Novartis AG & Anr. v. Cipla Ltd. (2015)
In the intricate tapestry of intellectual property law, few cases exemplify the tension between patent rights and public health as vividly as Novartis AG & Anr. v. Cipla Ltd., decided by the Delhi High Court on January 9, 2015. This legal skirmish revolved around the enforcement of a patent for INDACATEROL, a groundbreaking bronchodilator for chronic obstructive pulmonary disease (COPD), against the backdrop of India’s burgeoning public health crisis. The plaintiffs, Novartis AG and its Indian subsidiary, sought to protect their statutory monopoly, while the defendant, Cipla Ltd., challenged the exclusivity by invoking the dire needs of COPD patients.
Detailed Factual Background
The dispute centered on Indian Patent No. 222346, granted to Novartis AG, a Swiss pharmaceutical giant, on August 5, 2008, covering INDACATEROL and its maleate salt, INDACATEROL Maleate. Novartis AG is renowned for its pharmaceutical R&D, investing USD 7.2 billion in 2013 alone. Its Indian arm, Novartis Healthcare Pvt. Ltd., partnered with Lupin Ltd. under a 2012 agreement to market INDACATEROL Maleate in India as ONBREZ.
INDACATEROL, a novel ultra-long-acting β2-agonist, offered 24-hour bronchodilation—an advance over 12-hour therapies—approved globally by the EMA (2009) and the U.S. FDA (2011).
Cipla Ltd., an Indian pharmaceutical powerhouse, launched its own INDACATEROL-based product in October 2014, citing Novartis’s failure to meet India’s COPD demand—estimated at 1.5 crore patients annually—with imports covering only 0.03% of the need. Cipla argued that Novartis’s high-priced imports exacerbated the plight of India’s COPD population, which faces challenges like smoking, biomass fuel exposure, and limited healthcare access.
Novartis countered that INDACATEROL was a New Chemical Entity (NCE) developed through extensive R&D and centrally manufactured in Switzerland. Global sales hit USD 192.2 million in 2013; Indian sales rose from INR 4.2 million in 2010 to INR 23.6 million by September 2014. Cipla claimed this was still insufficient, citing studies predicting a rise in COPD cases to 2.2 crore.
Detailed Procedural Background
Novartis filed suit (CS(OS) 3812/2014) in the Delhi High Court, seeking a permanent injunction against Cipla for infringing Patent No. 222346, along with claims for damages and delivery-up. Novartis also moved an interim injunction application (I.A. No. 24863/2014) under Order XXXIX Rules 1 and 2 of the CPC.
Cipla, yet to file its written statement, replied on December 11, 2014. Earlier, on October 22, 2014, it had petitioned the Central Government under Sections 66 and 92(3) of the Patents Act, 1970, to revoke the patent. Novartis filed a rejoinder affirming its patent’s validity. Cipla also applied to implead the government—notice was issued but unresolved at judgment.
Issues Involved in the Case
- Whether Novartis established a prima facie case of patent infringement warranting an interim injunction?
- Whether public interest, i.e., INDACATEROL’s limited availability and affordability, could override Novartis’s statutory rights under Section 48 of the Patents Act?
Detailed Submission of Parties
Novartis: Asserted that Patent No. 222346, unchallenged since 2008, conferred an exclusive right under Section 48. Cited global approvals and claimed Cipla’s launch infringed the patent. Denied inadequate supply allegations, citing sales data and readiness to meet demand. Rejected Cipla’s public interest argument, proposing licensing (which Cipla refused). Emphasized that compulsory licensing belongs before the Controller.
Cipla: Challenged patent validity under Section 64 (obviousness, lack of novelty). Main argument was public interest under Sections 83 and 84, claiming Novartis failed to meet India’s COPD crisis. Positioned itself as offering a life-saving, affordable alternative. Cited TRIPS Agreement (Article 7) and Indian Constitution (Article 21). Proposed royalty deposit instead of injunction.
Novartis (Rejoinder): Dismissed revocation plea as implicit admission of patent validity. Contested Cipla’s COPD demand estimates. Argued that INDACATEROL suits only mild-to-moderate COPD. Claimed no mandate exists for local manufacturing.
Judgments and Precedents Cited
- American Cyanamid Co. v. Ethicon Ltd., [1975] RPC 513 (UK): Established prima facie case, balance of convenience, and irreparable harm for interim relief.
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006): Introduced a four-factor test for injunctive relief in patent cases—referenced for public interest considerations.
- Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 670 F.3d 1171 (2012): Denied permanent injunction on public access grounds—relevant for alternatives like royalties.
- F. Hoffmann-La Roche Ltd. v. Cipla Ltd., 148 (2008) DLT 598: Denied injunction due to validity concerns and public interest—distinguished but endorsed the public interest principle.
- Bayer Corporation v. Union of India & Ors., W.P. No. 1323 of 2013: Addressed what constitutes “working” a patent—Cipla’s argument; court deferred to the Controller.
Judicial Reasoning and Analysis
The Court interpreted Section 48 of the Patents Act to grant exclusive rights, but noted that public interest arguments (e.g., under Section 83) must be pursued before the Controller, not in infringement suits. The Court acknowledged public interest as relevant to balance of convenience in equitable relief, especially for life-saving drugs.
The court found Cipla’s demand estimates vague and unsupported, while Novartis’s affidavit indicated surplus stock and willingness to meet demand. Cipla’s proposal of royalty deposit was rejected due to lack of financial clarity and inequity to Novartis.
A conditional injunction was granted, allowing Cipla to pursue compulsory licensing within two weeks. Otherwise, Cipla was restrained from manufacturing or selling INDACATEROL Maleate until trial or licensing outcome.
Final Decision
On January 9, 2015, the Court granted an interim injunction restraining Cipla from manufacturing or selling INDACATEROL Maleate. However, it permitted Cipla to seek a compulsory license within two weeks, with the Controller required to decide within six months.
Law Settled in This Case
The judgment clarified that public interest arguments like non-working or affordability (under Section 83) are not valid defenses in infringement proceedings. These must be addressed via compulsory licensing under Section 84. However, courts may consider public interest within the balance of convenience for interim relief, provided strong evidence exists.
Case Details
- Case Title: Novartis AG & Anr. Vs. Cipla Ltd.
- Date of Order: January 9, 2015
- Case No.: CS(OS) 3812/2014
- Court: High Court of Delhi at New Delhi
- Judge: Hon’ble Justice Shree Manmohan Singh
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor – Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539
