India: Roche Cipla Appeal: Upheld In Favour Of Cipla

Last Updated: 12 May 2009

An appeal was filed by F. Hoffmann-La Roche Ltd. (`Roche') and OSI Pharmaceuticals Inc. (`OSI') against the earlier judgment of the learned Single Judge of the High Court of Delhi (dismissing I.A. No. 642/2008 in suit CS (OS) No.89/2008) wherein their prayer for the grant of an interim injunction to restrain Cipla Ltd. from manufacturing, offering for sale, selling and exporting the drug Erlotinib was declined. The impugned judgment had however directed Cipla to maintain accounts of sale and file in Court every quarter accounts (duly authenticated by CAs including tax returns) so as to assess damages accruing to Roche in the event of the suit being decreed.

Roche in the plaint filed in the suit CS (OS) No. 89 of 2008, had stated that its co-plaintiff OSI jointly owned a patent with Pfizer Products Inc. in respect of a drug molecule, claimed to be a major breakthrough and innovation in the treatment of cancer. According to Roche, the drug has depicted an increase in the survival benefit and is administered in the form of a tablet under the trademark and commercial name of 'Tarceva' which is registered in the name of Roche. The drug formulation was also claimed to have acquired approval from the USFDA (United States Food & Drug Administration). OSI along with Pfizer had moved to the Controller General of Patents, New Delhi who granted them a patent in respect of the drug. Subsequently, Roche entered into development collaboration and licensing agreement with OSI whereby Roche was granted licence to use and sell and offer for sale the licensed products of the former including Erlotinib. Roche was further licensed and authorized to cause enforcement of any infringement of property rights of any of the products of OSI. Roche claimed to have introduced Tarceva in India around April 2006 with wide publicity by the media owing to its importance in cancer treatment.

It was further stated that Cipla Ltd. launched the generic version of Tarceva (Erlotinib) in India, around January, 2008 and through a news daily learnt of Cipla's plans to infringe and violate their rights. Roche claimed that Tarceva had been developed after enormous investment in R &D and that owing to legal rights in the same Cipla could not violate their rights vested therein. The suit was said to have been valued at Rs. 20 Lakhs and damages were tentatively valued at Rs. 1 Crore.

Cipla in response had filed a counter-claim along with a prayer for the revocation of the patent granted to Roche. They averred Roche' patent to be "completely invalid". Section 3(d) of the Patent Act was brought to light and the drug in question was said to be a derivative of a known patent "Quinazoline", and the two displaying the exact chemical structure as found except for one substitution which is "obvious to any person skilled in the art". Cipla also claimed that Roche had failed to prove "any improved efficacy of the said drug" and that no invention or inventive step in the patent could be attributed.

Bringing to fore the pre-conditions for a recently granted patent claim to be protected was that it ought to be "worked fully and commercially". It was pointed out that though Roche acquired approval to import and sell the drug in December 2005, yet as on date the product was neither easily available nor affordable due to its high pricing. Cipla in its written statement had also pleaded the ground of public interest, in view of Roche' drug Tarceva costing Rs.4, 800/- per tablet while Cipla's Erlocip was priced at Rs.1, 600/-; the latter being cheaper and more affordable.

Cipla in its counter-claim filed contended Section 2 (1) (ta) of the Patents Act 1970, defining the expression 'pharmaceutical substance' as "any new entity involving one or more inventive steps" and under Section 2 (1) (l) describing a "new invention". They stated that a special scrutiny in the light of these provisions was called for. Further, Cipla averred that relevant data to portray enhanced activity over the closest compound of the prior art had not been adduced as also data to demonstrate the claimed compound had a higher therapeutic efficacy.

A reference was made to U.S.'221 which clearly stated that the compound Erlotinib Hydrochloride was a mixture of two polymorphs A&B and that one needed to separate and purify the B polymorph so as to get to the claimed compound for acceptable efficacy. It was stated that subsequent patent clearly defeated the inventive step of the alleged invention.

Cipla had filed an application under O VII R 11 CPC before the learned Single Judge seeking dismissal of the suit. Cipla had also discovered that Roche had made two further applications for grant of patent in respect of the same chemical compound for a different crystal form which was termed by Roche as B polymorph. The Single Judge on taking due consideration of all factors ruled in favour of Cipla and denied an injunction to Roche, giving due importance to pricing and the public interest factor.

This court while admitting the appeal did not stay the operation of the impugned judgment. However, it restrained Cipla from exporting Erlocip to countries where Roche had a patent during the pendency of the appeal.

While addressing the appeal, one of the significant issues posed by Cipla, which had a bearing upon whether Roche having made out a prima facie case for grant of injunction, is that the specification for the suit patent (i.e. patent No.196774 corresponding to U.S.'498) showed that it was in respect of Erlotinib Hydrochloride Polymorphs A+B which was on their own showing an unstable form which could not be administered as such. It was contended that the case of Roche was that it was Polymorph B which was the more stable form of the compound which could be administered in the tablet form. The x-ray diffraction pattern of the tablet Tarceva showed that it corresponded to Polymorph B for which the plaintiff n of Polymorphs A and B. Roche averred that a separate application for grant of patent in respect of Polymorph B had been made. As regards non-mention of these facts before the learned Single Judge they submitted that the application for Polymorph B was independent of the patent validly granted to the plaintiffs in respect of Polymorphs A and B.s did not yet hold a patent. Roche' application for the grant of patent for Polymorph B was pending consideration. It was further submitted that even a prima facie case was made out by Roche since they were seeking an injunction against Cipla in respect of a drug for which they did not yet hold a patent. This fact had not been revealed by Roche before the Controller of Patents as well as in the suit. The Court opined that ground was sufficient to refuse an injunction. Further it was averred that Polymorph B form of Erlotinib Hydrochloride (marketed as Tarceva) was not known to Roche at the time they applied for a patent for Erlotinib Hydrochloride as a combination of Polymorphs A and B. Therefore it was averred that Polymorph B could not be said to be subsumed in the compound of a combination

In the absence of this issue having been raised before the Single Judge, the present Court took note of the same. They noted that by the time the Ld. Single Judge took up for consideration I.A. No. 642/2008 filed by Roche seeking the ad interim injunction, Cipla had proceeded to file I.A. No. 1272/2008 under Order 7 Rule 11 CPC. Cipla at both fora raised the plea that the suit patent pertained to Polymorph A + B whereas Tarceva was Polymorph B. The Court noted that the plea concerning Polymorph B was noticed by the learned single Judge in the passing, but had no occasion to consider whether this was a relevant factor for determining if Roche had made out a prima facie case for grant of injunction in their favour.

Roche had clarified in a letter to the Controller of Patents that while in the U.S.A "it is perfectly possible and routinely done to patent incremental inventions e.g. Polymorph B of the main compound in addition to the main/dominating/umbrella compound", in India this is possible only subject to the conditions specified in Section 3 (d) of the Patents Act 1970 being satisfied. They also asserted that Polymorph B was thermodynamically more stable and provide improved oral dosage.

The Court opined that from Roche' own showing it would not have been possible for the Controller to have granted a patent in their favour both in respect of Polymorphs A+B as well as Polymorph B. The Court noted that in the light of Section 3 (d) demonstration of enhanced efficacy of the product. Although it was urged by the plaintiffs that stability of a product is not the same thing as its efficacy, it would have to be demonstrated by the Plaintiffs, particularly in light of their statements in the application for grant of a patent in respect of Polymorph B (and their statements in the corresponding patent U.S.'221) that a compound of Polymorphs A and B (and not A alone or B alone) could be orally administered as a drug. The Court opined that it was impossible to imagine that the therapeutic efficacy of a pharmaceutical product could be tested without it even being able to be administered to a sample population. Further, they noted that it was for the Controller to consider the application for the grant of the suit patent, for which he would have had to address the issue whether it was the combination of Polymorphs A and B or Polymorph B alone which satisfied all the patentability tests vis-à-vis Section 3 (d). The Court noted that the failure of Roche to bring the relevant facts to the notice of the Controller of Patents at the time of consideration of the application for patent for the compound of a combination of Polymorphs A and B was inconsistent with the requirement of a full disclosure. Considering the effect of nondisclosure by Roche, they stated that a sufficient ground had been made out to hold that Roche in fact failed to demonstrate before the learned Single Judge and even before this Court that notwithstanding the pending applications in respect of Polymorph B which wholly corresponded to the tablet Tarceva, they had a prima facie case.

The Court noted that when Roche proceeded to file their suit, they were fully aware of the fact that Polymorph B was the more stable form of Erlotinib Hydrochloride and that the tablet form, was more suited to its marketing. The Court expressed that they were intrigued that Roche chose not to be candid in making a full disclosure in view of the facts in its plaint.

Cipla founded its argument in the proviso to Section 11 A (7) of the Patents Act 1970. As an off shoot, they averred that Roche had admittedly not commercially exploited the patent granted in their favour for a compound which is a mixture of Polymorphs A and B, since the tablet form corresponds to Polymorph B of the said compound Erlotinib Hydrochloride. The Court was also of the view that Cipla in this regard had raised a serious doubt whether Roche in fact held a patent for the product sold in the tablet form as Tarceva. In this regard, the establishment of a prima facie case to favour the grant of an order restraining Cipla from marketing Erlocip was said to have been defeated.

The Court further noted the facts of the application in respect of Polymorph B which had been rejected by the Controller of Patents and the ruling there under was noted, however refrained from commenting on the Order. The order of the Controller was stated to have no bearing upon the failure of Roche to make out a prima facie case before the learned Single Judge. In this respect the Court stated that they ought to have been refused an interim injunction.

The Principles governing the grant of an injunction in an infringement suit were also looked into in view of the facts of the case, submissions made and precedents cited. The Court opined that at the present stage of considering the grant of an interim injunction, Cipla has to show that the patent that has been granted is vulnerable to challenge. Consequently, this Court rejects the contentions of the plaintiffs on this issue and affirms the impugned judgment of the learned Single Judge.

The discussion on the validity of the patent was concluded by concurring with the Single Judge that, assuming that Roche held a patent for the product which was the subject matter of the suit for infringement, Cipla raised a credible challenge to the validity of the patent by raising a serious triable and substantial question that renders it vulnerable to challenge.

Revisiting the Public Interest argument, the Bench opined that the issues of public interest and pricing were not germane or relevant in the context of patent law and that public interest was significant in protecting a validly granted patent. Roche had contended that if the rights of a patentee are not respected then it would be contrary to the public interest of encouraging further research. They also contended that generics having relatively low research and development costs, hence its pricing was lower. However, taking note of the fact that Roche imported the life-saving drugs into India and did not manufacture the same in the country, noted that the demand was fulfilled by relying on an international transport system. The Court noted that in the event of a grant of interim injunction the manufacturing and marketing network established by Cipla would get dismantled. In the event of the drug being unavailable in the required quantity in India, would prove disastrous for the patients.

In consideration of the factors alluded, the appeal was dismissed with costs quantified at Rs. 5 Lakhs to be paid by Roche to Cipla within a period of four weeks.

© Lex Orbis 2009

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