Jaipuria Institute of Management,

Vineet Khand, Gomti Nagar

Lucknow – 226 010

Academic Year 2019 - 2020

Batch 2019 - 2021
Trimester 2ND Trimester
Programme
PGDM (Retail Management)
(PGDM / PGDM-FS / PGDM-RM)
Name of Course Legal Aspects of Management
Section E
Name of Faculty Prof. Maneesh Yadav

Nature of submission
Project Report
(Assignment / Project Report)
Topic of Assignment / Project
Novartis and Cipla

Deadline for submission

13th December 2019 (23:59 Hrs.)

Group/ Learning Team Number Learning Team – E - 02

Submitted by:

Name of Student/ Enrolment

Sl. No. Contribution Signature
No.

1 Gunit Kaur Arora & JL19RM017

2 Manshi Verma & JL19RM022
Shahjahan Khatoon &

3 JL19RM043
4 Shashank Sahu & JL19RM045
5 Shivam Singh & JL19RM049
Suryansh Agrahari &

6 JL19RM056

Date of receiving at PMC Signature of PMC staff

ACKNOWLEDGEMENT
We wish to express our sincere gratitude to Prof. Maneesh Yadav, faculty of Legal Aspects of
Management of Jaipuria Institute of Management, Lucknow for providing us an opportunity to do our
project work on A Novartis and Cipla. This project bears an imprint of support of many peoples. I sincerely
thank to our project guide Prof. Maneesh Yadav for his guidance and encouragement in carrying out this
project work.

I also wish to express my gratitude to the officials and other staff members of Jaipuria Institute of
Management, Lucknow who rendered their help during the period of our project work. Last but not the least,
we wish to avail ourselves of this opportunity, express a sense of gratitude and love to our friends and our
beloved parents for their manual support, strength, help and for everything.

1. Gunit Kaur Arora [JL19RM017]

2. Manshi Verma [JL19RM022]
3. Shahjahan Khatoon [JL19RM043]
4. Shashank Sahu [JL19RM045]
5. Shivam Singh [JL19RM049]
4. Suryansh Agrahari [JL19RM056]
TOPIC
Novartis Ag & Anr
vs
Cipla Ltd
on
27 November, 2015
 Table of Content

CHAPTER TITLE PAGE NO.

Acknowledgement

Table of Contents

1 Introduction 1

2 Case Analysis 2

3 Fact & Legal issue involved 3

4 Judgement by the court 8

5 View of LT Team 9

Introduction about the Company

Novartis was setup in 1996 the historical backdrop of Novartis follows the
merging fates of three organizations: Geigy, a synthetic substances and colours
exchanging organization established in Basel, Switzerland in the eighteenth
century; Ciba, which started creating colours in 1859; and Sandoz, a compound
organization established in Basel in 1886. Novartis is a Global Drug
Development (GDD) they deliver new innovations which improve patients’ lives.
They lead the industry in R&D and are recognized and respected for their quality
of work. They have 200 products in clinical development. Their R&D innovation
is according to the needs of the patients and new technologies and innovative
science. There shareholders are share transfer agent (Link Intime India Private
Ltd.) and Nodal Officer for coordination with IEPF Authority (Trivikram Guda)

Cipla was setup in 1935 founder of the company is Dr. K.A. Hamied. Cipla is an
organization which has built its foundation of care brick by brick. Their main
purpose is was and will always continue to be Caring for Life. With this purpose
they have spread over 80 plus countries and they provide over 1500 products. To
make health care more affordable globally they have made their presence in
various markets of India, South Africa, the U.S. They constantly work on
ensuring high quality and affordable medicines to provide patients who are in
need. This is the reason why they are being trusted by health care professionals
and patients worldwide. Cipla limited is a multinational medicine and
biotechnology company. They have their headquarters in Mumbai. They develop
medicines which cure respiratory, diabetes, weight control, depression and
cardiovascular disease.

CASE ANALYSIS
Indian Pharmaceuticals is one of the largest industries which is ranked fourth
globally in production volume. They are the major manufacturers of cost-
effective generic drugs and will become the leading pharmaceutical products.
But recently Indian pharmaceuticals have seen some major judgements which
will have impact on Indian pharma players and even international pharma
companies. One such case is Novartis Vs Cipla which was presented in high
court on 27th November 2015. The division bench of the Delhi high court-
maintained request of a single judge who restricted India pharmaceutical
company Cipla from selling pharmaceutical products which contained
INDACATEROL, a respiratory drug in which Novartis is a patent.

INDACATEROL treats chronic obstructive pulmonary disease (COPD) which

was sold in India by Novartis under the trademark of ONBREZ. Indacaterol was
not manufactured by Novartis in India, it was manufactured in Switzerland and
was imported in Indian through another pharma company Lupin.
Cipla in his defence said
 Indacaterol does not manufacture in India and is imported through Lupin,
so this did not meet the demand of patient
 the price of Novartis medicine is five times higher than the price of Cipla’s
medicine.
 Even said that the it should be permitted to sell Indacaterol as Novartis was
not working on the patent in India.
 It further adds that public demand will not be considered if the operation of
Indacaterol injections stops in the market.
Novartis countering Cipla’s Defence
 It said though they did not manufactured products in India that does not
mean they were not working on Patent there are various other medicines
which were imported in India which considered the needs of the patients.
 It further added that Cipla’s lead was in dishonesty as it even attempted to
take away the Novartis trademark Onberz with its imprint Unibrez.
But this suit was settled by Cipla by not use Unibrez mark in future.

FACTS - LEGAL ISSUES

 Cipla launched the same copy of Novartis patented drug under the

mark Onberz which contained Indacaterol in October 2014

 Cipla priced the same copy of the drug at Rs 130 per pack of ten

tablets as compared with Rs 677 for Onberz

 Novartis filed a case against Cipla using its product.

 Cipla challenged the decision on three bases: -

 Novartis is not the manufacturer of Indacaterol in Indian

 Public demand is not fulfilled for just small quantity which is

imported and the price difference.

 Right to restrain the third party from breaking the law which is

section 48 so Cipla claimed that Novartis broke the rule of not

working the patent.

JUDGEMENT
Court made the decision: -

 There was no problem with the patent of Novartis, hence patentee is

qualified to avail the advantage.
 Not manufacturing products in the India is not necessary to prove the
working of patent.
 Public Interest was not the factor which could prove credible challenge to
validity of Novartis Patent
 Apart from Indacaterol, there are other drugs to manage COPD in Indian
Market and Indacaterol does not fall in the category of a lifesaving drug
(cancer medicine)

Cipla was not satisfied with the decision so it further went division bench
were two judges take decision so even Division Bench decision was
satisfied the single judge judgement so case was finalised with these
judgements.

To sum up:
The decision is important as it strikes the balance between public
interest and exclusive rights conferred on the patentee. Further it makes
clear that if there is no credible challenge to the Patent right
infringement provisions provided under Section 48 cannot be curtailed.

View Point of Learning Team

 According to our learning team Cipla presented a wrong defence because
there was no such problem from customers towards Novartis. People were
comfortable with the price of the product and there was ample of quantity
imported to provide the need of the patients. And we learned that if the product is
not manufactured in the country which imports product cannot be claimed by
patent issues under Section 48.

We even learned about the decisions making in court and how sections are
implied in the cases. And Cipla claimed wrong Section which was section 83
which says different inventories should be there so Cipla followed the same
medicine as Novartis did so this section was not implemented.

Further with the help of the Subject Legal Aspects of management we learned
about some laws and rules which are followed in the court.