CASE DETAILS

The Plaintiff for this case: Merck Sharp & Dohme Corp & Anr The Defendant for this case: SMS Pharmaceuticals Limited The Respected Court for this case: The Delhi High Court Coram: HON’BLE MR. Justice C. Hari Shankar Date of Pronunciation: 20th Huly, 2021

OVERVIEW OF THE CASE

• Sitagliptin, an anti-diabetic drug (which is commonly sold under the brand name Januvia and Janumet) is used to lower blood sugar levels in adults with type 2 diabetes.
• It is in a class of medications called dipeptidyl peptidase-4 (DPP-4) inhibitors.
• It works by increasing the amounts of certain natural substances that lower blood sugar when it is high.
• Sitagliptin is not used to treat type 1 diabetes (condition in which the body does not produce insulin and therefore cannot control the amount of sugar in the blood).
• Sitagliptin patent has been granted to Merck Sharp and Dohme Corporation (Indian Patent Application No. 209816).
• The Delhi High Court have previously adjudged that the patent Sitagliptin granted to Merck Sharp and Dohme Corporation has been infringed.
• The plaintiff sought injunction against infringement by the defendant, of the plaintiff’s invention, Sitagliptin.
• The plaintiff contended that the defendant by advertising, for sale, Sitagliptin Hydrochloride in its Active Pharmaceutical Ingredients (APIs) and Analytical Standards has infringed its patent.
• In the present case, the Delhi High Court observed that the defendant is advertising the sale of drug Sitagliptin. The defendant affirmed the availability of Sitagliptin Phosphate for a sum of Rs. 1 lakh for 1 Kg to the investigator during an inquiry.
• Further, the court opined that the plaintiff has a valid and subsisting patent for which a certificate of validity has already been granted by the court.
• The court later granted an ex-parte ad-interim injunction in the favour of the plaintiff and against the defendant and the ex-parte ad-interim order continues to remain in force till date.

SUBMISSIONS ON BEHALF OF THE PLAINTIFF

• The plaintiff contended that the disclaimer is merely in the nature of a tactic to enable commercial exploitation by the defendant.
• The plaintiff further said that once the drug is permitted to be exported, it is impossible for the plaintiff to verify or investigate whether it is ultimately being used for the research and development purposes or is being exploited.
• The plaintiff also contended that the exports of Sitagliptin by the defendant have been continuing since 2016 and almost 800 kg have been exported till now.
• Ostensibly, it is difficult to treat these activities of the defendant as being aimed at research and development.
• The plaintiff also stated that there is no material available which can claim that Chemo and Verben are sister concerns of the plaintiffs.
• They, therefore, are third party entities, located outside the jurisdiction of this Court, against whom it would be quite impossible for the plaintiffs to proceed.
• Subsequently, the plaintiff also contended that there is no compliance, by the defendant, with the conditions laid down by the Division Bench of this Court in Paras 112 and 113 of the report in Bayer Corporation.

SUBMISSIONS ON BEHALF OF THE DEFENDANT

• In response to the allegations made by the plaintiff, the defendant contended that the dealings of the defendant are the result of a joint venture between the defendant and M/s Cheo AG Lugano (“Chemo” in short), for development and manufacturing of certain products, so that the products could be launched in the market after patent terms expired.
• Further, the defendant also claimed that they have already obtained the due permission from Governmental and Drug Control Authorities and all the dealings of them are within the scope of patent laws.
• Additionally, the defendant claimed that there is absolutely no manufacturing or production of these drugs for commercial purposes.
• The sole intent of the defendant is to launch these drugs in a generic form at an affordable price after the patents granted in respect of the APIs in the said drugs expired.
• The defendant further stated that it has only supplied Sitagliptin Hydrochloride as a means to conduct research and development purposes after getting the due approval by the Drug Control Authorities.
• The defendant also contended that they have never sold Sitagliptin Hydrochloride in commercial quantities or to any clients who are using it for commercial purposes. Every sale of the defendant was duly licensed by the Drug Control Authorities.
• Further referring to Section 107A of the Patents Act, along with the judgement of the court in Bayer Corporation v. U.O., the defendant contended that their activities and working were permissible, as the defendant was only engaged in sale and export of Sitagliptin Hydrochloride for the purposes of research and development.
• The defendant in the written statement (Para 53) marked attention to the disclaimer, that is mentioned on the defendant’s website, which reads: “Some of the products may have patent rights in one or more countries and any such product having an existing patent will not be offered/sold for commercial requirements. The final responsibility with respect to the third-party patent rights lies exclusively with the buyer.”
• In the end, by the present application under Order XXXIX Rule 4 of the CPC, the defendant has sought modification/vacation of the ex parte interim order dated 21st October, 2020, citing in their favour Section 107A of the Patents Act.
• The defendant has also relied on the following order passed by a coordinate Bench of this court on 27th August, 2020 in CS(COMM) 195/2020, which is also related to Sitagliptin.
• In the said order, the Court modified the earlier injunction order granted against manufacture and dealings in Sitagliptin, by allowing usage of the Sitagliptin API by the defendant for research and development purposes, subject to compliance with the directions, in that regard, contained in the judgement in Bayer Corporation.

THE COURT’S OPINION AND JUDGEMENT

• The court stated that there can be no restraint of export of a patented invention, provided such export is for research and development purposes.
• Further, it opined that the defendant’s prayer for being extended the benefit of section 107A of the Patents Act deserves to be allowed.
• The court has allowed the defendant to export the API Sitagliptin to Chemo and Verben, as prayed.
• For this purpose, the defendant has to file, before such export, an affidavit before this Court by clearly stating the quantities of Sitagliptin/ Sitagliptin Hydrochloride.
• The affidavit shall also contain an undertaking that the exports are intended only for the purposes of research and development by the foreign buyers Chemo and Verben.
• The court also gave instructions to the defendant to comply with all the safeguards contained in the judgement of the Division Bench of this Court in Bayer Corporation.
• The ex parte ad interim injunction granted by the Court on 21st October 2020 stands modified accordingly.

In India, by virtue of Section 48 of the Patents Act, 1970, a granted patent enables a patentee to exclude others from making, using, selling, offering for sale or importing their patented invention without their consent. The patentee is entitled to seek suitable relief measures in case of infringement of his/her patent.

However, in terms of the very idea of granting a patent (a major part of it being to foster innovation by research and development) certain acts of making, using, selling or importing a patented invention by a third party, even without the consent of the patentee, are not considered to be an act of infringement.

In this aspect, the Bolar Exemptions is a safeguard against patent infringement, especially significant to pharmaceutical drugs. It derives its name from the US case of Roche Products v Bolar Pharmaceuticals, wherein it was held that Bolar’s use of the patented compound for federally mandated testing was an infringement of the patent. However, soon after this judgment, the US Congress overturned the decision by enacting a law permitting the use of patented inventions in research to seek Food and Drug Administration approval.

The watershed context of the Bolar exemption in India emerged from India adopting the product patent regime in 2005. The provision subsumes research exemption as a defense, according to which, the use of a patented invention in research to generate clinic trial data for regulatory approval is not considered an act of infringement. Before the expiry of the patent term, pharmaceutical patentees have, in general, monopolistic rights over patented drugs to restrain competitors from launching generic versions of the drug in the market. This monopolistic exclusion in effect provided an opportunity to innovator companies to extend the term beyond 20 years until generic versions are launched in the market.

The generic drugs market in India has largely flourished because of the Bolar exemption which permits the manufacturers to formulate generic drugs prior to patent expiration of branded drugs.

The current case is one of the many instances where this provision of Bolar exemption has been sought as a defense against purported patent infringement.

FURTHER READING

1. https://iprlawindia.org/case-summary-merck-sharp-and-dohme-corp-anr-v-sms-pharmaceuticals-limited-dated-20-07-2021/
2. https://indiankanoon.org/doc/56196795/
3. https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_113_1_The_Patents_Act_1970_-_Updated_till_23_June_2017.pdf
4. https://www.mondaq.com/india/patent/851804/indian-perspective-of-bolar-exemption
5. https://www.iam-media.com/patent-infringement-defences-indias-bolar-story-so-far