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Justice Manmohan Singh’s flawed judgment on biosimilars


imagesIn this post, Prashant Reddy examines Justice Manmohan Singh’s judgment in the lawsuit filed by Genentech and Roche against Biocon and Mylan over the launch of a biosimilar for Herceptin ®. Prashant, through his incisive analysis, argues that the judgment lacks coherent reasoning. This is indeed a “disturbing trend” since India is a common-law jurisdiction and therefore, legal reasoning forms an important component of legal jurisprudence. Recently, Prof. Shamnad inter alia dealt with this issue here.

[*Long Post]

Justice Manmohan Singh’s flawed judgment on biosimilars by Prashant Reddy

One of the exceptionally controversial judgments of Justice Manmohan Singh in the recent past has been on the issue of bio-similars. As reported earlier on this blog, Genentech and Roche had sued Biocon, Mylan and Reliance Life Sciences along with the Drug Controller General of India (DCGI) and the Department of Biotechnology (DBT), in the year 2014 and 2015. In the first lawsuit, an injunction was sought against Biocon-Mylan restraining either company from launching biosimilar version of Genentech’s wonder-drug, Herceptin ®, with the INN – Trastuzumab. The second lawsuit sought similar remedies against Reliance Life Sciences. I’ll focus on only on the first lawsuit in this post. For an earlier summary of the judgment, please read Rahul’s posts over here and here.

The thrust of Genentech’s lawsuit

The main averment made by Genentech in the lawsuit against Biocon-Mylan, was that the defendants had not complied with the testing requirements laid down by the Guidelines on Similar Biologics announced by the DCGI in 2012 but were still claiming, in their promotional material, that their biosimilar was equivalent to Genentech’s Herceptin ®. According to the Plaintiffs, these claims made by the defendants constituted the tort of“passing off” since the defendants were allegedly misrepresenting the quality of their products to claim a false equivalence to the plaintiff’s own product. In specific, the Plaintiff sought the following prayers:

(a) An injunction restraining the defendants from launching their biosimilar version of the plaintiff’s drug until such time that they complied with all the tests mandated by the Guidelines on Similar Biologics;

(b) An injunction restraining the Defendants from representing their biosimilar as “biosimilar of trastuzumab” – which is the INN or generic name of Herceptin ® – until tests had been conducted under the Guidelines on Similar Biologics;

(c) An injunction restraining the Defendants from representing their biosimilar as ‘Trastuzumab’ or ‘Trastuzumab Injection’ in any press releases, public announcements etc.;

(d) An injunction restraining the Defendants from referring to the Plaintiff’s trademarks Herceptin ®, Herclon ® and Biceltis ® in their promotional material or relying on the Plaintiff’s data in their press releases, public announcements etc.

Did Genentech have a right to sue for what it was suing?

Given the peculiarity of this lawsuit and its prayers, it is necessary to begin by understanding the claims being raised in this lawsuit. The main cause of action made by Genentech, is “passing off”. In order to establish passing off the Plaintiff first has to prove three ingredients:

(a) That the plaintiff has a reputation and goodwill associated with the product and its name;

(b) That the defendant has made misrepresentations by attempting to ride off the goodwill of the plaintiff by associating its products to those of the plaintiffs and such misrepresentation or deceit is causing confusion amongst consumers; &

(c) Such misrepresentation or deceit has caused damage to the Plaintiff’s goodwill;

The core element of a ‘passing off’ action is deceit or misrepresentation resulting in confusion amongst consumers. It would have been difficult to argue the same in the facts of the present case because Mylan-Biocon had received permission from the DCGI (the regulator) to manufacture and market a biosimilar of Trastuzumab under the Guidelines on Similar Biologics. The fact that such permission was granted establishes that Mylan-Biocon’s product was certified as being the equivalent of Genentech’s Herceptin ®. This meant that doctors who are used to the concept of biosimilars would not be confused and it also meant that Biocon-Mylan could claim a defence under the “nominative fair use” doctrine in trademark law.

The only way to circumvent this roadblock of the product being certified by the DCGI was for Genentech to first argue that Biocon-Mylan had been wrongly granted permission under Guidelines on Similar Biologics due to misrepresentations made to the DCGI. It is not possible to challenge the DCGI’s decision in a civil suit because the DCGI has immunity under Section 37 of the Drugs & Cosmetics Act, 1940 from being sued in civil proceedings – Genentech should have either filed a complaint with the DCGI (as Biocon had done against Natco in the case of a different drug – a complaint which Shamnad, Sai Vinod and I had written about here or alternatively filed a writ petition challenging the DCGI’s order). Instead of challenging the decision of the DCGI, the plaintiff appears to have argued that Mylan and Biocon have failed to comply with the Guidelines on Similar Biologics. If Genentech succeeded in proving that Mylan and Biocon failed to comply with the Guidelines, they could then perhaps also prove the element of deceit or misrepresentation required to prove a passing off action.

Except, the critical question, is whether Genentech could raise such an issue in a civil suit? As most of you may know a civil suit may be filed only if one of the following rights are infringed:

(a) A contractual right is breached; or

(b) A statutory right (for e.g. a copyright or trademark); or

(c) A tort, like passing off, negligence etc.

Thus a right has to be defined either by statute or common law or a contract before a civil suit can be instituted in a court of law. In this case Genentech did not have a statutory right, common law right or a contractual right to challenge the representations or misrepresentations made by Biocon-Mylan to the DCGI.

Justice Manmohan Singh of course thinks differently. I extract the following from para 70 of his judgment:

I would rather say after analysing the scheme of the Drugs Act that remedies prescribed under the Drugs and Cosmetics Act would merely allow the plaintiffs to contest the grant or refusal of the approval granted by the defendant No.1 by way of the appeal (though the participation of the plaintiffs before the drug controller appears to be minimal which is only to the extent of the using the referenced product and nothing more). The civil right of the plaintiffs being the owner of the drug and only parting with the innovated product in a regulated regime so that the rival trader can merely make the biologically similar product for safety, efficacy and another reasons and should not pass off the defendants’ products as those of the plaintiffs when they do not have such characteristics, can only be tested in the court of law and can be enforced therein and not before the drug controller.(Emphasis supplied)

When Justice Manmohan Singh claims that the Plaintiff has a “civil right”, I’m not quite sure as to what it means. There is the Civil Rights Act that was enacted in the United States in 1964 to outlaw discrimination on the basis of race, colour, religion, sex or national origin. India enacted The Protection of Civil Rights Act, 1955 to prescribe punishment for those who continue to practice untouchability. To the best of my knowledge this civil rights legislation does not cover pharmaceutical companies seeking to injunct competitors from entering the market with competitors.

So what exactly does Justice Manmohan Singh mean by “civil right”? What is this mysterious “civil right” that allows Genentech to restrain the defendants for allegedly not complying with the testing requirements laid down in the Guidelines? I’ve read the judgment and I’m afraid I don’t have the answer. Genentech has no civil right of the nature described by Justice Manmohan Singh in the above excerpt. Else, he would clearly articulated the nature of such “civil right” in his lengthy judgment running into 227 pages. If Genentech has no right to file a civil suit, the High Court should have simply rejected the suit without even adjudicating the issue of passing off.

The final ruling contradicts the Drugs & Cosmetics Act, 1940

After 227 pages, Justice Manmohan Singh concludes that Biocon and Mylan, secured approvals despite not following the criteria laid down in the Guidelines on Similar Biologics­– how he comes to such a conclusion without conducting a trial is perhaps the subject of a different post. In any case, moving to his final order, he orders Biocon and Mylan to comply with the following conditions while allowing them to manufacture and sell their biosimilar:

(a) Both companies were allowed to use the INN Trastuzumab only on the bottom part of the carton (on the packaging) in a font that is smaller than the brand names used by Biocon or Mylan. This aspect of the order is baffling to say the least because Rule 96 of the Drugs & Cosmetics Rules, 1945, states in pertinent part, that “the proper name of the drug shall be printed or written in a more conspicuous manner than the trade name”. The word “proper name” could include either the name in the Pharmacopeia or the INN. In other words, Justice Manmohan Singh basically forces Biocon and Mylan to violate Rule 96 by making sure their brand name is in a font that is bigger than the INN.

(b) Despite allowing Biocon-Mylan to use the INN Trastuzumab, Justice Manmohan Singh puzzlingly restrains them from mentioning the registered trademarks of Genentech (Such as Herceptin ®) in their promotional material or packaging. Genentech’s drugs, notwithstanding the different trademark, all basically contain the drug described by the same INN – Trastuzumab. Anybody who knows about INNs will tell you that if two drugs can legally use the same INN, it mean that the drugs are same. In fact INNs were invented by the WHO to ensure that ever active ingredient in a drug had a unique name which cannot be trademarked and which can be used in prescription by doctors thereby saving them the duty of prescribing specific brands. So it is bewildering that Justice Manmohan Singh allows both Biocon-Mylan to use the same INN as Genentech but refuses to allow them to establish equivalence with Genentech’s drugs.

The remaining issues in the final ruling are equally flawed but I’m not discussing them here due to space constraints.

Before I end, I must point out that although the main issue in the case was “passing off”, the last mention of this phrase is on page 79 of a 227 page judgment. Justice Manmohan Singh fails to explain how there could be any deceit or misrepresentation as required to prove “passing off” when regulatory law clearly required Mylan and Biocon to represent that the products were in fact manufactured by themselves i.e. the packaging will necessarily state that the drug is manufactured by Biocon-Mylan. Since the “consumers” for Herceptin are actually doctors – the drug is a prescription drug which has to necessarily be administered in hospital intravenously – there is little doubt of confusion that is required under the tort of passing off.  Indian oncology doctors are brilliant people who understand biosimilars. Unfortunately, we don’t see such analysis in the judgment.

 

Mathews P. George

Mathews P. George

Mathews is a graduate of National University of Juridical Sciences, Kolkata. His interest in intellectual property was kindled when he bagged the second position in his very second year in the prestigious Nani Palkhiwala Essay Competition on Intellectual Property. Winner of almost a dozen essay competitions in his law school days, he was involved in various research and policy initiatives relating to intellectual property. His stint as a student of Prof. Shamnad Basheer further accentuated his interest in intellectual property. Presently, he is associated with Ninan & Mathew Advocates, Cochin, a leading law firm in Kerala. Earlier, he was working as a corporate lawyer with Khaitan & Co., Bangalore.

14 comments.

  1. XYZ

    Dear Prashant:

    I must also highlight the following:
    a) There was NO prayer against the DCGI – though it was made the first defendant. In such an interesting suit, the Judge felt inclined to grant an ex-parte ad interim injunction which ultimately culminated in this 227 page order. If this is not reason enough for stakeholders to look at forum shopping, then what is?
    b) Roche has messed with other biolsimilar players outside India – for e.g Sri Lanka.
    c) One company was successful in evading this injunction threat – Cadila. They had their own anti-suit injunction at Bombay HC.

    Reply
  2. Prashant ReddyPrashant Reddy

    Thanks for that information XYZ. Do you have any further information on the Cadila case?

    Regards,
    Prashant

    Reply
    1. XYZ

      Dear Prashant:

      I am unable to link the Bombay HC orders since the website is different compared to Delhi HC.
      Below are the details:

      1. CADILA HEALTHCARE LTD V/S ROCHE PRODUCTS (INDIA) PVT LTD AND 4 ORS
      Bombay (Original) NMS/2093/2015

      2. CADILA HEALTHCARE LTD V/S ROCHE PRODUCTS (INDIA) PVT LTD AND 4 ORS
      Bombay (Original) S/1073/2015

      3. CADILA HEALTHCARE LTD V/S ROCHE PRODUCTS(INDIA) PVT LTD AND 4 ORS
      Bombay (Original) LPETN/274/2015

      Reply
  3. Masamune

    The indignation at Court’s assumption of jurisdiction leading to wide orders (that too in utter contradiction to the Rules) is palpable. Manmohan Singh himself was a plaintiff advocate for most of his career and thus, the reason why Plaintiffs never loses even when they claim monopoly over Lord Rama himself.

    Coming to the blog, I am interested and almost intrigued by the writer’s questioning of maintainability of the civil suit. The blog posits that civil suit can be filed only in the three situations so cited, namely – (a) contractual right; (b) statutory right and (c) tort. However, this position is incorrect. The right to file civil suit is expansive and could be filed for any claim no matter how frivolous it is. (This is the interpretation for section 9 and mulla / sarkar could be referred. One such case is Gangabai v. Vijay Kumar 1974 SCR (3) 882).

    Rather the question of maintainability lies only in the case where it can be shown that such suit is explicitly or by necessary implication barred by a statute. Now, does the statutory enactment and rules provides for the remedies as sought by the Plaintiff to bar the suit by necessary implication (assuming there is no particular section that explicitly bars this suit). If the answer to this question is ‘yes’, then this suit becomes barred. Otherwise, the suit is maintainable under section 9.

    I propose a slightly different way to look at this case – whether the Plaintiff does have a locus standi to involve itself in the approval / grant of licensing under the biosimilar guidelines to generics. Now, this proposition with respect to Biosimilar guidelines has not been answered (since I understand this is the on of the first cases on this point). However, the Supreme Court in various cases (most cited being Nagar Rice v. Gowda AIR 1971 SC 246) has stated that business competitors do not have any locus standi for challenging the permission/license process of their competitors till no such right is provided under statute.

    This is common sense principle for three reasons: (a) That to allow such competitors would cause such approvals to be challenged (and subsequently appealed) by business competitors who have clear motivated purpose to delay such permissions and; (b) this would cause the statutory authorities and Courts to become the tool for competitors to obstruct each other’s functioning in the market by challenging the approval processes and (c) a licensing / approval process is always interse between the licensing authority and the private party until the law explicitly provides for third party intervention (think: Patents Act, Trademarks Act).

    So – if the case is solely for the artistic arrangement concerning the label of the bottle or the product name (as opposed to INN), then, the passing off / trademark / copyright infringement claims would lie.

    However – I think this is not the sole goal of the present Plaintiff. It is seeking to delay the entry of generics by such challenges and hence, it should be prohibited under the Nagar Rice principle that the Court / statutory forums would not become battlegrounds for business competitors challenging each other’s registration with a view to delay / harm the competition until such a specific right is given to third parties. By this logic, nearly every regulatory application would become amenable to suits and consequent appeals and thus, causing delays in entry of competition.

    In short – the suit is maintainable in view of the wide wordings of Section 9 and its interpretation. Rather, the Plaintiff has no locus standi to challenge such a registration. By entertaining this challenge, Manmohan Singh has stifled business competition (after all there would be a chilling effect if each generic applicant could be challenged and hauled-up before a Court) and proved again that he is and would remain to be the quintessential Plaintiff Judge.

    Reply
    1. Prashant ReddyPrashant Reddy

      Thank you for that very insightful comment Masamune.

      I agree with most of your conclusions – however I didn’t quite understand the last paragraph – How is the suit maintainable, if the Plaintiff has no locus standi to challenge the registration?

      Regards,
      Prashant

      Reply
      1. Masamune

        Yes, the point of the comment was to stress that the suit is unmaintainable in view of absence of locus stands and not in view of section 9 cpc. If it creates that confusion, then my apologies.

        To further add to it, I would stress that genetech can at best be an informant to dcgi to initiate proceedings against Mylan et al under drugs and cosmetics act. A perusal of the act would show wide criminal powers to both inspect the laboratories of Mylan etc as well as to bring charges in a criminal court if any term of grant is violated or a fraud has been perpetrated. And subsequently, rescind such approvals.

        What I stress here is this jurisprudence which if unleashed would convert our forums, already bogged down, into title for tat challenges aimed to delay and harm competition. A mighty incentive for such market segments. By extension, I could challenge you driving license approvals at court. Nice no?

        But more on that once you release a post on the substantive aspect of this judgment.

        Keep writing. We will disagree but then, I hope we could contribute to growth of our jurisprudence.

        Reply
        1. Prashant ReddyPrashant Reddy

          Thank you for the clarification Masamune – I completely agree with you. I’m hoping to put out another post on the Reliance judgment where he seems to explore S. 34 in more detail.

          Regards,
          Prashant

          Reply
  4. Anonymous

    When you people do not have anything to defend on the judge, you caste aspersions on the judge. Bunch of mongers with basheer and company and reddys. Then Reddy picks up his own favourites from south galary to impose his foolish views. Wow.

    Reply
  5. Anonymous

    The understanding of civil right shows how much these students who act under the instruction malafide people include reddy and basheer company operate. If they correlate civil right under section 9 with civil right act of US, I think they are not worthy of being lawyers in India.

    Reply
  6. Anonymous

    You have no right to see what the judge was doing at the time of practice. Whenever the judge was made, he was made for all of them and not for the party specific. This shows that you have nothing against the person and you are just trying to malign him with vested rights and with your own malafide aims being an unsuccessful party in one of the cases. Totally outrageous! You dont judge a judge on the basis of what he has done in past as a lawyer. Judge him what he has done in the present. The judge has passed as many judgments in favour of the defendants as in the favour of plaintiff. Its petty that you being a lawyer having limited exposure of his judgments thinks like that because you are unsuccessful in convincing him. Poor knowledge, vested rights, lobbyist attached what can we expect from these bunch of people.

    Reply
  7. Deepveer Reginath

    As a general principle, I agree whole-heartedly with Anonymous on this. If you’re going to pillory judges on what they did (or did not do) as lawyers, every single Judge who came up from the Bar is suspect.

    Reply
  8. Anonymous

    Hi!

    can you provide me with the link to this judgement or suggest me a way to find this judgement

    Thankyou

    Reply

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