Interim Injunction Denied-AstraZeneca AB and Ors. vs. Intas Pharmaceuticals Limited and Ors

About the Parties to the dispute & the subject matter

In a recent landmark decision of the Delhi High Court, AstraZeneca AB and AstraZenca Pharma India Limited (the Plaintiffs) were denied the request for interim injunction against two Indian pharmaceutical companies, Intas Pharmaceuticals Limited (Intas) and Alkem Laboratories Limited (Alkem) (collectively, the Defendants), regarding manufacturing of the compound-in-issue i.e., Dapagliflozin [“DAPA”], which was alleged to be infringing the Plaintiffs’ two patents bearing Indian Patent numbers 205147 [“IN 147”] and 235625 [“IN 625”], the former being the genus patent while the latter being claimed to be the species patent. The patent term for IN 147 expired on October 02, 2020 while the patent term for IN 625 is valid till May 15, 2023. The patents in question were initially registered by Bristol Myers Squibb and were subsequently assigned to the Plaintiffs vide an assignment deed in 2014.

IN 147 discloses a Markush structure i.e., a patent covering a group of compounds which disclosed the possibility of individual permutations and combinations that can run into several million [if not more] structurally diverse compounds. The Plaintiffs claim that DAPA (which is ‘covered’ by the Markush structure of IN 147, though not ‘disclosed’ in IN 147) is used for treatment of type-II diabetes mellitus and is also approved for treating hypertensive heart failure in 2020[2]. The Plaintiffs also claim that Astra India is the only company in the country which has obtained the necessary statutory approvals for importing and marketing DAPA in India. As per the submissions of the Plaintiffs, DAPA has been granted patents in approximately 70 countries.

As per the documents available on the official portal of the IPO, a post-grant opposition has been filed against IN 625 before the IPO, and counterclaims for revocation are ongoing against said patent in other proceedings before the Hon’ble High Court.

Contentions of the Plaintiffs:

I. Non-disclosure of DAPA in IN 147:

· IN 147, which is, the genus patent claims a Markush structure which has 22 variables and, hence, can lead to millions and perhaps billions of possible permutations and combinations. While the Markush structure claimed by the Plaintiffs qua the genus patent i.e., IN 147 ‘covers’ DAPA, it does not ‘disclose’ the same;

· DAPA is also not disclosed in any of the 80 exemplified compounds in the specification of IN 147;

· DAPA was first synthesized in 2001, that is, after the priority date of IN 147 in 1999;

· In view of the case Hoffman vs. Cipla[3], admissions made after the priority date of the patent cannot alter the scope of the claims either by enlargement or reduction;

· In response to the Defendants’ reliance on the case Novartis vs. UOI and their submissions thereof (discussed hereinbelow), the Plaintiffs submitted that in the said case, the claimed invention had been ‘disclosed’ in an earlier patent whereas in the present case, there is no ‘disclosure’ of DAPA in IN 147.

II. Novelty and Inventive step:

· Defence of anticipation by prior publication by the Defendants would not apply as the publication date of IN 147 is after the priority date of IN 625 thereby rendering it as an invalid prior art;

· There can be no disclosure in law if a library of compounds is encompassed by a Markush structure wherein few species are disclosed only by way of examples;

· Mere possibility of an embodiment falling within the scope or periphery of a particular claim does not mean that the particular embodiment or compound has been disclosed with specificity – and anticipation of a patent requires “disclosure” in the prior art;

· A person of ordinary skill in the art would have to take recourse to various permutations and combinations before it could reach DAPA – which is nothing but an application of hindsight wisdom, thereby not acceptable.

III. Double-patenting and ever-greening:

· Mere filing of US 6515117 (US 117, US patent application corresponding to IN 625) as a continuation-in-part application and filing a “terminal disclaimer” before the USPTO in order to overcome non-final double patenting objection by the USPTO cannot be construed as an admission of double-patenting and it is an oft-used methodology to overcome the “Obviousness-type double patenting” objection raised by USPTO.

IV. Disclosure of material information under Section 8 of the Act:

· All relevant information and material particulars concerning the corresponding US species patent i.e., US 117 was provided to the Indian Patent Office at the time of filing Form 3 (Section 8(1) of the Act) and in reply to the examination report (office action);

· Errors, if any, made by the applicant cannot be construed as ‘material suppression’ which is the benchmark for adjudicating Section 8 compliance.

V. Balance of convenience, public interest and irreparable loss:

· The Plaintiffs have been selling the products under various brand names since 2015, both, directly and/or through their distributors;

· The defendants are either manufacturing or intending to manufacture DAPA and, therefore, admitting infringement;

· The balance of convenience lies in favour of the Plaintiffs since the Defendants were aware of the fact that the Plaintiffs have been granted a patent for DAPA, however, the Defendants did not oppose the same at any stage;

· The Plaintiffs will suffer an irreparable loss if injunction is not granted as it will destroy the market for them whereas only the launch of the Defendant’s product will be postponed;

· In the Novartis case, public interest was an issue as the drug manufactured by Novartis cost INR 1,20,000 whereas that manufactured by the Defendants cost INR 8,000, however, in the present case, the price difference is only INR 37 per capsule. Moreover, DAPA, which is used to treat diabetes, which is not a life-threatening disease, unlike the case cited by the Defendants.

Contentions of the Defendants:

I. Disclosure of DAPA in IN 147:

· The Plaintiffs cannot take self-defeating pleas, i.e., the Plaintiffs, having alleged that manufacture and/or sale of DAPA infringes IN 147 i.e., the genus patent, it stands to reason that the said compound stands fully and particularly described in IN 147 (as required under Section 10(4) of the Act). Thus, if the assertion of the Plaintiffs is accepted i.e., DAPA is not disclosed in IN 147, then, they would fall foul of the provisions of Section 10(5) of the Act;

· In US 117 - being the corresponding US application of IN 625 - when objected to on the ground of prior claiming i.e., “obviousness-type double patenting”, the Plaintiffs had filed a ‘terminal disclaimer’, which is a clue that the patentee did not consider IN 625 to be distinct from IN 147.

II. Anticipation and Obviousness:

Prior Claiming

· Since the Plaintiffs, while filing their specification qua IN 147, have claimed as also fully and particularly described the same in IN 147, DAPA would be publicly known in India;

· It was emphasized by the Defendants that when Section 13(1)(b) is read with Section 64(1)(a) of the Act, it would show that it allows the examiner to invoke anticipatory prior art on grounds of “prior claiming” i.e., even where the claim made in another complete specification filed in India is dated before or has a priority date earlier than the patent application placed before him for examination to ascertain whether the invention of the subject matter is the same;

· Therefore, once it is established that DAPA is covered by the claims of genus patent IN 147, the Plaintiffs cannot state that anticipation by prior claiming is not established under Section 64(1)(a) of the Act since DAPA, while being covered by the claims of IN 147 only because it is not disclosed by the said patent;

· In the facts of the instant case, since the prior claim of IN 147 is broader, encompassing within their scope, the entire principal claim of IN 625, it renders the entire principal claim of IN 625 vulnerable to revocation;

· Therefore, not only is DAPA covered by claims of IN 147, but the said claims are also supported by the disclosure of the specification.

Prior publication

· IN 625 is also vulnerable to challenge since it is anticipated by what is published or publicly known (prior publication) from IN 147, since IN 147 was first published (by way of PCT application) on 19.04.2001, whereas the priority date of IN 625 is 20.05.2002.

Obviousness

· IN 625 does not set out the economic significance over compounds of IN 147;

· As per the five-step analysis laid down in Hoffman vs. Cipla Ltd.[4] being:

(i) identification of person skilled in the art (Plaintiffs have failed to identify such person),

(ii) identifying the inventive concept (compound DAPA),

(iii) input of a person skilled in the art having common general knowledge (the independent expert in this case has stated that methyl and ethyl being homologues possessing similar properties can routinely involve substitution of methyl group with ethyl group in organic chemistry),

(iv) identification of differences between inventive concepts and prior knowledge (there is no difference between the two in the instant case as DAPA has been disclosed as one of the most preferred structure in IN 147 patent),

(v) whether those differences viewed in the knowledge of the alleged invention constituted steps which would have been obvious to the person skilled in the art without taking recourse to hindsight wisdom.

III. Double-patenting and ever-greening:

· The admissions in the plaint and other documents show that DAPA should be barred under Section 53 (4) of the Act which inter alia states that on expiry of the term of the patent, the subject matter covered by the said patent shall not be entitled to any protection (and therefore the protection of afforded to DAPA ceased with the expiry of IN 147).

IV. Non-fulfilment of Section 8 of the Act:

· IN 625 is vulnerable to challenge because the Plaintiffs had breached the provisions of Section 8 of the Act, which relate to informing the IPO about the status of all corresponding foreign patent applications filed in respect of the same or substantially the same invention qua which patent is sought and thus, IN 625 is open to revocation under Section 64(1)(m);

· The Plaintiffs failed to furnish this information on their own (Section 8(1) of the Act) or even when the IPO, vide its office action issued in relation to IN 625, sought the information (Section 8(2) of the Act);

· The Plaintiffs have misrepresented and concealed relevant facts from the IPO at the time of filing patent application for IN 625 including the fact that the Plaintiffs already hold a valid patent which discloses the sale compound (DAPA), material particulars of their corresponding US patents, the non-final rejection letter issued by USPTO and the “terminal disclaimer” filed in response thereto to the said objection.

V. Balance of convenience, public interest and irreparable loss:

· The balance of convenience is in favour of the Defendants since they would be manufacturing their drug in India which would generate employment and align with the policies of Government of India i.e., Make in India. Whereas the Plaintiffs would be importing their product for marketing in India;

· Plaintiffs have failed to prove any irreparable injury;

· The difference in percentage of the costs of the drugs would be approximately 250% and owing to the pandemic, the probability of a diabetic person being afflicted with the virus is exponentially high;

· Since the Defendants have not manufactured DAPA, there cannot be any infringement by them of IN 147;

· The interim injunction ought to be denied to the Plaintiffs given the considerations of the public interest.

Court’s Decision and Reasoning:

At this stage, the Hon’ble Court analysed the issues and arguments presented by the parties and presented a prima facie opinion for the purpose of addressing the preliminary issue of whether an interim injunction ought to be granted against the Defendants. The following is a brief summary of the Court’s analysis and conclusion:

I. Regarding presumption of validity of the patent:

· Even when the patent crosses the threshold of examination by the patent office, it does not, as per the Statute, warrant its validity (Section 13(3) of the Act);

· Presumption of validity exists only till such time the patent is credibly challenged;

· Plaintiffs’ averment that the older the patent, the stronger the firewall is contrary to the words of the Statute;

· At the stage of preliminary injunction, all that the Defendants are required to demonstrate is that a credible challenge is made or that the patent is vulnerable, and that validity is not vexatious.

II. Regarding disclosure of the Patent:

· There is a definitive assertion that DAPA is covered in both the genus patents granted in the US and India i.e., US 126 and IN 147;

· The fact that the Plaintiffs have filed the infringement suit for both IN 147 and IN 625 is sufficient to establish that DAPA is claimed in both suit patents and thus, it is disclosed;

· The Court also relied on the principles laid down by the United Kingdom Supreme Court in Regeneron Pharmaceuticals Inc vs. Kymab Ltd. and stated that the arguments of the Plaintiffs that DAPA was not claimed in IN 147 seem to be untenable;

· Thus, the Court held that a credible defence to the infringement action is prima facie set up by the Defendant.

III. Post-priority date data/ evidence:

· To establish the technical advance in the invention of IN 625, the Plaintiffs had relied on an Expert Affidavit and based on the data set out in the Affidavit, the Expert concluded that the results obtained by DAPA compared to Example 12 (which the Defendants allege to disclose DAPA) in the data disclosed in the Affidavit were surprising and unexpected;

· Referring to the decision in Generics (UK) Limited vs. Yeda Research and Development Company Limited[5], (cited by the Defendants), the Court held that post priority date evidence which has been furnished in the Expert Affidavit to show technical advance can only be taken into account to confirm the existence of technical effect which is found embedded in the specification of IN 625 and not to rely upon the same to establish its effect for the first time.

IV. Regarding lack of inventive step:

· The Plaintiffs have prima facie been unable to demonstrate the existence of such technical effect in the specifications and the Defendants are entitled to submit in support of their challenge that there is no demonstrable technical advance as on the date of priority of IN 625;

· In respect of the Defendants’ reliance on the five-step analysis laid down in Hoffman vs. Cipla[6] wherein the Defendants had contended that the expression publicly known is to be understood from the point of view of a person engaged in the pursuit of knowledge of the patented product which in this case would be a man of science dealing with organic/medicinal chemistry, the Court held that this is an aspect which would be required to be tested in a trial.

V. Regarding non-disclosure of material information:

· The Court held that revocation of the suit patents for failure to furnish information would be ruled upon after the trial however, it is an important factor to be taken into account at a preliminary injunction stage; at which point, the Court exercises equitable jurisdiction.

VI. Regarding double-patenting and ever-greening:

· The Court placed reliance on various judgements and held that while terminal disclaimers are not treated as admissions, they are taken into account to ascertain the prosecution history of the patent i.e., the reason as to why the patentee chose to narrow down its claim. Thus, while terminal disclaimer filed by a patentee is not treated as a complete bar against the defence of non- obviousness, depending on facts, it can operate as estoppel by conduct.

VII. Regarding balance of convenience, public interest and irreparable loss:

· The Court held that depriving the Defendants, at this stage, from manufacturing and selling their drugs, when, during the validity period of the genus patent i.e., IN 147 they largely held themselves in check, would not be appropriate, especially, since the Defendants have set up a credible challenge to the suit patents;

· The Court declined injunction since in this case damages, if proved at trial, appear to be compensable;

· The Court also held that if one were to bear in mind the aspect concerning price as also the nature of the disease which is sought to be treated by the drug-in-issue, the scales of balance, at this stage, would weigh in favour of the Defendant.

Thus, the Court refused to grant the injunction in favour of the Plaintiffs and against the Defendants. In another recent landmark decision of the Delhi High Court, Astrazeneca was denied the request for injunction of IN 625 against various other manufacturers, i.e., Torrent Pharmaceuticals, Micro Labs, Zydus, Eris, USV Pvt. And MSN Laboratories.

For any questions, please write to the author- Ms. Saumya Kapoor, Senior Associate, at saumya.kapoor@iprattorneys.com.

[1] I.A. No. 8826/2020 in CS (COMM) No. 410/2020 and I.A. No. 8859/2020 in CS (COMM) No. 411/2020 [2] a patent covering a group of compounds which disclosed the possibility of individual permutations and combinations that can run into several million structurally diverse compounds [3] MIPR 2016 (1) 0001] [4] supra [5] (2017) EWHC 2629 (Pat) [6] supra