India: Delhi High Court’s Decision On Teva Pharmaceutical’s Plaint Against Natco

The Delhi High Court in its recent judgment1 has returned Teva Pharmaceutical's (the Plaintiffs) plea against NATCO (the Defendant) seeking permanent injunction for restraining NATCO from manufacturing Glatiramer Acetate product (Copaxone) for sale in the US. The main reason for the return of plaint as stated in the decision is that the pleadings relating to the product copaxone being sold in Delhi or elsewhere, or the possibility of copaxone being launched in Delhi or elsewhere do not fall into the ambit of the jurisdiction of Delhi High Court. Copaxone (Glatiramer Acetate or Copolymer 1) is used in the treatment of multiple sclerosis.

THE 2007 SUIT

Teva Pharmaceuticals Industries Ltd ('Teva'), Yeda Research and Development Co.Ltd ('Yeda') and Regent Drugs Ltd ('RDL') filed a suit (CS (OS) No. 1708 of 2007) against NATCO in Delhi High Court restraining the Defendant from infringement of the Indian Patent No.190759 and the rights associated with 'Glatimer'. Further, the Plaintiffs pleaded for restraining NATCO and its agents from exporting the infringing drugs, formulations/bulk drugs outside India. In a reply statement, the counsel for NATCO stated that the process of manufacture of glatiramer acetate which is marketed as 'Glatimer' is entirely different from the process mentioned in the Patent No.190759. Subsequently, NATCO filed a counter claim for revocation of the Indian Patent No.190759, mentioning that the claims covered under the said patent did not meet the criteria for patentability under the Patents Act, 1970.

TEVA'S TUSSLE OVER NATCO & MYLAN COLLABORATION AND THE 2012 SUIT

In an article published in 'Business Line' on 17th January, 2012 it was reported that NATCO collaborated with US based Mylan Pharmaceuticals Inc. ('Mylan') to launch glatiramer acetate in India for the treatment of multiple sclerosis2 . The Plaintiffs further cited the annual report (2010-2011) published by NATCO, and reinstated that NATCO and Mylan signed an agreement relating to the development and marketing of glatiramer acetate in the US which thereby amounts to clear infringement of the Indian Patent.No.190759 and hence sought permanent injunction restraining NATCO from manufacturing Glatiramer Acetate product in India for sale in the US vide CS (OS) No. 3193 of 2012.

Further, Teva filed its second Indian suit, C.S. (O.S) 3193/2012, on grounds that NATCO's manufacture of glatiramer acetate in India for sale in the US and elsewhere infringed its Indian Patent 190759. In its findings, the US Court found that the glatiramer acetate product that Mylan and NATCO sought to sell in the US infringed the claims of US6054430 and US6048898. Therefore, the US Court decided that NATCO's act of manufacturing the glatiramer acetate product for sale in the US and elsewhere amounted to clear infringement of the Indian Patent No.190759 and liable to be restrained by permanent injunction. With regards to this suit, it is further stated by the order of the Hon'ble Delhi High Court that NATCO counterclaimed and sought a declaratory judgment of non-infringement and invalidated the aforementioned US patents.

In response to Teva's second Indian suit, C.S. (O.S) 3193/2012, NATCO filed an application under Order VII Rule 10 CPC vides IA No. 10390 for return of plaint for want of jurisdiction. NATCO further filed IA No. 10389 of 2013 under Order VII Rule 11 CPC seeking rejection of the plaint. NATCO also filed IA No.10638 of 2013 under Sections 10 and 11 of the CPC praying that further proceedings in CS(OS) No.3193 of 2012 should be stayed in view of the pendency of the earlier suit CS (OS) No. 1708 of 2007.

PLAINTIFF'S CONTENTIONS ON JURISDICTION

With regards to the application filed by the Plaintiffs under Order VII Rule 10 of the CPC, 1908 i.e IA No.10390 of 2013 questioning the jurisdiction of Court, the Court decided the application.

As per the arguments of the Plaintiffs, the Defendants had sought for regulatory approval for glatiramer acetate and has distribution networks in Delhi, through which the product glatiramer acetate is being sold in Delhi by the Defendants. Also, according to the Plaintiffs, the Defendants used two different processes for the manufacture of Glatiramer acetate, one for sale within India and the other for export to Mylan. This 2012 suit was not relating to the process used by Defendants for making the Glatiramer Acetate product for the Indian market ("GA-first product"). Instead, it was concerned with the process for making the Glatiramer Acetate product that the Defendant is manufacturing in India on behalf of Mylan for sale outside India ("GA-second product"). Therefore the cause of action in suit CS (OS) No.1708 of 2007 is quite different from that of CS (OS) No.3193 of 2012 and the prayers contained therein are clearly distinct.

It is stated by the Plaintiffs that NATCO has marketing approval to sell glatiramer acetate in India and therefore there is a reasonable anticipation and apprehension that the product manufactured by Mylan process will be sold in India without NATCO having to obtain a second market approval from the Indian regulatory agencies.

DEFENDANT'S SUBMISSIONS

It has been submitted by NATCO that it does not have any manufacturing facility in New Delhi and neither practices the process nor exports the product from Delhi. NATCO manufactures Copolymer -1 under the mark 'GLATIMER' but not at Delhi. The Defendants observed that nowhere in the Plaint it was alleged that the process being used by the Defendants within the Delhi High Court's jurisdiction. Further, it was pointed out that the product patent on glatiramer acetate, 93/ Del/2003, was rejected by the Indian Patent Office in March 2009 and therefore the Plaintiff has no enforceable rights in respect of the resultant product. It is worthy to note that NATCO had reportedly denied the use of the patented process within the Court's jurisdiction, and had also denied export of the drugs from New Delhi.

DECISION

The Court noted that CS (OS) No. 3193 of 2012, as stated by the Plaintiffs, is a quia timet action. The Court also observed that "Only an apprehension has been expressed that Natco, having tied up with Mylan, is likely to export the infringing Copolymer-I to US and other countries". The Court further stated that 'the case of the Plaintiffs concerns the infringement of the process involved in the GA-second product, which the Plaintiffs term as the 'Mylan process' and about the possible infringement for the purposes of 'export' of the said product to the US and elsewhere."

The Court clearly stated that since the suit is for a process patent, the pleading as regards to the product being sold in Delhi, or elsewhere or the possibility of it being launched in Delhi or elsewhere cannot justify the jurisdiction of the court." in para 40 of the plaint it is averred that "The US Court decision leads to an incontrovertible conclusion of infringement of rights of Plaintiffs No. 1 and 2 in IN '759 based on the manufacture of glatiramer acetate by Defendant No.2 for export and sale in the United States." . The Court further affirmed that the plaint CS (OS) No. 3193 of 2012 failed to make out a case for the Court to entertain the suit within its jurisdiction and hence directed the plaint to be returned to the Plaintiffs.

CONCLUSION

It is very noteworthy to consider the pointers mentioned in the Delhi HC order with regards to the structure of pleadings in case of quia timet proceedings. The averments in a plaint alleging infringement or apprehended infringement of a process patent have to be precise. The court referred to the decision in Astrazeneca Canada Inc v. Novopharm Limited in adopting 'Wordsmithing' in pleadings. Further, possibility that the Court is not entertaining pleadings that lacked material facts cannot be ruled out. The Court further held that the facts pleaded must be cogent, precise and material as it is not sufficient that pleadings are indefinite or speak only of intention or amount to mere speculation.

Footnotes

1 http://lobis.nic.in/dhc/SMD/judgement/28-02-2014/SMD28022014S31932012.pdf

2. http://www.thehindubusinessline.com/companies/article2808233.ece

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