With the functioning of Indian courts in the limelight this month, it’s an opportune time to ask some tough questions about how IP cases play out in our system. We have consistently blogged (here, here, here and here) about the unsuitability of interim injunctions in patent infringement cases, given the complex questions of claim construction and validity. In this post, I look at the case of Symed v. Sharon Bio-Medicine and Ors. to demonstrate just how damaging an interim injunction can be to the integrity of the patent system.
Background
Symed Laboratories Ltd. is an Indian bulk drug manufacturer based in Hyderabad. Among other things, it manufactures linezolid, an antibacterial used to treat skin and blood infection including pneumonia. Symed owns two process patents for the manufacture of “novel intermediates for linezolid and related compounds.” The product patent for the drug is owned by Pfizer. However, being a pre-1995 drug, there is no product patent for it in India. Symed was also granted a patent for their novel process by the US Patent Office in 2010. On the strength of their patent, Symed has sued a number of Indian manufacturers of linezolid for patent infringement including Glenmark, Optimus Pharma, Alkem Laboratories Limited (Symed has now entered into a settlement with Alkem), Mankind Pharma Limited and the defendants in this case, Sharon Bio-Medicine Ltd.
Symed won three interim injunctions against the above mentioned defendants before the Delhi High Court. The first two against Optimus and Sharon were ex parte and were granted by Justice Kailash Gambhir in 2012 and the third against Glenmark was granted by Justice G P Mittal in January of this year. These injunctions have been highly controversial for a number of reasons. The injunction against Glenmark was vacated by a Division Bench of the DHC consisting of Justice Badar Durrez Ahmed and Justice Sanjeev Sachdeva within 2 weeks of the Single Judge’s decision. The other defendants in this saga have not been as lucky and continue to suffer the injunction.
The grant of an interim injunction is predicated on four criteria: [1]
- That there is a prima facie case in favour of the plaintiff;
- That the plaintiff is likely to suffer an irreparable injury if the defendant is not restrained;
- That the balance of convenience lies in favour of the plaintiff; and
- That public interest would not be dis-serviced by the grant of the injunction.
- Prima Facie Case
The standard for a establishing a prima facie case for the purpose of an injunction in Indian law is not clear. The UK originally followed the ‘triable issue’ test laid down in the seminal case Amercian Cynamid vs Ethicon which only asked whether the claim was frivolous or vexatious, in other words, that there is a serious question to be tried. This was premised on the efficacy of the Patent Office’s work in granting patents coupled with multiple opportunities to challenge a patent at various stages. In the Series 5 case, this standard was altered to the ‘relative assessment test’ which explains that the court should not attempt to resolve difficult issues of fact or law on an application for interlocutory relief. If, on the other hand, the court is able to come to a view as to the strength of the parties’ cases on the credible evidence then it can do so.
Shamnad has argued in this paper that the Indian Patent Office faces a gamut of institutional infirmities that render the ‘triable issue’ standard entirely inappropriate to our context [Also see this paper by Bhaven Sampat and Tahir Amin]. A case might be made that deference ought to be given to the IPO’s grant only for those patents that have faced opposition proceedings. Overall, Indian courts should follow the ‘relative assessment’ standard. The DHC in a few cases has moved towards this by holding that injunctions should not be granted in cases involving new and unchallenged patents.
A common argument made across the linezolid cases is that first, Symed has failed to demonstrate that the defendants have used the patented process and secondly, relying on Section 104A, they have failed to prove that end product is identical to that obtained using their patented process. I will consider each of these arguments in detail.
Unique intermediate compounds
In all the above mentioned cases, Symed has argued that a positive test for Zodiac4, CHFA and PHPFMA in the products manufactured by the defendants prove prima facie that they have used the Plaintiff’s patented process. Whether these chemicals are novel and unique to the Plaintiff’s process has therefore been a moot point in these cases. While the Glenmark injunction involved some deliberation on whether Symed was precluded was from claiming novelty of these compounds based on their claims before the Indian and certain foreign patent offices, the Sharon Bio-Medicine case did not involve any such examination. Sharon Bio-Medicine has pleaded that the two patented processes are mutually exclusive and hence an averrment cannot be made that they were infringing both based on the test results of a single product. Justice Badar Durrez Ahmed has made a similar point in the order vacating the Glenmark injunction:
“It is evident from the processes shown at pages 137-138 of the appeal paper book that the process IN 213062 and IN 213063 would only result in Linezolid API with two of the markers in each case, namely, CHFA and ZODIAC-4 in the case of IN 213063 and CHFA and PHPFMA in the case of IN 213062. Therefore, the lab test reports which indicate the presence of three markers in the case of the appellants’ product would, in any event, indicate that the process used was different.”
The credibility of the tests have also been questioned by the defendants who were not able to present their own tests prior to the grant of the ex parte order.
Section 104A of the Indian Patents Act
Section 104A provides for a shift in the bruden of proof from the plaintiff to the defendant in the event that the former demonstrates that
- a) the patented process is for the manufacture of a new product, or
- b) there is a substantial likelihood that the identical product is made by the process and the patentee has be unable through reasonableefforts to determine the process actually used. Provided, that the patentee first proves that the product is identical to the product directly obtained by the patented process.
Sharon Bio-Medicine, (Defendant No. 1) has argued that the Plaintiff has failed to prove that their end product is identical to its own. This was also a controversial point the in Glenmark ruling with the Division Bench noting that:
“Linezolid API is not necessarily identical in the case of each of the different companies manufacturing the drug. “
In light of this failure, the burden cannot shift as per Section 104A to the defendants. However, even if it were proved that the final product is identical, it must still be demonstrated that there is ‘substantial likelihood’ that the same process was used. The defendants argued that the presence of Zodiac4 or PHPFMA cannot meet this standard since these are commonly used pharmaceutical ingredients.
Further, Sharon Bio-Medicine also argued that they have chosen to protect their own unique process as a trade secret, rather than patent it and therefore have the right to refrain from disclosing it to the Plaintiffs. Therefore, in the absence of the shift of burden of proof, they cannot be compelled to disclose their own novel process. The Division Bench order this pokes serious holes in the interim injunction awarded by the Single judge that should hold water across all the linezolid cases.
Counterclaim for revocation
Sharon Bio-Medicine has also filed a counterclaim for revocation of the Symed patents. In the face of a credible challenge to the validity of the patent, an interim injunction cannot be granted by the court. The ex parte orders in this saga did not allow the defendants to even make this challenge in the first instance. It must be remembered that grant of a patent is not proof of its validity [Section 13(4)]. The presentation of a credible challenge, however, requires detailed hearings on validity which makes the interim hearings tantamount to a fully fledged trial. This slows down the entire litigation process and for some unlucky defendants like Sharon Bio-Medicine, could mean that their business is suspended for years at a stretch.
Prima facie case is only the first step of the interim injunction test. In Part II, I examine how the court has failed to take into consideration the other limbs of the test.
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[1] Wander Limited v. Antox India Private Limited 1990 Supp (1) SCC 727; National Research Development Corporation of India v. The Delhi Cloth & General Mills Co. Limited AIR 1980 Delhi 132.
