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HC directs Single Judge to hear application for interim injunction of APIGAT once again, refers legal principle reiterated in Dorab Cawasji Warden v Coomi Sorab

NATCO Pharma Ltd vs. Bristol Myers Squibb Holdings Ireland Unlimited Company

This appeal is filed by Bristol Myers Squibb Holdings Ireland Unlimited Company (Plaintiff No. 1), Bristol-Myers Squibb India Private Limited (Plaintiff No. 2) and Pfizer Limited (Plaintiff No. 3) in CS (COMM) 342 of 2019 against an order dated 5th July 2019 passed Single Judge in IA No. 8873 of 2019 where NATCO Pharma Ltd (Defendant) was restrained from infringing Indian Patent No. 247381. Plaintiff 3 has entered into a collaboration arrangement with Plaintiff No. 2 to commercialize ‘Apixaban’ products in India.

This suit prayed for a permanent injunction restraining the Defendant from using, making, selling, storing, distributing, advertising, marketing, exporting, offering for sale, importing or in any other manner directly or indirectly dealing in any product, including but not limited to ‘APIGAT’ that was alleged to infringe the subject matter of the suit patent. 

Plaintiffs have averred that the suit patent covers a molecule having an INN Apixaben used in the prevention and treatment of thromboembolic diseases. They are the rightful owners of the suit patent which is due to expire on 17th September 2022. It is further mentioned that Defendant has earlier filed a petition before Intellectual Property Appellate Board for revocation of the suit patent which is still pending. Plaintiff No. 1 is also the owner of Indian Patent no. 243917 for ‘Nitrogen Containing Heterobicycles As factor Xa Inhibitors’ on 11th November 2010. Plaintiff No. 2 was granted import and marketing approval for Apixaban tablets by the Drug Controller General of India (DGCI) on 3rd August 2012, 16th May 2014, 29th May 2015 and was recently amended in the name of Plaintiff No. 3 on 15th February 2019 by the DGCI. 

It is claimed by the Plaintiffs that they received an information that Defendant is planning to launch a generic version of Apixaban under the brand name ‘Apigat’ and has already distributed sample packs to many cardiologists in the country while claiming that the stock will be available soon for sale in the market. Since the Defendant appeared to have sent the products to their distributors although the infringing product has not entered the commercial and retail market, plaintiff has filed CS (COMM) 342 of 2019 was filed along with IA No. 8876 of 2019 filed under Order XXXIX Rules 1 and 2 of Civil Procedure Code seeking interim injunction. 

Impugned order indicates that Single Judge directly asked the counsel for the Defendant to why interim order in terms of the order dated 31st May 2019 in Sterlite Technologies Ltd vs ZTT India Pvt. Ltd (CS (COMM) No. 314/2019) should not be passed till the completion of pleadings and hearing of the application for interim relief. It is important to notice that in the above mentioned case ad interim injunction was granted ex-parte. However, interestingly it was observed in the said order that “at this stage, it is not possible to form an opinion, even prima facie.” In the said order Single Judge observed that there should invariably be an interim injunction granted in the first place in favour of a patent holder by citing the following – 

“I say so because a patentee, even after succeeding in the suit, in the absence of any interim order, is entitled only to profits earned by the defendant and which do not reflect the profits which the plaintiff would have earned if there had been no infringement. As aforesaid, the infringer is able to market at a much lower price, resulting in earning far less profits that which the patentee would have earned if there had been no infringement. The patentee would then also be entitled to punitive action against defendant for violation of the interim order.  Such arrangement, in my view, will also ensure that suits for infringement are not contested, only to take advantage of and to reap the fruits of delays in Court process, in spite of defendant in its heart knowing the truth. Each defendant, in its heart knows the truth and if in spite of knowing that it is in infringement, violates the interim order, will, besides taking the risk of financial liability, also run the risk of penal consequences. This will also ensure purity of the Court process.”

Defendant’s counsel argued that since there is no satisfaction recorded of the Plaintiff having made out a prima facie case or balance of convenience in its favour, impugned interim order granting ad interim judgment is contrary to the well-established principles of decisions of the Supreme Court. Further, since for the same issue a suit was filed by the Defendant in the City Civil Court in Hyderabad against the plaint is pending and hence as per Section 10 of CPC, the suit before Single Judge should not have proceeded and moreover as Plaintiff admitted the cause of action arose in July 2019 when the Defendant’s suit was filed in Hyderabad, as per Section 20 of CPC Plaintiff should have pursued remedies in that Court. 

Since the revocation application filed by the Defendant was pending before the IPAB, no valid patent could have been granted. The said impugned order also ignored the presence of the Defendant’s product in the market. 

Counsel of Plaintiff submitted that without pursuing its revocation application pending before the IPAB to its logical conclusion, introducing the said product shows the mala fide intention of the Defendant. 

After analyzing the arguments, High Court observed that since the Defendant appeared on caveat and made submission, impugned order was not an ex parte order. High Court relied on Wander v Antox (1990) (Supp) SCC 727 and thereafter HC referred to Dorab Cawasji Warden v Coomi Sorab Warden (1990) 2 SCC 117 wherein SC held that, 

“The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are:

(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.

(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money. 

(3) The balance of convenience is in favour of the one seeking such relief.

Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive or complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.”

Further HC mentioned Tek Singh v Shashi Verma 2019 (3) SCALE 86 and referred to Seema Arshad Zaheer v Municipal Corporation of Greater Mumbai (2006) 5 SCC 282 wherein it was reiterated that,

 “ The discretion of the court is exercised to grant a temporary injunction only when the following requirements are made out by the plaintiff : 

(i) existence of a prima facie case as pleaded, necessitating protection of plaintiff’s rights by issue of a temporary injunction; 

(ii) when the need for protection of plaintiff’s rights is compared with or weighed against the need for protection of defendant’s rights or likely infringement of defendant’s rights, the balance of convenience tilting in favour of plaintiff; and 

(iii) clear possibility of irreparable injury being caused to plaintiff if the temporary injunction is not granted. In addition, temporary injunction being an equitable relief, the discretion to grant such relief will be exercised only when the plaintiff’s conduct is free from blame and he approaches the court with clean hands.”

Lastly, HC relied on Mahadeo Savlaram Shelke v Pune Municipal Corporation (1995) 3 SCC 33 in reference to the legal principles for passing of interim injunction. 

Court further said that it is not necessary that the order granting or refusing interim injunction should expressly state about the elements but a reading of the order should indicate the forming of an opinion on the said aspects. However, reading of the impugned order does not reflect that the Court has formed such an opinion on the aforementioned elements. 

Court set aside the impugned interim order and ordered that the application for interim injunction to be heard once again by the Single Judge on merits and status quo as on 5th July 2019 was restored. 

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