As the patent infringement matters often involve complex technologies and huge amounts at stake, it not just requires exercise of sound judicial wisdom by the Courts but also unswerving standards to be followed by them while deciding on interim injunction especially when what has often been seen is that the outcome of applications for interim injunction is determinative of the outcome of the litigation as a whole.

Injunction is as an equitable remedy in the form of a Court Order, whereby a party is required to do, or to refrain from doing, certain acts. Interim injunction is a remedy that prevents the violation of rights pending the trial of the suit. The object of the interlocutory injunction is to protect the patentee 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 favor at the trial.

In view of a catena of legal pronouncements, there has evolved criteria in terms of three basic factors that a Court should weigh while granting interim injunctions. These factors are: (i) Prima facie case, (ii) Irreparable damage and (iii) Balance of convenience. The origin of these factors may be sourced to 'celebrated' English decision in the case of American Cyanamid Co. vs. Ethicon Ltd., 1975 AC 396.

Apart from the aforementioned three prongs i.e. Prima facie case, irreparable loss and balance of convenience that were subsequently adopted in Indian law, another crucial prong that the test for interim injunctions involve is "public interest". Based on the Indian jurisprudence evolved considerably, it is observed that that the Indian Courts have recognized public interest both as a separate factor and as a factor read into the "balance of convenience" test. It is also recognized that whether the public interest exists or not in a case involving infringement of Patents is essentially a question of fact which has to be determined on case-to-case basis and no straight jacket formula can be devised in order to infer the public interest in a Patent infringement action. It is seen that the facet of public interest tends to cover within its sweep sub-facets like access to drugs, affordability, working of patented invention etc. The Public interest has also interplay with commercial interest of the patent holder in the context of Fair, Reasonable, and Non-Discriminatory (FRAND) licensing in the telecom sector and payment of royalty fees for genetically modified Bacillus Thuringiensis (Bt) cotton seeds to which the focus of litigation in India may shift in near future.

Some Representative Patent Cases Where "Public Interest" Factor Was Considered By Court

The table below depicts some representative cases where the Courts considered public interest while deciding interim injunction.

S. No. Case Details / Court Patented Invention / Product Court's Findings / Decision
1. Franz Xaver Huemer Vs. New Yash Engineers

AIR 1997 Delhi 79

Division Bench (DB) of High Court of Delhi (DHC)		 Mechanical devices used in textile industry In the words of DB:
  • The plaintiff who has registered patents in India in 1984 but has not used them in India cannot, in equity, seek temporary injunction against the respondent...
  • Learned counsel for the appellant submitted that... the plaintiff's exclusive right to exploit the invention lasts for 14 years and during the period plaintiff may use or not use it. It is his exclusive privilege to use or not to use... In our view, the contention of the appellant's counsel, if accepted, would seriously affect the market and economic conditions in our country inasmuch as it would enable a mechanical device, invented abroad (or in India) to be registered in India and kept unused thereby excluding public of its benefit and, at the same time precluding a similar device being produced or used in our market or industry.....
  • Balance of convenience has also an important role to play. Stultification of defendants investment loss or employment, public interest in the product (such a life saving drug), product quality coupled with price, or the defendant being smaller in size, may go against the plaintiff.
  • Trial court's Order vacating interim injunction confirmed.
2. Glaverbel S.A. Vs. Dave Rose & Ors.

2010 (43) PTC 630 (Del)

Single Judge (SJ) of DHC		 A mirror with no copper layer SJ followed the decision in Franz Xaver Huemer (supra). In the words of SJ:
  • The test which has to be applied is whether there is an actual commercial working/ exploitation of Invention in India. The test of commercial working is of course very difficult to define but at the same time giving meaningful reading would mean that the product or invention must be put to commerce, it must have sales arising out of the exploitation of the same. The commercial working may not be present in vacuum.
  • ...no cogent evidence for commercial working is placed on record except the averments in various pleadings...It is again questionable that to what extent can import of goods be considered actual commercial working of the inventions.
  • ...on the other hand, the defendants are stated to be in the business of manufacturing mirrors since the year 1993.
  • Ad-interim injunction denied.
3. Sandeep Jaidka Vs. Mukesh Mittal & Anr.

(2014) 59 PTC 234 (Del)

SJ of DHC		 Device for producing heating, cooling and aromatic effects SJ followed the decision in Franz Xaver Huemer (supra). In the words of SJ:
  • ...It is now well settled that if patent has not been sufficiently exploited in India and there is no user of the said patent in commercially viable form in India, the court may tilt the discretion in the interim stage in favor of the defendant.
  • From the material placed on record in the present case, it emerges clearly firstly that the plaintiff has not actually used the device/product on commercial scale which is subject matter of patent.
  • ...On the other hand, as alleged, defendant No.2 has been manufacturing and supplying equipments to various persons/companies, since 2003 and has made considerable investment for the same.
  • Interim injunction denied.
4. F.Hoffmann-La Roche Ltd. & Anr. Vs. Cipla Ltd.

2008 (37) PTC 71 (Del.)

SJ of DHC		 Erlotinib Hydrochloride In the words of SJ:
  • ..unlike in cases involving infringement of other products, the Courts have to tread with care whether pharmaceutical products and more specifically life saving drugs are involved. In such cases, the balancing would have to factor in imponderables such as the likelihood of injury to unknown parties and the potentialities of risk of denial of remedies.
  • ...price differential in the case of a life saving drug -- or even a life improving drug in the case of a life threatening situation, is an important and critical factor which cannot be ignored by the court. The materials before the Court in the form of documents undoubtedly show that the plaintiff does not have any manufacturing unit in India, for producing Tarceva... roughly 1000 patients have perhaps benefited from its drug on a rough conclusion so far. This is on the basis that the cost of the monthly doses being Rs. 1.28 lakhs; the course of treatment involving two months as against the total sale figure claimed as to be 13.2 crores. The defendant's product Erlotinib, on the other hand, is marketed at a third of the cost of Tarceva; it costs Rs. 1600/- per tablet.
  • ...as between the two competing public interests, i.e. the public interest in granting an injunction to affirm a patent during the pendency of an infringement action, as opposed to the public interest in access for the people to a life saving drug, the balance has to be tilted in favor of the latter. The damage or injury that would occur to the plaintiff in such case is capable of assessment in monetary terms. However, the injury to the public which would be deprived of the defendant's product, which may lead to shortening of lives of several unknown persons, who are not parties to the suit, and which damage cannot be restituted in monetary terms, is not only uncompensatable, it is irreparable. Thus, irreparable injury would be caused if the injunction sought for is granted.
  • Ad-interim injunction denied.
5. F.Hoffmann-La Roche Ltd. & Anr. Vs. Cipla Ltd.

2009 (40) PTC 125 (Del.) (DB)

DB of DHC		 -do- In the words of DB:
  • This Court is inclined to concur with the learned single Judge that in a country like India where question of general public access to life saving drugs assumes great significance, the adverse impact on such access which the grant of injunction in a case like the instant one is likely to have, would have to be accounted for. Erlocip is the Indian equivalent produced by the defendant in India as a generic drug manufacturer. It is priced at Rs.1600 per tablet. Even if this does not make it inexpensive, the question of greater availability of such drug in the market assumes significance.
  • ...the defendant has raised a credible challenge to the validity of the patent held by the plaintiffs. In such circumstances, the public interest in greater public access to a life saving drug will have to outweigh the public interest in granting an injunction to the patent holder.
  • Importantly, DB while admitting the appeal did not stay the operation of the impugned judgment, but restrained Cipla from exporting Erlocip to countries where the appellants had a registered patent during the pendency of the appeal. The DB finally dismissed the appeal imposing heavy costs quantified at Rs. 5 Lakhs to be paid by the appellants/plaintiffs to Cipla.
6. M.C. Jayasingh Vs. Mishra Dhatu Nigam Ltd. & Ors.

2009(41)PTC(Mad)(DB)

DB of Madras High Court		 Prosthesis (an artificial substitute or replacement of a part of the body such as eye, facial bone, knee, leg, arm etc.) In the words of DB:
  • Considering the relevance of prosthesis to those who are in need of the same as a life saving equipment, its cost effectiveness and the functional advantage of a customised titanium made prosthesis, the learned single Judge did not also find the balance of convenience in favour of the appellant to grant the interim injunction.... Given the fact that the products of the appellant and also the first respondent have their own uniqueness vis-a-vis the requirement of the particular patients, a mere functional similarity does not lay a strong ground for granting interim injunction
  • Appeal filed by the appellant – plaintiff against the decision of a SJ denying interim injunction finally dismissed.
7. Bristol-Myers Squibb Company & Anr. vs. Ramesh Adige & Anr.
CS(OS) 534/2010
(Order September 2010)
SJ of DHC

 Pharmaceutical Composition comprising up to 1% of entecavir The SJ relied on the decision of the Bombay HC in Novartis AG and Anr. vs. Mehar Pharma and Anr., 2005(30) PTC 160 Bom, (a case concerning exclusive marketing rights (EMR) granted by Patent Office to Novartis to sell or distribute the Beta-crystalline form of imaitnib mesylate in its doses forms) where the Court, while expressing its concerns for public health denied Novartis interim injunction.

The SJ observed:
  • Defendants by raising a credible challenge to the patent have tentatively shown that the patent has been rendered vulnerable.
  • Since hepatitis B is a chronic infection and its prevalence in India is not in dispute, its medication ought to be easily available and accessible to the patients across the country.
  • The plaintiffs are not entitled to interim injunction in view of the fact that they import the patented drug "Baraclude" and do not manufacture it locally and the price of this drug is almost three times higher than the defendants' product.
8. TELEFONAKTIEBOLAGET LM ERICSSON (PUBL) Vs. INTEX TECHNOLOGIES (INDIA) LTD.

CS(OS) 1045/2014

Order dated March 13, 2015

SJ of the DHC		 Patents relating to three Technologies viz.
  1. Adaptive Multi-Rate (AMR) speech codec – a feature that conserves use of bandwidth and enhances speech quality; (AMR)
  2. Features in 3G phones – Multi service handling by a Single Mobile Station & A mobile radio for use in a mobile radio communication system; (3G)
  3. Enhanced Data Rates for GSM Evolution (EDGE) - A transceiving unit for block automatic retransmission request; (EDGE)
  • The SJ took into account, inter alia,the conduct of the defendant for the last five years, and drew inference in favour of the plaintiff that the suit patents are prima facie valid and there is no credible defence raised by the defendant who is guilty of infringement of patents.
  • The SJ did not accept defendant's argument that grant of an injunction would in fact cause irreparable harm to its business  and to the consuming public which is dependent on the affordable mobile phones it made available.
  • The SJ held: "The balance of convenience lies in favour of the plaintiff and against the defendant. As regard irreparable loss and injury is concerned, in case the FRAND agreement is not signed by the defendant or royalty is not paid, it would have impact of other 100 licensors who are well known companies in the world who are paying the royalty. The plaintiff would suffer irreparable loss and injury in case the arguments of the defendant are accepted."
  • SJ finally passed an interim Order against the defendant for payment of royalty. The decision of SJ is under appeal before the DB.

The decision of the Hon'ble SJ of the DHC in F. Hoffmann-La Roche Ltd. (supra) has been the most significant decision having far reaching ramifications in the pharmaceutical patent arena in India. This case acquired significance as it was the first case post advent of product patent regime in 2005 in which the Court weighed the aspects of public interest and pricing of the drug in deciding on the interim injunction. The decision in this case drew mixed reactions as it was stated, inter alia, that the Court was not expected to transgress within the domain of the Executive for trading into the area of pricing of drugs as it would be violative of Doctrine of Separation of Power and that it must have appreciated that the issue of "affordability" of the drugs is altogether irrelevant as enough safeguards are already present in the Patents Act, 1970 to protect the "public interest" requirement.

Is Public Interest a Complete Exception to the Patent?

Novartis AG & Anr. Vs. Cipla Ltd.

In the case of Novartis AG (supra) 2015(61)PTC363(Del) concerning patent for anti-chronic obstructive pulmonary disease drug Indacaterol, while addressing the main question as to whether the Court will allow a party to infringe the patent which is prima facie held to be valid, the infringement is established and there is no credible defence raised by the other side, the Hon'ble SJ of the DHC observed that if the entire scheme of the Patents Act, 1970 is examined carefully, it appears that the answer of this question is "NO". The SJ observed that therefore to say that public interest is a complete exception to the patent would not be correct as otherwise the rights granted by the sovereign towards monopoly would be undermined by too broadly interpreting the public interest.

The SJ held: "It is clear that the grounds which are available for the person interested while seeking an application for the compulsory licensing or revocation of the patent on the ground of non-working of the patent could be urged before the relevant authority which will consider the matter and cannot be imported as a matter of defence to the suit for infringement as the civil court hearing the suit for infringement cannot transgress within the domain of the authority/ controller/ central government which are distinct functionaries having their powers and considerations specifically defined under the specific provisions of the Act. Even under the World Trade Organisation Trip Agreement, Compulsory Licences are receognized in order to overcome barriers in accessing affordable medicines and on other ground of non-workable of suit patent as per conditions prescribed under Sections 83 and 84 of the Act. Therefore, this court while hearing the application seeking the grant of the interim injunction may not refuse the injunction by forming any opinion solely on the ground as to whether the patented invention is sufficiently worked upon in India or whether the same is available to the public in reasonably affordable prices and the other pleas which overlap the grounds and considerations available in chapter XVI of the Act."

The SJ finally passed certain directions in order to balance the interest of the parties in the interim for instance - the defendant was restrained from infringing the patent until the determination of the pleas raised for seeking the compulsory licence, if so filed shall be determined on merit and after hearing of parties, in favour of defendant, otherwise, it would continue during the pendency of the suit, etc.

Bristol-Myers Squibb Company & Ors. Vs. Mr. J D Joshi & Anr. [CS(OS) 2303/2009]; Bristol-Myers Squibb Company & Ors. Vs. Mr. D Shah & Anr. [CS(OS) 679/2013]

In the cases of Bristol-Myers Squibb (supra) concerning patent for anti-cancer drug dasatinib, on June 29, 2015 the Hon'ble SJ of the DHC while following his own decision in Novartis AG supra observed that the question of the public interests for the purposes of the infringement proceedings in the form of deciding the interim application has to be only seen from the prima facie view of the credibility in the defence of the defendants. The SJ reiterated that if the patent is valid and the defendant has not been able to establish prima-facie credible defence, the case of infringement is made out. The SJ noted that in the case, the defendants have not made any representation to the Central Government by raising the plea of public interest, expensive drug and fully non-availability of the drug in question to the patients, nor has the Government exercised its discretion under Section 66 of the Act. The Court finally ordered that the interim Order (dated December 4, 2009) granting ad-interim injunction shall continue during the trial. It bears recalling that this interim Order contemplated to provide for "patent linkage" and as such invited backlash.

Merck Sharp And Dohme Corporation And Anr. Vs. Glenmark Pharmaceuticals: Court Considers Equitable Principles!

In the case of Merck Sharp And Dohme Corporation (supra) [2015 (63) PTC 257 (Del)] concerning patent for anti-diabetic drug sitagliptin, the Hon'ble DB of the DHC noted and considered six equitable principles that guide the exercise of discretion in considering the grant of an interim injunction. The DB observed that public interest, the first principle, is now well established in Indian jurisprudence and the Court must look at the public interest in granting an injunction, as access to drugs, especially one for a condition as prevalent as diabetes, is an important facet of the patent regime. The DB held that in the instant case, the price difference between the commercial products sold by Glenmark and MSD is not so startling as to compel the court to infer that allowing Glenmark to sell the drug, at depressed prices would result in increased access and therefore permitting Glenmark to operate would not necessarily result in lowering of market prices. The DB noted that importantly, whilst lower prices may result from competition amongst two competitors, no allegation has been made that MSD today sells its drugs at a relatively high price that hinders access to the drug.

While addressing the issue of public interest in respect of access to drugs, the DB distinguished the decision rendered in F. Hoffmann-La Roche Ltd. (supra) holding that whereas in Roche at the interlocutory stage, both at the stage of the SJ and the DB, the Court located the public interest concern in the debate on balance of convenience and noting that the price differential was about 300% in relation to a life-saving drug (one which treated lung cancer), and held that balance of convenience did not lie in favour of grant of injunction as the possibility of several thousands using the generic product being denied access, and consequently their lives, was real, in MSD, no such startling consequences are discernible as Diabetes is more of a lifestyle disorder which cannot be termed as life threatening so as to characterize the patented product as a life-saving drug.

Second principle -Whether the Court can overlook the public interest in maintaining the integrity of the patent system itself, so that a legitimate monopoly is not distorted: The DB held that the Court must be mindful – especially in a case where a strong case of infringement is established, as here – there is an interest in enforcing the Act.

Third principle - 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 DB observed: In such scenario, the patentee however can only do so at its peril since 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. In the instant case, given the size of the diabetes drug market in India, and the sheer number of patients, from all economic strata of society, the demand for low-priced medicines will remain, rather than any distortion of demand due to brand loyalty or a first mover's advantage to MSD. The balance of convenience clearly lies in favour of MSD as the interim arrangement not only ensures that Glenmark will – if successful – be able to return to the market without any handicap, but moreover, it will be compensated at market value for the period for which it was excluded.

The DB finally granted interim injunction in favour of MSD setting aside the Order of the SJ and in addition issued certain directions for instance 1. MSD shall furnish an affidavit undertaking in the pending suit, that in the event the suit is dismissed, it would compensate Glenmark for the damage or loss caused, including but not limited to loss of earnings; and 2. Glenmark shall file a detailed account of its earnings from the products, from the date of the filing of the present suit; accompanied by an affidavit, which shall also undertake to pay such damages, if any- which may be decided by the court if the ultimate result of the suit is a decree in favour of the plaintiff MSD.

Glenmark Pharmaceuticals Ltd. Vs. Merck Sharp And Dohme Corporation And Anr.: Supreme Court Takes a Little Unusual and Extraordinary Course of Action!

While hearing the Petition(s) for Special Leave to Appeal (C) No(s). 9220/2015 arising out of impugned final Judgment and Order of the DB in Merck Sharp And Dohme Corporation (supra), the Hon'ble Supreme Court granted an interim stay over the impugned Order and subsequently vide its Order dated May 15, 2015 observed that at this stage, it would not like to enter into a detailed discussion of the merits of the Order of the Ld. DB and its primary concern would be to balance the equities between the parties while maintaining public interest, which in its view would be best served if the existing stock of the two impugned products viz. ZITA and ZITAMET are allowed to be sold in the market which, according to the petitioner (Glenmark) itself, can take care of the current demand in the market for five to six months. Further, going by the prima facie satisfaction recorded by the DB, the Apex Court directed, inter alia, that the unfinished formulation of Sitagliptin Phosphate Monohydrate (SPM) which is to be processed in the petitioner's factory/factories will not be undertaken for the present and until the next date fixed. The Apex Court consequently took a little unusual and extraordinary course of action in ordering a specific time schedule for expedited trial and final hearing. The Court said that this has been prompted by its 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. As a direct result of the above observations, the recordal of evidence involving cross-examination in the matter was completed in record time. Further, in less than five months from the ordering of an expedited trial in the matter, the Judgement was finally delivered by the DHC on October 7, 2015.

"Public Interest" Factor Re-emerges!

Bayer Intellectual Property GMBH vs. Ajanta Pharma Ltd.

Very recently, in an interesting development, in the case of Bayer Intellectual Property GMBH (supra)[CS(COMM) 1648/2016] concerning patent for Vardenafil used for treating erectile dysfunction, the Hon'ble SJ of the DHC vide his Order dated January 4, 2017 vacated the ad-interim injunction Order dated December 20, 2016 subject to the defendant therein maintaining and filing proper accounts of production/manufacture of the subject products and their exports on the ground of "non-user" of the patent by the Plaintiff in India. The SJ followed the decision in Franz Xaver Huemer (supra) to address the issue at hand arising out of the admitted "non-user" of the subject patents in India by the plaintiff and the question of balance of convenience on account of claim of the defendant of having enjoyed uninterrupted long tenure in the international market since 2009-2010 of the impugned products being supported prima facie by the documents submitted with the application under Order XXXIX Rule 4 CPC read with Section 151 CPC. The SJ specifically observed:

"The plaintiff admittedly has not used the said patents for commercial exploitation in India till date. The plaintiff is unable to refute the documents submitted by the first defendant indicating that the impugned products were launched in 2009-2010 and after manufacture in its facilities in India (not Delhi) have been exported to various countries under the export license duly granted, since 2009. In these circumstances, though the non-user cannot be set up as a defence to the suit for infringement, upon the self-interest of the patentee being balanced against the larger public interest, equity demands that absolute or unconditional temporary injunction be not granted inasmuch as it would result in the manufacturing activity and the resultant exports of the impugned products of the defendant being ground to a halt resulting possibly in not only loss of employment but revenue to the State as well.... Having regard to the above noted facts, circumstances and considerations, particularly the admitted non-user in India of the patents by the plaintiff till date and the fact that neither sides sells its products in India, bearing in mind the elements of public interest and equity, as indeed the balance of convenience, the ex-parte ad interim injunction granted by order dated 20th December, 2016 is modified to the effect that the defendants shall stand injuncted, till disposal of the application under Order 39 Rules 1 and 2 CPC (IA No. 15840/2016), from offering for sale, selling or distributing for use or consumption in India the impugned products or any such other product that infringes the subject matter of suit patent Nos. IN 225529 and IN 188419. For removal of doubts, it is clarified that the earlier order of ad interim injunction against making/manufacturing, distribution, offer for sale or sale of the impugned products for purposes of exports stands suspended."

It bears recalling that non-working in the territory of India was also one of the grounds on which the Controller General of Patents in 2012 had granted a compulsory licence to Natco Pharma Ltd. on Bayer Corporation's patent relating to anti-cancer drug sorafenib tosylate which was subsequently upheld by the IPAB, Bombay High Court and the Apex Court.

Nonetheless, the SJ's Order is expected to draw mixed reactions for the reasons, inter alia, that on one hand it appears to re-assert the quintessential requirement of working/use of the patented invention in the territory of India, on the other hand it also appears to raise concerns as to whether the instant case of exports where the manufacture by the defendants of the impugned products is not for the benefit of public of India and also the patented product does not seem to be a lifesaving drug would really fall within the parameters laid down in Franz Xaver Huemer (supra) where the Court declined interim relief finding that the plaintiff therein was not using the patent in India and holding that the plaintiff was thus not entitled to restrain the defendant from producing the infringing product for use in Indian market or industries.

Does Court's Order in Bayer Intellectual Property GMBH vs. Ajanta Pharma Ltd. Have Any Precedential Value?

Interestingly, in the case of Bayer Intellectual Property GMBH Vs. BDR Pharmaceuticals International Pvt. Ltd.[CS(COMM)107/2017] apparently concerning the same patent and similar facts albeit Section 107A exports which is pending before a different judge of the same Court, the SJ vide his Order dated February 14, 2017 has indeed raised question over the application of ratio of Franz Xaver Huemer (supra) to the case at hand involving exports and non-life saving drug and refused to accept the contention of BDR that the exports are also in public interest as they earn foreign exchange for India and encourage economic activity in India observing that in his prima facie opinion, if such parameters are to be adopted, then in each case of a non-working of patent, infringement of the patent would be allowed. Accordingly, the SJ opined that the Order dated January 4, 2017 in Bayer supra cannot qualify as a precedent as the same is but an ad-interim Order and does not contain any discussion on this aspect. Nonetheless, the parties have been referred to the Mediation Cell of the Court for a quick mediation, if any.

In any case, it will be interesting to track said cases considering the important aspect of public interest being involved therein.

Conclusion

It is evident that the Indian jurisprudence on public interest in the context of patent infringement litigation is not only constantly evolving but it also appears to be unique, balancing innovation protection and public life/health. It is hoped that future decisions will reflect judicial application of the tenets governing the grant of an interim injunction and consequently provide more clarity on the issues involved.

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.