Case Study: F. Hoffmann-La Roche Ltd. & Anr. Petitioners v. Cipla Ltd.

By Sahil Kumar 11 Minutes Read

“A significant legal dispute between two major pharmaceutical companies centered on patent rights and generic drug manufacturing. The court upheld the validity of Roche’s patent but prioritized public access to affordable medication, ultimately leading to an out-of-court settlement between Roche and Cipla.”

Citation: 2015 SCC ONLINE DEL 13619

Date of Judgment: 27^th November, 2015

Court: Delhi High Court

Bench: Pradeep Nandrajog (J), Mukta Gupta (J)

Facts

• The legal battle between Roche and Cipla began over the drug Erlotinib, which Roche marketed under the brand name TARCEVA. The conflict ignited when Cipla announced its intention to launch a generic version of Erlotinib in January 2008. Roche swiftly initiated infringement proceedings, alleging that Cipla had violated its patent IN196774, which covered Erlotinib Hydrochloride.
• The case was first brought before the Delhi High Court, where Roche sought an injunction to prevent Cipla from producing its generic version, Erlocip. The suit was initially valued at Rs. 20 lakhs, with a claim for damages tentatively set at Rs. 1 crore.
• In defense, Cipla argued that it had obtained approval for its Erlotinib tablets and had introduced the product under the brand name Erlocip. They contended that the allegedly patented product was merely a derivative of Gefitinib, which had been developed by AstraZeneca and for which a patent had been denied in India. Cipla also counter-claimed that patent IN ‘774 lacked any inventive step.
• The lower court ruled against Roche, citing public interest and the balance of convenience in favor of Cipla. The judgment emphasized that preventing Cipla from producing its generic version would restrict access to affordable cancer treatment, a significant public health issue.
• Roche appealed the decision, but the Division Bench upheld the lower court’s ruling, noting Roche’s failure to establish a prima facie case of infringement. Roche then sought further recourse by filing a Special Leave Petition (SLP) with the Supreme Court, which was ultimately dismissed.
• The case was returned to a single judge for a trial on the main relief. Once again, the judge ruled against Roche, finding that the company had not provided sufficient evidence to prove that Cipla’s Erlocip infringed its patent. However, when the matter was taken to the Division Bench for further appeal, the judgment was reversed in favor of Roche.

Judgment of the Delhi High Court (Single Bench)

The Single Judge of the Delhi High Court dismissed Roche’s plea for an interim injunction, permitting Cipla to continue selling its generic drug, Erlocip. The court underscored the importance of public interest, highlighting the need for affordable medicines given the life-saving nature of Erlocip. This initial ruling reinforced the view that ensuring access to such critical medications outweighed Roche’s claims in this case.

Judgment of the Delhi High Court (Division Bench)

The Division Bench of the Delhi High Court, which upheld the Single Judge’s decision regarding dismissal of counter claim filed by Cipla seeking revocation of IN ‘577. However, the court did not grant the injunction as prayed by Roche against Cipla as the life of the patent in India would be expiring in March, 2016. Moreover, Cipla had already been manufacturing and selling Erlocip. Instead, the court ordered Cipla to render accounts for the profits earned from Erlocip’s sales. This ruling allowed Roche to pursue damages while refraining from granting an injunction.

Key legal issues discussed

1. Whether Cipla’s generic version of Erlotinib infringed Roche’s patent rights?

Yes

The court conducted a thorough examination of the validity of Roche’s patent (IN ‘774) for Erlotinib Hydrochloride, a compound that Roche asserted provided significant therapeutic benefits as an Epidermal Growth Factor Receptor (EGFR) inhibitor. In assessing the merits of the case, the court observed that Cipla’s product, marketed under the name Erlocip, also contained Erlotinib Hydrochloride. This led to the conclusion that Cipla’s product infringed upon Roche’s patent rights. The court further determined that the scope of Roche’s patent claim was sufficiently broad to encompass all polymorphic forms of Erlotinib Hydrochloride, thereby including Cipla’s product within its protective ambit. The court relied on Novartis AG v. Union of India^[1] and held that this comprehensive interpretation reinforced the infringement finding against Cipla.

The court also referred to Soda Fabrik v. Levinstein^[2] where Lord Halsbury recited that the factor of commercial success does not typically correlate with the question of utility in patent law. However, when the patent in question involves an improvement related to more cost-effective production, this consideration becomes central to the patent’s validity. In such cases, the claimed invention is not genuinely considered an invention if it only achieves the condition of cheaper production.

2. Whether the patent held by Roche was valid?

Yes

Cipla attempted to challenge the validity of Roche’s patent by asserting claims of obviousness and a lack of title. Cipla argued that the patent did not meet the necessary standards of innovation and that it should be deemed invalid due to its obvious nature. However, upon reviewing the evidence, the court found that Cipla did not provide sufficient proof to support these allegations. The court concluded that Cipla failed to establish a prima facie case for the patent’s invalidation based on obviousness, thereby affirming the validity of Roche’s patent application.

In addition to the obviousness argument, Cipla also accused Roche of violating Section 8 of the Patents Act, 1970. Cipla claimed that Roche had not disclosed its application for Polymorph B of Erlotinib Hydrochloride during the prosecution of the IN ‘774 patent, which Cipla argued was a significant omission. The court took the case of Chemtura Corporation v. Union of India^[3] into consideration and acknowledged Cipla’s concerns regarding the non-disclosure. However, the court clarified that the primary focus of the infringement case was the composition of the drug, Erlotinib Hydrochloride, rather than its polymorphic form. Consequently, Roche’s patent was upheld, and the court maintained that the case hinged on the broader composition claims rather than specific polymorphs.

3. Was the plaintiff entitled to an ad interim injunction?

No

Although Roche sought an injunction to prevent Cipla from continuing to sell Erlocip, the court opted not to grant this request, primarily due to the impending expiration of Roche’s patent in March 2016. The court reasoned that with the patent’s expiration approaching, an injunction would have little practical effect and was therefore unnecessary. Instead, the court chose to restore Roche’s suit for accounting, allowing Roche to seek compensation for the profits that Cipla had accrued from the sale of Erlocip during the period of infringement. This decision provided Roche with a means to recover damages for the financial harm caused by Cipla’s actions.

In its final judgment, the court referred to Bristol-Myers Squibb Company & Ors v. Mr. J.D. Joshi & Anr.^[4], and upheld the validity of Roche’s patent and confirmed that Cipla’s product did indeed infringe upon Roche’s patent rights. Despite this, the court found that the circumstances surrounding the case, particularly the imminent expiration of the patent, did not warrant the imposition of the requested injunction. Rather than halting the sale of Erlocip outright, the court emphasized the importance of holding Cipla accountable for the profits derived from the infringement. By restoring the suit for accounting, the court ensured that Roche had a legal avenue to seek damages, thereby balancing the enforcement of patent rights with the practical considerations of the case.

Later development

Cipla subsequently filed a Special Leave Petition (SLP) challenging this decision, which was admitted by the Supreme Court in 2016. The case was heard with a request to appoint a technical expert, following which the matter was adjourned.

After extensive legal proceedings, the pharmaceutical giants unexpectedly reached a settlement, agreeing to withdraw all pending litigation against each other, including the Special Leave Petition (SLP). This outcome was surprising, given that mediation—initially recommended by the Delhi High Court—had failed. Ultimately, both parties settled the matter out of court.

^[1] 2013 AIR SC 1311

^[2] (1887) 4 RPC 449

^[3] 2009 SCC ONLINE DEL 2634.

^[4] 2015 SCC ONLINE DEL 10109.

Sahil Kumar