Roche vs Cipla: The "Appellate" Battle Heats Up


Today was yet another momentous day in the big ticket Roche vs Cipla litigation. Abhishek Manu Singhvi, counsel for Roche (along with Parag Tripathi) closed arguments on behalf of Roche. And immediately thereafter, Arun Jaitley opened arguments on behalf of Cipla.

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.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof Amartya Sen. Professional History: After graduating from the NLS, Bangalore Professor Basheer joinedAnand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

4 comments.

  1. AvatarAnonymous

    Dear Shamnad,

    Many thanks for the interesting [should I say ‘ball by ball’] account of the Appellate hearing.

    I look forward to further posts, later.

    Personally:
    a) I think Justice Bhat’s order was amongst the better written one, say compared to the Che HC order in Bajaj/ TVS;
    b) Though I personally think that Justice Shah’s question to Jaitley was a critical point; I have a feeling that even at appellate level, the injunction will not be granted against Cipla [Feeling; not a legal analysis].
    c) Why do I get the sense that both sides could have learnt some important aspects simply by following Spicy IP.. the posts/ comments here seem to give very interesting ammunition to either side and I would honestly advise that both Company counsels’ track this site…

    Regards,
    Your ‘case forwarding friend’

    Reply
  2. AvatarAnonymous

    Justice Shah seems to act devil’s advocate during his hearings. That is what i noticed at least on the first two hearings. However, dont you think the price issue would not be a difficult one to address? There are judgments that recite paragraphs on the nexus between patent protection, access and affordability of medicines.

    1. Why is price being seen as a factor under balance of convenience? lower price/public interest is not on CIPLA’s agenda! Public interest factor should be a separate head! If the court looks at it separate from the rest three factors they might be able to see which side weighs more. CIPLA is a company too..no charity here and no one is/will sell at a loss.

    2. Why is Roche insisting on public interest not being a ground for determining interim injunction? Setting an example is one thing.. but in a suit concerning a subject matter like this (a life saving drug) isn’t it an unlikely argument to succeed? (though interestingly Roche’s counsel on the first hearing before DB1 said its not a life saving drug in the true sense and only helps prolong survival. its a second line of treatment..so the high price aspect dilutes a lil too)

    3. Wasn’t introducing price/public interest a good thing in instilling a pro-patient attitude among pharmas. Its acted like a deterrent to unreasonable pricing (atleast they are subsidizing a little). Government, pharmas and NGOs – all have responded to this change. The way the Court adjudicates a matter is not dictated by fixed norms that have to be followed to the T in every case. It’s subjective like, where public interest is a concern. and should be examined by the court. While you are right that price will in all cases be high but a patentee can justify the price where possible or give comparative accounts, or subsidize where possible..

    High price and reasonable price can be distinguished and shouldn’t that be the Courts task as well?

    Basically I feel Roche’s counsels are being slightly escapist by refuting public interest in the four-factor test. They did raise some very good points… based on which the price/public interest should not be a glitch.

    Best regards
    T

    Reply
  3. AvatarShamnad Basheer

    Dear Case forwarding friend,

    Thanks very much for the comment (and more importantly for continuing to help us track the latest cases of interest).

    We’ll have to wait and watch to see which way the courts go on this. I think we might get abetter sense after the next hearing or so–and particularly after Singhvi finishes rebuttal.

    Reply
  4. AvatarShamnad Basheer

    @anon: I think your point about public interest being read as a separate leg is an interesting one. no case has expressly stated it as a separate factor till date. I guess since Bhat J was already rocking the boat in terms of denying an injunction in terms of pricing, he may have wanted to hew as close as possible to existing jurisprudence and may have therefore fitted this in within the balance of convenience limb.

    Reply

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