advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Friday, May 31, 2013

LACK OF JURISDICTION = no part of the cause of action had arisen = INFRINGEMENT OF PATENT RIGHTS =The original application, in O.A.No.514 of 2011, in C.S.No.408 of 2011, had been filed praying that this Court may be pleased to grant an order of ad-interim injunction restraining the defendant, its directors, employees, officers, servants, agents, men, representatives and all others acting for and on their behalf, from making, selling, distributing, advertising, exporting, importing, offering for sale and in any other manner, directly or indirectly, dealing in pharmaceuticals or any chemical compound product that infringes the subject matter of Indian Patent No.196774, registered by the plaintiffs, pending disposal of the suit. = the appellants are based in Switzerland and the U.S.A. and the respondent is based in Ahmedabad, Gujarat. It is clear that this Court would not have the territorial jurisdiction to hear the suit filed by the appellants, in C.S.No.408 of 2011, only based on the claim of the appellants that a single sale of the infringing product had taken place, at Chennai. It is also seen that Vitman Pharma Limited, said to be the stockist/distributor/agent of the respondent in the present appeals had not been impleaded as a party to the suit, in C.S.No.408 of 2011, filed by the appellants. As such the suit filed by the appellants is bad in the eye of law for the non-joinder of the necessary party, as per Section 109 of the Patents Act, 1970. Even though certain rights have been conferred upon the patentee, under Section 48 of the Patents Act, 1970, the appellants in the present appeals have not been in a position to show that the respondent had infringed the patent right vested in the appellants, by showing sufficient evidence. The plaintiffs in the suit, in C.S.No.408 of 2011, who are the appellants in the present appeals, had not averred in the plaint that the defendant therein was carrying on the business dealing with the product in question, within the territorial jurisdiction of this Court. The learned single Judge had rightly found that the pleadings in the suit do not disclose any cause of action for the filing of the suit before this Court. Relying on the decision, in Dhodha House Vs. S.K.Maingi, (2006) 9 SCC 41, the learned single Judge had rejected the claims made on behalf of the appellants herein, who were the plaintiffs in the suit, in C.S.No.408 of 2011. In such circumstances, we are of the considered view that the present Original Side Appeals, filed by the appellants, are devoid of merits and hence, they are liable to be dismissed. Accordingly, they stand dismissed. No costs.

REPORTED IN/ PUBLISHED IN http://judis.nic.in/judis_chennai/filename=41736

IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED:     -4-2013

CORAM

THE HONOURABLE MR.JUSTICE M.JAICHANDREN
AND
THE HONOURABLE MR.JUSTICE M.M.SUNDRESH

O.S.A.Nos.36 and 37 of 2012

O.S.A.No.36 of 2012

F.Hoffmann-La Roche Ltd
Group Headquarter
Grenzacherstrassee 124
CH-4070 Basel
Switzerland
Represented by its constituted
attorney Ms.Sujatha Subramaniam

OSI Pharmaceuticals, LLC.
1 Bioscience Park Drive,
Farmingdale,
New York 11735,
United States of America
Represented by its constituted
attorney Ms.Sujatha Subramaniam

Earlier known as

OSI Pharmaceuticals, Inc.
41, Pinelawn Road,
Melville,
New York 11747,
United States of America
Represented by its constituted
attorney Ms.Sujatha Subramaniam .. Appellants.

Versus

Intas Biopharmaceuticals Limited
Plot No.423/P/A
Sarkhej-Bavla Highway,
Moraiya, Taluka-Sanand, 382210
Ahmedabad, Gujarat, India. .. Respondent.

Prayer in O.S.A.No.36 of 2012: Original Side Appeal filed under Order XXXVI Rule 9 of Original Side Rules read with Clause 15 of Letters Patent, against the order, dated 12.12.2011, passed in Application No.4664 of 2011 in C.S.No.408 of 2011.

O.S.A.No.37 of 2012

F.Hoffmann-La Roche Ltd
Group Headquarter
Grenzacherstrassee 124
CH-4070 Basel
Switzerland
Represented by its constituted
attorney Ms.Sujatha Subramaniam

OSI Pharmaceuticals, LLC.
1 Bioscience Park Drive,
Farmingdale,
New York 11735,
United States of America
Represented by its constituted
attorney Ms.Sujatha Subramaniam

Earlier known as
OSI Pharmaceuticals, Inc.
41, Pinelawn Road,
Melville,
New York 11747,
United States of America
Represented by its constituted
attorney Ms.Sujatha Subramaniam .. Appellants.

Versus

Intas Biopharmaceuticals Limited
Plot No.423/P/A
Sarkhej-Bavla Highway,
Moraiya, Taluka-Sanand, 382210
Ahmedabad, Gujarat, India. .. Respondent.

Prayer in O.S.A.No.37 of 2012: Original Side Appeal filed under Order XXXVI Rule 9 of Original Side Rules read with Clause 15 of Letters Patent, against the order, dated 12.12.2011, passed in O.A.No.514 of 2011, in C.S.No.408 of 2011.

For Appellants  
in both the appeals: Mr.P.S.Raman, Senior Advocate for
    Mr.K.Premchandar and Gowri Thirumurthi

For Respondent  
in both the appeals: Mr.T.V.Ramanujam, Senior Advocate for
    Mr.A.A.Mohan


COMMON JUDGMENT
(Judgment of the Court was made by M.Jaichandren,J.)

The Original Side Appeal, in O.S.A.No.36 of 2012, had been filed against the order, dated 12.12.2011, made in Application No.4644 of 2011, in C.S.No.408 of 2011.

2. The Original Side Appeal, in O.S.A.No.37 of 2012, had been filed against the order, dated 12.12.2011, made in the Original Application, in O.A.No.514 of 2011, in C.S.No.408 of 2011.

3. The appellants in the present Original Side Appeals are the plaintiffs in the suit, in C.S.No.408 of 2011.

4. The application in A.No.4644 of 2011, had been filed praying that this Court may be pleased to revoke the leave granted to the plaintiffs to institute the suit before this Court, vide A.No.2718 of 2011, dated 14.6.2011.

5. The original application, in O.A.No.514 of 2011, in C.S.No.408 of 2011, had been filed praying that this Court may be pleased to grant an order of ad-interim injunction restraining the defendant, its directors, employees, officers, servants, agents, men, representatives and all others acting for and on their behalf, from making, selling, distributing, advertising, exporting, importing, offering for sale and in any other manner, directly or indirectly, dealing in pharmaceuticals or any chemical compound product that infringes the subject matter of Indian Patent No.196774, registered by the plaintiffs, pending disposal of the suit.

6. By a common order, dated 12.12.2011, the learned single Judge of this Court had allowed the application, in A.No.4644 of 2011, and the leave granted had been ordered to be revoked, holding that no cause of action had accrued to the plaintiffs, within the jurisdiction of this court, to maintain the suit, in C.S.No.408 of 2011.

7. The brief facts of the case, as stated by the plaintiffs, who are the appellants in the present Original Side Appeals, are as follows:
7.1. The first plaintiff is one of the world s leading research focused healthcare groups in the fields of pharmaceuticals and diagnostics and it has been involved in the discovery, development, production and marketing of novel healthcare solutions, for more over 100 years. It is one of the world's largest biotech company and an innovator of products and services, for the early detection, prevention, diagnosis and treatment of diseases. It is also the world leader in in-vitro diagnostics and drugs for cancer and transplantation, and it is a market leader in virology and it is also active in other major therapeutic areas, such as autoimmune diseases, inflammation, metabolic disorders and diseases of the central nervous system.
7.2. The first plaintiff had been entering into collaborative agreements and alliances with numerous partners, including companies, universities and research institutions. It has over 80,000 employees world wide and it has invested over 9 Billion Swiss Francs in the areas of research and development.


7.3. The second plaintiff is committed to `shaping medicine and changing lives , by discovering, developing and commercializing high quality, novel and differentiated personalized medicines, designed to extend life and to improve the quality of life of the patients who are suffering from cancer. It specializes in the discovery and development of innovative molecular targeted therapies, with an aim to address special and significant medical needs, and it is also a pioneer in providing therapies for patients suffering from life threatening diseases.
7.4. The second plaintiff had entered into an agreement with Pfizer, Inc. on 1.4.1986 to conduct collaborative research in the field of cancer. The agreement had been renewed and modified, on 1.4.1991 and 1.4.1996. The research had ultimately led to the discovery of an Epidermal Growth Factor Receptor Tyrosine Kinase (EGFR TK) inhibitor. On account of the acquisition of Warner Lambert by Pfizer, Inc., the Federal Trade Commission of the United States of America required Pfizer, Inc. to divest its rights in and towards an Epidermal Growth Factor Receptor Tyrosine Kinase (EGFR TK) inhibitor compound. Pfizer, Inc. had elected to fulfil this requirement by returning all rights of the compound to the second plaintiff, pursuant to the terms of the collaborative agreement of 1.4.1996, through an agreement dated 23.5.2000.
7.5. The first and the second plaintiffs had entered into a development collaboration and licensing agreement, on 8.1.2001, whereby the first plaintiff was granted an exclusive licence outside of the United States of America, to use, offer for sale and to sell the compound, which had been, eventually, patented in India, under Patent No.196774.
7.6. The first and the second plaintiffs and Pfizer, Inc. had entered into an exclusive licence agreement, dated 4.9.2008, declaring the first plaintiff as the exclusive licencee for the purposes of Indian Patent No.196774. Subsequently, vide application, dated 9.3.2009, under Section 69 of the Patents Act, 1970, the plaintiffs had requested the Patent Office to record on the Patent Register, the Licence agreements, dated 8.1.2001 and 4.9.2008.
7.7. On 19.11.2009, the first plaintiff had received an official communication from the Deputy Controller of Patents confirming the recording of the first plaintiff, as the exclusive licensee of Indian Patent No.196774, in the register of patents. Accordingly, the first plaintiff has been actively engaged in the marketing and sale of the compound Erlotinib Hydrochloride, under the mark TARCEVA., worldwide.
7.8. The first plaintiff had introduced TARCEVA. in India, during the month of April, 2006. While so, the plaintiffs had received information during, the month of May, 2011, that the defendant pharmaceutical company, which is engaged in the manufacture and marketing of pharmaceutical and health care products in India, had started selling its infringing product in India, which is being manufactured by Natco Pharma limited. In order to check the veracity of the information received by the plaintiffs, they had deputed a representative to conduct a market survey. In the market survey conducted on behalf of the plaintiffs, it had been found that the defendant is selling the product ERLOTIB in India, especially, within the territorial jurisdiction of this Court. In order to prove the same, an invoice from J.F.Letoille, 830, Anna Salai,  Chennai, recording the purchase of the product had been filed before this Court. The plaintiffs have claimed that they have reasons to believe that the defendant had obtained a `No Objection Certificate' from the relevant authorities to export and are in fact selling the impugned product in several overseas markets. The package insert of the defendant's product ERLOTIB would clearly show that the impugned product is manufactured by Natco Pharma Limited and being sold by the defendant, within the territorial jurisdiction of this Court, infringing the Indian Patent No.196774.
7.9. The plaintiffs had preferred a number of suits before the High Court of Delhi against the various infringing pharmaceutical companies and their distributors and agents, for infringing Indian Patent No.196774, in respect of the manufacture and sale of products containing `ERLOTIB Hydrochloride'.
7.10 The plaintiffs had initiated legal proceedings against CIPLA Limited, before the High Court of Delhi, in C.S.(O.S.) 89 of 2008, in order to protect its Intellectual Property Rights, relating to Indian Patent No.196774. However, the prayer of the plaintiffs, for an order of interim injunction restraining the defendant from infringing the suit Patent, had been rejected. Therefore, the plaintiffs had preferred an appeal, in F.A.O. (O.S.) 188 of 2008. The said appeal had also been dismissed. In such circumstances, the plaintiffs had preferred a special leave petition before the Supreme Court, in S.L.P.No.20111 of 2009. The Supreme Court had passed an order, dated 28.8.2009, directing the trial in the suit, in C.S.(O.S.) No.89 of 2008, to be conducted, as expeditiously as possible, without being influenced by the observations made by the Division Bench of the High Court of Delhi, in F.A.O. (O.S.) 188 of 2008. The suit, in C.S.(O.S.) No.89 of 2008, was at the stage of final arguments at the time of the filing of the present suit before this Court.

7.11. It has also been stated that the plaintiffs have filed a suit against Natco Pharma Limited, before the Delhi High Court, in C.S.(O.S.) No.2465 of 2009, for the infringement of Indian Patent No.196774, in respect of the sale and manufacture of the product bearing the mark `ERLONAT', having the same API. i.e. `Erlotinib Hydrochloride'. The defendant in the said suit had also filed a Counter Claim No.32 of 2010, for revocation of Indian Patent No.196774.
7.12. The plaintiff had also filed a suit against Dr.Reddy's Laboratories and Natco Pharma Limited before the High Court of Delhi, in C.S.(O.S.) No.81 of 2010, for the infringement of Indian Patent No.196774, in respect of the sale and manufacture of the products bearing the mark TYROKININ, having the same API i.e. Erlotinib Hydrochloride. In addition, the plaintiffs have also filed certain other cases against other parties as well, with regard to the infringement of their patent rights.

8.In such circumstances, the plaintiffs had filed the suit, in C.S.(O.S.) No.408 of 2011, on the file of this Court, against the defendant, for selling the impugned product `ERLOTIB', infringing Indian Patent No.196774. The cause of action had arisen within the territorial jurisdiction of this Court, as per Section 20(c) of the Code of Civil Procedure, 1908. Further, under Section 48 of the Patents Act, 1970, the act of offering for sale and selling of the product, which is covered by a patent, amounts to violation of the exclusive rights of the patentee. Further, this court has the jurisdiction to entertain the suit, as the plaintiffs have the reason to believe that Vitman Pharma, at No.67, Poes Garden, Chennai, is the defendant s stockist/wholesaler/distributor for the city of Chennai and that the said Vitman Pharma is stocking and distributing the impugned product, within the territorial jurisdiction of this Court.

9. The defendant had sought the rejection of the plaint stating that the suit had been filed on the basis of the alleged infringement of the plaintiffs' registered Patent, without pointing out as to how the defendant had violated the same. Further, the plaintiffs had not disclosed the cause of action for the filing of the said suit against the defendant.

10. It had been further stated that, while the plaintiffs are based in Switzerland and the U.S.A., the defendant is based in Ahmedabad, Gujarat. The defendant is not carrying on business in Chennai, within the jurisdiction of this Court. Therefore, the plaint filed by the plaintiff, in C.S.No.408 of 2011, is to be rejected.

11. It had been further stated that the Patent had been granted to the plaintiffs, at Delhi, outside the jurisdiction of this Court. The jurisdiction of this Court had been invoked by the plaintiffs, based on one invoice relating to the purchase of `ERLOTIB' product, by the defendant, at Chennai. There is no material to prove that the composition of `ERLOTIB' product is of the same composition and formula, relating to which the Patent had been approved.

12. It had been contended on behalf of the defendant that one invoice relating to the purchase of the defendants product, at Chennai, cannot constitute the cause of action to invoke the jurisdiction of this court, as a `sporadic sale does not constitute `commercial sale . Further, there are no averments in the plaint and no documents had been filed to support the claim of the plaintiffs that the druggist at Chennai is the clearing and forwarding agent or the authorized distributor of the defendant. As such, no cause of action had accrued to the plaintiffs, within the jurisdiction of this Court.

13. It had also been contended that the defendant is only a marketer of the product manufactured by Natco Pharma Limited. The plaintiffs have filed a suit against the said company, at Delhi, praying for an injunction restraining the said company, its agents, stockists etc., from manufacturing and selling the infringing product in question. As such, the said suit covers the defendant. Therefore, it would not open to the plaintiffs to file a second suit for the same cause of action, as it would be hit by the principle of res judicata. Further, Natco Pharma Limited had not been impleaded in the said suit. As such, the suit filed by the plaintiffs is bad in law, for non joinder of the necessary party.

14. It had also been stated that the products of the defendant are totally different from that of the plaintiffs. Further, both the plaintiffs and the defendant are not residing at Chennai, within the jurisdiction of this court. It had also been stated that this court ought to consider the claim of the plaintiffs, with regard to the jurisdiction of this court, only on the averments made in the plaint, for its rejection, under Order VI Rule 11 of the Code of Civil Procedure, 1908. The averments made in the written statement filed by the defendant may not be considered. As such, it is clear that the plaintiffs had not made out a case for the maintenance of the suit before this Court, due to lack of jurisdiction.

15. The only allegation made in the plaint is that the defendant had sold the product in question, as a single sale. There is no mention in the plaint that the defendant is carrying on business, within the territorial jurisdiction of this Court. A sporadic sale cannot give rise to a cause of action to the plaintiffs, to maintain the suit against the defendant, especially, when the defendant is not residing or carrying on business, within the territorial jurisdiction of this Court.

16. The learned counsel appearing on behalf of the defendant had relied on the decision of the Supreme Court, in Dhodha House Vs. S.K.Maingi, (2006) 9 SCC 41, to substantiate his claim that the suit filed by the plaintiffs is not maintainable before this Court.

17. The learned counsel appearing on behalf of the plaintiffs had contended that this Court has the necessary jurisdiction to try the suit, as a substantial part of the cause of action had arisen, within the jurisdiction of this Court, as per Section 48(a) of the Patents Act, 1970.

18. The learned single Judge, in his order, dated 12.12.2011, had come to the conclusion that the leave to sue granted in favour of the plaintiffs, for the maintenance of the suit before this Court, by its order, dated 14.6.2011, in A.No.2718 of 2011, cannot be sustained, in view of the fact that the plaintiffs had not been in a position to show that the act of selling of the product, by a third party, had been authorized by the defendant. Further, it had not been shown by the plaintiffs that, J.F.Letoille, Chennai, is an authorized agent or a stockist of the defendant. Further, the plaintiffs have filed a suit against the marketing agent of the defendant, namely, Natco Pharma Limited, before the Delhi High Court. Further, there is no pleading that the defendant is carrying on the business, within the jurisdiction of this Court. An isolated sale cannot give the necessary cause of action to invoke the jurisdiction of this Court. The pleading in the suit does not disclose any cause of action.

19. In view of the decision of the Supreme Court, in Dhodha House Vs. S.K.Maingi, (2006) 9 SCC 41, the learned single Judge had held that there is no cause of action for the defendant to file a suit before this Court alleging that the defendant had infringed the Indian Patent of the plaintiffs, within the jurisdiction of this Court. In such view of the matter, the learned single Judge had held that the plaintiffs had not been in a position to show that a cause of action had arisen for the filing of the suit, within the territorial jurisdiction of this Court. As such, the suit filed by the plaintiffs cannot be maintained. Consequently, the learned single Judge had allowed the application filed by the defendant, in A.No.4644 of 2011, revoking the leave, which had been granted by this Court. The learned single Judge had also directed the Registry to return the plaint, to the plaintiffs, for its presentation before the court of competent jurisdiction. The learned single Judge had also dismissed the applications, in A.Nos.514 of 2011 and 4645 of 2011, as infructuous, in view of the detailed order passed by him.

20. Challenging the order of the learned single Judge, dated 12.12.2011, the plaintiffs in the suit have filed the present appeals, in O.S.A.Nos.36 and 37 of 2012.

21. The Original Side Appeal, in O.S.A.No.36 of 2012, had been filed by the plaintiffs, with regard to the order passed by the learned single Judge, dated 12.12.2011, made in Application No.4644 of 2011, in C.S.No.408 of 2011, revoking the leave granted to the plaintiffs, by the order, dated 14.6.2011.

22. The Original Side Appeal, in O.S.A.No.37 of 2012, had been filed seeking to set aside the order of the learned single Judge, dated 12.12.2011, made in O.A.No.514 of 2011, in C.S.No.408 of 2011, and for restoring the said original application on the file of this Court and for the passing of further orders thereon.

23. The learned senior counsel appearing on behalf of the appellants had submitted that the objections raised on behalf of the respondent are erroneous in law and on facts. The preliminary objections raised by the respondent relating to a number of issues, including the objections relating to the non joinder of parties, public interest and res judicata, are not within the purview of this Court, while considering the request for the revocation of the leave to sue. As such, the said objections ought not to be considered by this Court in the present appeals. The plaintiffs have not suppressed the material facts in the suit filed before this Court, in C.S.No.408 of 2011, as alleged by the respondent in the present appeals.

24. The learned counsel appearing on behalf of the appellants had further submitted that the averments made by the present appellants, as the plaintiffs in the suit, in C.S.No.408 of 2011, with regard to the jurisdiction of this Court and the cause of action, must be assessed by a harmonious construction of the plaint. The cause of action pleaded by the appellants, in the plaint filed in the suit, ought to be taken as the truth. The veracity of the averments cannot be gone into at the stage of demurrer. The appellants had clearly elucidated the cause of action that had arisen for the filing of the suit. A number of documents had also been filed to substantiate their claims. Paragraph 45 of the plaint makes it clear that the cause of action for the filing of the suit had arisen within the jurisdiction of this Court. The averments made by the respondent that the grant of the Patent in favour of the appellants, at Delhi, would preclude them from filing the suit before this Court cannot be accepted.

25. The jurisdiction of this Court with regard to the alleged infringement of the registered patent of the applicant is to be determined upon a reading of Section 48 of the Patents Act, 1970, read with Clause 12 of the Letters Patent Act of this Court. As per Clause 12 of the Letters Patent Act, it would be sufficient if a cause of action had arisen either wholly or partly, within the jurisdiction of this Court. The question as to whether the appellants are carrying on the business, within the jurisdiction of this Court may be irrelevant. However, the averments that the respondent is not carrying on the business within the meaning of Section 20(b) of the Code of Civil Procedure, 1908, is denied.

26. It had been further stated that the appellants had furnished the necessary information to show that Vitman Pharma, operating from No.67 Poes Garden, Chennai, is a stockist/druggist relating to the distribution and sale of the infringing product of the respondent. Vitman Pharma is also a registered licensee of the respondent, within the meaning under the Drugs and Cosmetics Act, 1950, and the rules framed thereunder. The infringing product had been sold by the pharmacist, namely, J.F.Letoille, 830, Anna Salai, Chennai. The averment of the respondent that a single invoice is insufficient to prove the jurisdiction of this Court is wholly incorrect. The respondent has been selling the impugned product in India, within the jurisdiction of this Court, and the cause of action for the filing of the suit had arisen in the second week of June, 2007, when the appellants representative had purchased the infringing product of the respondent, at Chennai.

27. It has been stated that the allegation of the respondent that the appellants had been `forum shopping is denied. A substantial and integral part of the cause of action had arisen and continues to subsist within the jurisdiction of this Court, as prescribed in Paragraph 45 of the plaint. Further, the suit filed by the appellants is not barred, under Section 11 of the Code of Civil Procedure, 1908. The filing of the suit, in C.S.No.408 of 2011, is not hit by the rule of res judicata. For the principle of res judicata to operate, the parties in the suits concerned must be the same and that the  former suit ought to have been heard and finally decided by the court of competent jurisdiction. The suit filed by the appellants in the High Court of Delhi, against Natco Pharma Limited, does  not involve the same parties.

28. It had also been stated that the suit filed by the appellants is not barred, under Order 2 Rule 2 of the Code of Civil Procedure, 1908. The filing of the suit before the High Court of Delhi and before this Court are based on different causes of action. Different acts of infringement had taken place at Delhi and at Chennai, as per Section 48 of the Patents Act, 1970. Therefore, the appellants had filed separate suits against Natco Pharma Limited and Intas Biopharmaceuticals, for different acts of infringement of the Indian Patent granted in favour of the appellants, for the product ERLOTINIB Hydrocholoride.

29. It had also been contended that all necessary parties have been impleaded in the suit filed by the appellants. Non joinder of Natco Pharma Limited in the suit filed before this Court cannot be considered to be a defect in the filing of the said suit. Further, it is not open to the respondent to claim that the patent granted in favour of the appellants is invalid, as it is frivolous and baseless. The appellants in the present appeals, who were the plaintiffs in the suit, in C.S.No.408 of 2011, had reasons to believe that Vitman Pharma, operating from No.67 Poes Garden, Chennai, is the stockist, wholesaler and distributor  of the defendant for the city of Chennai and that the respondent has been stocking and distributing the infringing product, within the territorial jurisdiction of this Court. Therefore, the order of the learned single Judge, dated 12.12.2011, revoking the leave granted to sue is erroneous and invalid in the eye of law and therefore, it is liable to be set aside.

30. The learned counsel appearing on behalf of the appellants had submitted that the reliance placed by the learned single Judge on the decision of the Supreme Court, in Dhodha House Vs. S.K.Maingi, (2006) 9 SCC 41, is erroneous, as the said decision could not be applicable to the present case. He had further submitted that the said decision had arisen, mainly, under the various sections of the Trade and Merchandise Marks Act, 1958, and the Copy Right Act, 1957, and the Trade Marks Act, 1979. It would not be applicable to the present case, which had arisen under the Patents Act, 1970. Even if it could be called as a `sporadic sale made by Vitman Pharma, on behalf of the respondent, it could be sufficient for this court to have the necessary jurisdiction to try the suit. The quantum of sale of the infringing product cannot be the only basis for rejecting the claims made by the appellants. Section 48 of the Patents Act, 1970, would give the necessary jurisdiction to the appellants to file the suit.

31. The learned counsel appearing on behalf of the appellants had relied on the decision of the Supreme Court, in Laxman Prasad Vs. Prodigy Electronics Ltd. and another, (2008) 1 SCC 618. He had submitted that Sections 16 to 20 deals with the territorial jurisdiction of a court and Section 20 of the code is a residuary provision and it covers all cases not falling under Section 16 to 19 of the Code. A bare reading of clause (c) of Section 20 leaves no room for doubt that a suit could lie in a court within a local limit of whose jurisdiction a cause of action had arisen, wholly or partly. In the said case the Supreme Court had held that Section 20 had been designed to secure that justice might be brought as near as possible to every man s hearthstone and that the defendant should not be put to trouble and the expense of traveling long distances, in order to defend himself.

32. He had also relied on the decision of the Supreme Court, in D.Ramachandran Vs. R.V.Janakiraman and others (1999) 3 SCC 267,  wherein, it had been held that it is well settled that in all cases of preliminary objections, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petitions are proved to be true. For the purpose of considering a preliminary objection, the averments in the petition should be assumed to be true and the court has to find out whether those averments disclose a cause of  action or a triable issue as such. The court cannot probe into the facts on the basis of the controversy raised in the counter.

33. The learned counsel had also relied on the decision, reported in Exphar SA and another Vs. Eupharma Laboratories Ltd and another, 2004(28) PTC 251 (SC), wherein it had been held that when an objection to the jurisdiction has been raised, by way of demurrer and not at the trial, the objection must proceed on the basis that the facts, as pleaded by the initiator of the impugned proceedings, are true. The submission, in order to succeed, must show that granted those facts the courts does not have jurisdiction as a matter of law. In rejecting a plaint on the ground of jurisdiction, the Division Bench should have taken the allegations contained in the plaint to be correct. However, the Division Bench had examined the written statement filed by the respondents, in which it was claimed that the goods were not at all sold within the territorial jurisdiction of the Delhi High Court and also that the second respondent did not carry on business within the jurisdiction of the Delhi High Court. It had also been held that it is clear that the object and reason for the introduction of sub-section (2) of Section 62 of the Copy Rights Act, 1957, was not to restrict the owners of the copy right to exercise their rights, but to remove any impediment from their doing so.

34. In Deva Ram Vs. Ishwar Chand, (1995) 6 SCC 733, it had been held that what Order 2 Rule 2 of the Civil Procedure Code, 1908, requires is the unity of all claims based on the same cause of action in one suit. It does not contemplate unity of distinct and separate causes of action. If, therefore, the subsequent suit is based on a different cause of action, the rule will not operate as a bar. In the said decision it had also been stated that Section 11 of the Civil Procedure Code, 1908, contains the rule of conclusiveness of the judgment which is based partly on the maxim of Roman Jurisprudence "Interest reipublicae ut sit finis litium" (it concerns the State that there be an end to law suits) and partly on the maxim "Nemo debet bis vexari pro una at eadem causa" (no man should be vexed twice over for the same cause). The section does not affect the jurisdiction of the Court but operates as a bar to the trial of the suit or issue, if the matter in the suit was directly and substantially in issue, and finally decided, in the previous suit between the same parties litigating under the same title in a court competent to try the subsequent suit in which such issue has been raised.

35. In Bengal Waterproof Limited Vs. Bombay Water Proof Mfg. Co., (1997) 1 SCC 99, it had been held that, for the bar under Order 2 Rule 2 (3) to operate, in respect of a claim of relief in a subsequent suit, the subsequent suit must be in respect of the same cause of action as that on which the previous suit was based. In case of a continuing or a recurring wrong there would be a corresponding continuous or recurrent causes of action.

36. In Union of India Vs. H.K.Dhruv, (2005) 10 SCC 218, it had been held as follows:
"4.... We are satisfied that no fault can be found with the view taken by the High Court. In order to attract applicability of the bar enacted by Order 2 Rule 2 CPC, it is necessary that the cause of action on which the subsequent claim is founded should have arisen to the claimant when he sought for enforcement of the first claim before any court. On the facts found and as recorded in the judgment of the High Court and with which we find no reason to differ, the second demand raised by the respondent was not available to be made a part of the claim raised in the first application. The bar enacted by Order 2 Rule 2 CPC is clearly not attracted."

37. In Triangle Conduit and Cable Co., Inc., Vs. National Electric Products Corporation, 138 F.2d 46, it had been held that a patent owner has a cause of action, independent from that against an infringing manufacturer, to recover profits and damages and to restrain one who resells a product purchased from an infringing manufacturer.

38. The learned counsel Mr.T.V.Krishnamachari appearing on behalf of the respondent had submitted that the appellants had filed the suit before this Court, in C.S.No.408 of 2011. The appellants had also filed an original application, in O.A.No.514 of 2011, for restraining the respondent from infringing the appellants Indian Patent No.196774. The respondent had filed applications, in A.Nos.4644 of 2011, for revoking the leave granted in favour of the appellants and A.No.4645 of 2011 for rejecting the plaint. After hearing the submissions made on behalf of the parties concerned, the learned single Judge had allowed the application, in A.No.4644 of 2011, revoking the leave granted in favour of the appellants. All other applications filed by the appellants, as well as the respondent, had been dismissed by the learned Single Judge, by his order, dated 12.12.2011.

39. The learned counsel appearing on behalf of the respondent had also submitted that the appeals filed by the appellants are not maintainable in law. The petition filed by the appellants praying for an order of interim injunction is not maintainable. The suit filed by the appellants, in C.S.No.408 of 2011, was liable to be dismissed, in limine. The appellants in the present appeals, who were the plaintiffs in the suit, in C.S.No.408 of 2011, have not been in a position to show that this Court had the territorial jurisdiction to hear the suit. The appellants are placed in Switzerland and the U.S.A. The respondent is placed at Ahmedabad. As such, the suit filed by the appellants was without jurisdiction. The appellants Patent No.196774 had been applied, granted and sealed in Delhi, outside the jurisdiction of this Court.

40. The learned counsel appearing on behalf of the respondent had also submitted that the appellants had invoked the jurisdiction of this Court in the civil suit, in C.S.No.408 of 2011,  based on one invoice for purchase of the respondents `ERLOTIB', at Chennai. No document had been filed on behalf of the appellants to prove that the product `ERLOTIB', has the same composition and formula for which the patentee had obtained the Patent No.196774. Further, a single sale cannot constitute the cause of action to invoke the jurisdiction of this court. In any event a `sporadic sale does not constitute `commercial sale . There is no averment in the plaint filed in the suit that the druggist from whom the purchase had been made is the clearing and forwarding agent or the authorized distributor of the respondent. No document had been filed to substantiate the claim made by the appellants that the respondent is selling the infringing product through its authorized agent. Further, the appellants had failed to substantiate their claim that a part of the cause of action had arisen within the jurisdiction of this Court. Therefore, the leave granted in favour of the appellants was not sustainable in the eye of law.

41. It had been further stated that the appellants, having filed several suits before the various courts of law have chosen to file the suit, in C.S.No.408 of 2011, before this Court, without having sufficient evidence to prove the same. The act of the appellants in filing the suit before this Court amounts to `forum shopping , which is impermissible in the eye of law. It had also been stated that the suit filed by the appellants, in C.S.No.408 of 2011, is barred under Section 11 of the Code of Civil Procedure, 1908, in view of the fact that a similar suit had been filed by the appellants, in C.S. (OS) 2465 of 2009, on the file of the High Court of Delhi. The suit filed by the appellants is also barred under Order 2 Rule 2 of the Code of Civil Procedure, 1908. The relief prayed for by the appellants before the High Court of Delhi includes the relief against the respondent herein.

42. It has been stated that, in the plaint filed by the appellants, it had been averred that the product of the respondent, namely `ERLOTIB' tablets are sold throughout India, including the territory of Delhi. When the plaint averment states that the respondent products are sold in Delhi, the respondent is only a marketer of the product manufactured by Natco Pharma Limited. As such, the appellants ought to have sought the relief against the respondent in the suit filed before the High Court of Delhi. When the appellants had intentionally failed to seek such a relief against the respondent in the suit pending on the file of the High Court of Delhi, they are prevented from filing a similar suit, before this Court, under Order 2 Rule 2 of the Code of Civil Procedure, 1908.

43. The learned counsel had also submitted that the suit filed by the appellants is bad in law for non-joinder of the necessary party. It has been alleged that the respondent is only a distributor of `ERLOTIB' tablets manufactured by Natco Pharma  Limited. However, Natco Pharma Limited has not been impleaded as the respondent in the suit filed by the appellants. Further, the appellants have not been in a position to show that the Patent said to have been granted in their favour is valid and enforceable in the eye of law. The patented product TARCEVA. is incapable of industrial application. The Patent in the suit relates to a compound called `ERLOTINIB hydrochloride' which is a combination of Polymorph A+B. The said product is unstable in nature and it cannot be used, commercially.

44. It had also been stated that the appellants have come before this court with unclean hands. In the case of Hoffman-La Roche Vs. CIPLA the Division Bench of the High court of Delhi has specially laid down certain criteria which has to be followed by all plaintiffs, while filing the suits. They should have made an unequivocal disclosure about the X-ray diffraction pattern and other technical details of the compound for which the Patent has been granted. The appellants have ignored the said direction of the Court, completely, while filing the suit.

45. It had been further stated that even though a certificate has been issued to the appellants by the Controller General of Patents, bearing Patent No.196774, dated 23.2.2007, the pre-grant opposition filed in respect of the Patent had been disposed of only on 4.7.2007. Therefore, the Patent could not have been granted, with effect from 23.2.2007. As such, no order of injunction could be granted in favour of the appellants, as prayed for by them.

46. It had been further stated that the reliefs prayed for by the appellants in the suit filed by them, in C.S.No.408 of 2011, are liable to be rejected on the ground of public interest, as the cost of the  dosage of the product to the patients using the Appellant's drug is rupees 1.4 lakhs, for a month, whereas the cost of the respondent's product is about six times less in comparison. Further, the product marketed by the respondent is different from the product for which the Patent had been granted in favour of the appellants, in Patent No.196774,. As such, the appeals filed by the appellants, in O.S.A.Nos.36 and 37 of 2012, are liable to be dismissed, as they are devoid of merits.

47. The learned counsel appearing on behalf of the respondents had relied on the following decisions in support of his contentions:
47.1) In Wander Ltd. And another Vs. Antox India P. Ltd., 1990 (Supp) SCC 727, it had been held as follows:
"9. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph :(1960) 3 SCR 713
... These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Jhanaton'.... the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case.
The appellate judgment does not seem to defer to this principle."

47.2. In Kusum Ingots and Alloys Limited Vs. Union of India and another, 2004(6) SCC 254, it had been held as follows:
"Cause of action implies a right to sue. The material facts which are imperative for the suitor to allege and prove constitute the cause of action. Cause of action is not defined in any statute. It has, however, been judicially interpreted inter alia to mean every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Negatively put, it would mean that everything which, if not proved, gives the defendant an immediate right to judgment, would be part of cause of action. Its importance is beyond any doubt. For every action, there has to be a cause of action, if not, the plaint or the writ petition, as the case may be, shall be rejected summarily. The entire bundle of facts pleaded need no constitute a cause of action as what is necessary to be proved before the petitioner can obtain a decree is the material facts. The expression material facts is also known as integral facts. All necessary facts must form an integral part of the cause of action.
The question as to whether the Court has a territorial jurisdiction to entertain a writ petition, must be arrived at on the basis of averments made in the petition, the truth or otherwise thereof being immaterial."

47.3. In Parameswari Veluchamy Vs. T.R.Jayaraman, 2002(1) CTC 134, it had been held as follows:
"8. The leave which can be sought from this Court and which the Court can grant is under Clause 12 of the letters Patent which inter alia provides that the original jurisdiction of this Court extends to suits of every description in the case of suits for lands or other immovable properties if such lands or properties are situated within the jurisdiction of this Court and in all other cases, the cause of action shall have arisen either wholly, or, in case the leave of the Court shall have been first obtained and the cause of action had arisen in part within the local limits of the ordinary original jurisdiction of this Court, or if the defendant at the time of the commencement of the suit resides or carries on business or personally works for gain within the limits of this Court's jurisdiction.
9. There can be no doubt that this Court has jurisdiction to try any suit in relation to any land which is situated within the jurisdiction of this Court. No leave of the Court is necessary in such cases. In case where a part of cause of action arises within the jurisdiction of this Court as also in cases where the defendants do not reside or carry on business or work for gain within the jurisdiction of this Court leave of the Court is essential. The grant or refusal of leave is discretionary."

47.4. In Glaxosmithkline Consumer Healthcare Ltd. And another Vs. Heinz India (P) Ltd. 2009(39) PTC 498 (Del.), it had been held as follows:
"22. As stated above, Section 20 of the Code gives dominus litis to the plaintiff to file a suit in the courts located at a place where defendant resides or works for gain or where cause of action, partly or wholly arises. However, it is also equally well settled that in spite of Section 20 of the Code, parties by a contract can confer sole or exclusive jurisdiction to courts at one location which otherwise has jurisdiction and exclude jurisdiction of other courts. In other words, it is accepted that Section 20 of the Code does not bar or prohibit parties from entering into a contract or mutual understanding that courts only at a particular location will have exclusive jurisdiction to decide the disputes and oust jurisdiction of courts located at other locations. The only condition is that the exclusive or the sole Court should otherwise have territorial jurisdiction to decide the disputes in terms of Section 20 of the Code (Refer A.B.C. Laminart versus A.P. Agencies, (1989(2) SCC 163). The legal position, therefore, recognizes that Section 20 of the Code does not bar or prohibit parties from entering into a mutual arrangement restricting territorial jurisdiction of the court which can entertain legal proceedings. Section 20 of the Code, therefore, stipulates that plaintiffs have dominus litis to determine and decide the location where they want to institute a suit but this can be restricted by a mutual contract.
23. In view of the above interpretation of Section 20 of the Code, it cannot be said that the principle of "forum non-convenience" is alien, barred or prohibited by Section 20 the Code. Section 20 of the Code indicates and specifies the courts which can have jurisdiction. Principle of "forum non-convenience" does not confer jurisdiction on a court contrary to Section 20 of the Code but applies when a court otherwise has jurisdiction but for valid, sound and good reasons does not wish to entertain a suit. Section 20 of the Code, does not prohibit or bar the principle of "forum non- convenience".

47.5. In Duroflex Pvt. Limited Vs. R.P.Home Private Limited, 2008(36) PTC 600 (Mad.), it had been held as follows:
"As regard the law of this Court, so far we are aware it has never been held that the question of convenience is not a question which may be taken into consideration in dealing with the Applications under Article 12, and we are certainly not prepared to hold that this question should be excluded from consideration.
18. Counsel also relied upon the decision of Venkatasubbarao,J. In Amir B. Vs. Abdul rAhim Sahib, AIR 1928 Mad. 760, wherein while considering the question of granting leave in an administration Suit it was inter alia observed that "The Court will not grant leave unless a substantial portion immovable properties are outside jurisdiction and they represent the bulk of the estate, that maybe a good ground for refusing leave; for, in determining what constitutes cause of action one element is undoubtedly: where is the property movable or immovable situate?"
21. Moreover, considerations of convenience are very germane while determining the question of grant, refusal or revocation of leave. Almost all the properties, the documents relating thereto and the witnesses who have knowledge of the same are outside the city of Madras."

48. In view of the submissions made by the learned counsels appearing on behalf of the appellants, as well as the respondent, and on a perusal of the records available and on considering the decisions cited supra, we are of the considered view that the present appeals filed by the appellants are devoid of merits.

49. It is noted that the present appeals have been filed by the appellants against the order of the learned single Judge, dated 12.12.2011,  stating that the order passed by him, revoking the leave to sue granted in favour of the appellants, is bad in the eye of law. It had been contended, on behalf of the appellants, that this Court has the jurisdiction to try the suit filed by the appellants, in C.S.No.408 of 2011, as it had been established, by the appellants, by sufficient evidence, that the infringing product of the respondent had been sold by the stockist/druggist, namely, Vitman Pharma, at Door No.67, Poes Garden, Chennai, as an authorized agent of the respondent.

50. It had been further contended that Vitman Pharma is a registered licencee of the respondent, within the meaning under the Drugs and Cosmetics Act, 1940. However, the appellants had not been in a position to substantiate the said claim, by way of documentary evidence. Further, the appellants have not been in a position to establish its claim that the invoice showing the purchase of the product in question, from J.F.Letoille, 830, Anna Salai, Chennai, would constitute `commercial sale .

51. It is a well settled position in law that a sporadic sale would not constitute `commercial sale in the normal course of business. Further, the appellants had not been in a position to show that Vitman Pharma is the authorized agent or stockist of the respondent. There is nothing on record to show that Vitman Pharma had sold the infringing product as an authorized agent of the respondent, showing the causal link.

52. It has also been noted that the appellants had filed a number of suits before the various courts of law in India alleging that their Indian Patent No.196774 had been infringed. One such suit had been filed on the file of the High Court of Delhi, in the suit, in C.S (OS) No.2465 of 2009, in which Natco Pharma Limited had been arrayed as a party. The respondent in the present writ appeals is alleged to be a marketer of the drug manufactured by Natco Pharma Limited. As such, it may not be open to the appellants to file the present case, for a similar relief as in the case pending on the file of the High Court of Delhi. Further, the appellants had not been in a position to show that a part of the cause of action had arisen within the territorial jurisdiction of this court, for maintaining the suit, in C.S.No.408 of 2011, as per Clause 12 of the Letters Patent Act, 1940.

53. It is further noted that the appellants are based in Switzerland and the U.S.A. and the respondent is based in Ahmedabad, Gujarat.
It is clear that this Court would not have the territorial jurisdiction to hear the suit filed by the appellants, in C.S.No.408 of 2011, only based on the claim of the appellants that a single sale of the infringing product had taken place, at Chennai. 
Thus, it could be seen that the reasons shown by the learned single Judge of this court, in his order, dated 12.12.2011, cannot be held to be erroneous in the eye of law. 
The learned single Judge had rightly revoked the right to sue granted in favour of the appellants, holding that no part of the cause of action had arisen within the territorial jurisdiction of this court for the filing of the suit, by the appellants.

54. It is also seen that Vitman Pharma Limited, said to be the stockist/distributor/agent of the respondent in the present appeals had not been impleaded as a party to the suit, in C.S.No.408 of 2011, filed by the appellants. 
As such the suit filed by the appellants is bad in the eye of law for the non-joinder of the necessary party, as per Section 109 of the Patents Act, 1970. 
Even though certain rights have been conferred upon the patentee, under Section 48 of the Patents Act, 1970, the appellants in the present appeals have not been in a position to show that the respondent had infringed the patent right vested in the appellants, by showing sufficient evidence. 
The plaintiffs in the suit, in C.S.No.408 of 2011, who are the appellants in the present appeals, had not averred in the plaint that the defendant therein was carrying on the business dealing with the product in question, within the territorial jurisdiction of this Court. 
The learned single Judge had rightly found that the pleadings in the suit do not disclose any cause of action for the filing of the suit before this Court. 
Relying on the decision, in Dhodha House Vs. S.K.Maingi, (2006) 9 SCC 41, the learned single Judge had rejected the claims made on behalf of the appellants herein, who were the plaintiffs in the suit, in C.S.No.408 of 2011. In such circumstances, we are of the considered view that the present Original Side Appeals, filed by the appellants, are devoid of merits and hence, they are liable to be dismissed. Accordingly, they stand dismissed. No costs.  

(M.J.J.) (M.M.S.J.)
Index:Yes/No 30-4-2013
Internet:Yes/No
csh





M.JAICHANDREN,J.
AND
M.M.SUNDRESH,J.
csh











O.S.A.Nos.36 and 37 of 2012












30-4-2013

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.