Roche vs Cipla: The "Appellate" Battle Heats Up

As our readers are aware, in the first instance, a single judge of the Delhi High Court, Justice S Ravindra Bhat denied an injunction to Roche in relation to its anticancer drug “Tarceva” and permitted Cipla to continue manufacturing generic versions. Thereafter an appeal was filed by Cipla before a division bench of the Delhi High Court, consisting of the Chief Justice, AP Shah and Justice S Muralidhar. For those who came in late, we have about 25 earlier posts tracking this litigation. See here.

Roche Arguments:

Roche’s counsels (Abhishek Manu Singhvi, assisted by Parag Tripathi) closed their arguments after a good 5-6 hearings. And I believe the last hearing went on for a good 5 hours! Their main thrust seemed to be that “public interest” and “pricing” ought to not form part of India’s injunction jurisprudence. Particularly since the Patents Act already provided for extensive compulsory licensing provisions (and one of the grounds was that a license could be granted if patented product was expensive and not affordable). Therefore, Singhvi contended that the court should not operate as a defacto compulsory licensing authority.

As we noted in an earlier post, the “public interest” and “pricing” logic of Justice Bhat could be transposed to the final stage, –i.e. even if the patent were held valid, a judge could deny an injunction to Roche since its drug was more expensive (and therefore less affordable) than Cipla’s. Since in most pharma patent cases, this would always be the case (innovators who incur an R&D cost would almost always charge more than generics), no patentee would ever get an injunction. In short, such a ruling would amount to a de facto judge made automatic compulsory licensing rule.

Roche’s counsels also argued that Justice Bhat ought not to have second-guessed the patent office ruling (in the pre-grant opposition proceeding) in favour of Roche. Particularly when the patent office possesses more expertise to assess technical issues (such as non-obviousness of a chemical compound), when compared with Justice Bhat, who was merely examining the matter at a peripheral “interim” level. A plethora of cases from India and abroad suggests that one cannot undertake a mini trial to assess the relative weight of each party’s case at the stage of an interim injunction. This line of argument appears to have impressed the judges, particularly Justice Shah.

However, I’m not entirely sure what the impact of this impression will be on the final decision. Particularly when Justice Bhat cleverly held in favour of a “prima facie” case. In other words, although he seemed suitably impressed by the validity attack by Cipla’s counsel, he was careful enough to ensure that this did not impact his finding that Roche had established the existence of a “prima facie” case in its favour. As we noted earlier in several posts, the traditional three step test for the grant of a temporary injunction demands that the plaintiff demonstrate that:

1. There is a “prima facie” case in favour of the plaintiff
2. The plaintiff would suffer “irreparable injury”, if injunction not granted
3. The “balance of convenience” is in favour of the plaintiff.

While Justice Bhat held in favour of Roche on the first ground (prima facie case), he held against them on the other two. And most controversially perhaps, he imported “public interest” as a factor to be considered while assessing the third ground, namely “balance of convenience”.

By holding in favour of Roche on the first ground, Justice Bhat appeared to suggest that he was wary of second guessing a more thorough assessment of “validity” by the patent office. Had he second guessed the patent office and held against the existence of a “prima facie” case, his ruling might have come under attack. But then, one might ask: why did he venture to make statements questioning the validity of the patent and casting aspersions on the patent office ruling? Perhaps, this suspicion of the validity caused him to move to the second and third factors (irreparable injury and balance of convenience) and weigh against Roche while assessing those factors.

Cipla Arguments:

Jaitley attempted to rebut most of hte arguments advanced by Singhvi and team. In short, some of the arguments that he raised were as below:

1. He reiterated his argument before the lower court that there is no statutory presumption of validity in favour of a patent (unlike the trademarks act, which presumes a registered trademark to be valid). One wonders as to what effect this argument would have at the appellate level, given that the trial court had already held in favour of a “prima facie’ case, despite casting aspersions on the validity of the patent. Given that an appellate court only reviews questions of law de novo, it is doubtful if it will overturn Bhat’s ruling that a prima facie case had been established. In fact, if anythying at all, Justice Shah seemed to be concerned that Justice Bhat had even ventured to cast aspersions on the patent office (oppn) ruling, without the benefit of more evidence and hearing on the point.

2. Jaitley appeared to suggest that there were two Roche patents in issue here. While the first patent was a granted one, the second one was merely a pending application. And that Cipla’s product, Erlocip merely implicated the second patent application. Since the second application was still pending and not yet granted, there could be no “infringement”. From the facts of the case, I doubt very much if this argument is likely to fly. In the lower court, Bhat J does not seem to have given much weightage to this argument. In fact, if this argument were a strong one and a finding of “non infringement” were likely, Justice Bhat would not have found in favour of a “prima facie” case at all.

3. In reply to Singhvi’s contention that there was already a compulsory licensing scheme to address pricing and public health issues, Jaitley argued that such a scheme would come into effect only 3 years after the date of the grant of a patent. While this is true in the case of section 84 (which is a ground to be invoked by private parties such as Cipla), it is not true in the case of Cl grounds invocable by the government (there is no minimum time period for this).

Interestingly, Judge Shah asked Jaitley point blank: if the Roche patent was finally held valid, could the court still deny an injunction to Roche on the ground that the patented price is higher than the generic version? In other words, ought the court to establish an automatic judicially created compulsory licensing ground? Jaitley cleverly ducked this issue, stating that he would address it later. Clearly, this will be a major point on which the appellate court ruling is likely to hinge.

5. Jaitley also pointed to section 92A of the Indian patents act as endorsing public health concerns. And mentioned that “epidemic” as used in this section would include even “cancer” .

Jaitley will continue his arguments on Monday.

Conclusion:

At the appellate stage, the case will likely hinge on whether or not pricing and public interest can be part of the “interim injunction” calculus. And whether or not “judge made compulsory licensing norms” can form part of Indian patent jurisprudence. We’ll bring you more updates as this case proceeds.