In yet another Natco-Novartis matter before the Delhi High Court, a couple of very interesting issues have arisen. While the dispute has been ongoing since 2016, the post will mostly focus on the January 2023 order. One of the issues addressed in the order was regarding the question of whether opposition proceedings are adversarial or do they run on a parallel track with the examination of an application. And the other is whether the patent in question, titled pharmaceutical combinations of an Angiotensin Receptor Antagonist and an NEP Inhibitor (IN 414518), is a secondary patent to the recently expired Vymada patent (combination of Valsartan-Sacubitril).
Background
Natco had filed a pre-grant opposition in 2016 against Novartis’ IN 414518 patent application. One of the grounds under this opposition was against the claim by Novartis regarding the crystalline form of the valsartan-sacubitril composition. After multiple rounds of to-and-fro amendments, written submissions, and other applications, the patent application finally was limited to 8 claims on 6th June 2020. However, of these 8 claims, Natco alleged that Claim no. 4 and no.1 pertain to the crystalline form of the valsartan-sacubitril composition which were initially deleted by Novartis after Natco’s opposition and has now been re-claimed by them. While this matter was pending, the Controller issued a hearing notice to Novartis without informing Natco and subsequently passed an order granting the IN 414518 patent to Novartis. It is pertinent to note that the patent was granted on the same day Novartis filed its written submission through which it agreed to delete the contentious Claim no. 4. Aggrieved by the order, Natco filed a writ petition challenging the legality of the order passed by the Controller, alleging violation of the principle of natural justice.
On the procedure to address pre-grant opposition: Are Examination and Opposition 2 parallel tracks?
Novartis argued that the whole exercise of the grant of a patent runs on two parallel tracks. One on track, the examination of the patent application by the examiner and the controller; and on the other track, oppositions filed before the controller. It conjointly read Section 14 (Communication by the controller about the objections raised by the examiner to the applicant), 15 (Controller’s power to demand an amendment/ refuse an application if the application does not comply with Patent Act) and 80 (Controller’s discretionary power to afford an opportunity to an applicant before exercising any discretion adversely against it) along with Rule 20, 28 (Procedure in case of anticipation by prior publication) and Rule 55 (opposition to a patent) of the Patent Rules to argue against direct participation of 3rd parties such as opponents in examination proceedings. Novartis further pointed out that not only was Natco heard on multiple occasions, but the impugned order also refers to Natco’s opposition and the consideration thereof by the controller.
However, the court disagreed with this straitjacket formula and made some interesting observations about the role of the pre-grant opponent. Relying on an earlier order in Natco v. Union of India and UCB Farchim v. Cipla the court reiterated that once a pre-grant opposition is filed, the proceedings become adversarial in nature. With regard to the trifecta of Section 14, Section 15, Section 80, the court read it with Rule 55 to hold that the “parallel” paths chalked by Novartis eventually converge and the pre-grant opponent is to be kept informed of all the development concerning the patent application. The court also expressed its dissatisfaction with the fact that the impugned order was passed by the patent office on the same day as the submission of the written statement by Novartis, after this single-party hearing.
The court in the above-cited Natco v Union of India order had held that “the proceeding in a pre-grant opposition and simultaneous examination of a patent application, however, cannot also result in a situation where the pre-grant opponent is kept in dark about the developments taking place in the examination process.” The court had further explained that if an amendment is being carried out during the pendency of a pre-grant opposition, the ruling on the amendment should be sent to the pre-grant opponent as well, and “in case amendments are carried out during the course of hearings across the table, then the Controller ought to examine the said amendments and convey the decision to the Applicant, and if the Opponent is present, even to the Opponent.”
In the present case, the court went a little further stating that “Keep(ing) the pre-grant opponent abreast of the developments taking place in the examination process, by its very nature, would require involvement of the pre-grant opponent in the decision-making exercise.” Therefore, making it mandatory for the controller to keep the opponent in the loop about all the developments with regard to the examination process as and when they are happening.
This interpretation effectively opens Pandora’s box of questions surrounding the procedural aspects of opposition proceedings. On one hand, adhering to transparency should be appreciated and this is not the first instance where a broad interpretation of ‘opposition’ has been taken by the court. In Neon Labs v. Trioka Pharma (2010) (pdf), the Bombay High Court extensively discussed the importance of affording a hearing to the opponent and interpreted pre-grant opposition as a lis (u/s 77) and not a mere administrative procedure. However, on the other hand, after affording the opponent an opportunity to be heard, the controller has to, at some point, decide on the application. It is to be kept in mind that the pre-grant opposition is after all in the “aid” of the examination process (as explained in the UCB Farchim Case (Also see here, here and here from relevant posts on this case)). This order has been stayed by a Division Bench with instructions to Novartis to maintain the account of its expenses and sales. In the appeal, Novartis argued that the single judge erroneously interpreted Rule 55 to apply in case of patent examination, the procedure of which is prescribed under Rules 24B, 28 and 28A. It further argued that the order was passed without giving the controller an opportunity to file a counter affidavit.
Trail of Valsartan- Sacubitril law suits
Another interesting observation by the court was how, regardless the deletion of a contentious claim by Novartis, Natco was still deprived of the opportunity to demonstrate that the crystalline form of the Valsartan-Sacubitril composition was also subsumed in Claim 1 of the claims filed by Novartis on 6th June 2020 (Para. 109). It is pertinent to mention here that Novartis till very recently enjoyed patent on combination of Valsartan-Sacubitril (sold as Vymada in India and Entresto globally) and looking at the prosecution history of the case, it can be seen that Natco did file an application to get on record Novartis’ plaint in a previous litigation between the parties concerning Vymada, wherein it allegedly accepted that IN 414518 patent stands claimed in the patent for Vymada.
While the court did not dive into addressing this argument, going by this report by Anju Ghangurde here (paywalled) IN 414518 is explained as a supra molecular compound of valsartan- sacubitril. Thus, no wonder other opponents to this application have recently been impleaded as parties in the appeal, along with the Indian Pharmaceutical Alliance. Those who have been following high-profile IP litigations over the years will recall that valsartan-sacubitril has been the subject matter of multiple suits in the past. Delhi High Court in 2021 passed an interim injunction against Natco Pharma Ltd., Torrent Pharmaceuticals Ltd., Eris Lifesciences Ltd. and Windlas Biotech Pvt. Ltd. In another interesting turn of events, in 2021 Novartis sought a quia timet injunction against Zydus for launching its own variant of valsartan and sacubitril. However, the application for interim injunction has now been disposed of considering that the patent expired on January 16. The matter has now proceeded for the trial to determine issues of damages and costs. (H/T to Vrinda Pathak, one of the counsels for Zydus, for pointing us towards the development.)
With expiry of Novartis’ right on Vymada, companies were quick to launch their own variants of the drug (see here and here). However, with the stay on the order of the single judge there have been some mixed reactions from the generic companies with some choosing to venture ahead while others holding back to test the waters. In another piece (paywalled), Ghangurde reports that Glenmark Pharmaceuticals Limited launched its generic variant of sacubitril/valsartan combination on 17 January, and Lupin followed suit the next day. Whereas a third player redacted its statement to launch the drug in light of the appeal. But why the rush you ask? Because reportedly the sacubitril-valsartan combination is currently prescribed to a vast majority of heart failure patients (30-35 percent) and this share can go up to 50-60 per cent with the right pricing. The news report further states that the market for the drug is worth around Rs 514 crore, and can grow at the rate of 37.2 percent annually. Of this large cake, Novartis enjoyed a fairly big slice capturing 38 percent of the cardiac drug market share through its patent over Vymada and perhaps now others thought it’s their turn to have a bite, but is it too soon to say anything? Only time will tell, the matter is now posted for 17th and 18th April with the instruction that the interim stay will continue for the pendency of the appeal.
