Maintainability of Patent Infringement Suit during pendency of Post Grant Opposition
Introduction: The case of Astrazeneca AB & Anr. v. Westcoast Pharmaceutical Works Limited [2023:DHC:3337] is a pivotal decision by the Delhi High Court addressing the maintainability of a patent infringement suit under the Patents Act, 1970, when post-grant opposition proceedings are pending. The defendant sought rejection of the plaintiff’s suit under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), arguing, inter alia, that the Supreme Court’s observations in Aloys Wobben v. Yogesh Mehra [(2014) 15 SCC 360] preclude such suits until the patentee’s rights are crystallized post-opposition. The High Court’s ruling clarifies the scope of Order VII Rule 11, the jurisdictional requirements for patent suits, and the statutory rights of a patentee under Section 48 of the Patents Act, emphasizing that no provision prohibits infringement actions during pending oppositions. This case study provides a comprehensive analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering critical insights into patent enforcement in India.
Detailed Factual Background: The plaintiffs, Astrazeneca AB (a Swedish company) and its Indian subsidiary, initiated CS(COMM) 101/2022 against the defendant, Westcoast Pharmaceutical Works Limited, alleging infringement of Indian Patent No. 297581 (IN’581), granted on June 11, 2018, for the compound Osimertinib, used in cancer treatment. The plaintiffs claimed that the defendant had begun manufacturing and was either selling or preparing to sell products infringing IN’581 in India. The suit sought an injunction, damages of Rs. 2,00,01,000, and other reliefs, asserting that the defendant’s actions violated their exclusive rights under Section 48 of the Patents Act.
The defendant contested the suit’s maintainability, filing an application (I.A. 21995/2022) under Order VII Rule 11 CPC for its rejection. The application was based on three grounds: lack of pecuniary jurisdiction, lack of territorial jurisdiction, and the pendency of post-grant oppositions under Section 25(2) of the Patents Act. Specifically, post-grant oppositions were filed by Sunshine Organics Pvt. Ltd. on May 14, 2019, and Natco Pharma Ltd. on June 10, 2019, challenging IN’581, and were pending before the Controller General of Patents when the suit was filed on February 8, 2022. The defendant relied on paragraph 19 of Aloys Wobben, arguing that the plaintiffs’ right to sue for infringement had not crystallized due to these pending oppositions.
Detailed Procedural Background: The suit was instituted on February 8, 2022, before the Delhi High Court, invoking its original jurisdiction based on the damages claimed (Rs. 2,00,01,000), which exceeded the pecuniary threshold for district courts. The defendant responded by filing I.A. 21995/2022 under Order VII Rule 11 CPC, seeking rejection of the plaint. The application was argued before Justice C. Hari Shankar, with Mr. Vikas Khera representing the defendant and Mr. Pravin Anand representing the plaintiffs. The court heard extensive submissions on May 12, 2023, reserved its judgment, and pronounced it on May 15, 2023, dismissing the defendant’s application. A related application (I.A. 1079/2023) under Order XIIIA Rule 3 CPC was re-notified for August 1, 2023, indicating ongoing proceedings.
Issues Involved in the Case:The case raised the following issues for determination:Whether the suit was liable to be rejected under Order VII Rule 11 CPC for lack of pecuniary jurisdiction, given the plaintiffs’ claim for damages in a purported quia timet action?Whether the suit could be rejected under Order VII Rule 11 CPC for lack of territorial jurisdiction, considering the defendant’s location outside Delhi and the plaintiffs’ operational presence.?Whether the pendency of post-grant oppositions under Section 25(2) of the Patents Act barred the plaintiffs from filing an infringement suit, as per the Supreme Court’s observations in Aloys Wobben?Whether paragraph 19 of Aloys Wobben constituted binding precedent or obiter dicta, and its impact on the plaintiffs’ statutory rights under Section 48 of the Patents Act?
Defendant's submission: The defendant argued for rejection of the plaint on three grounds. First, they contended that the suit lacked pecuniary jurisdiction, as it was a quia timet action based on mere apprehension of infringement, not actual infringement. Citing Toni & Guy Products Ltd. v. Shyam Sunder Nagpal [2007 (34) DLT 309], they argued that damages are not claimable in such suits, reducing the suit’s valuation to Rs. 1,000, below the High Court’s pecuniary threshold. Second, they challenged territorial jurisdiction under Section 20 CPC, noting that the defendant was based outside Delhi and Plaintiff 1 was in Sweden, despite Plaintiff 2’s Delhi office. However, this ground was not pressed during arguments. Third, relying on paragraph 19 of Aloys Wobben [(2014) 15 SCC 360], they argued that the plaintiffs’ right to sue had not crystallized due to pending post-grant oppositions by Sunshine and Natco. They emphasized the Supreme Court’s observation that it was “unlikely and quite impossible” for an infringement suit to be filed during such proceedings. The defendant also cited Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd. [2019 (78) PTC 329] and Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd. [2015 SCC OnLine Bom 6984], along with a related Supreme Court order, to support their interpretation of Aloys Wobben.
Plaintiff's submission: The plaintiff opposed the application, arguing that the plaint disclosed a valid cause of action and met jurisdictional requirements. On pecuniary jurisdiction, they distinguished Toni & Guy, asserting that the plaint alleged actual manufacture and sale (or imminent sale) by the defendant, not mere apprehension, justifying the damages claim and High Court jurisdiction. On territorial jurisdiction, they noted the issue was not argued and was irrelevant under Order VII Rule 11, as Order VII Rule 10 governs such challenges. On the Aloys Wobben issue, they relied on the proviso to Section 11A(3) of the Patents Act, which permits infringement suits post-grant without further restrictions. They argued that Aloys Wobben addressed a different issue—simultaneous revocation petitions and counterclaims—not the maintainability of infringement suits during post-grant oppositions. They contended that paragraph 19 was obiter dicta, not binding, as per Career Institute Educational Society v. Om Shree Thakur Educational Society [2023 SCC OnLine SC 586], and cited Novartis AG v. Natco Ltd. [CS(Comm) 299/2019, dated May 2, 2019] and CDE Asia Ltd. v. Terex India Pvt. Ltd. [MANU/DE/0584/2020] to show that infringement suits are maintainable post-grant. They warned that barring such suits would undermine patentees’ rights and encourage infringement during opposition proceedings.
Detailed Discussion on Judgments and Citations: The court extensively analyzed the cited judgments to resolve the issues, particularly the interpretation of Aloys Wobben and the scope of Order VII Rule 11 CPC. Below is a detailed discussion of each judgment, its citation, and its context in the case:
Toni & Guy Products Ltd. v. Shyam Sunder Nagpal, 2007 (34) DLT 309: Cited by the defendant to argue lack of pecuniary jurisdiction, this Delhi High Court decision held that damages are not claimable in a quia timet suit based on mere apprehension of trademark infringement, as no proprietary rights were invaded. The court distinguished this case, noting that the plaintiffs alleged actual manufacture and sale by the defendant, not mere apprehension, making the damages claim valid and conferring pecuniary jurisdiction on the High Court.
Aloys Wobben v. Yogesh Mehra, (2014) 15 SCC 360: Central to the defendant’s case, this Supreme Court decision was cited for paragraph 19, which suggests that a patentee’s right to hold a patent crystallizes only after favorable disposal of post-grant oppositions or expiry of the one-year opposition period, and that infringement suits are “unlikely and quite impossible” during such proceedings. The plaintiffs argued that this paragraph was obiter, as the case addressed whether a defendant could simultaneously pursue revocation petitions and counterclaims, not the maintainability of infringement suits. The court agreed, applying the inversion test from Career Institute to find paragraph 19 unnecessary to the decision, thus obiter. It further noted that Aloys Wobben distinguished between patent grant and crystallization, with Section 48 rights arising upon grant, not crystallization.
Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd., 2019 (78) PTC 329: Cited by the defendant, this interlocutory Delhi High Court order expressed tentative concern that Aloys Wobben’s paragraph 19 might bar infringement suits during post-grant oppositions, but noted the absence of statutory provisions supporting such a bar and the potential hardship to patentees. The court dismissed its precedential value, describing paragraph 19 as an inconclusive reflection (using “perhaps”) and highlighting the judge’s discomfort with barring suits, especially given the 20-year patent term.
Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd., 2015 SCC OnLine Bom 6984: Cited by the defendant, this Bombay High Court Division Bench order admitted an appeal and stayed an injunction, partly due to a pending post-grant opposition, citing Aloys Wobben. However, the Supreme Court’s order in SLP(C) 34749-34751/2015 (December 16, 2015) set aside the stay, restoring the injunction despite the opposition, indicating that Aloys Wobben did not bar such suits. The court relied on this to reject the defendant’s interpretation, noting the Supreme Court’s disapproval of prioritizing oppositions over merits.
Career Institute Educational Society v. Om Shree Thakur Educational Society, 2023 SCC OnLine SC 586: Cited by the plaintiffs to argue that Aloys Wobben’s paragraph 19 was obiter, this Supreme Court decision clarified the distinction between ratio decidendi and obiter dicta, introducing the inversion test: if removing a passage does not alter the case’s conclusion, it is obiter. The court applied this test, finding that removing paragraph 19 from Aloys Wobben would not change its outcome, confirming its obiter status. The decision also emphasized that only the ratio binds lower courts under Article 141.
Novartis AG v. Natco Ltd., CS(Comm) 299/2019, dated May 2, 2019: Cited by the plaintiffs, this interlocutory Delhi High Court order held that Aloys Wobben does not bar infringement suits during post-grant oppositions, as the patentee’s rights under Section 48 arise upon grant. The court noted this supported the plaintiffs’ position but did not rely heavily on it due to its interlocutory nature.
CDE Asia Ltd. v. Terex India Pvt. Ltd., MANU/DE/0584/2020: Cited by the plaintiffs, this Delhi High Court order similarly held that Aloys Wobben does not preclude infringement suits post-grant, emphasizing Section 48 rights. The court acknowledged this but gave it limited weight as an interlocutory view.
Director of Settlements v. M.R. Apparao, (2002) 4 SCC 638: Cited by the court, this Supreme Court decision elucidated the binding nature of Supreme Court judgments under Article 141, stating that only the ratio decidendi binds, while obiter dicta, though not binding, carry considerable weight. The court used this to balance respect for Aloys Wobben’s observations with their non-binding status.
Arun Kumar Aggarwal v. State of Madhya Pradesh, (2014) 13 SCC 707: Cited by the court, this Supreme Court decision discussed obiter dicta, defining them as observations unnecessary to the decision, lacking binding force but persuasive value. The court referenced this to reinforce that Aloys Wobben’s paragraph 19 was non-binding.
MCD v. Gurnam Kaur, (1989) 1 SCC 101: Cited by the court, this Supreme Court decision held that casual expressions by judges are not authoritative. The court used this to argue that Aloys Wobben’s observation about the improbability of infringement suits was not a binding legal pronouncement.
Karnataka SRTC v. Mahadeva Shetty, (2003) 7 SCC 197:Cited by the court, this Supreme Court decision reiterated that passing remarks lack authoritative weight, supporting the court’s view that Aloys Wobben’s paragraph 19 was not binding.
State of Haryana v. Ranbir, (2006) 5 SCC 167:Cited by the court, this Supreme Court decision clarified that obiter dicta are unnecessary to the decision and non-authoritative, reinforcing the court’s classification of Aloys Wobben’s paragraph 19.
Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555:Cited by the court, this Supreme Court decision held that only the ratio decidendi is binding, not general observations, supporting the court’s finding that Aloys Wobben’s paragraph 19 was obiter.
Skill Lotto Solutions (P) Ltd. v. Union of India, (2021) 15 SCC 667:Cited by the court, this Supreme Court decision distinguished obiter from ratio, emphasizing that observations integral to the decision are binding. The court used this to contrast Aloys Wobben’s incidental remarks with its core holding.
U.O.I. v. Chhajju Ram, (2003) 5 SCC 568:Cited by the court, this Supreme Court decision held that a precedent is authority only for what it decides, not logical extensions, supporting the court’s refusal to extend Aloys Wobben’s observation into a prohibition on infringement suits.Detailed Reasoning and Analysis of Judge: Justice C. Hari Shankar’s reasoning meticulously addressed each ground for rejection under Order VII Rule 11 CPC, focusing heavily on the Aloys Wobben controversy and the statutory framework of the Patents Act.
The analysis can be summarized as follows:
Pecuniary Jurisdiction: The court rejected the defendant’s claim that the suit was a quia timet action lacking a basis for damages. Unlike Toni & Guy, where no trademark use was alleged, the plaintiffs’ plaint asserted actual manufacture and sale, taken as true under Order VII Rule 11. The damages claim of Rs. 2,00,01,000 justified High Court jurisdiction, as it exceeded the district court threshold.
Territorial Jurisdiction: The court noted that territorial jurisdiction challenges fall under Order VII Rule 10 CPC (return of plaint), not Order VII Rule 11 (rejection). Since the defendant did not argue this ground, the court reserved the issue for a potential future application, returning no finding.
Aloys Wobben and Post-Grant Oppositions: The court’s core analysis centered on whether Aloys Wobben’s paragraph 19 barred the suit due to pending oppositions. The court agreed with the plaintiffs that the Patents Act imposes no restriction on infringement suits post-grant, as per the proviso to Section 11A(3). Section 48 confers exclusive rights upon grant, without conditions related to oppositions or a one-year waiting period. The court found that requiring patentees to wait would undermine these rights, allowing unchecked infringement and reducing the patent’s 20-year term, as noted in Pharmacosmos Holding.
Interpretation of Aloys Wobben: The court conducted a detailed analysis of Aloys Wobben, concluding that paragraph 19 was obiter. The case addressed whether a defendant could pursue simultaneous revocation petitions and counterclaims, not the patentee’s right to sue during oppositions. No post-grant oppositions were involved in Aloys Wobben, and the issue of suit maintainability was neither argued nor decided. Applying the inversion test from Career Institute, the court found that removing paragraph 19 would not alter Aloys Wobben’s outcome, confirming its obiter status. The court also noted that Aloys Wobben distinguished between patent grant (conferring Section 48 rights) and crystallization (post-opposition finality), supporting the plaintiffs’ right to sue upon grant.
Precedential Value of Obiter: Citing Director of Settlements and Arun Kumar Aggarwal, the court acknowledged that Supreme Court obiter carries weight but is not binding under Article 141. Paragraph 19’s observation that infringement suits are “unlikely and quite impossible” during oppositions was not a legal prohibition but a possibility, not warranting a bar on suits. The court emphasized that judicial precedents are authority only for what they decide, per U.O.I. v. Chhajju Ram.Supporting Precedents: The court found support in the Supreme Court’s order in Sergi, where an injunction was upheld despite a pending opposition, indicating no bar under Aloys Wobben. The interlocutory orders in Novartis and CDE Asia were noted but not heavily relied upon due to their prima facie nature. Pharmacosmos Holding was dismissed as lacking precedential value, given its tentative and interlocutory nature.
Policy Considerations: The court highlighted the absurdity of barring infringement suits during oppositions, as it would incentivize frivolous oppositions to delay enforcement and erode the patent’s term. Such an interpretation would contravene the Patents Act’s ethos of protecting patentees’ rights.
Final Decision: The Delhi High Court dismissed the defendant’s application (I.A. 21995/2022) under Order VII Rule 11 CPC, holding that no grounds for rejecting the plaint existed. The court found the suit maintainable, with valid pecuniary jurisdiction based on the damages claim, and reserved the territorial jurisdiction issue for a potential Order VII Rule 10 application. The pendency of post-grant oppositions did not bar the infringement suit, as Aloys Wobben’s paragraph 19 was obiter and the Patents Act imposed no such restriction. The related application (I.A. 1079/2023) was re-notified for August 1, 2023.
Law Settled in the Case: The case clarified several principles under the Patents Act and CPC:
Maintainability of Infringement Suits: A patentee can institute an infringement suit upon grant of a patent under Section 48, without waiting for the expiry of the one-year post-grant opposition period or resolution of pending oppositions under Section 25(2).
Scope of Order VII Rule 11 CPC: Rejection of a plaint for lack of pecuniary jurisdiction requires demonstrating that the plaint’s averments, taken as true, do not meet the court’s threshold. Territorial jurisdiction challenges fall under Order VII Rule 10, not Order VII Rule 11.
Interpretation of Aloys Wobben: Paragraph 19 of Aloys Wobben is obiter dicta, not binding, as it addresses a different issue and does not prohibit infringement suits during post-grant oppositions.
Statutory Rights Under Patents Act: Section 48 confers immediate rights to prevent infringement upon patent grant, per the proviso to Section 11A(3), without conditions related to oppositions.
Obiter Dicta’s Precedential Value: Supreme Court obiter, while persuasive, is not binding under Article 141, as clarified by the inversion test and principles in Career Institute and Director of Settlements.
Case Title: Astrazeneca AB & Anr. Vs. Westcoast Pharmaceutical Works Limited:Date of Order: May 15, 2023:Case No.: CS(COMM) 101/2022:Citation: 2023:DHC:3337:Name of Court: High Court of Delhi:Name of Hon'ble Judge: C. Hari Shankar, J.
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
