Novartis AG v. Windlas Biotech Pvt Ltd

Delhi High Court · 25 Mar 2022 · 2022:DHC:1093

Prathiba M. Singh

CS (COMM) 156/2021

2022:DHC:1093

civil other Significant

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The Delhi High Court upheld interim injunctions restraining patent infringement while permitting sale of pre-existing stock under strict disclosure and accounting conditions in pharmaceutical patent suits.

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CS (COMM) 156/2021, 68/2022, 557/2020
HIGH COURT OF DELHI
Date of Decision: 25th March, 2022

CS (COMM) 156/2021 & I.A. 6539/2021
NOVARTIS AG & ANR. ..... Plaintiffs
Through: Mr. Hemant Singh, Ms. Mamta Jha and Mr. Siddhant Sharma, Advocates.
(M:9557629905)

VERSUS

WINDLAS BIOTECH PVT LTD & ANR. ..... Defendants
Through: Ms. Rajeshwari H., Mr. Vikramjeet and Ms. Deepanshu Nagar, Advocates. (M:9717996516)

JUDGMENT

10 WITH + CS(COMM) 68/2022 & I.A. 1516/2022

VERSUS

CHHABRA HEALTHCARE SOLUTIONS PRIVATE LIMITED..... Defendant Through: Ms. Archana Sahadeva and Ms. Pragati Agarwal, Advs. (M:9818758576) 20 AND + CS(COMM) 557/2020 & I.As. 5231/2021, 3014/2022

VERSUS

ERIS LIFESCIENCES LIMITED..... Defendant Through: Ms. Rajeshwari H., Mr. Vikramjeet and Ms. Deepanshu Nagar, Advs. CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode. 2022:DHC:1093

2. Submissions have been heard in respect of the applications filed on behalf of the Plaintiffs.

3. The present three suits have been filed seeking permanent injunction restraining the infringement of Indian Patent No.IN229051 (hereinafter, “suit patent”), damages, rendition of accounts, delivery up, etc. As per the Plaintiffs, the suit patent relates to a pharmaceutical composition consisting of Valsartan or a pharmaceutically acceptable salt thereof, and Sacubitril or a pharmaceutically acceptable salt thereof, and a pharmaceutically acceptable carrier. The said pharmaceutical preparation is used in the treatment of cardiovascular disease.

4. The Defendants in each these suits are arrayed as under: CS (COMM) 557/2020 ‘ERIS suit’ ERIS LIFESCIENCES LIMITED Defendant CS (COMM) 156/2021 ‘Windlas suit’ WINDLAS BIOTECH PVT. LTD. Defendant No.1

ERIS LIFESCIENCES LIMITED Defendant No.2 CS (COMM) 68/2022 ‘Chhabra suit’ CHHABRA HEALTHCARE SOLUTIONS PVT. LTD. Defendant

5. The history of the litigation goes back to a suit, being TR COS No.1/2020, which was filed by the Plaintiffs, against one MSN Laboratories Pvt. Ltd. (hereinafter, “MSN Laboratories” and “MSN suit”) before the Telangana High Court, seeking permanent injunction restraining the infringement of the suit patent, damages, rendition of accounts, delivery up, etc. In the said suit, the following order was passed on 11th December, 2020, by the Telangana High Court: “ORDERS: “These matters are moved as Lunch Motions. With consent of both counsel, matters stand posted to 17.12.2020 at 2.30 pm. Both parties are directed to maintain status-quo obtaining as on today in all respects operative for a period of one week. Post on 17.12.2020 at 2.30 pm.”

6. The above status quo order was, thereafter, made absolute on 26th February, 2021. The said order was challenged before the ld. Division Bench of the Telangana High Court, wherein the appeal and cross-appeal were dismissed. The operative portion of the order dated 26th February, 2021 reads as under:

“3. Just to clarify, I may note that the High Court for the State of Telengana had on 26.02.2021 passed the following order:- “37. For all the aforesaid reasons, there shall be interim injunction restraining the defendant/respondent, by itself or through its directors, group company, associates, divisions, assigns in business, licensees, franchisees, agents, distributors and dealers from using, manufacturing, importing, selling, offering for sale, exporting, directly or indirectly dealing in pharmaceutical composition comprising combination of valsartan or a pharmaceutically acceptable salt thereof and sacubitril or a pharmaceutically acceptable salt, and a pharmaceutically acceptable carrier or more specifically a pharmaceutical composition comprising combination of sacubitril + valsartan as sodium salt complex/compound or any other form as may amount to infringement of Indian Patent No.229051 of the plaintiff No.1. Xxx

39. At this stage, it is represented by Sri Ashok Ram Kumar that before the status quo order was granted and after the transfer of the suit to this Court, the defendant has manufactured certain quantity of subject drug and they have expiry date and unless said stock is disposed of, grave prejudice will be caused to the defendant. He therefore submits that defendant may be permitted to sell the said quantity of drug. Having regard to this submission, defendant is permitted to sell the quantity of drugs already manufactured before the status quo order was granted by this Court on 11.12.2020. However, the defendant shall maintain account of the details of quantity of drugs already manufactured, sold in pursuant to this order and the sale proceeds. He shall furnish the details to the plaintiff No.1 and shall also file an affidavit to that effect in the suit. The permission to sell the drugs already manufactured is without prejudice to the claims of the plaintiffs and defendants in the suit.”

7. Parallelly, the ERIS suit was filed before this Court against ERIS Lifesciences Limited (hereinafter, “ERIS”), wherein vide order dated 21st December, 2020 passed by a ld. Single Judge of this Court, ERIS was directed to file an affidavit detailing the stock of the impugned product available with it. The said direction reads as under:

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“9. Insofar as I.A.No.12285/2020 is concerned, the same is disposed of with a direction that the defendant i.e. Eris will file an affidavit detailing out the stock available with it qua the impugned product. In this behalf, the affidavit will set forth the source from which the stock was received, the quantity of the stock received, and the sales made by the defendant after the receipt of the stock. Both, the quantity and the value of the sales

made, will be disclosed in the affidavit. 9.[1] The affidavit will be filed within 10 days from today. A copy of the affidavit will be furnished to Ms. Mamta Rani Jha i.e. the counsel-on-record for the plaintiffs. 9.[2] The defendant will file a written statement and reply to the interlocutory application i.e. I.A. NO. 12284/2020 within three weeks from today. Replication and rejoinder thereto, if any, will be filed before the next date of hearing. 9.[3] The parties will be governed by the order dated 11.12.2020 passed by the Telangana High Court.” Thus, in the MSN Suit and the ERIS Suit, status quo orders were passed both by the Telangana High Court and this Court.

8. In terms of the direction given above, an affidavit was filed on 4th January, 2021 by one Mr. Milind Talegaonkar as an authorized signatory on behalf of ERIS. The said affidavit disclosed the quantum of purchase made from MSN Laboratories, as under:

“2. I state that the Defendant Company purchases the product ZAYO from MSN Laboratories Private Limited. I state that the Zayo product is a Crystalline Form S [Valsartan and Sacubitril]. 3. I state that the Defendant Company received certain batches of the product containing crystalline Form S [compound of Valsartan and Sacubitril] from MSN Laboratories Private Limited on 10.12.2020. The batch numbers and quantity of the product, Zayo, received from MSN Laboratories are herein below:

┌────────────────────────────────────────────────────────────────────────────────────────────┐
│      Sl.     Product         Pack       Batch    Qty         Invoice Date from             │
│      No.     Description     Style      No.      (Bottles)   MSN Laboratories              │
│                                                              Pvt. Ltd.                     │
├────────────────────────────────────────────────────────────────────────────────────────────┤
│      1.      Zayo 50         Bottle     DRA      6000        Dec 10, 2020                  │
│                              of 30’s    12083B                                             │
│                              TAB                                                           │
│      2.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12084A                                             │
│                              TAB                                                           │
│      3.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12085A                                             │
│                              TAB                                                           │
│      4.      Zayo 50         Bottle     DRA      3000        Dec 10, 2020                  │
│                              of 30’s    12095A                                             │
│                              TAB                                                           │
│      5.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12096A                                             │
│                              TAB                                                           │
│      6.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12097A                                             │
│                              TAB                                                           │
│      7.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12098A                                             │
│                              TAB                                                           │
│      8.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12099A                                             │
│                              TAB                                                           │
│      9.      Zayo 50         Bottle     DRA      12000       Dec 10, 2020                  │
│                              of 30’s    12100A                                             │
│                              TAB                                                           │
│      10.     Zayo 100        Bottle     DRA      3000        Dec 10, 2020                  │
│                              of 30’s    12086B                                             │
│                              TAB                                                           │
│      11.     Zayo 100        Bottle     DRA      6000        Dec 10, 2020                  │
│                              of 30’s    12087A                                             │
│                              TAB                                                           │
│      12.     Zayo 100        Bottle     DRA      6000        Dec 10, 2020                  │
│                              of 30’s    12088A                                             │
│                              TAB                                                           │
│      13.     Zayo 100        Bottle     DRA      3000        Dec 10, 2020                  │
│                              of 30’s    12101B                                             │
│                              TAB                                                           │
│ CS (COMM) 156/2021, 68/2022, 557/2020                                       Page 6 of 16   │
│                                                                        2022:DHC:1093       │
│      14.     Zayo 100        Bottle     DRA      6000   Dec 10, 2020                       │
│                              of 30’s    12102A                                             │
│                              TAB                                                           │
│      15.     Zayo 100        Bottle     DRA      6000   Dec 10, 2020                       │
│                              of 30’s    12103A                                             │
│                              TAB                                                           │
│      16.     Zayo 100        Bottle     DRA      6000   Dec 10, 2020                       │
│                              of 30’s    12104A                                             │
│                              TAB                                                           │
│      17.     Zayo 100        Bottle     DRA      6000   Dec 10, 2020                       │
│                              of 30’s    12105A                                             │
│                              TAB                                                           │
│      18.     Zayo 100        Bottle     DRA      6000   Dec 10, 2020                       │
│                              of 30’s    12106A                                             │
│                              TAB                                                           │
│                4. I state that Eris Lifesciences has sold all the                          │
│                products mentioned at para 4 to the                                         │
│                distributors/stockists on a principal to principal                          │
│                basis. I submit that the stockists/distributors in                          │
│                turn have sold the same to various hospitals and                            │
│                pharmacies across the country. The product is                               │
│                now available with the pharmacies and chemists                              │
│                and the stock is now no longer with the company                             │
│                Eris.”                                                                      │
│ 9.     Pursuant to the said quantum being disclosed, further orders were                   │
└────────────────────────────────────────────────────────────────────────────────────────────┘

30. Let the documents in the sealed cover be scanned and tagged along with the record. Copy of the same may be provided to counsel for the Plaintiffs, upon request.

31. On the next date, the application under Order XXXIX Rule 2A CPC being I.A. No.5231/2021 shall be taken up for hearing.

32. List before Joint Registrar for marking of exhibits, on 20th May, 2022.

33. List before Court for framing of issues and case management, on 1st August, 2022.

PRATHIBA M. SINGH JUDGE MARCH 25, 2022/dk/ad

Novartis AG v. Windlas Biotech Pvt Ltd

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