Novartis AG & Another Vs. Natco Pharma Limited-Mini Pushkarna H.J.

Additional Written Statement under Order VIII Rule 9 CPC

Introduction:This case concerns a suit filed by Novartis AG and its affiliate seeking a permanent injunction to restrain Natco Pharma Limited from infringing its Indian Patent No. 276026 (hereafter "IN'026"), along with reliefs for rendition of accounts, damages, and delivery of infringing goods. A key development was the Defendant’s request to file an additional written statement, which was contested by the Plaintiffs.

Patent Ownership and Dispute Initiation:Novartis owns Indian Patent IN'026, granted in September 2016, covering specific pharmaceutical innovations.The Plaintiffs claimed Natco infringed their patent by manufacturing and marketing products using their patented invention.

Interim Injunction:The Court granted an interim injunction in favor of the Plaintiffs on January 9, 2023, barring Natco from further infringement.Natco's attempts to vacate this injunction were dismissed on April 9, 2024.

Divisional Application:Novartis had filed a Divisional Application, IN 5338/DELNP/2014 ("IN'5338"), linked to the same innovation but chose not to pursue it, leading to its rejection in December 2022.Natco argued that the rejection of the Divisional Application was a significant development and sought to include it in the proceedings through an additional written statement.

Brief Facts of the Case:Natco sought leave under Order VIII Rule 9 of the Code of Civil Procedure (CPC) to file an additional written statement.Natco argued the Plaintiffs had suppressed material facts related to the Divisional Application and its rejection.Novartis opposed the application, asserting the rejection of the Divisional Application was immaterial to the suit, as it was unrelated to the validity of IN'026.

Issues Involved:Materiality of the Divisional Application: Whether the facts surrounding the Divisional Application (its rejection and related prior art) were relevant to the present dispute.Application of Order VIII Rule 9 CPC: Whether the Defendant should be permitted to file an additional written statement given the procedural constraints of the Commercial Courts Act, 2015.Impact on Interim Injunction: Whether allowing the additional written statement would affect prior decisions on the interim injunction.

Submissions of the Parties: Natco (Defendant):The Divisional Application's rejection revealed prior art that undermines the Plaintiffs' claims.The Plaintiffs failed to disclose the rejection, violating their duty under Order XI Rule 1(12) CPC, which mandates continuous disclosure of material facts.Filing an additional written statement was necessary to ensure the dispute's full adjudication.

Novartis (Plaintiffs): The rejection of the Divisional Application was procedural, not on merits, and hence irrelevant.Prior decisions on the interim injunction already considered the cited prior art, and the Defendant's claims amounted to issue estoppel.Allowing the additional written statement would delay proceedings and prejudice the Plaintiffs.

Reasoning and Analysis by the Court:

Materiality of Divisional Application:The Court noted that while the Divisional Application was not pursued by the Plaintiffs, its rejection could be considered a subsequent development relevant to the case.However, the rejection was procedural, not on the merits of the patent claims, as confirmed by prior judgments.

Procedural Framework under Order VIII Rule 9 CPC:The Court emphasized its discretionary power to allow additional pleadings under Order VIII Rule 9 CPC, provided they were necessary for justice.It clarified that the statutory limit for filing a written statement under Order VIII Rule 1 (120 days under the Commercial Courts Act, 2015) did not apply to subsequent pleadings.

Impact on Interim Injunction:The Court rejected Natco's argument that the Divisional Application's rejection warranted revisiting the interim injunction.It highlighted that prior judgments (January 9, 2023, and April 9, 2024) had comprehensively addressed the validity of IN'026 and the relevance of cited prior art.

Duty of Continuous Disclosure: The Court agreed with Natco that both parties had a duty to disclose material facts until the suit's resolution.It concluded that the rejection of the Divisional Application, though not critical, was a fact that could be brought on record without prejudice to the Plaintiffs.

Decision:  Grant of Leave to File Additional Written Statement: The Court allowed Natco to file an additional written statement to incorporate facts related to the Divisional Application.It directed Natco to restrict its additional pleadings to matters already raised in its prior application for vacation of the interim injunction (I.A. 4636/2023).Natco was given 30 days to file the additional written statement.

Conclusion: This case underscores the balance courts must strike between procedural efficiency and ensuring complete adjudication. The judgment highlights:The discretionary scope of Order VIII Rule 9 CPC in permitting subsequent pleadings.The importance of continuous disclosure in commercial litigation.The distinction between procedural and substantive grounds in determining the relevance of additional evidence.

Case Title: Novartis AG & Another Vs. Natco Pharma Limited

Date of Order: January 8, 2025

Case Number: CS(COMM) 229/2019 

Neutral Citation: 2025:DHC:51

Court: High Court of Delhi, New Delhi

Judge: Hon'ble Ms. Justice Mini Pushkarna

Advocate Ajay Amitabh Suman
IP Adjutor
[Patent and Trademark Attorney]
High Court of Delhi
Email: ajayamitabhsuman@gmail.com
Phone: 9990389539

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.

Anubhav Jain Vs Satish Kumar Jain: C Hari Shankar, H.J.

Harmonizing Sections 124 and 57 of the Trademarks Act 1999

Introduction:

The interplay between Sections 124 and 57 of the Trademarks Act 1999 has long been a subject of legal debate in India. Specifically, the question arises as to whether Section 124, which mandates obtaining leave from the court before challenging the validity of a registered trademark, operates to bar the initiation of rectification petitions under Section 57 independently. This article analyzes a recent judgment by the Hon'ble High Court of Delhi, which provides crucial insights into the compatibility of these provisions.

Section 124 of Trademarks Act 1999:

Section 124 of the Trademarks Act 1999 prescribes the requirement for obtaining leave from the court when challenging the validity of a registered trademark in a suit. It serves as a protective mechanism for registered trademark holders and prevents frivolous challenges to the validity of their marks.

Section 57 of Trademarks Act 1999:

On the other hand, Section 57 of the same Act allows for the initiation of rectification proceedings for the cancellation of a registered trademark independently of any pending suit. This provision empowers interested parties to seek rectification of the register based on various grounds, including the invalidity of the trademark.

The Case at Hand:

In a recent case before the Hon'ble High Court of Delhi, the petitioner, Mr. Anubhav Jain, filed a cancellation petition under Section 57 and Section 125 of the Trademarks Act 1999, seeking the cancellation of Certificate No. 2772286 dated 18th June 2021. Notably, Mr. Jain did not seek leave under Section 124 before initiating the rectification proceedings.

The Respondent's Contention:

The respondent, in response to rectification petition, raised a preliminary objection based on Section 124 of the Trademarks Act. Citing the Supreme Court's judgment in Patel Field Marshal Agencies v. P.M. Diesels Ltd (2018) 2 SCC 112, the respondent contended that once a suit for infringement is filed by the plaintiff against the defendant, and the defendant raises the plea of invalidity of the plaintiff's mark as a ground of defense, the defendant forfeits the right to independently invoke Section 57 to seek rectification and cancellation of the plaintiff's mark.

The Court's Interpretation:

The Hon'ble High Court of Delhi, in its judgment, rejected the respondent's interpretation of the law. The court made several noteworthy observations to clarify the relationship between Sections 124 and 57 of the Trademarks Act 1999.

Firstly, the court emphasized that the decision in Patel Field Marshal Agencies did not conclusively establish that the right to seek cancellation of a mark under Section 57 and the right to seek rectification under Clause (ii) of the second part of Section 124 are mutually destructive to each other.

The court held that the right to seek cancellation and rectification, as conferred by Section 57 and Clause (ii) of the second part of Section 124, respectively, are independent rights. Therefore, an interested party retains the right to invoke either or both of these provisions, even in the absence of leave obtained under Section 124.

The Concluding Note:

The judgment of the Hon'ble High Court of Delhi provides a significant clarification on the relationship between Sections 124 and 57 of the Trademarks Act 1999. It highlights that these provisions operate independently, allowing interested parties to initiate rectification proceedings under Section 57 without being barred by the absence of leave obtained under Section 124.

Case Law Discussed:

Date of Judgement:09/01/2023

Case No. Co Comm IPD TM 55 of 2021

Neutral Citation No: 2023:DHC:7089-DB

Name of Hon'ble Court: Delhi High Court

Name of Hon'ble Judge:C Hari Shankar

Case Title:Anubhav Jain Vs Satish Kumar Jain

Disclaimer:

Information and discussion contained herein is being shared in the public Interest. The same should not be treated as substitute for expert advice as it is subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Advocate Ajay Amitabh Suman,

IP Adjutor: Patent and Trademark Attorney

Email: ajayamitabhsuman@gmail.com,

Mob No: 9990389539

KRBL LTD. VS SHRI LAL MAHAL-PRATIBHA M.SINGH,H.J.

$~31

*                    IN THE HIGH COURT OF DELHI AT NEW DELHI

+		CS (COMM) 929/2016
KRBL LTD				..... Plaintiff
		Through:	Mr. Ajay Amitabh Suman, Mr. Vinay
			Kumar Shukla, and Mr. V. K. Sinha,
			Advocates.	(M:9654130460	&
			9990389539)
		versus
LAL MAHAL LTD AND ANR.				.... Defendants
		Through:	Mr.   Mohan	Vidhani,   Mr.	Rahul
			Vidhani and Mr. Summit Aggarwal,
			Advocates.	(M:9811545888	&
			9811041240)
CORAM:
JUSTICE PRATHIBA M. SINGH
		O R D E R
%	07.09.2018
Learned counsel for the Defendants submits that due to mistake of the
counsel,  they  did  not	appear  before  the  Local			Commissioner  on	three

occasions. This fact is disputed by the learned counsel for Plaintiff.  Learned

counsel for the Defendants also submits that the Defendants have since sold

the brand ‘CHURCH GATE’ to a third party, namely M/s. Vigyat Trade Pvt.

Ltd. in Andhra Pradesh.  Issue notice to M/s. Vigyat Trade Pvt. Ltd., Door

No.-70-17-30/2, R. R. Nagar, Near R.T.O. Office, Kakinada, East Godavari,

Andhra Pradesh-533003, for the next date of hearing.

The assignment deed between the Defendants and M/s Vigyat Trade

Pvt Ltd is taken on record. As per the assignment deed, the Defendants have

received  a  sum  of  Rs.1.48  crores  for  the  sale  of  various  brands.  The

injunction application in the present case was dismissed on 23^rd February, 2015, by appointing a Local Commissioner for recordal of evidence. Thereafter of the Defendants in the present case reveals that The Defendants shall deposit a sum of Rs.30 lakhs in this Court within four weeks from today. The said amount shall be deposited in a Fixed Deposit with the Registrar General of this Court.

List on 4^th October, 2018.

PRATHIBA M. SINGH, J.

SEPTEMBER 07, 2018/dk

RAKESH KUMAR AGGARWAL VS LOCK & LOCKING DEVICES-R.S.ENDLAW, H.J.

$~76

*                    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   RFA 68/2009 & C.M. No. 30627/2018

RAKESH KUMAR AGGARWAL                                     ..... Appellant

Through :      Mr S.K.Bansal and Mr Ajay Amitabh

Suman, Advocates.

versus

LOCK & LOCKING DEVICES                                            ..... Respondent

Through :      Mr Harshvardhan Pandey, Advocate.

CORAM:

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW O R D E R

%                                         09.08.2018

1.                This order is in continuation of yesterday’s order.

2.                The counsel for the appellant/applicant has handed over in Court the affidavit, as was directed to be filed, along with documents and which are taken on record.

3.                As per the said affidavit and as per the counsel for the appellant/applicant, whatever stocks bearing the impugned mark were in possession of the appellant/applicant, at the instance of the respondent, have already been seized by the Police from the premises of the appellant/applicant.

4.                The appellant/applicant however states, that the appellant/applicant, from the month of April, 2018 till the month of July, 2018 has effected sale of the goods with the impugned mark to

RFA 68/2009                                                                                                                       page 1 of 4

his distributor and the distributor of the appellant/applicant may be in possession of such of those goods with the impugned mark which have not been sold till date. It is contended that just like the respondent has got the goods with the impugned mark seized from the premises of the appellant/applicant, the respondent may also have the goods with the impugned mark seized from the premises of the distributor of the appellant.

5.                However, copies of the invoices filed by the appellant/applicant show the delivery to the distributor of the goods with the impugned mark being by way of sale with IGST paid thereon. The appellant/applicant present in person, on enquiry, states that IGST is paid on inter-State sales. I have thus enquired from the counsel for the appellant/applicant that once the appellant has delivered the goods with the impugned mark to his distributor, by way of sale, and not as an agent and not on sale or return basis, how can the distributor of the appellant/applicant be bound by the injunction order.

6.                It has been pointed out that the subject goods, being padlocks, bearing the embossed impugned mark, would be in possession of the purchasers thereof also and the injunction cannot possibly direct the persons who have purchased the said goods, from using the same.

7.                The counsel for the appellant/applicant confirms that the transaction between the appellant and the distributor namely M/s. Vijayan Lock Industries, Navi Mumbai-400708, is of sale and the property in goods has been transferred and M/s Vijayan Lock Industries has not taken the goods on sale or return basis.

RFA 68/2009                                                                                                                       page 2 of 4

8.                The counsel for the respondent agrees that in such situation, the distributor of appellant will not be bound by the injunction; he however states that VIJAYAN was the impugned mark and M/s Vijayan Lock Industries must be an entity of the appellant only.

9.                The counsel for the appellant/applicant, on enquiry, under instructions from the appellant/applicant present in Court, states that Ankit Aggarwal son of the appellant/applicant, is the sole proprietor of Vijayan Lock Industries.

10.           The same shows the mala fides of the appellant/applicant in moving the subject application, without disclosing to the Court that the distributor is an alter ego of the appellant/applicant. In fact the counsel for the appellant/applicant ought to have informed the Court, at the outset, of this fact. The Court cannot possibly decide all the large number of matters listed before it, without trusting the counsel; if such faith is lost, in each case, the Court will have to read the file minutely, without believing single word of the counsel, making the presence of the counsel redundant.

11.           The aforesaid act of the appellant/applicant is found to be a clear attempt to overreach the Court and to interfere with and obstruct the administration of justice and the appellant/applicant is liable to be proceeded against therefor. Not only so, all the goods, as per the particulars given in the affidavit handed over today, are liable to be delivered by the appellant/applicant to the respondent and if not delivered by the appellant/applicant, are liable to be seized from the premises of M/s. Vijayan Lock Industries.

RFA 68/2009                                                                                                                       page 3 of 4

12.           The counsel for the appellant/applicant apologizes and states that the appellant/applicant will make amends and will, within one week deliver all goods on his own to the respondent.

13.           The undertaking to this effect is given by the appellant/applicant present in Court, which is accepted and the appellant/applicant has been explained the consequences of the breach of the undertaking given to this Court.

14.           The counsel for the appellant/applicant also states that the appellant/applicant is willing to pay damages in the sum of Rs.1 lakh to the respondent as penalty for the aforesaid misconduct of the appellant/applicant. An undertaking is given to pay the said amount also within one week of today and which undertaking is also accepted.

15.           The application is dismissed.

16.           If the appellant/applicant is in violation/breach of any of the undertakings aforesaid, it will be open to the respondent to take appropriate action against the appellant/applicant including for breach of undertaking given to this Court. In such eventuality, it will also be open to the respondent to take the Police to whichsoever premises of the appellant/applicant or of any of his family members, for the purposes of seizure of the goods, particulars of which are given in the affidavit.

Dasti.

RAJIV SAHAI ENDLAW, J

AUGUST 09, 2018/‘Sn’..

RFA 68/2009                                                                                                                       page 4 of 4