claimed in a valid claim of an earlier priority date contained in the complete specification of another patent [i.e. IN 147]- a ground for revocation is made out.
9. The High Court highlighted the observation made in Merck & Co. (Macek's) Patent,  R.P.C. 157 for its facts being much closer to the present case, that there would appear to be no ground for construing the phrase “the invention so far as claimed in any claim” in different senses in the sub-divisions of section 14(1), so that, if the prior claim on its fair construction can be seen to grant as a manner of manufacture that which the latter claim would re-monopolise, the objection of prior claiming is established, and this despite the inclusion in the latter claim of variants of the manner of manufacture to which no objection can properly be raised.
10. The question of disclosure or non-disclosure of Dapagliflozin is answered by the judgement of the United Kingdom Supreme Court in Regeneron Pharmaceuticals Inc vs. Kymab Ltd., (2020) UKSC 27 where it was faced with a challenge to the "287 patent" and "163 patent" and the 163 patents was divisional of 287 patent and sought to confer monopoly over the creation of a range of transgenic mouse. The Court observed that “in order to patent an inventive product the patentee must be able to demonstrate that a skilled person can make the product by the use of teachings disclosed in the patent coupled with common general knowledge which is already available at the time of priority date without having to undertake undue experimental burden or apply any inventiveness on their own”. This requirement is labelled as sufficiency. Applying this test, the Court set forth certain principles which are set out in paragraph 56 of the judgement. Applying these principles, it would have to be said that the arguments of the plaintiffs that Dapagliflozin was not claimed in IN 147 rest on shaky ground.
11. It must be stated that it was portrayed on behalf of the plaintiffs that the genus patent i.e. IN 147 enclosed certain compounds which were disclosed only when the species patent i.e. IN 625 was granted, which implies that the written description/complete specification of IN 147 covered Dapagliflozin but did not disclose it. According to the Court, such written descriptions/specifications would be flawed as it would prevent third parties from carrying out research in future. The observations of the Federal Court in this behalf in Ariad Pharmaceuticals, Inc. vs. Eli Lilly and Company, 598 F.3d 1336 provide a credible defence to the infringement action set up by the defendants, that the written description requirement ensures that when a patent claims a genus by its function or result, the specification lists sufficient materials to accomplish that function. The purpose of the written description requirement is to ensure that the scope of the right to exclude, as set forth in the claims, does not overreach the scope of the inventor's contribution to the concerned field as described in the patent specification. It is part of the quid pro quo of the patent grant and ensures that the public receives a meaningful disclosure in exchange for being excluded from practising an invention for a period of time.
12. In Monsanto Company vs. Coromandel Indag Products, (1986) 1 SCC 642, It was contended on behalf of the defendants that the expression ‘publicly known’ is to be understood from the point of view of a person engaged in the pursuit of knowledge of the patented product which in this case would be a man of science dealing with organic/medicinal chemistry. Challenge was laid to IN 625 on the ground that it was anticipated by what was published or publicly known from IN 147. The PCT publication date of IN 147 is 19.04.2001 which is well before the priority date of IN 625, i.e., 20.05.2002. It is contended on behalf of the defendants that since Dapagliflozin is both claimed and “fully and particularly described” as required under Section 10(4)(a) of the Patents Act, 1970 as a part of its complete specification, there is a credible case that Dapagliflozin was known and, therefore, vulnerable under Section 64(1)(e). Thus, to the man of science of ordinary skill but otherwise interested in the field of organic/medicinal chemistry having reasonable experience, Dapagliflozin was not new and was known prior to the priority date of IN 625.
13. Another ground was taken for revocation under Section 64(1)(f) i.e., that IN 625 is vulnerable as it does not involve any “inventive step”. Section 2(1)(ja) defines the inventive step in two parts, First part involves the patentee to show that the invention claimed in any claim involves “technical advance” as compared to the existing knowledge or has “economic significance” or both. The second part mentions that the invention should not be obvious to the person skilled in the art. A comparison of the complete specifications/descriptions of the Indian genus patent i.e., IN 147 and the Indian species patent i.e., IN 625 shows that there is no technical advance of the latter over the former. With the help of Idenix Pharmaceuticals Inc v. Gilead Sciences Inc,  EWCA Civ 1089, it was explained that post priority date evidence to show technical advance can only be taken into account to confirm the existence of technical effect which is found embedded in the specification of IN 625 and is capable of being understood by a skilled person having common general knowledge and not to rely upon the same to establish its effect for the first time. Thus, that there is no demonstrable technical advance as on the date of priority of IN 625.
14. On the issue as to whether the plaintiffs failed to make a complete disclosure in terms of Section 8 of the Patents Act, 1970 it was observed that the plaintiffs, on 19.08.2002 voluntarily sought to limit the term of US 117 [equivalent to IN 625] to the date when the US genus patent 126 was to expire. It was only after the terminal disclaimer was filed by the plaintiffs, which was accepted by US Patent Office, that US 117 was granted on 20.09.2002, though, with the caveat that it would expire on the same date as the US genus patent i.e. US 126. This information was not furnished to the Indian Patent Office.
15. The examination report dated 30.07.2002 issued by the US Patent Office regarding US species patent 117 was not furnished. The fact that the validity period of US 117 was voluntarily aligned with the US genus patent i.e. US 126 was not placed before the Indian Patent Office. These were vital documents that ought to have been furnished to the Indian Patent Office.
16. The scope of Section 8 of the Patents Act, 1970 has been captured in Chemtura Corporation vs. Union of India (UOI) and Ors., 2009 (41) PTC 260 (Del)] where it was observed that As far as Section 8(2) is concerned, the Controller on his own may also require the applicant to furnish details “relating to the processing of the application in a country outside India, and in that event the applicant shall furnish to the Controller information available to him within such period as may be prescribed.” That requirement is mandatory as has been further emphasised under Section 64(1)(j). And it is not possible to accept that since the omission to furnish particulars is not serious enough to affect the grant of the patent; it did not impinge on its validity. Section 64(1)(j) and (m) indicate to the contrary. Further under Section 43(1)(b) a patent can be granted only when the application has been found not to be contrary to any provision of the Act. It cannot be said that the omission to comply with the requirement of Section 8(2) was not serious enough to affect the decision of the Controller to grant the patent to the Plaintiff.
17. Therefore, whether or not the Court would, ultimately, revoke the suit patents for failure to furnish information, as sought for by the Indian Patent Office, would be ruled upon after the trial. It, nevertheless, is an important factor to be taken into account at a preliminary injunction stage; at which point, the Court exercises equitable jurisdiction.
18. The defendants have been able to set up a credible challenge and establish, at least at the preliminary injunction stage, the vulnerability of the suit patents. Even if the balance of convenience is in favour of the plaintiffs, the injunction cannot be granted. The plaintiffs have obtained injunctions in several pending suit actions which have been instituted in this Court. Furthermore, if the injunction is not granted, it would destroy the plaintiffs' market regarding their product. The defendants, on the other hand, say that the plaintiffs' suit actions are abusive which are intended to re-monopolise their rights that admittedly came to an end on 02.10.2020. The grant of an injunction would not only impact the defendants' rights to enter the market but would deprive the public at large to obtain their drug at relatively cheap prices. Since the plaintiffs are interested in licensing their product to third parties, the damage if any caused is compensable in monetary terms in accordance with the mandate of the law. If an injunction is granted, the opportunity lost by the defendants to market their products cannot be quantified in monetary terms. Therefore, even from the point of restitution, the balance tilts in favour of the defendants.
19. The provisions of the Patents Act, 1970 do not provide any shield of inviolability. This principle is true not only in India but in jurisdictions across the world. In no country, a mere grant of a patent by the patent offices' guarantees their validity. The grant of monopoly to the inventor, which is necessary to recoup investments and derive profits from their inventions, comes with a quid pro quo. Report on the Revision of the Patents Law by N. Rajagopala Ayyangar, J. was referred to for emphasising this point.
20. The Honourable High Court has to be vigilant towards attempts of the patentee that aims at evergreening an invention that does not inter alia involve an inventive step i.e. technical advance or economic significance. Therefore, depriving the defendants, at this stage, from manufacturing and selling their drugs, when, during the validity period of the genus patent i.e. IN 147 they largely held themselves in check would not be appropriate, especially, when they have set up a credible challenge to the suit patents.
21. As far as the issue of public interest is concerned, the drugs sold by defendants are much cheaper than that of the plaintiffs. Whereas the concerned statutory authority can deal with the apprehensions related to quality in a better way.
22. In view of the report “Diabetes Special Edition on Occasion of World Health Day 2016” released by The National Centre for Disease Control, Directorate General of Health Service, Government of India, the Court observed that the scale of balance weighed in favour of the defendants.
23. The Honourable High Court also highlighted the presence of academic literature asserting that the doctrine of double patenting needs to be strengthened.
The Decision Held by the Court
The Honourable Delhi High Court dismissed the applications and gave directions to be followed by the defendants:
1. The defendants, via their respective affidavits, will every quarter place on record the details, quantum, and value of drug manufactured and sold along with indirect and direct taxes paid in that behalf.
2. The defendants will also provide details of their assets [encumbered and unencumbered] which would include their location and current market value. The information given in the affidavits will be backed by a certificate of a statutory auditor.
3. The defendants via their affidavits will also undertake to pay damages as and when called upon to do so by the Court. These affidavits will be filed within 3 weeks.