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Process patent litigation in pharma sector – An overview

By Vindhya Srinivasamani

Introduction

Since the inception of the Patents Act, 1970, Indian patent law has been a process patent regime in the field of pharmaceuticals. Based on the recommendations of a committee chaired by Judge Rajagopala Ayyangar in 1959, product patent protection in the pharmaceutical sector was abolished in order to ensure that medicines were available to the public at reasonable prices.

It was only in 2005, in order to comply with the obligations under the Agreement on   Trade Related Aspects of Intellectual Property Rights (TRIPS) that India permitted  patent rights to pharmaceutical products. Thus, the law as it stands today under the Patents Act, 1970 (the Act) expressly states that an invention under the Act means a new product or process involving an inventive step and capable of industrial application. Although much of the patent litigation till date in the field of pharmaceutical has arisen out of product patent infringement, a recent judgment by the High Court of Delhi in Glenmark Pharmaceuticals Ltd. & Anr. v. Symed Labs Limited [FAO (OS) No. 60 of 2015, dated 5th Feb., 2015] has brought back the spotlight on process patent infringement in the pharmaceutical sector. In this case, the Division Bench of the Delhi High Court set aside the order of the Single Judge of the Delhi High Court granting an interim injunction in favour of the patentee plaintiff, Symed.

Relevant statutory provisions

It is important to note that rights of a process patentee differ from that of a product patentee. Section 48 of the Act demarcates the right of patentees and states that with respect to a process patent, a patentee has the exclusive right not only to prevent third parties from the act of using the patented process without consent but also to prevent them from using, offering for sale, selling or importing the product obtained directly by the patented process in India. This is in contrast to the rights of a product patentee, whereby a product patent confers upon the patentee the right to prevent third parties from making, using, offering for sale, selling or importing the patented product in India.

Specifically with regard to process patent infringement, Section 104 A of the Act is relevant. This provision states that in the case of a suit for infringement of a process patent, if the patentee is able to prove that the product manufactured by the patented process is identical to the product manufactured by the defendant, then the burden of proof in the infringement suit shifts to the defendant to establish that the process used to manufacture its product is different from that of the patented process.

Major cases on process patent litigation in the pharma sector


Teva v. Natco

One of the first major process patent infringement litigation was initiated by Teva Pharmaceuticals Industries Ltd. (Teva) against Natco Pharma Ltd. (Natco) in 2007. Teva filed a suit [CS (OS) 1708 of 2007; the First Suit] for permanent injunction before the Delhi High Court against Natco to restrain them from infringing Patent No.190759 for an invention titled “a method for manufacturing Co-polymer I fraction". The patented process is used in the manufacture of the drug glatiramer acetate that is useful in the treatment of multiple sclerosis. Natco on the other hand contended that the process employed by them for producing glatiramer acetate was entirely different from the process patented by Teva. Further, Natco also filed a counterclaim for revocation of Teva’s patent. However, by order dated 20th August, 2014, the Single Judge of the Delhi High Court dismissed the First Suit and the counterclaim filed by Natco on the ground that both the parties failed to lead evidence to support the averments made in the plaint or in the counterclaim.

While the First Suit and the counter claim were pending trial before the Delhi High Court, Teva filed another suit against Natco in 2012 [CS (OS) 3193 of 2012 - the Second Suit] for a quia timet permanent injunction to restrain Natco and its agents from infringing Teva’s patent no. 190759. After a series of appeals before the Division Bench of the Delhi High Court and subsequently the Supreme Court, the Bench restored the matter to the Single Judge of the Delhi High Court who has vide order dated 16th January, 2015 reserved judgment in the Second Suit.

BMS v. Mylan

Bristol-Myers Squibb (BMS) filed a suit for infringement (O.S No. 670 of 2014) before a trial court in Hyderabad against Mylan Laboratories Ltd. (Mylan) to prevent them for infringing its processes patented in India by virtue of Patent Nos. 206217 and 210496. The patents in suit were directed to a stereo-selective process for preparing substituted oxobutanes and a process for preparing alpha-chloroketones, respectively. Both  the above mentioned processes are used in the manufacture of Atazanavir, an antiretroviral drug for the treatment of AIDS. Specifically BMS sought to prevent Mylan from manufacturing Atazanavir using the patented process and exporting the same to Venezuela.

Mylan contended that its manufacture of Atazanavir Sulphate Capsules does not fall within the purview of the patented processes of BMS. Further, Mylan also asserted that the suit patents are immaterial and irrelevant to Mylan’s export of Atazanavir Sulphate product to Venezuela in compliance with the contractual obligations undertaken with International Bodies i.e., Pan American Health Organization (PAHO) / World Health Organization (WHO). The trial court by order dated 26th Sept., 2014 denied BMS an interim injunction for having failed to establish a prima facie case of infringement of its process patents. On appeal the Andhra Pradesh High Court [AP High Court vide order dated 5th Dec., 2014 (Bristol-Myers Squibb Holdings Ireland v. Mylan Laboratories Limited - 2015(1)ALT4)] upheld the order of the trial court denying an interim injunction in favour of BMS.

The AP High Court interpreted Section 104 A of the Act and held that in a suit for infringement of a process, if the patentee proves that the product of the defendant is identical to the product obtained by the patented process, then the burden of proving that the process used by the defendant in obtaining his product is different from the patented process lies on the defendant. The AP High Court also held that in the context of Section 104A of the Act, the word ‘identical’ means the same and not similar.

On the question as to whether BMS was successful in establishing a prima facie case of infringement so as to warrant an interim injunction in its favour, the High Court observed that the suit patents neither claim the drug Atazanavir nor any process for the preparation of Atazanavir but were essentially directed to the process of producing intermediates used in the manufacture of Atazanavir. Further, the Court also observed that BMS did not assert that Mylan was producing the intermediates claimed in the suit patent, namely, choloroketones or oxobutanes. Thus, in the light of failure by BMS to satisfy the threshold under Section 104A of the Act, the High Court held that BMS failed to produce evidence to show that the process used by Mylan is the same as that of the process covered under the suit patent.

Symed v. Glenmark

Arguments Advanced

On April 12, 2013, Symed filed a suit before the Delhi High Court [C.S. (OS) No. 678 of 2013] seeking an injunction restraining Glenmark Pharmaceuticals Limited and Glenmark Generics Limited from infringing Symed’s process patents in their manufacture of Linezolid. Linezolid is useful in the treatment of serious infections caused by Gram-positive bacteria that are resistant to several other antibiotics[ see end note 1].

Symed asserted that its patent nos. 213062(‘062 Patent) and 213063 (‘063 Patent) are directed to a more economical, safe and commercially viable process of manufacturing Linezolid as compared to the processes known in the art.  Based on the fact that the patented processes were directed towards the production of linezolid by producing novel intermediates such as, N - [3 – Chloro – 2 - (R) - hydroxprophy1] – 3 – fluoro – 4 –morpholinyl - anlaniline” (CHFA claimed in Claims 18 and 19 of the ‘063 Patent) and “N – 3 [Phthalimido – 2 - (R) - hydroxprophyl] – 3 – fluoro – 4 (morpholinyl) aniline” (PHPFMA claimed in Claims 23, 24 and 25 of the ‘062 Patent); Symed argued that the presence of any of these intermediate compounds in the final product (Linezolid) would be indicative of the fact that the product has been manufactured by the patented process. It was further argued that on testing samples of the Linezolid (marketed under the brand name ‘Lizolid’) manufactured by Glenmark both before and after filing the instant suit, presence of intermediates PHPFMA, CHFA and Zodiac-4 were detected (Zodiac-4 is obtained by carbonylating CHFA) and thus, Glenmark was infringing Symed’s patents.

Glenmark, on the other hand, besides challenging the jurisdiction of the Court to entertain the instant suit also filed a counterclaim challenging the validity of the suit patents on the ground of lack of novelty. Further, Glenmark asserted that the pre-suit lab reports did not indicate the presence of CHFA, whereas, the post-suit reports showed the presence of CHFA. Therefore, Glenmark assailed the veracity of Symed’s averments as to the presence of the intermediates in the final product. Glenmark also stressed that the presence of the intermediates Zodiac-4 and PHPFMA in the final product prepared by Glenmark i.e. Linezolid API (Active Pharmaceutical Ingredient) was not indicative of infringement as said intermediate compounds could also be found in the final product produced by processes of manufacture of Linezolid already known in the art.

Order of the Single Judge of the Delhi High Court

On hearing the above arguments raised by the parties, the Single Judge vide order [see end note 2] dated 19th Jan., 2015 granted an interim injunction in favour of Symed, thereby restraining Glenmark from manufacturing Linezolid in a manner so as to result in infringement of the suit patents.

With regard to the pertinent issue raised by Glenmark as to the lack of detection of the intermediate CHFA in the pre-suit reports and the sudden detection of the same in the post-suit reports, the Single Judge dismissed the argument observing that this was possibly due to the fact that the samples were not tested for CHFA and further, upheld Symed’s argument that presence of CHFA, PHPFMA and Zodiac-4 is a strong indicator of the fact that Glenmark employed Symed’s patented process to manufacture Linezolid API. The Single Judge in coming to such a finding also considered the fact that the test reports relied upon by Symed were from both Symed’s own facility and independent laboratories.

In light of the above, the Single Judge held that Symed satisfied all the tests for grant of an interim injunction, namely establishing a prima facie case, that the balance of convenience is in favour of Symed and that irreparable loss and injury will be caused if the interim injunction is not granted.

Order of the Division Bench of the Delhi High Court

Aggrieved by the order of the Single Judge of the Delhi High Court, Glenmark approached the Division Bench of the Delhi High Court in appeal on the following two grounds:
  • that prior commercial use of the product before filing of the process patents, would not entitle Symed to an injunction, subsequently.
  • that the Single Judge failed to adhere to the statutory mandate under the proviso to Section 104A(1)(b) of the Act that the initial burden of proof rests on the patentee to show that the product manufactured by the other party is identical to the product manufactured by the patented process.
Essentially, it was asserted that the Linezolid API manufactured by Glenmark was not identical to the Linezolid API manufactured by the patented process because the intermediates or markers in the Linezolid manufactured by Glenmark were different from the Linezolid manufactured by the patented process. It was argued that merely because a product is known as Linezolid API, it does not mean that the same is identical to the product manufactured by the patentee directly through patented processes.

The Division Bench of the Delhi High Court observed that in a case of process patent infringement, it was incumbent upon the Single Judge to ascertain whether the requirements under Section 104A of the Act were fulfilled. Specifically, it was observed that the Single Judge ought to ascertain as to whether the Linezolid API manufactured by Symed was identical to that manufactured by Glenmark.

Further, the Bench upheld the argument made by Glenmark that while the ‘062 Patent results in Linezolid API with two intermediates or markers, namely CHFA and Zodiac-4 and the ‘063 Patent results in CHFA and PHPFMA; the Linezolid API manufactured by Glenmark consists of three intermediates namely, Zodiaz-4, CHFA and PHPFMA. Thus, the Division Bench held that this clearly indicated that Glenmark was manufacturing Linezolid API by a different process.

In light of the above, the Division Bench vacated the interim injunction granted by the Single Judge and directed Glenmark to maintain accounts and file the same in Court along with a copy to Symed. The next date of hearing in the instant case is 6th April, 2015.

Conclusion


In the case of process patents in the field of pharmaceuticals, where the processes are mostly directed towards the manufacture of a drug, proving infringement of such a process patent poses a significant challenge. The primary reason for this difficulty in proving that a process has been infringed is that there is no way to conclusively determine the process used by the defendant. This is because the patentee will never be able to legally enter the premises of the defendant to ascertain the actual process of manufacture of the final product.

The above difficulty is probably the reason Article 34 was included in the TRIPS Agreement. In light of the obligations under TRIPS, India enacted Section 104A of the Act which essentially reproduces Article 34 of TRIPS, whereby it is the defendant who is to establish that they did not employ the patented process, provided the product manufactured by them is identical to the product manufactured by the patented process.

It is to be noted that the Symed v. Glenmark case is the first process patent case in India that actually demonstrates the difficulties and uncertainties that arise in establishing that the products are identical. While markers and intermediates many be one way of establishing the identical nature of two APIs there is no legal basis to say that it is the only way. It will be interesting to see if courts continue to employ intermediates as the criteria or if parties are able to convince the courts of other parameters to ascertain the identical or distinguishing features between APIs, as the case may be.

[The author is an Associate, IPR Practice, Lakshmikumaran & Sridharan, New Delhi]

End Note:

  1. Source: Wikipedia
  2. Symed Labs v. Glenmark Pharmaceuticals and Anr. – CS (OS) No. 678 of 2013, Delhi High Court                              
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