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07 February 2017

Can non-working of a patent in India affect an interim injunction order

Facts in brief :

Plaintiff, Bayer Intellectual Property GmBH, is a company incorporated under the laws of Germany. The plaintiff is the owner of patents IN 225529 and IN 188419 that relate to drugs VARDENAFIL and VARDENAFIL HYDROCHLORIDE respectively. The plaintiff filed an infringement suit in the Delhi High Court (HC) against the defendants, Ajanta Pharma and ORS, for selling or offering to sell a product with same component covered by patent 225529 under the mark “VALIF”. A single Judge of the Delhi HC granted an ex-parte ad interim injunction against the defendants vide order dated 20 December 2016, restraining the defendants and all the other parties acting for and on behalf of the defendants, till the next date of hearing, from making, selling, distributing, advertising, exporting, and offering to sell any product infringing the plaintiff’s patents.

Aggrieved by the judgment of the single judge, defendant no.1 filed an application under Order 39 Rule 4 CPC praying for said ex parte ad interim injunction to be set aside. The defendant contended that the plaintiff was admittedly a “non-user” of the patent in India and further argued that the plaintiff, being an owner of a foreign patent in India, ought not enjoy the equitable relief of injunction since it would amount to giving lesser importance to public interest compared to self-interest of the patentee. The defendant proved with documental evidence that the impugned products were launched in 2009 and an export licence was also secured in 2009. In response, the plaintiff argued that though the non-working of the patent in India could be ground for compulsory licensing, it could not be used as a defence for an infringement suit in the civil court.

 

Decision:

Vide order dated 4 January 2017, a single judge of the Delhi HC varied the earlier order dated 20 December 2016 and held that the defendants should restrain from offering to sell, selling or distributing for use or consumption in India the impugned products. The single judge, however, suspended the earlier order of ad interim injunction against manufacturing, distribution, offer to sale or sale of impugned products for purposes of export.

 

Analysis and principle laid down:

The single Judge noted that the plaintiff admittedly had not used said patents for commercial exploitation in India till date. The single judge further pointed out the plaintiff was unable to contradict the documents relating to the launch of the impugned products by the first defendant in 2009.

While the single judge agreed to the contention of the plaintiff that the issue of being a non-user cannot be set up as a defence to the infringement suit, he held that equity demanded that absolute or unconditional temporary injunction not be granted insomuch as halting of manufacturing activity and the resultant exports of the impugned products of the defendants would result in not only loss of employment but revenue of the State as well. Accordingly, the present order, varying the order issued on 20th December, 2016 was issued subject to the first defendant maintaining and periodically submitting to the Court the accounts of the production and export of the impugned products.