Japanese pharmaceutical company sues for patent infringement in Delhi to protect its French markets


We have recently received information about an interesting patent infringement case filed by Astellas Pharma Europe B.V. (‘Astellas’) a company incorporated in the Netherlands, before the Delhi High Court (C.S. (O.S.) No. 1166 of 2011) against Micro-Labs Ltd., a Bangalore based Indian pharmaceutical company. Despite the distinctly European name of the Plaintiff, it is in reality a subsidiary of a Japanese company, which in itself is the child of a merger between two Japanese companies. For some reason, probably one of convenience, it is this Dutch corporation which holds most of the world-wide patents of the Japanese group companies.
This is an interesting case because the thrust of this patent infringement action is aimed at cutting the supply lines of Mylan’s French subsidiary (Mylan SAS) and it is not really aimed at stopping any marketing activities of the impugned product within India. It must be remembered that until now the patent litigation in India has always been aimed at stopping the marketing activities of generics within India itself. Indian courts are therefore slowing turning into a playground for global litigation. The history of the litigation between the parties, the details of the patent and the lawsuit are explained in greater detail below:

A. History of the Litigation
The litigation before the Delhi High Court can be traced to a commercial agreement between ‘Astellas’ and Mylan SAS for the supply of amoxicillin fast disintegrating tablets along with the sale of the requisite registration data in order for Mylan to be granted, regulatory approval for marketing the drug in France. This commercial arrangement which continued for at least a decade gradually lapsed and Mylan eventually entered into a commercial agreement with Micro-Labs for the supply of the same tablets which were previously being sourced from Astellas. Once Astellas learnt that they had been dumped by Mylan for Micro-Labs, they sued Mylan for patent infringement in France on the grounds that the tablets in question were covered by the claims of a European Patent bearing number 0910344. Mylan counter-sued by initiating legal proceedings for the revocation of the European Patent on grounds of invalidity etc. After several legal threats to Micro-Labs, Astellas filed the present patent infringement suit against Micro-Labs in May of 2011 for violation of the corresponding Indian patent granted by the Chennai Patent Office. However this suit before the Delhi High Court had been pre-empted by both Mylan and Micro-Labs filing separate revocation petitions against Astella’s Indian Patent before the IPAB on the ground of obviousness etc.

B. Indian Patent No: 234753
Astellas has filed the present infringement suit against Micro-Labs on the grounds that its Indian patent number 234753 was infringed. Claim no. 1 of the patent reads as follows:

1. A granulate for the preparation of fast-disintegrating and fast-dissolving compositions, containing an active ingredient, having a solubility in water of 1:>10, in admixture with a water dispersible cellulose, which is a microcrystalline cellulose and sodium carboxymethyl cellulose, characterized in that the water dispersible cellulose is present in an amount of < 15 wt%, the percentage based on the weight of the active ingredient. The remaining 9 claims are dependant claims.

The patent specification explains in the following manner, the problem sought to be solved by the present invention lay in providing a “composition or manufacturing method, which would be generally applicable to all kinds of active ingredients having a solubility in water of less than 10%, in order to obtain fast-disintegrating and fast dissolving compositions, containing a high amount of the active ingredient, while using conventional production equipment”.

The patent specification also explains that the prior art in the field has always contained a lower percentage of active ingredient than the claimed invention which has managed to maintain a higher percentage of active ingredient with the same rate of dissolution thereby not only increasing the bioavailability of the drug but also vastly improving the efficiency of the entire manufacturing process.

C. The defence put up by Micro-Labs in the Delhi law-suit
Since Micro-Labs had already received legal notices from Astellas regarding the alleged infringement, they had filed caveats in all relevant courts and were present in the Delhi High Court on the day Astellas suit came up for the first hearing. Micro-Labs has claimed the following defences in the infringement suit:

(a) Indian patent no. 234753 is anticipated by US Patent No: 5,455,049;
(b) Indian patent no. 234753 lacks inventive step in light of US Patent Nos: 3,539,365; 4,231,802 & 4,199,368 and WO 93/12768;
(c) Indian patent no. 234753 does not sufficiently and fairly describe the invention and the method by which it is to be performed;
(d) Indian patent no. 234753 was obtained on a false suggestion or representation.
(e) That the subject matter of the impugned patent is not patentable under Section 3(d) because it is a combination of known ingredients;
(f) That the claimed composition is not patentable within the meaning of Section 3(e);
(g) That the subject matter of the impugned patent lacks utility;
(h) That the Delhi High Court lacks jurisdiction to hear the matter because the principal office of Micro-Labs is located in Bangalore and not within the jurisdiction of the Delhi High Court.

Conclusion: Most of the above allegations and counter-allegations by both parties can be decided only at the stage of trial. The only issue which can be decided without leading any evidence is the jurisdiction question. If Micro-Labs does file an application under Order 7 Rule 11 of the CPC it is possible that the Delhi High Court will reject the entire plaint for want of jurisdiction. The reason for this being that Astellas has claimed jurisdiction by virtue of Section 20 of the CPC stating that Micro-Labs is residing and carrying out business within the jurisdiction of the Delhi High Court. It must however be noted that Micro-Labs has only a branch office in Delhi, while its registered office is in Bangalore. The ‘explanation’ to Section 20 of the CPC allows for corporations to be sued only at the location of their registered office and not at the location of their branch offices unless the cause of action arises in the location of the branch office. In the present case, Micro-Labs only has a branch office in Delhi, with the registered office located in Bangalore. It is not even the contention of the Plaintiff that Micro-Labs is marketing the impugned product in Delhi and hence there is simply no cause of action in Delhi. If there is no cause of action in Delhi, the suit will necessarily have to be dismissed even before the trial begins.
Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

8 comments.

  1. AvatarAnonymous

    Prashant,
    The suit cannot be dismissed under order 7 rule 11 for want of jurisdiction. In case the defendant challenges the jurisdiction it would be under order 7 rule 10 seeking the relief of return of the plaint for being filed in the court having jurisdiction.
    There are some judgments which hold that the averments in the plaint are sufficient for the jurisdiction. If the plaintiff has stated that the cause of action has arisen in Delhi, that would be sufficient. It is a matter of evidence whether the plaintiff is able to prove the averments with respect to the cause of action having arisen in Delhi.
    At the same time there are judgments which state that the plaintiff must at least file some proof prima facie to show that the goods are being sold in Delhi. The same is in Dabur versus K.R. Industries which went up to Supreme Court and was upheld. But in that case the Delhi High court had the jurisdiction at least under the Copyright Act.

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  2. AvatarPrashant Reddy

    Hi Anon,

    Thank you for the correction, you are right it is Order VII Rule 10.

    In re your second point I agree with you. In the present case however the Plaintiff does not seem to have alleged that the cause of action has arisen in Delhi. Instead they seem to be claiming jurisdiction only through the branch office. In such a case there is no need for any factual determination and I think the Court can decide this question purely on the law.

    Best,
    Prashant

    Reply
  3. AvatarAnonymous

    What are the basic requirements to get a temporary injunction in India? Is there any precedence that court has given TI for such cases in India?

    Reply
  4. AvatarAnonymous

    There are two kinds of Temporary Injunction orders. One is the ex parte ad interim injunction for which recently a judgment has been pronounced by Hon’ble Supreme Court by a bench presided by Hon’ble Mr. Justice Dalveer Bhandari which mentions not only about the basic requirements for the grant of ex parte ad interim injunction order but also much more AND the other is bi parte injunction order. In Bi parte injunction order there is judgment of Hon’ble Supreme Court in the case of Dalpat Kumar which mentions that the three ingredients for the interim injunction namely
    Prima facie case;
    The balance of Convenience AND
    The irreparable loss that the party is going to suffer in case the injunction order is or is not granted.

    Reply
  5. AvatarAnonymous

    Prashant:

    This seems to be a very interesting case as one set of parties went to the IPAB.

    So, what is happening on the IPAB action? Both your posts are very detailed on the Delhi High Court matter, but not much information on the IPAB front. Do you have information on what is the latest at the IPAB front?

    anon..

    Reply
  6. AvatarAnonymous

    Shamnad,
    Please note the judgment details:
    Ramrameshwari Devi and Ors.Versus Nirmala Devi and Ors. CIVIL APPEAL NOS. 4912-4913 OF 2011 (Arising out of SLP(C) Nos. 3157-3158 of 2011) Judgment dated 4th July, 2011Please take special care to paragraphs 46 onwards.

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