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2011 DIGILAW 4779 (MAD)

F. Hoffmann-La Roche Ltd. v. Intas Biopharmacenticals Limited

2011-12-10

VINOD KUMAR SHARMA

body2011
ORDER : VINOD KUMAR SHARMA, J. 1. This order shall dispose of the following applications: (i) O.A. No. 514 of 2011 -- To grant ad-interim injunction, restraining defendant, its directors, employees, officers, servants, agents, men, representatives and all others acting for and on their behalf from making, selling distributing, advertising, exporting, importing, offering for sale and in any other manner, directly or indirectly, dealing in any pharmaceuticals or any chemical compound product that infringes the subject matter of Indian Patent No. 196774. (ii) A. No. 4644 of 2011 -- To revoke the leave granted to the plaintiffs to institute the suit in this Court in A. No. 2718 of 2011 dated 14.06.2011. (iii) A. No. 4645 of 2011 -- To reject the plaint filed by the plaintiffs. The plaintiffs have filed a suit against defendant praying for a decree of permanent injunction restraining defendant, their directors, employees, officers, servants, agents and all other acting for and on their behalf from making, selling distributing, advertising, exporting, importing, offering for sale and in any other manner, directly or indirectly, dealing in any pharmaceuticals or any chemical compound product that infringes the subject matter of Indian Patent No. 196774 registered by the plaintiffs. 2. A prayer is also made for grant of damages amounting to Rs. 25,00,000/-(Rupees Twenty Five Lakhs only) in favour of the plaintiffs against defendant. It is also prayed that defendant be directed to deliver infringing products bearing the mark "ERLOTIB" and further rendition of accounts. 3. The plaintiff No. 1 is a leading research focused healthcare groups in the fields of pharmaceutical and diagnostics, involved in discovery, development, production and marketing of novel healthcare solutions for over 110 years. 4. The plaintiff No. 2 is said to have entered into an agreement with plaintiff No. 1 on 01.04.1986 to conduct collaborative research in the field of cancer. The agreement was renewed and modified on 01.04.1991 and 01.04.1996 with the research ultimately leading to the discovery of a compound designated by Pfizer, Inc. as CP-358,774, an Epidermal Growth Factor Receptor Tyrosine Kinase (EGFR TK) inhibitor. On account of the acquisition of Warner Lambert by Pfizer, Inc., the Federal Trade Commission of the United States of America required Pfizer, Inc. to divest its rights in and towards an EGFR TK inhibitor compound. Pfizer, Inc. as CP-358,774, an Epidermal Growth Factor Receptor Tyrosine Kinase (EGFR TK) inhibitor. On account of the acquisition of Warner Lambert by Pfizer, Inc., the Federal Trade Commission of the United States of America required Pfizer, Inc. to divest its rights in and towards an EGFR TK inhibitor compound. Pfizer, Inc. elected to fulfill this requirement by returning all rights to the CP-358,774 compound to plaintiff No. 2 in pursuance to the terms of the collaborative agreement dated 01.04.1996 through an agreement dated 23.05.2000. 5. The plaintiff Nos. 1 & 2 thereafter entered into a Development Collaboration and Licensing Agreement on 08.01.2001, whereby plaintiff No. 1 was granted exclusive license outside of the United States to use, offer for sale and sell the CP-358,774 compound which eventually patented in India under Patent No. 196774. 6. The plaintiff Nos. 1 & 2 and Pfizer, Inc. entered into an Exclusive License Agreement dated 04.09.2008, vide which Pfizer, Inc. and plaintiff No. 2 consented to the grant of the exclusive license given on 08.01.2001 by plaintiff No. 2 to plaintiff No. 1 thus declaring plaintiff No. 1 as the exclusive licensee for the purposes of Indian Patent No. 196774. Subsequently, vide application dated 09.03.2009 under Section 69 of the Patents Act, 1970 the plaintiffs requested the Patent Office to record on the Patent Register, the License agreements dated 08.01.2001 and 04.09.2008. 7. That on November 19th, 2009, Plaintiff No. 1 received an official communication from the Deputy Controller of Patents confirming the recordal of plaintiff No. 1 in the Register of Patents as the exclusive licensee of Indian Patent No. 196774 on account of the exclusive license agreements dated January 8th, 2001 and September 4th, 2008 between plaintiff No. 1 and plaintiff No. 2. 8. Pfizer, Inc had applied for grant of a patent in respect of the CP-358,774 compound, also known as Erlotinib Hydrochloride and its process vide Application No. 537/DEL/1996 on March 13th, 1996. Subsequently, Pfizer, Inc assigned their entire right in and to the above patent application to Pfizer Products Inc., who in turn has assigned one half share to Plaintiff No. 2. These assignments were filed at the Patent Office on 7th November 2005. This patent application was taken up for examination in the year 2005 on account of it being a mailbox application. 9. These assignments were filed at the Patent Office on 7th November 2005. This patent application was taken up for examination in the year 2005 on account of it being a mailbox application. 9. The Indian Patent No. 196774 was granted to the plaintiff No. 2 and Pfizer Products, Inc. only after the Indian Patent Office, which is the competent statutory authority, carried out all steps mandated by the Indian Patents Act, 1970 to determine whether the invention of the plaintiffs merited the patent. This included an extensive and exhaustive search to determine whether the invention in question was indeed novel and inventive and a publication of the plaintiffs' patent application in March, 2005 in the Official Gazette to enable any person to oppose the plaintiffs' patent application before the grant of patent. 10. That the patent application of plaintiff No. 2 was found in order for grant on February 23rd, 2007. Thereafter, Natco Pharma Limited filed a pre-grant opposition challenging plaintiff No. 2's patent application on April 10th, 2007. After granting adequate opportunity to plaintiff No. 2 and Natco Pharma Ltd., to present oral arguments, written submission and to lead evidence in support of the same, the Indian Patent Office rejected the pre-grant opposition filed by Natco Pharma Ltd., through a well reasoned order dated July 4th, 2007. Thus on 6th July 2007, the Controller of Patents issued a patent certificate for the compound "A novel (6,7-bis (2-methoxyethoxy) quinazolin-4-yl)-(3-ethynylphenyl) amine hydrochloride compound" ('Erlotinib Hydrochloride') bearing Patent No. 196774 dating back to 23rd February, 2007, which was when the patent was originally found in order for grant. This has been recorded by the Controller vide his covering letter dated 6th July, 2007 noting that the grant of Patent has been recorded in the Register of Patents on 6th July, 2007. 11. The plaintiffs have also pleaded, compound of the product for cancer, other patent applications, commercial use of patent by plaintiffs and also about filing of compulsory license of suit patent. It is pleaded that the defendant is engaged in manufacturing and marketing of pharmaceutical and health care products in India, but the details of the constitution of the defendant is not disclosed. 12. It is pleaded that the defendant is engaged in manufacturing and marketing of pharmaceutical and health care products in India, but the details of the constitution of the defendant is not disclosed. 12. It is pleaded that it was in the month of May 2011 that the information was received by the plaintiffs that defendant had begun to market and sell its infringing product in India, which was being manufactured by NATCO Pharma Limited. The plaintiffs, therefore, deputed a representative to conduct a market survey whether the defendant was selling the product ERLOTIB in India within territorial jurisdiction of this Court. The collected invoice from J.F. Letoille, 830, Anna Salai, Chennai with regard to purchase of the same has been filed with the proceedings. This fact has been pleaded for bringing the suit within the jurisdiction of this Court. 13. It is pleaded case of the plaintiffs/applicants that the plaintiffs already initiated legal proceedings against Cipla Ltd, in order to protect its invaluable intellectual property vide C.S. (O.S.) 89 of 2008 before the Hon'ble Delhi High Court in which the defendant has filed an application for revocation of Indian Patent. The Hon'ble Delhi High Court in the suit had denied injunction to the plaintiffs against which, plaintiffs preferred an appeal, which was dismissed by the Hon'ble Delhi High Court with costs of Rs. 5,00,000/- (Rupees Five Lakhs only). 14. The plaintiffs thereafter preferred Special Leave Petition, which stood disposed off for expeditious disposal of the suit and the suit is said to be at the final stage. The plaintiffs have also filed a suit against NATCO Pharma Limited before the Hon'ble Delhi High Court in which again counter claim has been filed, there again, injunction application has not been decided so far. 15. The plaintiffs in addition filed another suit in Delhi High Court against Dr. Reddy's Laboratories and NATCO Pharma Limited for infringement of Indian Patent. Another suit has been filed by the plaintiffs against Glenmark Pharmaceutical Limited in the Hon'ble Delhi High Court. In addition, the plaintiffs are said to have filed other cases against other countries also. 16. As already observed above, the jurisdiction of this Court is invoked on the ground that defendant is selling the infringing product within the jurisdiction of this Court. 17. In addition, the plaintiffs are said to have filed other cases against other countries also. 16. As already observed above, the jurisdiction of this Court is invoked on the ground that defendant is selling the infringing product within the jurisdiction of this Court. 17. The defendant/non applicant seeks rejection of plaint on the pleadings that the suit has been filed on the basis of infringement of the patent without pointing out how the defendant has violated the same. The plaint does not disclose the cause of action against defendant. 18. It is pleaded that neither the respondents/plaintiffs nor the applicant/defendant in A. No. 4645 of 2011 carry on business in Chennai within the jurisdiction of this Court. The respondents in A. No. 4645 of 2011 are based in Switzerland and United States of America. Whereas the applicant/defendant is based in Ahmedabad, Gujarat. 19. The patent was granted to the plaintiffs/non applicants at Delhi, outside the jurisdiction of this Court. The jurisdiction is based on one invoice for purchase of the ERLOTIB product by defendant at Chennai. It is contended that there is no material to prove that composition of ERLOTIB product is of same composition and formula for which the patent is approved. 20. The basic contention is that one invoice for purchase of defendant's product at Chennai cannot constitute the cause of action to invoke the jurisdiction of this Court, as sporadic sale does not constitute commercial sale. It is pleaded that there are no documents or averments in the plaint that the druggist in Chennai is the C&F agent or authorized distributor of the defendant, therefore, it is pleaded that no cause of action has accrued to the plaintiffs within the jurisdiction of this Court and that the plaintiffs are guilty of suppressing the material facts. 21. It is the case of the applicant/defendant in A. No. 4645 of 2011 that they are only the marketer of the product, manufactured by NATCO Pharma Limited, against whom the plaintiffs have instituted a suit at Delhi, in which, the relief of injunction has been sought against agents, stockists etc, thus, the suit also covers the applicant/defendant. 22. The case of the applicant /defendant is that same relief is claimed, therefore, the second suit on the same cause of action is not competent. 22. The case of the applicant /defendant is that same relief is claimed, therefore, the second suit on the same cause of action is not competent. Furthermore, NATCO has not been impleaded as defendant in the suit, therefore, suit is bad for non joinder of necessary party. It is also averment of the applicant/defendant that its products are totally different that of plaintiffs. It is also the case of the applicant/defendant that both the applicant and plaintiffs are not residing at Chennai within the jurisdiction of this Court and that a suit has already been filed in the Hon'ble Delhi High Court. 23. It is well settled law that in order to consider whether the plaint deserves to be rejected under Order 7 Rule 11, the averments in the plaint can be seen and not the defense. 24. The stand of the applicant/defendant is that even if the pleadings in the plaint are taken to be correct, it would be seen that the plaintiffs have already filed a suit against manufacturer in the Hon'ble Delhi High Court, and the defendants are only its distributors, who is also covered under the suit, thus, suit in this Court is not maintainable. 25. It is also the contention of the learned counsel for the applicant/defendant that even if the pleadings in the plaint are taken to be on its face value, the only allegation is of sale of product by defendant, but it has not been mentioned that defendant is carrying on business within the territorial jurisdiction of this Court. 26. It is further contention of the learned counsel for the applicant/defendant that some sporadic sale cannot give cause of action to the plaintiffs to maintain the suit against the defendant, who are neither residing in the territorial jurisdiction of this Court nor are carrying on the business. 27. In support of this contention that suit is not maintainable in this Court, learned counsel for the applicant/defendant placed reliance on the judgment of the Hon'ble Supreme Court in the case of Dhodha House v. S.K. Maingi, (2006) 9 SCC 41 , wherein the Hon'ble Supreme Court was pleased to lay down as under: 42. 27. In support of this contention that suit is not maintainable in this Court, learned counsel for the applicant/defendant placed reliance on the judgment of the Hon'ble Supreme Court in the case of Dhodha House v. S.K. Maingi, (2006) 9 SCC 41 , wherein the Hon'ble Supreme Court was pleased to lay down as under: 42. The Delhi High Court, as noticed hereinbefore, however, did not advert to the third contention raised therein saying that the question as to whether the defendants had been selling its product on a commercial scale at Delhi was a question of fact and, thus, was required to be properly determined in case evidence is led by the parties. 43. The short question which arises for consideration is as to whether causes of action in terms of both the 1957 Act and the 1958 Act although may be different, would a suit be maintainable in a court only because it has the jurisdiction to entertain the same in terms of Section 62(2) of the 1957 Act? 44. A cause of action in a given case both under the 1957 Act as also under the 1958 Act may be overlapping to some extent. The territorial jurisdiction conferred upon the court in terms of the provisions of the Code of Civil Procedure indisputably shall apply to a suit or proceeding under the 1957 Act as also the 1958 Act. Sub-section (2) of Section 62 of the 1957 Act provides for an additional forum. Such additional forum was provided so as to enable the author to file a suit who may not otherwise be in a position to file a suit at different places where his copyright was violated. The Parliament while enacting the Trade and Merchandise Marks Act in the year 1958 was aware of the provisions of the 1957 Act. It still did not choose to make a similar provision therein. Such an omission may be held to be a conscious action on the part of the Parliament. The intention of the Parliament in not providing for an additional forum in relation to the violation of the 1958 Act is, therefore, clear and explicit. The Parliament while enacting the Trade Marks Act, 1999 provided for such an additional forum by enacting sub-section (2) of Section 134 of the Trade Marks Act. The intention of the Parliament in not providing for an additional forum in relation to the violation of the 1958 Act is, therefore, clear and explicit. The Parliament while enacting the Trade Marks Act, 1999 provided for such an additional forum by enacting sub-section (2) of Section 134 of the Trade Marks Act. The court shall not, it is well well-settled, readily presume the existence of jurisdiction of a court which was not conferred by the statute. For the purpose of attracting the jurisdiction of a court in terms of sub-section (2) of Section 62 of the 1957 Act, the conditions precedent specified therein must be fulfilled, the requisites wherefor are that the plaintiff must actually and voluntarily reside to carry on business or personally work for gain. 45. In Dhodha House (supra), admittedly the plaintiff-Appellant neither resided at Ghaziabad nor carried on any business at the place of residence of the respondent. In Patel Field Marshal (supra), the registered office of the plaintiff-firm was at Rajkot. Ordinarily, the residence of a company would be where registered office is [See Morgan Stanley Mutual Fund v. Kartick Das.) 46. The expression 'carries on business' and the expression 'personally works for gain' connotes two different meanings. For the purpose of carrying on business only presence of a man at a place is not necessary. Such business may be carried at a place through an agent or a manager or through a servant. The owner may not event visit that place. The phrase 'carries on business" at a certain place would, therefore, mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover. The expression is much wider than what the expression in normal parlance connotes, because of the ambit of a civil action within the meaning of section 9 of the Code. But it is necessary that the following three conditions should be satisfied, namely:- (1) The agent must be a special agent who attends exclusively to the business of the principal and carries it on in the name of the principal and not a general agent who does business for any one that pays him. But it is necessary that the following three conditions should be satisfied, namely:- (1) The agent must be a special agent who attends exclusively to the business of the principal and carries it on in the name of the principal and not a general agent who does business for any one that pays him. Thus, a trader in the mufassil who habitually sends grain to Madras for sale by a firm of commission agents who have an independent business of selling goods for others on commission, cannot be said to "carry on business" in Madras. So a firm in England, carrying on business in the name of A.B. & Co., which employs upon the usual terms a Bombay firm carrying on business in the name of C.D. & Co., to act as the English firm's commission agents in Bombay, does not "carry on business" in Bombay so as to render itself liable to be sued in Bombay. (2) The person acting as agent must be an agent in the strict sense of the term. The manager of a joint Hindu family is not an "agent" within the meaning of this condition. (3) To constitute "carrying on business" at a certain place, the essential part of the business must take place in that place. Therefore, a retail dealer who sells goods in the mufassil cannot be said to "carry on business" in Bombay merely because he has an agent in Bombay to import and purchase his stock for him. He cannot be said to carry on business in Bombay unless his agent made sales there on his behalf. A Calcutta firm that employs an agent at Amritsar who has no power to receive money or to enter into contracts, but only collects orders which are forwarded to and dealt with in Calcutta, cannot be said to do business in Amritsar. But a Bombay firm that has a branch office at Amritsar, where orders are received subject to confirmation by the head office at Bombay, and where money is paid and disbursed, is carrying on business at Amritsar and is liable to be sued at Amritsar. Similarly a Life Assurance Company which carries on business in Bombay and employs an agent at Madras who acts merely as a Post Office forwarding proposals and sending moneys cannot be said to do business in Madras. Similarly a Life Assurance Company which carries on business in Bombay and employs an agent at Madras who acts merely as a Post Office forwarding proposals and sending moneys cannot be said to do business in Madras. Where a contract of insurance was made at place A and the insurance amount was also payable there, a suit filed at place B where the insurance Co. had a branch office was held not maintainable. Where the plaintiff instituted a suit at Kozhikode alleging that its account with the defendant Bank at its Calcutta branch had been wrongly debited and it was claimed that that court had jurisdiction as the defendant had a branch there, it was held that the existence of a branch was not part of the cause of action and that the Kozhikode Court therefore had no jurisdiction. But when a company through incorporated outside India gets itself registered in India and does business in a place in India through its agent authorized to accept insurance proposals, and to pay claims, and to do other business incidental to the work of agency, the company carries on business at the place of business in India. [See Mulla on the Code of Civil Procedure (Act V of 1908) - Fifteenth Edition Volume I, Pages 246-247.] 47. A corporation in view of Explanation appended to Section 20 of the Code would be deemed to be carrying on business inter alia at a place where it has a subordinate office. Only because, its goods are being sold at a place would thus evidently not mean that it carries a business at that place. 48. In Dhodha House (supra), the High Court has positively arrived at a finding that the infringement complained of primarily is that of the 1958 Act and not under Copyright Act. 49. In Patel Field Marshal (supra) again the thrust was on the sale of products and/or advertisement by the Appellant for registration of trade marks in the Trade Marks Journal and other local papers. The Division Bench of the High Court, as has been noticed hereinbefore, did not advert to the issue as to whether the defendant had been selling its product in Delhi on commercial scale or not. It is, therefore, not necessary for us also to dilate further on the said question. The Division Bench of the High Court, as has been noticed hereinbefore, did not advert to the issue as to whether the defendant had been selling its product in Delhi on commercial scale or not. It is, therefore, not necessary for us also to dilate further on the said question. We have furthermore noticed hereinbefore that the advertisement appearing in a journal or newspapers by itself would not confer any jurisdiction on the court, if it otherwise did not have any. 50. In this case, the Delhi High Court could not have invoked its jurisdiction in terms of the 1957 Act. The primary ground upon which the jurisdiction of the original side of the High Court was invoked was the violation of the 1958 Act, but in relation thereto, the provisions of sub- section (2) of Section 62 of the 1957 Act could not be invoked. 51. The plaintiff was not a resident of Delhi. It has not been able to establish that it carries on any business at Delhi. For our purpose, the question as to whether the defendant had been selling its produce in Delhi or not is wholly irrelevant. It is possible that the goods manufactured by the plaintiff are available in the market of Delhi or they are sold in Delhi but that by itself would not mean that the plaintiff carries on any business in Delhi. 28. Learned counsel for the plaintiffs/non applicants on the other hand contends that Madras High Court has necessary jurisdiction to try and maintain the present suit, as substantial part of cause of action arose within the jurisdiction of this Court, as Section 48A of the Patent Act, 1970, conferred on the patently right to exclude third party to file patent without its consent and the act of selling by third party without consent amounts to infringement of exclusive right. 29. This proposition cannot be disputed. It is for the plaintiffs to show the act of selling of infringing patent by C&F agent of the applicant/defendant, and not an isolated sale. 30. Learned counsel for the plaintiffs also contends that the suit cannot be said to be barred by Order 2 Rule 2, as this fact could be proved by evidence to show that the cause of action in both cases is same. 30. Learned counsel for the plaintiffs also contends that the suit cannot be said to be barred by Order 2 Rule 2, as this fact could be proved by evidence to show that the cause of action in both cases is same. It is the case of the plaintiffs that cause of action arose to the plaintiffs after 18 months of the suit filed against NATCO. 31. It may be noticed here that it is no nowhere disputed that defendant is the marketing agent of NATCO, against whom the plaintiffs have filed a suit in the Hon'ble Delhi High Court. Furthermore, in the plaint, there is no pleading that the defendant is carrying on business within the territorial jurisdiction of this Court and isolated sale cannot be treated to be cause of action for the plaintiffs to maintain a suit in this Court. Rather pleadings in the suit do not disclose any cause of action, therefore, in view of law laid down by the Hon'ble Supreme Court in the case of Dhodha House v. S.K. Maingi (supra), it cannot be held that any cause of action has accrued to the plaintiffs within the jurisdiction of this Court to maintain the present suit. 32. Consequently, A. No. 4644 of 2011 is allowed. The leave granted is ordered to be revoked. 33. The Registry is directed to return the plaint to the plaintiffs for presentation to the Court of competent jurisdiction. No costs. In view of the detailed order passed herein above, O.A. No. 514 of 2011 and A. No. 4645 of 2011 are dismissed as having been rendered infructuous.