MANU/DE/1373/2014

Equivalent Citation: 210(2014)DLT591, MIPR2014(2)289, 2014(59)PTC 124(Del)

IN THE HIGH COURT OF DELHI

FAO (OS) 144/2014
Decided On: 30.05.2014
Appellants: Teva Pharmaceutical Industries Ltd. and Ors.
Vs.
Respondent: Natco Pharma Limited
Hon'ble Judges/Coram:
G. Rohini, C.J. and Rajiv Sahai Endlaw, J.
Counsels:
For Appellant/Petitioner/Plaintiff: Mr. Parag P. Tripathi and Mr. Sudhir Chandra, Sr.
Advocates, Mr. Pravin Anand, Mr. Nischal Anand, Ms. Savitha Suresh and Mr. Aman
Taneja, Advocates
For Respondents/Defendant: Mr. Chetan Sharma, Sr. Advocate, Ms. H. Rajeshwari,
Mr. Tahir Abduljabbar and Ms. Sudipa Dasgupta, Advocates
Case Note:
Patent - Jurisdiction - Whether suit of Appellants/Plaintiffs as per
averments therein is limited to prohibiting export to US -
Held, once Appellants/Plaintiffs had pleaded apprehension of
sale/marketing in Delhi, Courts in Delhi would have jurisdiction to
entertain suit and such jurisdiction could not be ousted by Defendant by
making a statement not to do any such act in Delhi, though Defendant
would be entitled to prove that there was no basis for such apprehension. If
such a course of action were to be permitted, it would enable a Defendant
to avoid action in a particular Court by making such a statement and
indulge in forum shopping. Single Judge erred in holding that suit, as per
averments in plaint was confined to preventing only export to US of
products manufactured at Hyderabad using process patented by
Appellants/Defendants. Averments in plaint extended to apprehension of
marketing by Respondent/Defendant of products manufactured by process
patented by Appellants/Defendants, in Delhi. Thus, as per dicta in Bristol
Myers Squibb, Courts at Delhi would have territorial jurisdiction to
entertain suit. Therefore order of Single Judge allowing application of
Respondent/Defendant under Order 7 Rule 10 of CPC was set aside. Appeal
allowed.
Ratio Decidendi:
"Once Appellants/Plaintiffs have pleaded apprehension of sale/marketing
in Delhi, Courts in Delhi would have jurisdiction to entertain suit and such
jurisdiction cannot be ousted by Defendant by making a statement not to do
any such act in Delhi, though Defendant would be entitled to prove that
there is no basis for such apprehension"

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 JUDGMENT
Rajiv Sahai Endlaw, J.
1. This appeal under Order 43 Rule 1(a) of the Code of Civil Procedure 1908 impugns
the order dated 28th February, 2014 of the learned Single Judge (exercising ordinary
original civil jurisdiction) of allowing IA No. 10390/2012 of the respondent/defendant
under Order 7 Rule 10 of the CPC and returning the plaint in CS(OS) No. 3193/2012
filed by the three appellants/plaintiffs for presentation in the appropriate Court.
2 . Notice of the appeal was issued and owing to the urgency expressed by the
appellants on the ground that the protection afforded by the US Supreme Court to the
appellants qua the patent to which the suit pertains is till 24th May, 2014 only,
hearing was expedited. We have heard the counsels for the parties.
3. The suit from which this appeal arises was filed by the appellants/plaintiffs for the
relief of permanent injunction restraining the respondent/defendant from
manufacturing, selling, offering for sale, exporting or registering the product that has
been held by the United States District Court to infringe the appellants/plaintiffs
Indian Patent No. 190759 and for ancillary reliefs of rendition of accounts and
damages, pleading:-
(i) that the appellant/plaintiff no. 2 Yeda Research and Development Co. Ltd.
Israel is the holder of Patent No. 190759 dated 23rd May, 1995 in respect of
"a method for manufacturing Co-polymer I fraction";
(ii) that the appellants/plaintiffs using the patented method are
manufacturing drug under the trademark COPAXONE for treatment of
relapsing, remitting multiple sclerosis;
(iii) that the appellants/plaintiffs earlier filed CS(OS) No. 1708/2007 in this
Court against the respondent/defendant for restraining infringement of the
said Patent No. 190759;
(iv) that the respondent/defendant in the previous suit aforesaid made a
statement that the process employed by the respondent/defendant for
manufacturing the drug Glatiramer Acetate is different from the process
which had been patented by the appellants/plaintiffs;
(v) that in view of the aforesaid statement of the respondent/defendant, the
appellants/plaintiffs did not press their application for interim relief in the
previous suit;
(vi) however it was reported in the news article published on 17th January,
2012 that the respondent/defendant will work with Mylan Pharmaceuticals
Inc. (MPI) to launch Glatiramer Acetate for the treatment of multiple
sclerosis;
(vii) that the appellants/plaintiffs on making enquiries learnt that MPI had
signed an agreement with the respondent/defendant relating to development
and marketing of Glatiramer Acetate in the United States and in pursuance
thereof MPI submitted to the US FDA an Abbreviated New Drug Application
seeking approval to manufacture and sell MPI's proposed Glatiramer Acetate;
(viii) that the appellants/plaintiffs instituted a suit in the US District Court

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 against MPI and the respondent/defendant for infringement of the US Patents
of the appellants/plaintiffs;
(ix) after trial, the US Court found that the Glatiramer Acetate product that
MPI and the respondent/defendant were seeking to sell in the United States
infringes the claims of US Patent 430 and 898 (corresponding to Indian
Patent 190759) of the appellants/plaintiffs;
(x) that the US Court's decision leads to an incontrovertible conclusion of
infringement of rights of the appellants/plaintiffs in Indian Patent 190759
based on the manufacture of Glatiramer Acetate by the respondent/defendant
for export and sale in the United States; and,
(xi) "that the acts of the defendant in manufacturing the Glatiramer Acetate
product for sale in the United States and elsewhere amount to a clear
infringement of the registered Patent No. 190759.
4 . Needless to state respondent/defendant contested the suit by filing a written
statement. Application aforesaid under Order 7 Rule 10 of the CPC was also filed,
pleading:-
(a) that this Court does not have territorial jurisdiction to entertain the suit;
(b) no part of the alleged cause of action has accrued within the territorial
jurisdiction of this Court;
(c) that the alleged cause of action as set-out in the plaint is qua the
manufacture and export of Copolymer-I by the respondent/defendant;
(d) the only basis for filing the suit at Delhi is the alleged presence of an
office of the respondent/defendant at Delhi;
(e) that the respondent/defendant does not have any manufacturing facility
at Delhi that could possibly practice or export the product of the suit patent;
(f) though the respondent/defendant manufactures Copolymer-I under the
mark Glatiramer Acetate but not at Delhi;
(g) the respondent/defendant does not carry on any business within the
territorial jurisdiction of this Court; and,
(h) that the suit is only concerned with the process patent and the
appellants/plaintiffs do not claim any patent in the product manufactured by
the said process; though the appellants/plaintiffs had applied for a product
patent also but the same was denied.
5 . The learned Single Judge has vide impugned order allowed the aforesaid
application of the respondent/defendant and held this Court to be not having any
territorial jurisdiction to entertain the suit and has resultantly ordered the plaint to be
returned, finding/observing/holding:-
A. that it is the case of the appellants/plaintiffs themselves that the suit is a
quia timet action in as much as the same is based on a apprehension of the
likelihood of the respondent/defendant exporting the infringing goods to US
and other countries;

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 B. that the patent, for restraining infringement of which the suit is filed, is a
process patent and not a product patent; though the appellants/plaintiffs had
applied for a product patent also but the said application was rejected;
C. that the argument of the appellants/plaintiffs was that though the
respondent/defendant for producing the product Glatiramer Acetate for
marketing in India was using a different process as stated by the
respondent/defendant in the first suit but the respondent/defendant for
exporting Glatiramer Acetate to MPI for sale in US was intending to use the
process in which the appellants/plaintiffs held a patent;
D. that there is no averment in the plaint of the violation of the process
patent of the appellants/plaintiffs within the territorial jurisdiction of this
Court; there is no averment that the process patent was being
practiced/infringed by the respondent/defendant within the jurisdiction of the
Court in as much as neither had the appellants/plaintiffs pleaded nor
controverted that the respondent/defendant had no manufacturing activity in
Delhi and that the manufacturing facilities of the respondent/defendant were
in Hyderabad only;
E. that since the suit concerned a process patent, the pleadings as regard the
product being sold in Delhi or the possibility of the product being launched
in Delhi or elsewhere cannot justify the territorial jurisdiction of this Court;
F. rather the case of the appellants/plaintiffs was that the
respondent/defendant was intending to practice the process patent of the
appellants/plaintiffs for manufacturing of goods for export to US and
elsewhere;
G. that there is no averment in the plaint of the product manufactured from
practicing the process patent of the appellants/plaintiffs being marketed in
Delhi;
H. Thus the argument raised by the appellants/plaintiffs on the basis of
Section 48(b) of the Patents Act, 1970 is misconceived;
I. the fact that the respondent/defendant may have an office in Delhi or a
distributor in Delhi is not relevant to the subject matter of the suit;
J. that the argument, of the respondent/defendant having obtained approval
to sell Glatiramer Acetate in India or of the respondent/defendant selling
Glatiramer Acetate manufactured by different process in Delhi, in the face of
the cause of action in the instant suit of apprehension of infringement of
process patent for the purpose of export to US and elsewhere, were
irrelevant; and,
K. the judgment in Bristol Myers Squibb Vs. V.C. Bhutada
MANU/DE/3672/2013 : 2013 (56) PTC 268 (Del). relied upon by the
appellants/plaintiffs which was concerned with a product patent and in which
the defendant had already obtained approval from the Drug Controller for
marketing the product without any restriction as to territory, was not
applicable.
6. The senior counsel for the appellants/plaintiffs has argued:-

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 I. that the learned Single Judge has misconstrued the rights attaching to a
process patent; the said rights are not only in the process but also extend to
preventing others from offering for sale or selling products obtained from
that process; reference in this regard is made to Section 48(b) supra; and,
II. that the learned Single Judge has also erred in holding that the relief
claimed in the suit was limited to preventing export of the product
manufactured by using/practicing the patented process of the
appellants/plaintiffs to US and other countries when the averments in the
plaint were not so confined or limited.
7. Per contra the senior counsel for the respondent/defendant has argued:-
(i) that the suit is indeed confined to prohibiting export to US by the
respondent/defendant of the product manufactured from the patented
process; the appellants/plaintiffs have otherwise filed the first suit for
prohibiting the respondent/defendant from marketing the products
manufactured from the patented process in India; if the scope of the second
suit were to extend to marketing the goods in India, then the same would in
any case be not maintainable for the reason of the pendency of the first suit;
(ii) that the fact that the present suit is confined to prohibiting export by the
respondent/defendant of products manufactured by the patented process to
US becomes clear from the replication filed by the appellants/plaintiffs to the
written statement of the respondent/defendant where the appellants/plaintiffs
have repeatedly stated that the second suit is confined to apprehensions of
export to US only;
(iii) thus as far as the second suit is concerned, as per the averments of the
appellants/plaintiffs also, no cause of action has accrued at Delhi in as much
as neither was the patented process going to be practiced/used in Delhi nor
was the product manufactured therefrom to be marketed in Delhi; and,
(iv) in the judgment in Bristol Myers Squibb, quia timet action was held
maintainable since the defendant had already obtained the sanction of the
Drug Controller while that is not the plea of the appellants/plaintiffs in the
second suit.
8 . In view of the aforesaid arguments, we, during the course of hearing enquired
from the senior counsel for the respondent/defendant whether the
respondent/defendant was willing to make a statement that the products
manufactured from the process in which the appellants/plaintiffs claim patent will be
only for export and not for the Indian market. Though the senior counsel for the
respondent/defendant responded by first contending that the respondent/defendant
was not required to make such statement as the question of territorial jurisdiction
was to be adjudicated on the basis of the averments in the plaint itself but
subsequently on instructions stated that the respondent/defendant has no intention to
market the products to be manufactured in its plant at Hyderabad for export to US, in
India or in Delhi.
9. We further enquired from the senior counsel for the respondent/defendant whether
any permission was required for such export and whether such permission had been
obtained.

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 1 0 . The senior counsel replied in the affirmative but stated that as of now the
respondent/defendant does not have the permission for export to US.
1 1 . We further enquired from the senior counsel for the respondent/defendant
whether the permission from the Drug Controller was required qua a product only or
also qua the process of manufacture of the product and whether the
respondent/defendant has such permissions.
1 2 . The senior counsel on instructions informed that permission from the Drug
Controller is required for process also and the respondent/defendant as of today has
no such permission either.
13. Though in view of the aforesaid we enquired as to what survives in the suit, in as
much as the respondent/defendant as per its own statement, as of today does not
appear to be in a position to indulge in the acts, from doing of which it is sought to
be prohibited, but the senior counsel for the appellants/plaintiffs contended that the
respondent/defendant have not taken the said stand neither in the pleadings nor in
the arguments and the suit thus has to proceed.
14. The senior counsel for the appellants/plaintiffs in rejoinder contended:-
(a) that for the purposes of Order 7 Rule 10, only the averments in the plaint
are to be seen and the replication which is in response to the written
statement cannot be seen in as much as for comprehending the replication
the written statement will necessarily have to be seen and which is not to be
seen;
(b) that the appellants/plaintiffs, on the basis of the replication cannot be
said to have given up any part of the case as made out in the plaint and it
was not so pleaded by the respondent/defendant in the application under
Order 7 Rule 10 of the CPC also though filed after the filing of the
replication; and,
(c) that the focus in the replication was on the interim relief and not to the
prayer in the plaint.
15. We have considered the rival contentions;
16. The same learned Single Judge who has passed the impugned order is the author
of Bristol Myers Squibb also where quia timet action has been held to be
maintainable on apprehension of marketing of the patented product in Delhi. What
has however prevailed with the learned Single Judge in the impugned order to hold
this Court to be not having territorial jurisdiction is the factum of the subject suit
being confined to prohibiting export to US of the products manufactured from the
patented process. It is for this reason only that the learned Single Judge has held that
the question of the sale/marketing of products manufactured from the patented
process within the territorial jurisdiction of this Court does not arise. The learned
Single Judge thus cannot be said to have misconstrued Section 48(b) of the Act, as
has been argued by the appellants/plaintiffs.
1 7 . So the only question to be considered is, whether the suit of the
appellants/plaintiffs as per averments therein is limited to prohibiting export to US.
1 8 . The pleadings in the plaint, to say the least, are not very lucid and clear.

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 However the senior counsel for the respondent/defendant also has not argued on the
basis of the pleadings in the plaint. He has in this regard rather relied on the
replication which indeed shows that the focus of the appellants/plaintiffs was/is on
prohibiting/preventing export. We have perused the replication carefully. We tend to
agree with the senior counsel for the appellants/plaintiffs that what has been filed as
a replication is indeed a cut and paste job perhaps from the rejoinder which may
have been prepared or filed to the reply to the application for interim relief. However
what arises for consideration is, whether the appellants/plaintiffs are to be penalized
for the weak, not precise and ambiguous pleadings of their Advocates. We are in this
context reminded of what the Courts have held about Moffusil pleadings. It has been
held that they are to be construed liberally and that only because the parties did not
use the terminology which they should have, ipso facto, would not mean that the
ingredients for satisfying the requirements of statute are absent. The Supreme Court
in Kedar Lal Seal Vs. Hari Lal Seal MANU/SC/0064/1951 : AIR 1952 SC 47 held that
the Courts would be slow to throw out a claim on a mere technicality of pleading
when the substance of the thing is there and no prejudice is caused to the other side,
however, clumsily or inartistically the plaint may be worded. The same sentiment was
echoed in Ganesh Trading Co. Vs. Moji Ram MANU/SC/0018/1978 : (1978) 2 SCC 91.
Though the genesis of the said view was, the Moffusil lawyers being not skilled in
language and pleadings but we find the principle to have travelled till Des Raj Vs.
Bhagat Ram MANU/SC/7153/2007 : (2007) 9 SCC 641 and Narain Prasad Aggarwal
Vs. State of M.P. MANU/SC/7729/2007 : (2007) 11 SCC 736, though the Supreme
Court in Devasahayam Vs. P. Savithramma MANU/SC/0568/2005 : (2005) 7 SCC 653
also observed that different considerations on construction of pleadings may arise
between pleadings in the Moffusil Court and pleadings on the Original Side of the
High Court. Alas, we find that the said difference appears to have ceased to exist--
pleadings on the Original Side of this Court are being drafted, as in the Moffusil
Court.
19. However we are still of the opinion that the principle, of not allowing a litigant to
suffer for such defects in pleadings should still be upheld. From a reading of the
plaint, it can undoubtedly be not said that the suit is confined to prohibiting exports.
The suit is for using the patented process of the appellants/plaintiffs for
manufacturing the product for sale in US and "elsewhere" and from the averments of
the respondent/defendant of sale network of the respondent/defendant in Delhi, it
has to be held that the averments pertain to Delhi also. We are also of the view that
no prejudice is caused to the respondent/defendant from so giving benefit of doubt to
the appellants/plaintiffs inspite of defect in their pleadings, as the
respondent/defendant is already contesting the first suit in this Court. We are further
of the view that the second suit for the same relief i.e. of restraining the
respondent/defendant from marketing the goods produced from infringing process in
Delhi would be maintainable as the same is based on a subsequent cause of action
i.e. threat by the respondent/defendant to commence marketing goods produced from
infringing process, in Delhi, as pleaded, i.e. after having made a statement in the first
suit of not using the infringing process.
2 0 . We have also wondered whether owing to the statement aforesaid of the
respondent/defendant, of not intending to market the product in India, the territorial
jurisdiction of this Court, otherwise invoked in accordance with law, can be ousted.
We are unable to find any basis for holding that though on the basis of averments in
the plaint, this Court will have territorial jurisdiction, the same can be ousted on the
statement of the respondent/defendant of not doing/intending to do act, to prevent
which suit is filed, within the territorial jurisdiction of this Court. We are of the

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 opinion that once the appellants/plaintiffs have pleaded apprehension of
sale/marketing in Delhi, the Courts in Delhi would have jurisdiction to entertain the
suit and such jurisdiction cannot be ousted by the defendant by making a statement
not to do any such act in Delhi, though the defendant would be entitled to prove that
there is no basis for such apprehension. If such a course of action were to be
permitted, it would enable a defendant to avoid action in a particular Court by making
such a statement and indulge in forum shopping. We also find that the same was not
permitted by this Court in Rana Steels Vs. Ran India Steels Pvt. Ltd.
MANU/DE/0476/2008 : (2008) 37 PTC 24 (Del); there, though the counsel for the
defendant stated that the defendant had no intention to sell its products in Delhi, it
was held that the plaint could not be ordered to be returned on the basis of the said
statement. Though the matter was taken in appeal by way of FAO(OS) 212/2008 but
was compromised.
21. Thus, we hold that the learned Single Judge erred in holding that the suit, as per
averments in the plaint was confined to preventing only the export to US of products
manufactured at Hyderabad using the process patented by the appellants/defendants.
The averments in the plaint extend to apprehension of marketing by the
respondent/defendant of the products manufactured by the process patented by the
appellants/defendants, in Delhi. Thus, as per dicta in Bristol Myers Squibb (supra),
Courts at Delhi would have territorial jurisdiction to entertain the suit.
2 2 . Accordingly, the appeal is allowed. The order of the learned Single Judge
allowing the application of the respondent/defendant under Order 7 Rule 10 of the
CPC is set aside. Resultantly the suit is restored to the Board of the learned Single
Judge. The parties to appear before the learned Single Judge on 2nd July, 2014.
No costs.
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