The case of Astrazeneca AB & Anr. v. Westcoast Pharmaceutical Works Limited [2023:DHC:3337] is a pivotal decision by the Delhi High Court addressing the maintainability of a patent infringement suit under the Patents Act, 1970, when post-grant opposition proceedings are pending. The defendant sought rejection of the plaintiff’s suit under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), arguing, inter alia, that the Supreme Court’s observations in Aloys Wobben v. Yogesh Mehra [(2014) 15 SCC 360] preclude such suits until the patentee’s rights are crystallized post-opposition.

The High Court’s ruling clarifies the scope of Order VII Rule 11, the jurisdictional requirements for patent suits, and the statutory rights of a patentee under Section 48 of the Patents Act, emphasizing that no provision prohibits infringement actions during pending oppositions. This case study provides a comprehensive analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering critical insights into patent enforcement in India.

• Detailed Factual Background: The plaintiffs, Astrazeneca AB (a Swedish company) and its Indian subsidiary, initiated CS(COMM) 101/2022 against the defendant, Westcoast Pharmaceutical Works Limited, alleging infringement of Indian Patent No. 297581 (IN’581), granted on June 11, 2018, for the compound Osimertinib, used in cancer treatment. The plaintiffs claimed that the defendant had begun manufacturing and was either selling or preparing to sell products infringing IN’581 in India. The suit sought an injunction, damages of Rs. 2,00,01,000, and other reliefs, asserting that the defendant’s actions violated their exclusive rights under Section 48 of the Patents Act.
  • The defendant contested the suit’s maintainability, filing an application (I.A. 21995/2022) under Order VII Rule 11 CPC for its rejection.
  • The application was based on three grounds:
    • Lack of pecuniary jurisdiction,
    • Lack of territorial jurisdiction,
    • Pendency of post-grant oppositions under Section 25(2) of the Patents Act.
  • Specifically, post-grant oppositions were filed by Sunshine Organics Pvt. Ltd. on May 14, 2019, and Natco Pharma Ltd. on June 10, 2019, challenging IN’581, and were pending before the Controller General of Patents when the suit was filed on February 8, 2022.
  • The defendant relied on paragraph 19 of Aloys Wobben, arguing that the plaintiffs’ right to sue for infringement had not crystallized due to these pending oppositions.
• Detailed Procedural Background: The suit was instituted on February 8, 2022, before the Delhi High Court, invoking its original jurisdiction based on the damages claimed (Rs. 2,00,01,000), which exceeded the pecuniary threshold for district courts.
  • The defendant filed I.A. 21995/2022 under Order VII Rule 11 CPC, seeking rejection of the plaint.
  • The application was argued before Justice C. Hari Shankar, with Mr. Vikas Khera representing the defendant and Mr. Pravin Anand representing the plaintiffs.
  • The court heard extensive submissions on May 12, 2023, reserved its judgment, and pronounced it on May 15, 2023, dismissing the defendant’s application.
  • A related application (I.A. 1079/2023) under Order XIIIA Rule 3 CPC was re-notified for August 1, 2023, indicating ongoing proceedings.
• Issues Involved in the Case:
  • Whether the suit was liable to be rejected under Order VII Rule 11 CPC for lack of pecuniary jurisdiction, given the plaintiffs’ claim for damages in a purported quia timet action?
  • Whether the suit could be rejected under Order VII Rule 11 CPC for lack of territorial jurisdiction, considering the defendant’s location outside Delhi and the plaintiffs’ operational presence?
  • Whether the pendency of post-grant oppositions under Section 25(2) of the Patents Act barred the plaintiffs from filing an infringement suit, as per the Supreme Court’s observations in Aloys Wobben?
  • Whether paragraph 19 of Aloys Wobben constituted binding precedent or obiter dicta, and its impact on the plaintiffs’ statutory rights under Section 48 of the Patents Act?

Defendant's submission:
The defendant argued for rejection of the plaint on three grounds. First, they contended that the suit lacked pecuniary jurisdiction, as it was a quia timet action based on mere apprehension of infringement, not actual infringement. Citing Toni & Guy Products Ltd. v. Shyam Sunder Nagpal [2007 (34) DLT 309], they argued that damages are not claimable in such suits, reducing the suit’s valuation to Rs. 1,000, below the High Court’s pecuniary threshold. Second, they challenged territorial jurisdiction under Section 20 CPC, noting that the defendant was based outside Delhi and Plaintiff 1 was in Sweden, despite Plaintiff 2’s Delhi office.

However, this ground was not pressed during arguments. Third, relying on paragraph 19 of Aloys Wobben [(2014) 15 SCC 360], they argued that the plaintiffs’ right to sue had not crystallized due to pending post-grant oppositions by Sunshine and Natco. They emphasized the Supreme Court’s observation that it was “unlikely and quite impossible” for an infringement suit to be filed during such proceedings. The defendant also cited Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd. [2019 (78) PTC 329] and Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd. [2015 SCC OnLine Bom 6984], along with a related Supreme Court order, to support their interpretation of Aloys Wobben.

Plaintiff's submission:
The plaintiff opposed the application, arguing that the plaint disclosed a valid cause of action and met jurisdictional requirements. On pecuniary jurisdiction, they distinguished Toni & Guy, asserting that the plaint alleged actual manufacture and sale (or imminent sale) by the defendant, not mere apprehension, justifying the damages claim and High Court jurisdiction. On territorial jurisdiction, they noted the issue was not argued and was irrelevant under Order VII Rule 11, as Order VII Rule 10 governs such challenges. On the Aloys Wobben issue, they relied on the proviso to Section 11A(3) of the Patents Act, which permits infringement suits post-grant without further restrictions.

They argued that Aloys Wobben addressed a different issue—simultaneous revocation petitions and counterclaims—not the maintainability of infringement suits during post-grant oppositions. They contended that paragraph 19 was obiter dicta, not binding, as per Career Institute Educational Society v. Om Shree Thakur Educational Society [2023 SCC OnLine SC 586], and cited Novartis AG v. Natco Ltd. [CS(Comm) 299/2019, dated May 2, 2019] and CDE Asia Ltd. v. Terex India Pvt. Ltd. [MANU/DE/0584/2020] to show that infringement suits are maintainable post-grant. They warned that barring such suits would undermine patentees’ rights and encourage infringement during opposition proceedings.

Detailed Discussion on Judgments and Citations:

The court extensively analyzed the cited judgments to resolve the issues, particularly the interpretation of Aloys Wobben and the scope of Order VII Rule 11 CPC. Below is a detailed discussion of each judgment, its citation, and its context in the case:

• Toni & Guy Products Ltd. v. Shyam Sunder Nagpal, 2007 (34) DLT 309: Cited by the defendant to argue lack of pecuniary jurisdiction. The Delhi High Court held that damages are not claimable in a quia timet suit based on mere apprehension of trademark infringement. The court distinguished this case, noting actual manufacture and sale by the defendant, thus conferring jurisdiction.
• Aloys Wobben v. Yogesh Mehra, (2014) 15 SCC 360: Central to the defendant’s case. Paragraph 19 suggested a patent crystallizes post-opposition. The court held the paragraph was obiter, applying the inversion test from Career Institute, noting Section 48 rights arise upon grant, not crystallization.
• Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd., 2019 (78) PTC 329: Interlocutory order expressing concern over Aloys Wobben paragraph 19, but rejected its binding value, noting lack of statutory basis for barring suits during oppositions.
• Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd., 2015 SCC OnLine Bom 6984: Bombay HC stayed injunction due to opposition. The SC later set aside this stay, restoring the injunction, showing Aloys Wobben did not bar suits.
• Career Institute Educational Society v. Om Shree Thakur Educational Society, 2023 SCC OnLine SC 586: Introduced the inversion test for identifying obiter dicta. Removing paragraph 19 from Aloys Wobben would not alter its decision, confirming its obiter nature.
• Novartis AG v. Natco Ltd., CS(Comm) 299/2019, dated May 2, 2019: Held that Aloys Wobben does not bar infringement suits post-grant. Section 48 rights arise upon grant, though court relied on it only modestly due to its interlocutory nature.
• CDE Asia Ltd. v. Terex India Pvt. Ltd., MANU/DE/0584/2020: Reaffirmed the principle that post-grant infringement suits are not barred. Also noted the interlocutory nature of the decision.
• Director of Settlements v. M.R. Apparao, (2002) 4 SCC 638: Clarified that only the ratio decidendi of SC judgments is binding under Article 141. Obiter dicta carry weight but are not binding.
• Arun Kumar Aggarwal v. State of Madhya Pradesh, (2014) 13 SCC 707: Defined obiter dicta as non-binding observations. The court used this to support its finding that paragraph 19 was obiter.
• MCD v. Gurnam Kaur, (1989) 1 SCC 101: Held that casual judicial expressions lack authority. The court applied this to dismiss Aloys Wobben paragraph 19 as non-binding.
• Karnataka SRTC v. Mahadeva Shetty, (2003) 7 SCC 197: Reiterated that passing remarks are not authoritative, supporting the finding that paragraph 19 is not binding.
• State of Haryana v. Ranbir, (2006) 5 SCC 167: Emphasized that obiter dicta do not have binding force, reinforcing the non-binding nature of paragraph 19.
• Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555: Held that only the ratio is binding, not general judicial observations. Applied to negate the binding value of paragraph 19.
• Skill Lotto Solutions (P) Ltd. v. Union of India, (2021) 15 SCC 667: Distinguished between ratio and obiter, noting that only the former binds. Used to contrast Aloys Wobben’s remarks with its holding.
• U.O.I. v. Chhajju Ram, (2003) 5 SCC 568: Precedent is binding only for what it decides, not what logically follows. Court cited this to reject extending paragraph 19 into a prohibition on suits.

Detailed Reasoning and Analysis of Judge:

Justice C. Hari Shankar addressed each ground for rejection under Order VII Rule 11 CPC, especially focusing on Aloys Wobben and the Patents Act framework.

Key Findings:

• Pecuniary Jurisdiction: The claim of Rs. 2,00,01,000 based on actual sales was sufficient to confer jurisdiction, unlike Toni & Guy where no use was alleged.
• Territorial Jurisdiction: Since the defendant didn’t argue this ground, it was reserved for future consideration under Order VII Rule 10 CPC.
• Aloys Wobben and Post-Grant Oppositions: The court held there is no statutory bar to infringement suits post-grant. Section 48 rights arise immediately upon grant, and requiring a wait would undermine the 20-year patent term.
• Interpretation of Aloys Wobben: The court concluded paragraph 19 was obiter, not forming the ratio. Applying the inversion test, it found the outcome would remain unchanged even without paragraph 19.
• Precedential Value of Obiter: Citing Director of Settlements and Arun Kumar Aggarwal, the court noted obiter is persuasive but non-binding under Article 141.
• Supporting Precedents: The court leaned on Sergi for upholding injunctions despite oppositions and acknowledged but minimized the precedential value of Novartis, CDE Asia, and Pharmacosmos Holding.
• Policy Considerations: Barring suits during opposition would promote misuse and delay, undermining patent rights and enforcement.
• Final Decision: The application under Order VII Rule 11 CPC was dismissed. The suit was held maintainable with valid pecuniary jurisdiction, and territorial jurisdiction was reserved.

Case Title: Astrazeneca AB & Anr. Vs. Westcoast Pharmaceutical Works Limited: Date of Order: May 15, 2023:Case No.: CS(COMM) 101/2022:Citation: 2023:DHC:3337:Name of Court: High Court of Delhi:Name of Hon'ble Judge: C. Hari Shankar, J.

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