In Part I of this post, I used the Symed linezolid case study to analyse the contentiousness of establishing a prima facie case in interim injunction applications. I highlighted both the complexity of the question and the uncritical analysis that accompanied the injunction award in those instances. In this post I look at the next two limbs of the interim injunction test to see how well the judges fared on this analysis.
- Irreparable injury
For the grant of an interim injunction it must be proved that the plaintiff would suffer an irreparable injury if the remedy is not granted. In a jurisdiction like ours, where patent cases take years to litigate, a patent might be meaningless without the remedy of an injunction. However, what exactly is grave and irreparable injury remains uncertain. In Zenith Metalplast vs State of Maharashtra it was held that:
“The object of the interlocutory injunction is, to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial.”
Does this require a certain market share to shift to the defendant? A certain reputational loss? Or is it sufficient that the patent is being allegedly infringement at a certain scale? Some of these questions become pertinent to the next step of the test as well. In the Symed case, linezolid is neither exclusively manufactured by the plaintiffs and defendants nor uniquely associated with the plaintiffs. Moreover, in this case as in most pharma cases, detailed accounts of manufacture and disbursement can be kept to adequately compensate in damages should the trial prove the plaintiff’s case. None of these questions were examined in the ex parte injunctions granted in Symed’s favour.
- Balance of convenience
Should the validity of the patent be free from doubt, this aspect of the test is the real clincher [which is not to say that this prong is subservient to the test of prima facie case]. In the case of American Cynamid v. Ethicon, a House of Lords case that has been appreciatively quoted in a number of Indian judgments, it was held that the question of adequacy of damages would be crucial to the balance of convenience assessment:
“It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises.”
A number of factors would come into play in this instance including whether there was an inordinate delay in filing the suit, there was any fraud or deceit committed by either parties and there will be undue hardship to either party in suffering the injunction/alleged infringement. [In Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd., the SC stressed that regard must also be had to the injury suffered by the defendant in suffering the injunction]
In American Cynamid the House of Lords further held that:
“Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake ; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.”
The Sharon Bio-Medicine ex parte interim injunction was granted on 1st June, 2012. After attempting to vary the order by way of another IA, Defendant No. 1 filed a petition for vacation of the injunction on 26th November, 2012.On 19th March, 2013, Defendant No. 1 filed another IA for judgement in default in its favour for the Plaintiff’s failure to file a written statement to its counterclaim. The delay, however, was condoned by the court. This is a recurring pattern across litigation. Advocates expect that any amount of delay will be condoned without any adverse consequences. In Rameshwari Devi vs Nirmala Devi, the SC laid down guidelines for civil litigation to address strung out and vexatious litigation, among which includes:
“If in a given case, ex parte injunction is granted, then the said application for grant of injunction should be disposed of on merits, after hearing both sides as expeditiously as may be possible on a priority basis and undue adjournments should be avoided.”
Similarly, Order 39 Rule 3A provides that a petition for vacation of an ex-parte order shall be heard within 30 days and where the court fails to do so, it must record reasons in writing for the same. This is also in consonance with the basic tenets of the Principles of Natural Justice which requires that all parties be heard before suffering adverse consequences from an order of the court. However, even nearly three years after the passage of the ex parte order, the defendant is yet to be heard on its merits. The entire case has had 37 hearings till date. When asked to consider the IA for vacation of the injunction, the Defendant states that the court expressed that it was not a priority. Rather, the parties were directed to record evidence and commence with the main trial. Even today, while judgment has been reserved in the main case, a number of IAs are still being heard by the court. This begs the question – what is the purpose of granting an interim injunction in such a case at all? It only serves to occupy the court’s time and delay the main trial.
It becomes a matter of even greater prudence to maintain status quo when the trial involves vital and life saving drugs. In Part III I will look at the final prong of the test – the question of public interest.