It’s American Cyanamid again on patents vs access to medicines

Delhi High Court’s refusal of injunction for Roche’s cancer drug is a landmark pronouncement

In a country where 50 persons are diagnosed of cancer every hour, the order of the Delhi High Court refusing the grant of injunction for Roche’s patented lung cancer drug ‘Tarceva’ on the ground of public interest is without doubt the most significant judicial pronouncement involving the interface of patent law and access to medicines.

The order will also be remembered for applying the rules laid down by the House of Lords in American Cyanamid Co vs Ethicon Ltd (1975) AC 396, which have now become the quintessential rules to be followed in interlocutory proceedings involving patents.

Factors for grant of injunction
The Delhi High Court relied on the ‘celebrated’ English decision in the case of American Cyanamid and observed that they were “the guiding principles which courts have to adopt in cases involving infringement of patent and copyright cases.”

The Cyanamid approach consists of the following series of steps in deciding whether or not to grant an injunction in a patent infringement case. First, the court has to consider whether there is a serious question to be tried. If the above issue is answered in the affirmative, the court has to see whether damages would be an adequate remedy for a party injured by the court’s grant of, or its failure to grant, an injunction. Thirdly, if damages cannot be an adequate remedy, the court has to determine where the ‘balance of convenience’ lies.

The court summarised that in the grant of interlocutory injunctions, the courts would (1) follow the American Cyanamid approach, (2) not presume that patents are valid, especially if the defendant challenges it and (3) look whether the defendant’s challenge is genuine or vexatious, to see whether the defendant has an arguable case.

Adequacy of damages overlooked
Though the Delhi High Court’s order proceeded on the right premise as it first determined whether there was an arguable case (i.e. a serious question to be tried), the order surprisingly omitted to consider the critical issue of adequacy of damages. Following the Cyanamid approach, which the court opined was the right thing to do, would require the court to determine whether damages would be an adequate remedy for either of the parties before embarking on a determination on the balance of convenience. That the court failed to do this opens an array of vital questions, though it is difficult to assume that the court’s conclusion would have been any different.

Balance of convenience
In determining the issue of balance of convenience, the Delhi High Court observed that the courts have to ‘tread with care’ in cases involving pharmaceutical products and more specifically life-saving drugs and opined that the courts will have to consider the likelihood of injury to unknown parties.

Relying on a ‘luminous’ decision of the Chancery Division of the High Court (and not the Court of Appeal, as mentioned in the order) in Roussel Uclaf v GD Searle 1977 FSR 125, the Delhi High Court observed that in cases where members of the public will be deprived of the drug in the light of an order of injunction, it would be for the plaintiff to show that the injury to the public was minimal as a result of their inability to obtain the patented drug.

‘Jingoistic’ argument
In its submissions made before the Delhi High Court, Roche had discounted the price difference between the patented drug and the generic version as being ‘dangerous’ and ‘jingoistic’. But the fact that Roche did not manufacture the product in India and that Cipla did, tilted the balance against the grant of an injunction. More importantly, the submission made by Roche that the volume of sales was Rs13.2 crore proved counter-productive. The court did some simple arithmetic taking into account the fact that the course of treatment involved two months and concluded that roughly 1,000 persons have benefited by the drugs sold by Roche when estimates showed that more than 1.6 lakh Indians suffer annually from lung cancer.

Obligations under TRIPS
The court was reminded of India’s obligations under the TRIPS agreement, but not so forcefully, as the issue of non-compliance of the Patents Act with the TRIPS has been conclusively settled after the Novartis decision. The court observed that it could not be unmindful of the right of the general public to access life saving drugs, which would be curbed if an injunction is granted.

Right to life
The court observed that if an injunction was granted in the case of a life saving drug, it would be stifling the right to life guaranteed under article 21 of the Constitution of India with respect to those persons who had access to the generic version. This observation by the court is likely to pave way for a new jurisprudence in which access to patented medicines would be understood in this country. The court has in effect stated that the right to life of the end-users of the life-saving drug will outweigh the right to exploit a patented drug vested with the patentee, in the interim stage of an infringement action. Taking account of the widespread nature of cancer, the court observed that injuries caused to patients who are denied access to life saving drugs would be “uncompensatable.”

Public interest
Public interest has always been an essential factor considered by the courts in the United States in granting or refusing an interlocutory injunction in patent infringement cases. The courts in the US have refused to permanently enjoin activities that would injure the public health. But in India, ‘public interest’ has for long remained outside the essential criteria of ‘prima facie case’, ‘balance of convenience’ and ‘irreparable hardship’ - the three factors that determine the grant or refusal of injunctions. This is the first time public interest has figured as a valuable consideration in the interlocutory stage. The order exemplifies remarkable judicial skill and ingenuity in introducing the element of ‘public interest’ as a factor to be considered in determining the balance of convenience.

Putting patients before patents
The court took into account the fact that lakhs of Indians suffer from cancer every year and the dire need of the access to life saving drugs. Balancing the two competing public interests - public interest in granting an injunction to affirm a patent at the interim stage and the public interest in patients’ access to a life saving drug - the court held that the balance titled in favour of the patients. The court rightly reasoned that the damage or injury caused to the plaintiff could be assessed in monetary terms whereas the injury to the public who are deprived of the generic version would be irreparable and could not be compensated in monetary terms.

The author is a Chennai-based advocate and the author of the recent book The Law of Patents - With a Special Focus on Pharmaceuticals in India, published by LexisNexis Butterworths India, 2007.