Strategising IP litigation in India

Most litigators would agree that one of the most crucial elements in planning any litigation is deciding against whom, where and when enforcement action should be initiated. The 'where' is becoming increasingly critical in litigation involving process patents – that is, a process is used in one jurisdiction and the product obtained directly therefrom is sold across multiple jurisdictions, whether within the same country or across borders. The recent decision of the Delhi High Court in Teva v Natco (February 28 2014) throws some light on the questions of when and where.

Teva sued Natco, seeking a permanent injunction to restrain Natco and its agents from infringing Teva's Indian patent 190759 (the ''759 patent'). The ‘759 patent related to a process for manufacturing Glatiramer acetate, a drug used in the treatment of multiple sclerosis. Teva averred that Natco manufactured glatiramer acetate using two different processes – the GA-1 process was used to manufacture the product intended for the Indian market, which admittedly did not infringe the '759 patent, while the GA-2 process was used to manufacture the product intended for export to the United States. It was the GA-2 process that was alleged to infringe the '759 patent.  

The timing of the suit was interesting, as it was initiated before export to the United States. Under common law, actions to prevent the alleged violation of a right are known as quia timet actions. Common law applies in India unless contrary to statutory law. What was also interesting was the basis on which the suit was filed in Delhi – the sale of glatiramer acetate in Delhi.

Teva relied on certain facts to substantiate its quia timet action. Teva referred to an article in a leading newspaper and Natco's annual report, both of which provided that Natco was working with Mylan Pharma to manufacture of glatiramer acetate. Teva referred to a 2008 agreement between Natco and Mylan for the development and export of glatiramer acetate to the United States. Teva also submitted that Mylan applied for an abbreviated new drug application with the US Food and Drug Administration for the manufacture and sale of glatiramer acetate.

Natco challenged the court's jurisdiction. Recollecting the law on quia timet actions, the court noted that the plaint alleging apprehended infringement of a process patent would have to be precise. The court relied on its decision in Connaught Laboratories Limited v Smithkline Beecham Pharma Inc, in which it held as follows:

• A statement of claim in such cases must allege a deliberate expressed intention to engage in activity which would raise a strong possibility of infringement; 
• The activity to be engaged in must be alleged to be imminent and the resulting damage to plaintiff must be very substantial, if not irreparable; and
• The facts pleaded must be cogent, precise and material – it is insufficient that they are indefinite or speak only of intention or amount to mere speculation.

While the court appeared to permit quia timet actions in theory, it was not satisfied that there were sufficiently precise averments giving jurisdiction to the Delhi High Court. The court noted that Teva did not specifically assert that the infringing process (ie, GA-2) was being used in the territorial jurisdiction of the court.

Teva argued that it believed that the product obtained directly from the alleged infringing process would be sold in Delhi. Under Section 48(b) of the Patents Act 1970, a process patent gives the patentee exclusivity in relation to the product directly obtained by the process. However, with due respect to the court, this specific legal point appears to have been missed. While responding to Teva's argument, the court held that the claim at issue was a process claim and not a product claim, seemingly under the mistaken impression that process claims cannot be related to products in any way.

At the same time, in its order, the court extracted the relevant averments made by Teva in its plaint to establish the Delhi High Court's jurisdiction. While the plaint threw some light on Natco's business establishments in Delhi, as well as Natco's general capability and intent to market its products in Delhi, Teva did not appear to aver precisely that the product manufactured using the GA-2 process was expected to be sold in Delhi. This is based solely on the parts of the plaint extracted in the order. The fact that Teva consistently stated that the GA-2 process was employed only for export purposes cast doubt on the strength of an expectation that the products obtained through that process would be sold in Delhi.

The question of whether averring an infringer's general capability and intent to market products in a given jurisdiction is sufficiently precise for a quia timet action covering a specific product remains unanswered. However, this case highlights the need to be careful when drafting plaints for quia timet actions; in particular, patentees should be mindful of precision and clarity. At present, Teva's plaint has been returned so that it can file the action in the court with appropriate jurisdiction. It will be interesting to see where Teva will initiate its action (or appeal) – there may soon be another decision on this issue from a different court.