In the legal dispute between Novartis and Natco Pharma, in Novartis AG & Anr. vs Natco Pharma Limited [CS(COMM) 229/2019], the Delhi High Court has been addressing infringement of patent IN 276026 that claims the protein kinase inhibitor Ceritinib. The Court granted an interlocutory injunction on January 9, 2023, restraining Natco from selling and manufacturing Ceritinib. The Court rejected Natco’s contention of invalidity of the suit patent on the grounds of anticipation and obviousness and found the suit patent prima facie valid. However, the case took a turn when Natco sought to vacate this injunction (vide interlocutory application IA 4636/2023 filed under order 39 Rule 4 of CPC), on the ground of changed circumstances due to suppression and concealment of relevant documents by Novartis and undue hardship caused to them by such concealment.
The foundation of Natco’s interlocutory application was the concealment of the refusal of a divisional application arising out of the application in relation to the suit patent.Before the grant of patent IN 276026, Novartis filed a divisional application (IN 5338/DELNP/2014) that included all claims from the corresponding PCT application. This divisional application, examined post-grant of the parent case covering Ceritinib, encountered an objection under Section 16 of the Patents Act, 1970, for overlapping claims with the parent case. The First Examination Report (FER) for the divisional application also referenced the same prior art as the parent case’s FER. Although Novartis reduced the claims to mitigate the conflict with the suit patent, the Section 16 objection remained in the subsequent hearing notice. Novartis decided not to proceed with the application and notified the Controller, who then refused the application under section 15 of the Act, as per the order dated February 16, 2022.
Natco pressed their application for vacation of interim injunction based on the refusal of Novartis’s divisional application. Natco submitted that the since the refusal of the divisional application was issued under Section 15 of the Patents Act, it could not be treated as abandonment of the divisional application but was a decision on merits. It was further asserted that since the prior art cited in the FER and the hearing notice of the divisional application were also cited by Natco to contest the prime facie validity of the suit patent, the refusal of the divisional application negatively impacted Novartis’s prima facie case that led to the grant of injunction. Thus, the concealment of the refusal order in the divisional application vitiated the order granting injunction. Finally, it was alleged that since a claim covering Ceritinib was amongst the claims that were refused in the divisional application, the refusal of the divisional application had led to Ceritinib falling into public domain.
The Court, by its decision dated April 9, 2024, upheld the injunction granted against Natco and ruled as follows.
- The divisional application was abandoned and not refused on merits: Unless there is an adjudication on the objections raised in the FER, the application cannot be said to be rejected on merits. A reference to Section 15 in the refusal order under such circumstances does not amount to adjudication of the claims on merits. A decision to abandon a divisional application does not imply admission of the merits of the objections raised by the Controller. Therefore, such abandonment cannot estop a patentee from contesting the validity of the patent.
- Suppression of the details of divisional application cannot be regarded as suppression of material facts: The omission to disclose details of an abandoned divisional application cannot impact the prima facie merits of the granted parent patent. Even in an alternate scenario where a divisional application is refused on merits and the Court has made an independent analysis on merits in relation to the granted parent case, concealment of such details still cannot be taken as a ground to vacate an interim injunction because the decision of the Controller is not binding on the Court.
- Grounds of changed circumstances and undue hardship taken by Natco to seek vacation of the injunction order do not hold: Non-disclosure of the details of the divisional application cannot constitute “change in circumstances” within the meaning of Order 39 Rule 4 of CPC because the divisional application and its outcome were prior to the injunction order passed by the Court. The claim of ‘undue hardship’ is not tenable as the Court had considered all of Natco’s submissions before passing the interim injunction order.
- The refusal of the divisional application does not extinguish the suit patent: Divisional application is dependent on the suit patent and not vice versa. Therefore, abandonment or refusal of a divisional application containing claims which were granted in the suit patent does not amount to making such a claim available in public domain. Any exploitation of a granted claim by a third-party amounts to infringement of the suit patent.
The Court set a precedent in patent litigation, particularly regarding the probative weight of divisional applications which are refused/abandoned prior to an injunction order and their impact on the validity of suit patents.
PatentsRewind 