India: Pharma Giants' Tussle Over Weight Loss Medicine: Analysis Of EISAI v. Dr. Reddy's

Last Updated: 12 June 2019
Article by Asis Panda and Anuj Maharana

EISAI Co. Ltd along with the patentee ("Plaintiffs") have instituted a suit for permanent injunction against Satish Reddy and others ("Defendants") for restraining the Defendants from manufacturing, selling, distributing, exporting or offering for sale any product that infringes the Plaintiff's patent no. 215528 including Lorcaserin Hydrocholride ("LH") or any other pharmaceutically acceptable salts of Lorcaserin such as Lorcaserin Hydochloride Hemihydrate ("LHH"). The Plaintiff had applied for patent in India on 23 September 2004 which was ultimately granted for a period of 20 years i.e. from 11 April 2003 till 10 April 2023. No pre-grant opposition, no post grant oppositions, no counter statements- etc., have been filed against the patent and it has been undisturbed for a period of 10 years.

Plaintiff no.1, a Japanese Pharmaceutical company which is an exclusive licensee of Indian patent no. 215528 and Plaintiff no. 2, is the patentee in respect of the above-mentioned patent. Plaintiff no. 2 claimed that it had invented a man-made molecule named Lorcaserin, around the year 2001 and has spent considerable time and resources to develop and commercialise the molecule. It is to be noted that Plaintiff no. 2 has obtained patents in over 65 jurisdictions and WHO had recognised Lorcaserin to be a new molecule. Further, the Plaintiff has carried out the mandatory requirement as per US FDA and has been granted marketing approvals in six countries. Also the Plaintiffs have already completed the regulatory approval for its drug products in India and expects pre-marketing approval by March 2019.

Issue:

In August 2018, the Plaintiffs found that the Defendants were planning to commercialize Lorcaserin in Indian market. Further, online search revealed that the Defendants had filed a US patent application for LH bearing US patent application No.14/141, 112. The Plaintiffs further found that the Defendants approached the Subject Expert Committee (SEC) for permission to manufacture and market LH in India which was subsequently granted such permission in the SEC meeting of 5 August 2018. The Plaintiffs thus filed a suit for permanent injunction.

Opposition raised by the Plaintiffs:

According to the Plaintiffs, the Defendant's product LHH infringes the plaintiffs patent No.215528 which covers Lorcaserin and its pharmaceutically acceptable salts, including LHH, which are specifically claimed in Claims 38 and 39. To simplify Plaintiffs' patent is being infringed as Lorcaserin forms the major portion of LH and LHH, and the Defendants cannot manufacture their product without infringing the Plaintiffs' patent in the first place.

Further, the Defendants have relied on the data generated by the Plaintiffs who have spent millions of dollars by carrying out more than 18 different studies. As opposed to this, the Defendants have only carried out limited bio-equivalence studies with reference to the Plaintiffs' drug.

Further, the balance of convenience lies in favour of the Plaintiffs as the Defendants have not "cleared the way" before going ahead with the launch of their product and on the other hand the Defendants have admitted that they got the manufacturing approval only on 22 October 2018 and have not commenced with the manufacturing of the drug. In addition the Plaintiffs would suffer from irreparable loss if the injunction is not granted to them. The Plaintiffs here have relied on the case of Merck v. Glenmark; 2015 (63) PTC [Del] [Db] where the court observed that "if a defendant is aware that there may be a possible challenge to its product, but still chooses to release the drug without first invoking revocation proceedings or attempting to negotiate, that is surely a relevant factor. The defendant‟s legal right to challenge the patent at any point in time is intact, but that does not mean that this factor cannot determine the interim arrangement".

As mentioned earlier, the Plaintiffs have stated that non-grant of injunction would result in serious irreparable loss and they relied on the above-mentioned case of Merck v. Glenmark, wherein the court observed "where an infringer is allowed to operate in the interim during the trial, it may result in a reduction in price by that infringer since it has no research and development expenses to recoup - most revenue becomes profit. The patentee however can only do so at its peril. Importantly, prices may not recover after the patentee ultimately prevails, even if it is able to survive the financial setback (or "hit") during the interim, which may take some time. The victory for the patentee therefore should not be pyrrhic but real".

Defences taken by the Defendants

The Defendants have relied on three main defences. The Defendants claim that:

  1. they have not infringed the suit patent as the patent does not cover LHH, for which they are obtained the approval for;
  2. the Plaintiffs have not worked out the suit patent in India; and
  3. the suit patent is invalid.
  4. The first contention of the Defendants is that the suit patent of the Plaintiffs does not contain LHH. According to the Plaintiffs the contention taken by the Defendant ignores the well-established concept of basic and improvement patents. The Plaintiffs have relied on the case of G. Farbenindutrie A.G.'S Patents: (1930) 47 RPC 289, where the court observed that that chemical patents can be divided to two classes. The first class of patent is based on what is described as an originating invention that is the discovery of a new compound or new reaction. And the second class comprises of patents based on a selection of related compounds such as the homologous and substitution derivatives of the original compounds, which presumably have been described in original patent.

The Court observed that the suit patent was in the nature of an originating/genus patent and the numerous patent applications were for its improvement/selection inventions. Thus, merely because Plaintiffs applied for a patent separately for specific species of genus i.e. Lorcaserin, it does not mean that the species patent i.e. LHH would not fall within the ambit of genus patent.

As regards to the second contention placed by the Defendants, the same stands to be false. The remedy provided in case of non- working of a suit patent is provided in Sections 83 and 84 of the Patents Act, 1970 which calls for the Defendants to seek for a compulsory license. However, the Defendants have not applied for either a compulsory or voluntary license and on its own violation decided to seek the marketing approval by relying on Plaintiff's data. Further, it is to be noted that the Plaintiffs have taken steps to commercialise the LHH product in India and are expected to receive the final regulatory approval by March 2019. Thus the question of non-working is completely irrelevant.

The Defendants here also relied on the case of Franz Xaver Huemer v. New Yash Engineers; AIR 1997 Del 79, for non-working of a patent, where the defendants related to a special kind of loom which was vital for textile industry in the country and which would affect the economy of the country by seriously affecting the market. The Court in this case accepted that the plea of injunction as the market would be seriously affected as a mechanical device invented in abroad or in India would be kept unused for the benefit of the public, and industry.

However, in the present case as stated earlier the Plaintiffs have applied for marketing which will be granted within a period of next two-three months and therefore the above mentioned case's facts are distinguishable from the present case.

The contention made by the Defendants that the suit patent is invalid in view of Section 3(d) of the Patents Act was found to be erroneous. The suit patent is novel and that an inventive compound and does not fall under Section 3(d) of the Indian Patents Act. For Section 3(d) to apply two conditions need to be satisfied: (a) the claimed invention is a new form of a known substance or a derivative of a known substance; and (b) the known substance should have known efficacy.

In the present case, the compounds of the present invention are structurally different from the compounds disclosed by the Defendants and the compounds in the present invention are not a salt, ester, ether, polymorph or derivative of any known compound that has known efficacy.

Further, the court also discussed on the issue of granting an injunction in relation to a product that is not taught, motivated, suggested, disclosed, or covered by a patent. Relying on Novartis AG v. Union of India [2013 (6) SCC 1] the court stated that the disclosures made in a patent application should enable a Person of Ordinary Skill in the Art (POSA) to "make" the invention. If such disclosures are lacking then such invention would not be covered by the patent. The Plaintiff maintained that L/LHH were covered and disclosed in the suit patent (even though the Plaintiff had taken a contradictory stand before the Indian Patent Office) and the Court concluded that the suit patent specifically claimed Lorcaserin and all its pharmaceutically acceptable salts and hydrates.

Judgement of the court

After considering the submissions of the Plaintiffs and the Defendant, the Delhi High Court found the balance of convenience in the favour of the Plaintiffs and thus allowed their application for injunction by restraining the Defendants from making, using, selling or in any other manner dealing in any product that infringed the Plaintiffs' patent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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