In the case of Novartis AG & Anr. v Natco Pharma Limited, the Delhi High Court dismissed an application by the defendant, Natco Pharma Limited (Natco), an Indian pharmaceutical company, seeking vacation of the interim injunction granted to Novartis AG (Novartis) in 2023 in the ongoing patent infringement suit against Natco.
Novartis is suing Natco for infringing its Indian patent for Ceritinib, a protein kinase inhibitor used to treat a certain type of lung cancer, alleging that Natco was manufacturing and selling a generic version of Ceritinib without a license. In January 2023, the Court granted an ad-interim injunction against Natco, restraining them from exploiting the suit patent till the disposal of the infringement suit.
Natco then challenged the validity of the suit patent asserting anticipation and obviousness of the claims based on prior art including patents belonging to other pharmaceutical companies such as AstraZeneca, Nigel and Novartis as well.
Natco also argued that Novartis suppressed material facts by not disclosing the filing and subsequent rejection of a divisional application related to the suit patent during the interim injunction hearing. Natco contented that the divisional application was rejected as it did not meet the statutory criteria. Therefore, the rejection should not be seen as mere abandonment and Novartis had a responsibility to disclose these facts as this would have significantly impacted Novartis’s attempt to secure an interim injunction.
Novartis countered that the divisional application was not pursued due to strategic reasons and thus, did not impact the validity of the suit patent. They asserted the refusal did not constitute an adjudication on merits.
The Court dismissed Natco’s application for the vacation of the interim injunction while making the following observations:
- Analysis of Markush claims: It was concluded that the general Markush formula in the prior art did not enable the synthesis of Ceritinib, showing that Ceritinib was not obvious from existing patents;
- Inventive step and therapeutic advantage: The inventive step in creating Ceritinib was highlighted, noting its unique structural modifications and therapeutic advantages, such as fewer side effects, emphasizing the non-obvious nature of Novartis’s patent;
- Merits of the refusal of divisional: Novartis’s divisional application was not rejected on its merits; rather, Novartis chose not to pursue it. This does not prevent Novartis from contesting the validity of the suit patent challenged by Natco. Even if the refusal were on merits, the Controller's decision is not binding on the Court. The Court's independent analysis determined that the suit patent is not vulnerable to invalidity on any grounds raised under Section 64 of the Act, which covers reasons for revoking a patent, such as lack of novelty or obviousness;
- Revisitation of injunction order: Under the second proviso to Order 39, Rule 4, Code of Civil Procedure (CPC), the injunction order cannot be revisited unless there is a change in circumstances or the order causes hardship to the defendant, which was not the case here;
- Suppression of facts: Revisiting the interim injunction order on the grounds of suppression of fact is only warranted if the disclosure could alter the case's outcome. In this instance, the non-disclosure of the divisional application's status did not meet this criterion; and
The Court also delved into the meaning and scope of “suppression of material act” referring to the Supreme Court judgement in SJS Business Enterprises Pvt Ltd v State of Bihar which held:
“13. As a general rule, suppression of a material fact by a litigant disqualifies such a litigant from obtaining any relief. This rule has been developed to deter litigants from abusing the process of the court by deceiving it. However, the suppressed fact must be material in the sense that its disclosure would have affected the merits of the case. It must be a matter significant for the court’s consideration, irrespective of the view the court might have taken [R. v. General Commissioners for the purposes of the Income Tax Act for the District of Kensington].”
The Court thus clarified that only the suppression of a fact that would alter the outcome of the case if disclosed can be regarded as a material fact, justifying a revisitation of the order of interim injunction.
The Court’s stance in this case indirectly suggests that despite the Controller’s thorough examination, the Court’s prima facie assessment could still supersede them. In this case, the Court’s prima facie assessment seems to have weighed heavily, indicating that it is critical to present all relevant information during legal proceedings, more so in patent enforcement proceedings.