Breaking News: Roche Loses Tarceva Patent Case and Faces Hefty Fine


The Appellate Bench at the Delhi High Court (consisting of Justice AP Shah and Justice Muralidhar) held in favour of Cipla and against Roche in a high profile patent litigation involving Roche’s patented drug Tarceva.

Roche had sued Cipla before the Delhi high court, praying that a temporary restraining order be issued against Cipla. For a history of this case, please see our previous posts.

The appeal in question was filed against the order of Justice Ravindra Bhat who had refused to restrain Cipla from selling generic versions of Tarceva (Erlocip) on the ground of “public interest” i..e Cipla’s drug cost about 1/3rd of Roche’s patented drug.

Public Interest and Pricing

The Appellate court did not dwell much on this “public interest” point. Rather it rejected the appeal on the ground of lack of a “prima facie” case. As we’d noted in a previous post, Indian courts insist on 3 conditions prior to the grant of a temporary restraining order (or injunction):

i) The patentee has to establish a “prima facie” case against the defendant
ii) But for the injunction or restraining order, the patentee would face irreparable losses
iii) The balance of convenience is in favour of the defendant

While Justice Bhat had held in favour of Roche on the first point (that Roche had established a prima facie case), he held against Roche on the “balance of convenience” point, ruling that “public interest” and lower pricing of Cipla’s drug tilted the “convenience” in favour of Cipla.

Lack of Prima Facie Case

The appellate court overruled Justice Bhat on this point and held that on the evidence before the court, Roche had failed to establish a prima facie case. Firstly, the validity of Roche’s patent was in serious doubt. In view of the existence of Gefatinib, an earlier known molecule, the court appears to suggest that Erlotinib, Roche’s patented molecule may not be inventive.

Secondly, there is a serious doubt about whether or not Cipla infringes the Roche patent at all.

Since the court ruled that Roche had not even established a prima facie case, it did not have to wade into the other factors, such as the pricing of the drug and the public interest factor, something that the trial judge, Justice Bhat had based his judgement on.

Roche Fined Rs 5 lakhs!

Interestingly, and perhaps very damagingly for Roche, the judge also imposed a cost of 5 lakhs (approximately USD 10,000) on Roche for suppressing material facts. The court appears to suggest that Roche had taken the patent office and the court for a ride by suppressing facts. Roche has around ninety days to appeal to the Supreme Court of India now. If not for anything else, it ought to appeal to reverse the finding that it suppressed material facts.

Likely Supreme Court Verdict

Even assuming the Supreme Court does overrule the High Court (division bench) on the “prima facie” issue, it is likely that since Cipla has been selling the drug since late 2007, the court may hold the “balance of convenience” to be in favour of Cipla.

Appellate Court Arguments

In a previous post, we had outlined the arguments by Cipla’s counsel before the appellate bench, and the court appears to have relied substantially on these arguments:

“Continuing from our earlier post, yesterday’s hearing saw Cipla’s counsels continue arguments before an appellate bench consisting of Justice AP Shah and Justice S. Muralidhar. The key arguments advanced were:

1. That the patent in suit (covering Erlotinib) was invalid
2. That the patent, even if valid, was not infringed

The “public interest” and “pricing” argument was altogether avoided by Cipla’s counsels. It appears that they may have strategically decided to downplay the “public interest” argument. (Or perhaps they make take it up at the next hearing).

…..The patent invalidity argument ran along the same lines of what had been advanced before Justice Bhat.

i) That Erlotinib was “obvious” from an earlier patent covering a “known” substance, Gefatinib.

ii) That Erlotinib did not show any increased efficacy over and above Gefatinib. And therefore contravened section 3.d of the Indian Patents Act.

iii) That the patent office finding in favour of Roche (during the course of the pre grant oppn hearing) ought to be disregarded by the court. Counsels for Cipla advanced rather cogent and powerful arguments for why they thought the patent office ruling was suspect (on similar lines as that advanced in the trial court before Bhat J):

a. For one, the order in favour of Roche was passed by the patent office within a span of a mere 7 days, when the norm for most opposition decisions was 6 to 8 months.

b. Secondly, the date of grant of the patent in suit was unclear. As we noted in a previous post:

“Apparently, there was some problem with determining the exact date of the grant/issue of patent. The register of patents notes the date as 6th July 2007. However, the patent certificate states the date to be 23rd February 2007.

This date has direct relevance for determining the dates of the opposition proceedings. Natco filed an opposition on 10th April 2007. If the Feb 2007 date is taken to be the date of grant, then Natco’s opposition is a post-grant one. However, if the 6th July 2007 date is taken, then Natco’s opposition qualifies as a “pre-grant” one.

c. Most importantly, perhaps, Cipla’s counsels argued vehemently that the controller merely addressed arguments on “novelty” and did not even consider arguments on non obviousness, when the case effectively hinged on non obviousness.

d. Counsels decried the ruling of the patent office on 3 (d) observation as garbled and totally incoherent.

While this attack by counsel on the patent office decision appears persuasive, this does not automatically mean that the court will conclude that the patent is invalid. Rather, defendants will have to independently demonstrate that this is the case, since the patent is a granted one and remains in force, till invalidated. However, given this persuasive attack, the court may not defer too much to the patent office determination that the patent was indeed valid.”

Caveat: Most of the above observations are based on my conversations with folks familiar with the order that was pronounced today. I will bring you more details on this case, once I have read the judgment in full.

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.

3 comments.

  1. AvatarAnonymous

    Dear Mr. Basheer,

    There is an additional argument that suggests obviousness of erlotinib. The patentee alleges that an object of the invention was to provide compounds having improved tyrosine kinase inhibitory activity. Roche needed to support this statement regarding “improvement” by objective evidence. The evidence could include comparative tests vis-a-vis the closest prior art. The closest prior art does not necessarily mean the closest commercially marketed embodiment of the cited prior art but also those embodiments that come structurally closest to the claimed compound, in order to substantiate the technical advancement of the art. There are compounds in the prior art that are indeed structurally closer to erlotinib than the gefitinib structure, which raises another arguable plank of obviousness argument.

    I am not aware how far this argument is being pleaded by the Cipla counsel but I felt this comment would be useful for the readers of this wonderful blog.

    Thanks and Regards,

    Reply
  2. AvatarAnonymous

    Dear shamnad
    Excellent post and breaking news for generic
    I wouldlike to raise some question whihc may be question of future
    1. if cipla can market this drug along with Roche than why not other companies try to this option wherein they can argue on the same basis.

    Regards
    Anon-14

    Reply
  3. AvatarAnonymous

    Dear Shamnad

    I was going through the Del HC decision and it looks like the court does not specify that it is imposing 5 Lakhs as a fine for suppressing material facts, but rather it states that “The appeal is dismissed with costs quantified at Rs.5 lakhs which will be paid by the appellants/plaintiffs to the defendant within a period of four weeks.” Do correct me if I am wrong, but arent costs different from fines?

    Also, you state in this post that “Since the court ruled that Roche had not even established a prima facie case, it did not have to wade into the other factors, such as the pricing of the drug and the public interest factor, something that the trial judge, Justice Bhat had based his judgement on.” However, on reading the judgment, it appears that the court has gone extensively into the point of public interest and upheld Justice Bhat’s order in this regard. See paragraphs 76 to 83 of the decision. I presume the decision uploaded on the India Kanoon page is the one you are discussing in this post: http://www.indiankanoon.org/doc/401740/ Please do let me know if I have misread something…

    Reply

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