There is no statutory bar on instituting Patent infringement suit while post-grant opposition is pending
Introduction: Astrazeneca AB & Anr. filed a suit against Westcoast Pharmaceutical Works Ltd. alleging patent infringement. The plaintiffs contended that the defendant was manufacturing and selling a pharmaceutical product that infringed upon their patented invention. The defendant, in response, filed an application under Order VII Rule 11 of the Code of Civil Procedure (CPC), 1908, seeking the rejection of the suit based on grounds of want of pecuniary jurisdiction, want of territorial jurisdiction, and applicability of the Supreme Court's judgment in Aloys Wobben v. Yogesh Mehra.
Detailed Factual Background: The plaintiffs, Astrazeneca AB and its Indian subsidiary, claimed to hold a valid patent for the compound Osimertinib under patent number IN 297581. The patent was granted on June 11, 2018. The plaintiffs contended that the defendant was attempting to manufacture and distribute a product that infringed on their patent rights.
Post-grant oppositions were filed against the patent by Sunshine Organics Pvt. Ltd. on May 14, 2019, and by Natco Pharma Ltd. on June 10, 2019. The plaintiffs argued that despite these oppositions being pending before the Controller General of Patents, they retained the right to file an infringement suit. The defendant, in contrast, argued that the plaintiffs' rights were not crystallized until the resolution of post-grant opposition proceedings.
Detailed Procedural Background: The plaintiffs filed a commercial intellectual property rights (IPR) suit before the Delhi High Court, seeking an injunction to restrain the defendant from manufacturing or selling the allegedly infringing product. In response, the defendant filed an application under Order VII Rule 11 CPC, seeking rejection of the plaint based on:
Lack of pecuniary jurisdiction
Lack of territorial jurisdiction
Applicability of the Supreme Court's judgment in Aloys Wobben, which the defendant claimed precluded the filing of an infringement suit while post-grant opposition proceedings were pending.
Issues Involved in the Case:
Whether the suit was maintainable despite the pending post-grant opposition proceedings?
Whether the decision in Aloys Wobben precluded the plaintiffs from filing an infringement suit while the post-grant opposition was pending?
Detailed Submission of Parties Plaintiffs' Arguments:
The plaintiffs asserted that Section 11A(3) of the Patents Act allows an infringement suit to be filed once a patent is granted and does not mandate waiting for post-grant opposition proceedings to conclude.
They relied on precedents such as Novartis AG v. Natco Ltd. and CDE Asia Ltd. v. Terex India Pvt. Ltd., which held that the right to sue for infringement exists immediately upon the grant of a patent.
The plaintiffs argued that the judgment in Aloys Wobben was inapplicable to their case, as it dealt with the issue of whether a party could file both a revocation petition and a counterclaim in an infringement suit, not with the maintainability of an infringement suit pending post-grant opposition.
Defendant's Arguments:
The defendant relied on para 19 of the Aloys Wobben judgment, arguing that the plaintiffs’ patent rights had not crystallized while post-grant opposition proceedings were pending.
They claimed that as per the judgment in Toni & Guy Products Ltd. v. Shyam Sunder Nagpal, the suit should have been filed before a lower court due to lack of pecuniary jurisdiction.
They further argued that the court lacked territorial jurisdiction under Section 20 CPC, as the defendant’s principal place of business was outside Delhi.
Detailed Discussion on Judgments Cited and Their Context:
Aloys Wobben v. Yogesh Mehra (2014) 15 SCC 360: The Supreme Court held that once a party has filed a revocation petition, they cannot file a counterclaim in an infringement suit. The plaintiffs argued that this case was distinguishable as it did not discuss the maintainability of an infringement suit during post-grant opposition.
Novartis AG v. Natco Ltd.: The Delhi High Court held that a patentee could sue for infringement even while a post-grant opposition was pending.
CDE Asia Ltd. v. Terex India Pvt. Ltd.: The court reaffirmed that the pendency of a post-grant opposition does not preclude the filing of an infringement suit.
Toni & Guy Products Ltd. v. Shyam Sunder Nagpal: The court found that the valuation of damages in a quia timet action does not establish pecuniary jurisdiction unless actual damages are demonstrable.
Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd.: The Bombay High Court initially held that a post-grant opposition impacted an infringement suit, but the Supreme Court overturned this decision, allowing the suit to proceed.
Detailed Reasoning and Analysis of the Judge: The Delhi High Court, presided over by Justice C. Hari Shankar, rejected the defendant’s application under Order VII Rule 11 CPC, reasoning as follows:
The court held that there is no statutory bar on instituting an infringement suit while post-grant opposition is pending. The only requirement under Section 11A(3) of the Patents Act is that a patent must be granted before an infringement suit can be filed.
The court distinguished the case from Aloys Wobben, noting that the Supreme Court’s observations in para 19 were obiter dicta and not binding precedents.
On pecuniary jurisdiction, the court found that the plaintiff had adequately pleaded damages exceeding the threshold for the Delhi High Court’s jurisdiction.
On territorial jurisdiction, the court held that the plaintiffs had a subordinate office in Delhi, and the infringing products were likely to be sold in Delhi, satisfying jurisdictional requirements.
Final Decision The Delhi High Court dismissed the defendant’s application under Order VII Rule 11 CPC, allowing the suit to proceed. The court reaffirmed that a patentee can initiate an infringement suit immediately upon the grant of a patent, irrespective of pending post-grant oppositions.
Law Settled in This Case:
The mere pendency of a post-grant opposition does not bar a patentee from filing an infringement suit.
The right to sue for infringement crystallizes upon the grant of a patent under Section 11A(3) of the Patents Act.
The Supreme Court’s observations in para 19 of Aloys Wobben are obiter dicta and do not constitute binding precedent.
Pecuniary jurisdiction is established if damages are claimed in excess of the court’s threshold, even in a quia timet suit.
Territorial jurisdiction exists where the infringing products are sold or likely to be sold, even if the defendant's principal place of business is elsewhere.
