Section 105 of Patent Act’s non-obstante clause overrides Section 34 of the Specific Relief Act, requiring non-infringement declarations to comply with its specific conditions
Introduction
In the high-stakes arena of pharmaceutical patent litigation, where intellectual property rights collide with procedural stratagems, the case of Bristol-Myers Squibb Holdings Ireland Unlimited Company & Ors. vs. Natco Pharma, decided by the Delhi High Court on January 23, 2020, emerges as a pivotal exploration of jurisdictional competence and the misuse of legal processes.
This dispute centers on Indian Patent No. IN247381 (the “junior patent”), covering Apixaban, an anticoagulant drug, and its interplay with an earlier genus patent, IN243917 (the “senior patent”). Bristol-Myers Squibb, a global pharmaceutical titan, sought to enjoin Natco Pharma, an Indian generic manufacturer, from infringing the junior patent by selling Apixaban under the brand “Apigat.” Natco countered with an application under Section 10 of the Code of Civil Procedure (CPC), 1908, seeking to stay the Delhi suit, arguing that a prior suit it filed in Hyderabad’s City Civil Court should take precedence. The Hyderabad suit sought a declaration that Apixaban was disclosed but not claimed in the senior patent, rendering it public domain. The Delhi High Court, under Justice Rajiv Sahai Endlaw, dissected the procedural and substantive issues, ultimately dismissing Natco’s application and reinforcing the primacy of the Patents Act, 1970, over general statutes in patent disputes. This case study unravels the factual matrix, procedural maneuvers, legal issues, parties’ arguments, judicial precedents, the court’s reasoning, and the broader implications, painting a vivid picture of a legal chess game in India’s patent landscape.
Detailed Factual Background
Bristol-Myers Squibb Holdings Ireland Unlimited Company, the primary plaintiff, is a global pharmaceutical leader holding Indian Patent No. IN247381, granted on April 4, 2011, for Apixaban, an anticoagulant used to prevent and treat blood clots. Marketed under brands like Eliquis, Apixaban is a critical drug with significant commercial value. The junior patent, valid until September 17, 2022, grants exclusive rights under Section 48 of the Patents Act to prevent unauthorized manufacture, sale, or use. Bristol-Myers Squibb India Private Ltd. and Pfizer Limited, co-plaintiffs, are involved in marketing and licensing Apixaban in India. The plaintiffs also hold Indian Patent No. IN243917, granted on November 11, 2010, a genus patent covering nitrogen-containing heterobicycles as Factor Xa inhibitors, which expires on December 17, 2019. The senior patent’s Markush claim encompasses trillions of compounds, generically covering Apixaban but not specifically disclosing or claiming it, according to the plaintiffs. They reserved the right to sue for infringement of the senior patent but focused this suit on the junior patent, alleging that Natco’s Apigat infringed IN247381.
Natco Pharma, a prominent Indian generic drug manufacturer, argued that Apixaban was disclosed in the senior patent’s written description, including its preparation method, but not claimed, placing it in the public domain upon the senior patent’s expiry. Natco contended that Bristol-Myers Squibb’s Form-27 filings for both patents listed Apixaban as covered, suggesting an attempt to extend monopoly rights through the junior patent, a practice known as evergreening. Natco had initiated a revocation petition against the junior patent before the Intellectual Property Appellate Board (IPAB) in 2016, alleging invalidity due to prior disclosure in the senior patent. The plaintiffs’ contradictory statements in the IPAB proceedings—admitting that the senior patent did not claim Apixaban but encompassed it in its disclosure—fueled Natco’s claim of mala fide intent to secure an extended monopoly.
Detailed Procedural Background
The dispute crystallized in CS(COMM) 342/2019, filed by Bristol-Myers Squibb and co-plaintiffs on July 4, 2019, before the Delhi High Court, seeking a permanent injunction against Natco for infringing the junior patent, along with ancillary reliefs like damages. The suit first came up on July 5, 2019, when Natco’s counsel appeared on caveat, and summons were issued. Natco filed a written statement defending its actions and an application (IA No.9768/2019) under Section 10 of the CPC, seeking to stay the Delhi suit due to a prior suit it filed in Hyderabad’s City Civil Court. On November 7, 2019, the court framed a preliminary issue: whether the Delhi suit should be stayed under Section 10 owing to the Hyderabad suit.
The Hyderabad suit, filed by Natco before the City Civil Court, sought a declaratory decree under Section 34 of the Specific Relief Act, 1963, asserting Natco’s right to manufacture Apixaban as a product disclosed but not claimed in the senior patent, thus in the public domain. It also sought a permanent injunction to restrain Bristol-Myers Squibb from threatening or hampering Natco’s business regarding Apixaban. Filed prior to the Delhi suit, it was heard on June 28, 2019, with summons and notice of an interim relief application issued for July 8, 2019. The plaintiffs were served on July 1, 2019, and filed an application under Order VII Rule 11 of the CPC in Hyderabad, challenging the suit’s maintainability. Natco argued that the Hyderabad suit’s priority and overlapping issues warranted staying the Delhi suit under Section 10.
Issues Involved in the Case
The case hinged on several critical legal questions at the intersection of patent law and civil procedure:
Whether the Hyderabad suit, filed earlier, met the requirements of Section 10 of the CPC to stay the Delhi suit, particularly regarding the competence of the Hyderabad court to grant the reliefs sought in both suits?
Whether the Hyderabad suit, filed under Section 34 of the Specific Relief Act, was maintainable given the specific provisions of Sections 105 and 106 of the Patents Act for non-infringement declarations and groundless threat remedies?
Whether the statutory framework of the Patents Act, as a special statute, precluded reliefs under the general provisions of the Specific Relief Act in patent dispute?.
How the absence of a proviso in Section 106 of the Patents Act, unlike similar provisions in the Trade Marks and Copyright Acts, affected the interplay between groundless threat suits and subsequent infringement actions?
Detailed Submission of Parties
Bristol-Myers Squibb’s argued that the Delhi suit should proceed as the Hyderabad suit was not maintainable under Section 34 of the Specific Relief Act. They contended that the Patents Act, as a special statute, exclusively governs patent-related reliefs, with Sections 105 and 106 providing specific remedies for non-infringement declarations and groundless threats.
The Hyderabad suit failed to meet Section 105’s prerequisites, such as written application to the patentee for acknowledgment of non-infringement, and lacked allegations of threats by circulars or communications required under Section 106. The plaintiffs emphasized that the senior patent’s Markush claim covered trillions of compounds without specifically disclosing Apixaban, and a skilled person could not envisage Apixaban from its disclosure, distinguishing it from the junior patent’s specific claims. They argued that the Hyderabad suit’s reliefs indirectly challenged the junior patent’s validity, a matter beyond the City Civil Court’s jurisdiction under Section 104’s proviso, which mandates High Court adjudication for revocation counterclaims.
The plaintiffs asserted that the parties and reliefs differed between the suits, and the Hyderabad suit was a strategic ploy to forestall legitimate infringement action, warranting dismissal of Natco’s Section 10 application.
Natco argued that the Hyderabad suit, filed earlier, triggered Section 10 of the CPC, as its issues were substantially similar to those in the Delhi suit, particularly the scope of the senior patent’s disclosure of Apixaban. They contended that Apixaban was disclosed but not claimed in the senior patent, placing it in the public domain upon its expiry, and that Bristol-Myers Squibb’s Form-27 filings and IPAB statements admitted this coverage, undermining the junior patent’s validity. Natco framed the Hyderabad suit under Section 34 of the Specific Relief Act, not Sections 105 or 106, arguing that Section 105’s non-obstante clause did not bar general declaratory reliefs. They cited UK patent law, where non-infringement declarations could be sought under common law, suggesting Indian courts retained similar powers under Section 34.
Natco asserted that the Hyderabad court had concurrent jurisdiction under Section 20 of the CPC, and a finding in Hyderabad that Apixaban was public domain would negate the Delhi suit’s infringement claim. They highlighted the absence of a proviso in Section 106, unlike the Trade Marks and Copyright Acts, arguing that a groundless threat suit could not be automatically terminated by an infringement action, supporting the stay of the Delhi suit.
Detailed Discussion on Judgments Cited by Parties
The court’s analysis was informed by a rich tapestry of precedents, each providing context to the issues of Section 10’s applicability, the Patents Act’s exclusivity, and jurisdictional competence. The key judgments, their complete citations, and their relevance are as follows:
Chitivalasa Jute Mills vs. Jaypee Rewa Cement, (2004) 3 SCC 85: The Supreme Court held that Section 10 applies when two suits involve the same matter in issue, ordering consolidation of a buyer’s suit in Rewa with a seller’s prior suit in Visakhapatnam. Natco cited this to argue that the Hyderabad suit’s priority warranted staying the Delhi suit, but the court distinguished it, noting the Hyderabad court’s lack of jurisdiction to grant the Delhi suit’s reliefs.
Pukhraj D. Jain vs. G. Gopalakrishna, (2004) 7 SCC 251: The Supreme Court clarified that Section 10 is a procedural rule, not conferring substantive rights, and courts may prioritize expeditious disposal. The court relied on this to reject Natco’s application, emphasizing that staying the Delhi suit would not serve justice given the Hyderabad suit’s jurisdictional flaws.
Telecommunications Consultants India Ltd. vs. TCIL Bellsouth Ltd., 2006 SCC OnLine Del 1035: The Delhi High Court held that judicial comity under Section 10 yields to the principle that a court must grant complete relief. The court applied this to find the Hyderabad court incompetent to adjudicate the Delhi suit’s infringement claims, prioritizing the High Court’s jurisdiction.
Cadbury UK Limited vs. Lotte India Corporation Ltd., 2019 SCC OnLine Del 9810: Justice Endlaw held that Section 10 cannot be applied pedantically if it causes injustice, particularly when a prior suit is an abuse of process. The court used this to deem the Hyderabad suit a preemptive tactic, justifying dismissal of Natco’s application.
Prabir Ram Borooah vs. Albert David Ltd., AIR 1957 Gau 120: The Gauhati High Court ruled that Section 10 does not apply to suits filed to abuse the judicial process. The court invoked this to find the Hyderabad suit strategically filed to forestall the Delhi suit, negating Section 10’s applicability.
Time Warner Entertainment Company LP vs. RPG Netcom Globe, (2007) 140 DLT 758; Entertainment Network (India) Ltd. vs. Super Cassette Industries Ltd., (2008) 13 SCC 30; Krishika Lulla vs. Shyam Vithalrao Devkatta, (2016) 2 SCC 521; Navigators Logistics Ltd. vs. Kashif Qureshi, (2018) 254 DLT 307; Satish Kumar vs. Khushboo Singh, MANU/DE/3411/2019: These cases established that copyright is a statutory right without common law basis. The court extended this principle to patents, holding that the Patents Act is the sole repository of patent rights, precluding reliefs under the Specific Relief Act.
Crocs Inc. USA vs. Aqualite India Ltd., 2019 SCC OnLine Del 7409; Micolube India Ltd. vs. Saurabh Industries, (2013) 199 DLT 740 (FB): These cases applied the statutory exclusivity principle to designs, which the court analogized to patents, reinforcing that patent reliefs must align with the Patents Act.
Gujarat State Co-operative Land Development Bank Ltd. vs. P.R. Mankad, (1979) 3 SCC 123; Belsund Sugar Co. Ltd. vs. State of Bihar, (1999) 9 SCC 620; P.S. Sathappan vs. Andhra Bank Ltd., (2004) 11 SCC 672: These cases established that special statutes prevail over general ones (generalia specialibus non derogant). The court applied this to hold that the Patents Act overrides the Specific Relief Act for patent-related reliefs.
Travellers Exchange Corporation Limited vs. Celebrities Management Private Limited, 2019 SCC OnLine Del 6943: Justice Endlaw clarified that a non-obstante clause gives overriding effect to a new enactment over inconsistent existing laws. The court used this to interpret Section 105’s non-obstante clause as excluding Section 34’s applicability for non-infringement declarations.
Manohar Lal Chatrath vs. Municipal Corporation of Delhi, (1999) 77 DLT 5; Spentex Industries Ltd. vs. Dunavant SA, 2009 SCC OnLine Del 1666 (affirmed in 2009 SCC OnLine Del 3447 (DB)); Roshan Lal Gupta vs. Parasram Holdings Pvt. Ltd., (2009) 157 DLT 712; P.K. Gupta vs. Ansal Properties & Industries, 2010 SCC OnLine Del 3538; Handicrafts & Handlooms Exports Corporation of India, 2010 SCC OnLine Del 2099; Devinder Kumar Gupta vs. Realogy Corporation, 2011 SCC OnLine Del 3050 (DB): These cases held that declaratory relief under Section 34 is discretionary and unavailable when efficacious statutory remedies exist. The court applied this to find the Hyderabad suit’s reliefs barred by Sections 105 and 106.
Ram Singh vs. Gram Panchayat Mehal Kalan, (1986) 4 SCC 364; Splendor Landbase Limited vs. Mirage Infra Limited, (2010) 169 DLT 126 (DB); Axis Bank Limited vs. Madhav Prasad Aggarwal, 2018 SCC OnLine Bom 3891 (DB): These cases emphasized that courts must look beyond clever drafting to the substance of claims. The court used this to characterize the Hyderabad suit’s reliefs as an invalidity challenge, outside the City Civil Court’s jurisdiction.
These precedents provided a robust framework for assessing the Hyderabad suit’s legitimacy and Section 10’s applicability, anchoring the court’s decision in established legal principles.
Detailed Reasoning and Analysis of Judge
The court delivered a comprehensive judgment, meticulously analyzing Natco’s Section 10 application against the backdrop of patent law’s statutory framework and procedural fairness. The court’s reasoning centered on three pillars: the Hyderabad court’s jurisdictional incompetence, the Patents Act’s exclusivity, and the Hyderabad suit’s abusive nature.
First, the court held that Section 10 requires the prior suit’s court to be competent to grant both the reliefs sought therein and those in the subsequent suit. Citing Sagar Shamsher Jang Bahadur Rana vs. Union of India (1978 SCC OnLine Del 222) and other precedents, the court found the Hyderabad City Civil Court lacked jurisdiction to adjudicate the Delhi suit’s infringement claims. The Hyderabad suit’s reliefs—declaring Apixaban’s public domain status and enjoining Bristol-Myers Squibb—effectively challenged the junior patent’s validity, a matter reserved for the High Court under Section 104’s proviso when revocation counterclaims are raised. Section 105(3) further barred validity challenges in non-infringement suits, and the City Civil Court could not issue a certificate of validity under Section 113, rendering it incompetent to grant the Hyderabad suit’s reliefs substantively.
Second, the court emphasized the Patents Act’s status as a special statute, precluding reliefs under the general provisions of the Specific Relief Act. Drawing on Gujarat State Co-operative Land Development Bank Ltd. vs. P.R. Mankad and related cases, the court applied the maxim generalia specialibus non derogant, holding that Sections 105 and 106 provide exclusive remedies for non-infringement declarations and groundless threats. Section 105’s non-obstante clause, as interpreted in Travellers Exchange Corporation Limited, overrode Section 34, requiring compliance with specific conditions (e.g., written application to the patentee) that Natco admittedly did not meet. The court rejected Natco’s reliance on UK law, noting that India’s codified declaratory relief under Section 34 differed from UK’s common law framework, and the absence of a saving clause in Section 105 (unlike the UK Patents Act, 1977) confirmed its exclusivity. The court also found the Hyderabad suit’s injunctive relief impermissible under Section 41(a) and (b) of the Specific Relief Act, which bar injunctions against judicial proceedings, and Section 41(h), which prefers statutory remedies like Sections 105 and 106.
Third, the court deemed the Hyderabad suit an abuse of process, filed to preempt the Delhi suit and delay enforcement of the junior patent. Citing Prabir Ram Borooah and Cadbury UK Limited, the court held that Section 10, as a procedural rule per Pukhraj D. Jain, could be disregarded when its application would perpetuate injustice. The court scrutinized the Hyderabad suit’s substance, per Ram Singh, finding its declaratory relief a disguised invalidity challenge, cleverly drafted to circumvent jurisdictional limits. The court noted Natco’s failure to invoke Sections 105 or 106, likely to avoid disclosing manufacturing details, further evidencing strategic intent. The Delhi suit, encompassing Natco’s invalidity defense and counterclaim, was a comprehensive adjudication, unlike the Hyderabad suit, which risked multiplicity of proceedings, contrary to Section 10’s objective.
The court also addressed Section 106’s legislative anomaly, noting its lack of a proviso (unlike the Trade Marks and Copyright Acts) that terminates groundless threat suits upon infringement actions. While tracing this to the UK Patents Act, 1932, and the Ayyangar Committee’s influence, the court deemed it unnecessary to resolve, as Natco explicitly disclaimed reliance on Sections 105 and 106. Ultimately, the court prioritized justice and judicial efficiency, refusing to stay a suit before a competent court for one in an incompetent forum.
Final Decision
On January 23, 2020, the Delhi High Court dismissed Natco’s application (IA No.9768/2019) under Section 10 of the CPC and decided the preliminary issue in favor of the plaintiffs, holding that the Delhi suit was not liable to be stayed. The court permitted the infringement proceedings to continue, finding the Hyderabad suit jurisdictionally flawed and abusive.
Law Settled in this Case
The judgment clarified several principles governing patent litigation and procedural stays in India:
The Patents Act, 1970, is the sole repository of patent-related rights and remedies, precluding reliefs under general statutes like the Specific Relief Act, 1963, per the maxim generalia specialibus non derogant.
Section 105’s non-obstante clause overrides Section 34 of the Specific Relief Act, requiring non-infringement declarations to comply with its specific conditions, excluding general declaratory reliefs for patent disputes.
Section 10 of the CPC applies only when the prior suit’s court is competent to grant both its own reliefs and those of the subsequent suit, with competence assessed substantively, including the ability to address validity challenges (Sections 104, 113).
Suits seeking to indirectly challenge patent validity, disguised as declaratory reliefs, are beyond the jurisdiction of courts inferior to the High Court when revocation is at issue, per Section 104’s proviso.
Section 10, as a procedural rule, can be disregarded when the prior suit is an abuse of process, filed to preempt legitimate actions, ensuring courts prioritize justice over technicalities.
The absence of a proviso in Section 106, unlike other IP statutes, does not automatically bar groundless threat suits but is irrelevant when such suits fail to meet statutory prerequisites.
Case Title: Bristol-Myers Squibb Holdings Ireland Unlimited Company Vs. Natco Pharma
Date of Order: January 23, 2020
Case No.: CS(COMM) 342/2019
Name of Court: High Court of Delhi, New Delhi
Name of Hon'ble Judge: Justice Rajiv Sahai Endlaw
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
