Merck vs Glenmark: Speeding Up Trials and Injuncting Injunctions

LawyerZoneOnly a week or so ago, I wrote an op-ed in the Mint highlighting instances of “Jugaad Justice” from our courts. And one such instance turned on the maverick Justice Katju ordering that interim injunctions be dispensed with in complex IP cases. And that one move directly to the trial stage, albeit an expedited one. As I’d noted:

“Years ago, in a rare flash of intuitive intelligence, the maverick justice Markandey Katju did away with “interim” injunctions, often the first phase of an IP dispute. Such injunctions were granted upon the demonstration of a “prima facie” case, and meant to protect an IP owner against the vicissitudes of a long trial, where the alleged infringer could flood the market with competing products and destroy the value of a time-sensitive IP rights.

Katju’s logic was simple. Given that this initial interim phase was itself subject to endless adjournments and delays, it was far simpler to dispense with this phase and move directly to the more complex trial phase and resolve the dispute once and for all (the second phase).

This dispensation had the added advantage of ensuring that in complex cases such as pharmaceutical patents, the judge faced no “prima facie” pressure and could review all evidence in depth to arrive at the right determination. A wrong interim result effectively meant that competitors and hapless consumers were denied access to cheaper life-saving medicines, till such time as the court finally got it right.

Underlying this elegant solution was an intuitive logic that made the most of a resource-crunched ecosystem beset with endemic process delays. However, Katju rightly cautioned that in all such cases where the interim phase was dispensed with, trials would need to be expedited through mandatory timelines. Unfortunately, this policy prescription is observed more in the breach by lower courts and lawyers appearing before them.”

Monitoring Patent Trials: TVS vs Bajaj

For a nice academic discussion around Justice Katju’s creative policy prescription, see our piece here. I’m at a loss to understand as to why this prescription has been observed more in the breach by lower courts, lawyers and litigants. Is this owing to the lack of a monitoring mechanism/oversight by the court to ensure that its timelines are strictly complied with? The fact that Justice Katju merely stated (in the TVS vs Bajaj patent dispute) that the trial shall take place on a day to day basis, that no adjournments would “ordinarily” be granted and that the entire trial ought to be wind up in 2 months; but did not do anything more to ensure compliance with its diktat. Is this why the Bajaj trial took forever? I believe from Sai Deepak’s excellent blog that its still not been completed! Despite more than 5.5 years going by from the deadline imposed by the SC! For those that are more in the know of this case, please do share the latest update.

Merck vs Glenmark: A “Drag” of an Interim Injunction

It now turns out that the Supremes are once again grappling with this complex issue of lengthy interim phase proceedings and the need for expedited patent trials. In the ongoing Merck vs Glenmark patent dispute (hearings were held yesterday and the day before), the judges were irked by the fact that the the interim inunction phase itself was taking a long time to wind up. Recall that the infringement suit was filed in April 2013, and the temporary injunction phase (with a lower court refusing the injunction at the first instance, and an appellate court then proceeding to grant the injunction, only to have it stayed by the Supreme Court) took more than two years (i.e the matter is still pending as of today).

Added to their woes was the fact that the trial also appears to have commenced, but was chugging along at a pace that made the snail look good; allegedly it took more than one year to cross examine just one witness! Firstly, if both the trial and the interim injunction phase are pending simultaneously, does it not make sense to simply dispense with the injunction phase and focus only on the trial and get it over with as quickly as possible? My sense is that this is what the court is leaning towards. However, in a bid to balance out equities as best as they could in the specific facts of this case, the judges did not do away with the interim injunction phase outrightly, but ordered that Glenmark is free to dispose of all existing stock (which apparently will last for around 5-6 months from now). In the courts’ words:

“At this stage, we would not like to enter into a detailed discussion of the merits of the order of the Learned Division Bench of the High Court and our primary concern would be to balance the equities between the parties while maintaining public interest. In our view, in the present case the above would be best served if the existing stock of the two products viz. ZITA and ZITAMET are allowed to be sold in the market which, according to the petitioner itself, can take care of the current demand in the market for five to six months i.e September-November, 2015.”

As for the trial itself, the court categorically observed that it has to be expedited and that it will monitor the situation closely:

“Insofar as the present suit is concerned, we direct the Local Commissioner to record evidence on a day-to-day basis commencing from 20th May, 2015 and complete the recording of the evidence of both sides including cross-examination on or before 30th June, 2015. Both the parties will cooperate and any perceptible lack of cooperation by either side will be noticed and recorded by the Local Commissioner to be placed before us. If required, the Local Commissioner will arrange a Special Venue for conduct of the proceedings before him which shall be held from 10.00 a.m. to 5.00 p.m. with the usual break(s). If the Local Commissioner is otherwise overburdened on account of other commitments and is not in a position to comply with the time frame fixed by this Court, the learned trial judge shall be informed immediately and the learned trial judge may pass appropriate orders in the matter for appointment of a suitable Local Commissioner. In the event the learned trial judge is not available to pass necessary orders replacing the Local Commissioner we authorize the Registrar General of the Delhi High Court to pass necessary orders in the matter.

We make it clear that we expect the Local Commissioner appointed by the High Court to complete the recording of the evidence in the matter on and before 30th June, 2015 and the learned trial judge to commence hearing the arguments on and from 6th July, 2015 on a day-to-day basis.

…..We make it clear that we have taken a little unusual and extraordinary course of action in ordering the above time schedule. This has been prompted by our desire to ensure that highly contested commercial cases, in which category this instant case can be put, requires immediate attention and disposal to ensure a suitable commercial environment which is vital to national interest. Our above directions, therefore, will be construed to be in exercise of our jurisdiction under Article 142 of the Constitution.”

TVS vs Bajaj: (Mis)Rule of Law?

One hopes that with this strict monitoring by the court, the patent trial is brought to a rapid conclusion. And that going forward, this speedy disposal becomes the norm. But I wonder why no counsel ever cites the Katju prescription to the court, i.e. that in IP cases, interim injunctions are to be dispensed with; and that one move to trial directly. Here are the relevant extracts from the case (TVS vs Bajaj):

“Recently, we have held in Special Leave Petition(C) No.21594 of 2009 decided on 07th September, 2009 in the case of M/s. Shree Vardhman Rice & Gen Mills vs. M/s Amar Singh Chawalwala as follows

“…Without going into the merits of the controversy, we are of the opinion that the matters relating to trademarks, copyrights and patents should be finally decided very expeditiously by the Trial Court instead of merely granting or refusing to grant injunction. Experience shows that in the matters of trademarks, copyrights and patents, litigation is mainly fought between the parties about the temporary injunction and that goes on for years and years and the result is that the suit is hardly decided finally. This is not proper:

Proviso (a)to Order XVII Rule 1(2)C.P.C. states that when the hearing of the suit has commenced, it shall be continued from day-to-day until all the witnesses in attendance have been examined, unless the Court finds that, for exceptional reasons to be recorded by it the adjournment of the hearing beyond the following day is necessary. The Court should also observe clauses (b) to (e) of the said proviso.

In our opinion, in matters relating to trademarks, copyright and patents the proviso to Order XVII Rule 1(2) C.P.C. should be strictly complied with by all the Courts, and the hearing of the suit in such matters should proceed on day to day basis and the final judgment should be given normally within four months from the date of the filing of the suit.”

….In the present case, although arguments were advanced at some length by the learned counsel for both the parties, we are of the opinion that instead of deciding the case at the interlocutory stage, the suit itself should be disposed of finally at a very early date.

…We would request the learned Single Judge who is trying the suit to commence the hearing of the suit on the re-opening of the Madras High Court after Dussehra holidays and then carry it on a day to day basis. No adjournment whatsoever ordinarily will be granted and the suit shall be finally disposed of on or before 30th November, 2009.”

There you have it! Couldn’t have been laid down in clearer terms. And yet, this is a Supreme Court diktat that is observed more in the breach! (Mis)Rule of Law? Or a special case really, given that we’re not quite partial to Justice Katju, who labelled more than 90% of us as stupid?

ps: image from here.

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