IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 1.12.2011 CORAM : THE HONOURABLE Mrs.JUSTICE R.BANUMATHI and THE HONOURABLE Ms.JUSTICE R.MALA O.S.A.NO.365 of 2011 Matrix Laboratories limited 1-1-151/1, 4th Floor, Sai Ram Towers Alexander Road Secunderabad – 500 003. ... Appellant Vs. 1.F.Hoffman – La Roche Ltd., Group Headquarter Grenzacherstrasse 124 CH-4070, Basel Switzerland rep.by its Constituted Attorney Ms.Sujatha Subramaniam 2.OSI Pharmaceuticals, Inc., 41, Pinellawn Road, Melville, New York, 11747, United States of America rep.by its Constituted Attorney Ms.Sujatha Subramaniam .... Respondents Prayer: Original Side Appeal filed under Clause 15 of Letters Patent read with Order XXXVI Rule 1 of O.S.Rules against the Order dated 19.8.2011 in Application No.5529 of 2010 in Application No.5166 of 2010 in C.S.No.801 of 2010 on the file of this Court. For Appellant : Mr.T.V.Ramanujam, Senior Counsel for Mr.Feroz Ali For Respondents : Mr.P.S.Raman, Senior Counsel for Mr.M.S.Bharath https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT R.BANUMATHI,J. AND R.MALA,J. Whether this Court has jurisdiction to entertain Patent Infringement suit in the matter of Patent No.196774 - Erlotinib Hydrochloride and whether learned single Judge was right in refusing to revoke the leave granted in Application No.5166 of 2010 in C.S.No.801 of 2010 are the points falling for consideration in this appeal arising out of the Order made in A.No.5529 of 2010. 2. Briefly stated case of respondents/plaintiffs is:- Respondents are two multi-national Pharmaceutical Companies with Office outside India. Appellant is a Pharmaceutical Company having its office at Secunderabad. Pfizer Products, Inc. had applied for grant of a patent in respect of the CP-358, 774 compound, also known as Erlotinib Hydrochloride and its process vide Application No.537/DEL/1996 on 13.3.1996. Subsequently, Pfizer Inc. assigned their entire right in and to the above patent application to Pfizer Products Inc., who in turn has assigned one half share to respondent No.2. The Indian Patent No.196774 was granted to the respondent No.2 and Pfizer Products. The Controller vide his covering letter dated 6.7.2007 noted that the grant of Patent has been recorded in the Register of patents on 6.7.2007. The Suit Patent Application No.196774 was published in the Official Gazette in March 2005 to enable any person to oppose the Suit Patent Application before the grant of Patent. The said Patent Application No.196774 was found in order for grant on 23.2.2007. Thereafter, Natco Pharma Limited filed a pre-grant opposition challenging 2nd respondent's patent application on 10.4.2007. By an order dated 4.7.2007, Indian Patent Office rejected the pre-grant opposition filed by Natco Pharma Limited. On 6.7.2007, the Controller of Patents issued a patent certificate for the compound "A novel (6,7 – bis (2-methoxyethoxy) quinazolin – 4 – y1)- (3- ethynylphenyl) amine hydrochloride compound" (Erlotinib Hydrochloride) bearing Patent No.196774 dating back to 23.2.2007, which was when the patent was originally found in order for grant. The respondents further averred that the suit patent bearing No.196774 has not been subjected to any post-grant opposition under Section 25(2) of the Patents Act before the Indian Patent Office. The 2nd respondent is the joint owner of Indian Patent No.196774 along with Pfizer Products and 1st respondent is the exclusive licensee of the suit patent. 3. Further case of respondents is that Suit Patent No.196774, which relates to the Compound Erlotinib Hydrochloride, has been widely acknowledged by various International bodies to have positive effects towards treatment of lung cancer and pancreatic cancer. The same has been marketed by the 1st respondent in the name of TARCEVA in several countries including India for several years following extensive research activities and clinical trials. The appellant/defendant has filed revocation petition dated 30.4.2010 before the Intellectual Property Appellate Board (in https://hcservices.ecourts.gov.in/hcservices/ short, "IPA Board"), Chennai, wherein the appellant had expressed its intention to commercially make/use/sell/ distribute/market Erlotinib Hydrochloride, the very compound that is subject matter of the suit patent. It is further alleged that for the reason the appellant has been conducting clinical trial and/or study of their drugs in Lotus Laboratory Pvt. Ltd., Chennai and the respondents apprehended that the appellant threatens to infringe the patent of the respondents. Appellant's wilful plans to infringe respondents' patent for its own commercial benefits would seriously affect the statutory rights of the respondents. Hence, the respondents have filed the suit for permanent injunction to restrain the appellant, their employers/servants/agents from launching making, selling, distributing, advertising, exporting, importing, offering for sale and in any other manner directly or indirectly deal in any pharmaceutical or any chemical compound that infringes the subject matter of Indian Patent No.196774 registered by the respondents. 4. Alleging that a substantial part of cause of action has arisen in Chennai and that the appellant is residing outside the jurisdiction of this High Court, respondents filed A.No.5166 of 2010 seeking leave to sue. In the said application, the Court granted leave to sue on 16.09.2010. On 17.09.2010, an exparte interim injunction was granted against the appellant. The appellant was served and appellant filed A.No.5529 of 2010 to revoke the leave granted to the respondents under clause 12 of the Letters Patent. 5. A petition for revocation has been filed before IPA Board, Chennai. In the application seeking to revoke the leave, the appellant contended that the petition for revocation, being filed before IPA Board, Chennai, can never be considered as sufficient cause of action to file suit for infringement and such revocation petition filed before IPA Board cannot grant territorial jurisdiction to Madras High Court. The appellant further averred that a mere statement expressing interest to manufacture and marketing a patented product, whether made within a revocation petition before IPA Board or elsewhere, cannot constitute a cause of action for infringement. According to the appellant, the Managing Director of Lotus Labs Pvt. Ltd. has given a statement declaring that it is not involved in the testing of the product relating to IN Patent No.196774 for and on behalf of the appellant. Appellant further averred that in any event conducting research on the appellant's patented product with Lotus Labs Pvt. Ltd. is expressly excluded from constituting an act of infringement by Section 107-A(a) of the Patents Act, 1970 and as a result no cause of action for infringement can arise from such research/testing. If there is no cause of action that can rise from research or testing, leave to sue has to be revoked. Case of appellant is that no cause of action in infringement has arisen in Chennai and appellant's entire office and critical operations are based in Hyderbad, Andhra Pradesh and the continuation of the suit against the appellant before the High Court, Chennai would cause inconvenience to the appellant and therefore appellant prayed for revocation of the leave granted under Clause XII of the Letters Patent. https://hcservices.ecourts.gov.in/hcservices/ 6. Upon consideration of the contentions, the learned single Judge held that "...... by the act of the appellant in approaching IPA Board by filing a revocation petition, a part of cause of action has arisen in Chennai". The learned single Judge further held that "the appellant approached IPA Board situated in Chennai and made their intention very clear that they wanted to produce a product, which will not offend the respondents' products and at the same time, expressed the apprehension that the respondents would object to such a new product that may be manufactured and sold by them and this itself is sufficient to give rise to a cause of action in Chennai and within the jurisdiction of the Madras High Court." Referring to the decisions of ROHTAS INDUSTRIES LIMITED AND OTHERS VS. INDIAN HUME PIPE COMPANY IMITED, (AIR 1954 PATNA 492), RAJASTHAN HIGH COURT ADVOCATES ASSOCIATION VS. UNION OF INDIA AND OTHERS, (JT 2001(1) SC 287) and other decisions, the learned single Judge declined to revoke the leave and dismissed the application in A.No.5529 of 2010 filed by the appellant. While so dismissing the application, the learned single judge further directed for continuation of the interim injunction earlier granted. 7. Mr.T.V.Ramanujam, learned Senior Counsel appearing for the appellant contended that the only place, where revocation proceedings under Section 64 could be filed, is before IPA Board, which has its Registry at Chennai and the attempt of respondents to place every person seeking to institute revocation proceedings in Madras High Court is a misguided quia timet action. 8. The learned Senior Counsel for respondents Mr.P.S.Raman inter alia submitted that in the light of appellant's own admissions stating its intention to commercially make/use/sell/distribute a generic version of Erlotinib Hydrochloride infringing the suit patent all over India including Chennai, part of cause of action has arisen before the jurisdiction of the Court and the suit in Madras High Court is well maintainable. 9. Jurisdiction of the Court:- Under Section 104 of the Patents Act, Suit for infringement of a Patent or Suit for declaration under Section 105 or for any relief under Section 106 shall be instituted in "a District Court" having jurisdiction to try the suit". As per the proviso to Section 104, where a counter- claim of revocation of the patent has been made by the defendant, the suit, along with the counter-claim shall be transferred to the High Court for decision. As per Section 2(1)(e) of the Patents Act, "District Court" has the meaning assigned to that expression by the Code of Civil Procedure. Section 2(4) of the Code of Civil Procedure defines "district" as "the local limits of the jurisdiction of principal Civil Court of original jurisdiction (hereinafter called a District Court), and includes the local limits of the ordinary original civil jurisdiction of a High Court." Since definition of "District" in the Code of Civil Procedure is inclusive of High Court, the ordinary civil jurisdiction of High Court will have the jurisdiction to entertain https://hcservices.ecourts.gov.in/hcservices/ the suit for infringement of Patent. The emphasis is on the expression in Section 104 having jurisdiction to try the suit. The Madras High Court, being Chartered High Court, ordinary civil jurisdiction of Madras High Court is governed by Letters Patent. We have to consider whether a Suit for infringement of a Patent filed under Section 108 would be governed by the Letters Patent. Let us consider filing of the cases of infringement of a Trade mark and a copyright. 10. It is seen from Section 134 of the Trade Marks Act, 1999 that it contemplates three types of suits viz.:- (a) suit for infringement of a registered trade mark (b) suit relating to any right in a registered trade mark and (c) suit for passing off. In view of sub-section (1) of Section 134, all the above three types of suits are to be instituted only in a Court not inferior to a District Court having jurisdiction to try the suit. Sub-section (2) of Section 134 defines the expression 'District Court having jurisdiction' found in sub-section (1), to include a District Court within whose jurisdiction the plaintiff resides or carries on business at the time of institution of the suit, if the suit is in respect of a registered trade mark. Therefore, a special privilege is conferred upon the Proprietor of a registered trade mark to institute a suit for infringement or a suit relating to any right in a registered trade mark, in the District Court within whose jurisdiction, he resides or carries on business. This privilege is conferred by Section 134(2), with a non obstante Clause, by using the phrase 'notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force'. Since Section 134(2) declares that it would hold the field notwithstanding anything contained in the CPC or any other law for the time being in force, the same cannot be annulled or rendered nugatory, by importing the requirements of Clause 12 of the Letters Patent into a case covered by Section 134(2) of the Trade Marks Act, 1999. 11. Section 62(1) of the Copyright Act stipulates that forum for institution of infringement proceedings etc., to be the "District Court". Section 62(2) of the Copyright Act provides that the term "District Court having jurisdiction" notwithstanding anything contained in the Civil Procedure Code or any other law for the time being in force would include "a District Court" within the local limits of whose jurisdiction, the person or one of the persons instituted in the suit actually or voluntarily resides or carries on business or personally works for gain. 12. Thus, in Section 62(2) of the Copyright Act as well as Section 134(2) of the Trademarks Act, a deliberate departure is made from Section 20 of the Civil Procedure Code to enable the plaintiff to sue one who infringed his copyright in the Court within whose local limit he carried on business at the time of institution of the suit or other proceedings. The expression in the non obstante clause in section 134(2) of the Trade Marks Act and Section 62(2) of the Copyright Act using the phrase "notwithstanding anything contained in the Code of Civil Procedure, https://hcservices.ecourts.gov.in/hcservices/ 1908" makes a clear departure from Section 20 of the Civil Procedure Code. 13. Per contra, as per Section 104 of the Patents Act, the infringement of a Patent and other infringement actions i.e., actions under Sections 105 and 106 may be brought before the District Court as per the definition of the Code of Civil Procedure or the High Court. The Madras High Court, being a Chartered High Court, its ordinary/original civil jurisdiction is governed by Clause 12 of the Letters Patent. 14. Clause 12 of the Letters Patent deals with filing of suits on the Original Side of Madras High Court. Clause 12 empowers the Madras High Court to decide the suits for land or other immovable property if such land or property is situated within the local limits of the ordinary original jurisdiction of the High Court. Secondly, it empowers the court to deal with a dispute where cause of action has arisen wholly within the jurisdiction of the High Court. Thirdly, it empowers the High Court to deal with the matter where cause of action has arisen in part within the jurisdiction of the High Court, provided before institution of such suit leave of the High Court has been obtained. Fourthly it also empowers the High Court to deal with the dispute “ ... if the defendant at the time of the commencement of the suit shall dwell or carry on business or personally work for gain, within such limits”. 15. In the present case, the 1st respondent is a Company organised and existing under the laws of Switzerland, having its principal office at Grenzacherstrasse 124, CH-4070, Basel, Switzerland. The 2nd respondent is a Company organised and incorporated as per the laws of United States having its registered office at 41, Pinelawn Road, Melville, New York 11747, U.S.A. The appellant/defendant is Matrix Laboratories Limited, a Pharmaceutical Company registered under the Indian Companies Act, 1956 having its office at 1-1-151/1, 4th Floor, Sai Ram Towers, Alexander Road, Secunderabad, Andhra Pradesh – 500 003. 16. Clause 12 of the Letters Patent inter alia states that if the defendant at the time of commencement of the suit shall dwell or carry on business or personally works for gain within such limits of ordinary original jurisdiction of this Court, the suit could be laid in this Court on its Original Side. Since the sole defendant/ appellant is having its registered office at Secunderabad and also carrying on business in the said place, the 4th limb of clause 12 is not applicable. We will have to see whether cause of action has partly arisen in Chennai. 17. Can the Statement in the revocation petition before the IPA Board can give rise to cause of action:- The suit for infringement of a patent can be filed in the Court having jurisdiction to try the suit, where the cause of action has arisen. For the purpose of considering application for the grant of leave or revocation of leave one has to look into the plaint averments. Now the question falling for consideration is, whether this Court https://hcservices.ecourts.gov.in/hcservices/ has jurisdiction to entertain the suit. For determining this question, it is necessary to have a look into the plaint. At this stage, the plea taken by the appellant/defendant would be wholly irrelevant. By virtue of amendment to Patents Act, 2005, revocation petition has to be filed before the Intellectual Properly Appellate Board. 18. As per Section 64 of the Patents Act, a revocation petition may be filed by "any person interested" or the Central Government before the IPA Board, Chennai. IPA Board has its registered office at Chennai. The revocation petitions are filed in the Registry of IPA Board at Chennai and the applications are scrutinised in Chennai. Once the revocation petition is found to be in order, O.R.A.Number is assigned and notice is issued by registry of IPA Board in Chennai. 19. IPA Board has been constituted by a Gazette notification of the Central Government in the Ministry of Commerce and Industry on 15.9.2003 to hear the appeals. IPA Board has its Headquarters at Chennai and shall have sittings at Chennai, Mumbai, Delhi, Kolkata and Ahmedabad. Thus, filing of revocation petition in Chennai is by statutory compulsion. Mere filing of an application for revocation in IPA Board, Chennai cannot give rise to a cause of action. After filing of revocation petition before IPA Board at Chennai and after scrutinising of the application, the IPA Board may have the hearing either at Chennai or where the parties opt to have the hearing. IPA Board is a Circuit Board having its sittings in various parts of the country. Once the respondent appeared and filed their response, by and large the proceedings would be heard in the situs that the patent was granted, unless the parties choose otherwise. Therefore, mere filing of revocation petition before IPA Board in Chennai cannot amount to giving rise the cause of action and can only be stated as a transitory one. (underlining added) 20. Now it is to be seen whether any part of cause of action has arisen within the ordinary original jurisdiction of Madras High Court. Paragraphs No.42 and 43 of the plaint refer to cause of action for filing the infringement suit in Chennai, which reads as under: "42.The cause of action for filing the present suit first arose in the month of August, 2010, when Plaintiff No.2 first received communications from the IPAB at Chennai that a revocation petition against the suit patent, Indian Patent No.196774 had been filed by the Defendant. It is reiterated that the Plaintiffs were first made aware of the Defendant's intent to infringe the suit patent by the pleadings in the revocation petition. The cause of action is a continuous one and continues to subsist until the Defendant is restrained by the orders of this Hon'ble Court from infringing the Plaintiffs' Indian Patent No.196774. https://hcservices.ecourts.gov.in/hcservices/ 43.This Hon'ble Court has the jurisdiction to try and entertain the present suit as the Defendant by its own admissions within its revocation petition intends to commercially make/use/sell/distribute a generic version of Erlotinib Hydrochloride infringing the suit patent all over India, including Chennai which is situated within the territorial jurisdiction of this Hon'ble Court. The impending threat of sale of a product all over India, which is covered by a patent amounts to violation of the exclusive rights of the Patentee under Section 48 of the Patents Act and thus in light of the same this Hon'ble Court has the necessary jurisdiction to try and entertain the present suit. Additionally, the Defendant has filed the revocation petition before the IPAB at Chennai, which is situated within the territorial jurisdiction of this Hon'ble Court. Therefore, this Hon'ble Court has the necessary jurisdiction to try and entertain the present suit vide Section 20 of the Code of Civil Procedure, 1908. 21. Even at the outset it is to be pointed out that in view of Section 120 C.P.C, Sections 17, 18 and 20 of Civil procedure Code are not applicable to the original Side of the High Court. Therefore plaintiff cannot invoke Section 20 C.P.C. 22. Learned Senior Counsel for appellant/defendant contended that infringement suit cannot be based on a statement made in a Revocation Petition filed before IPA Board, since IPA Board is the only forum available for the appellant to question the validity of the patented invention and any statement made in the revocation petition does not amount to part of cause of action under Clause 12 of the letters Patent. It was further submitted that the statement made in the revocation petition does not amount to an impending threat to infringe and such statement was made only to comply with a statutory requirement as to the appellant's status as "person interested". The learned Senior Counsel would further submit that in any event the suit patent was granted in New Delhi and the proceedings would be held only in New Delhi, which is the situs of the patent granted. It was further argued that it was completely open to the respondents to file appropriate proceedings either in New Delhi or any other Court within whose jurisdiction the appellant has its manufacturing unit and while so the respondents opted to choose the Madras High Court and resorted to "forum shopping" to cause inconvenience to the appellant. 23. Refuting the contentions, the learned Senior Counsel for respondents submitted that in August 2010 the 2nd respondent received a communication from IPA Board at Chennai and in the said petition, respondents noted that the appellant brazenly advertised its intention to commercially launch a product, which would be governed by Indian patent No.196774 of respondents. The learned Senior Counsel would further submit that the quia timet action (any action by the appellant, which would cause irreparable loss to the respondents) is a preventive measure to avert an action of the https://hcservices.ecourts.gov.in/hcservices/ appellant, which would cause irreparable damage to the respondents, who have spent millions of dollars in conducting research and clinical trial. 24. The learned Senior Counsel had drawn our attention to the averments made by the appellant in the various proceedings to justify the quia timet action. In paragraph Nos.5 and 6 of the revocation petition, the appellant has averred as under: "5. ..... The Petitioner's commercial/business plans include making/using/selling/distributing a generic version of the drug Erlotinib Hydrochloride. The Petitioner states that it is actually inclined to make a novel Polymorphic form of the compound Erlotinib Hydrochloride. It is stated that while this novel Polymorphic form of the compound Erlotinib Hydrochloride is not covered under the said Patent No.196774 but there is every likelihood that the Respondents may institute infringement action against the Petitioner on the basis of its said patent No.196774 even though the Petitioner will manufacture and market a novel Polymorphic form of the compound Erlotinib Hydrochloride.... 6. .... the Respondents would use the said Patent No.196774 to prevent the Petitioner from making and selling any Polymorphic form of the compound Erlotinib Hydrochloride on the plea of infringement of the said patent No.196774. The Petitioner states that the patent No.196774 is therefore a serious obstruction to the commercial/business plans of the Petitioner with regard to the manufacture and sale of the compound Erlotinib Hydrochloride." In the revocation petition, the appellant has also set forth various grounds seeking for revocation. The learned counsel for the respondents has mainly contended that the above averments made in the revocation petition are actually a threat of infringement of respondents' patent and when the threat is given from Chennai by way of revocation petition, the suit for infringement of patent is well maintainable in Madras High Court. 25. At this juncture, it is appropriate to refer Section 48 of the Patents Act, 1970 which reads as follows; "48. Rights of patentees. Subject to the other provisions contained in this Act and the conditions specified in Section 47, a patent granted under this Act shall confer upon the patentee-- "(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making using, offering, for