Realistic costs ought to be awarded considering ever-increasing litigation expenses

Background

The plaintiffs, AstraZeneca, filed a suit (CS (Comm.) 101/2022) at the Delhi High Court seeking a permanent injunction to restrain the defendant, Westcoast Pharmaceutical Works Limited, from infringing their patent IN 297581. The patent was for the novel compound Osimertinib, used for treating specific types of non-small cell lung cancer.

In January 2022, AstraZeneca discovered that Westcoast Pharmaceutical Works Limited was offering to manufacture and sell Osimertinib in large quantities, which led to the filing of the present suit. The court issued an ex parte ad-interim injunction on February 11, 2022, restraining the defendant from dealing with Osimertinib.

Despite being served with a summons, the defendant failed to file a written statement (reply to the infringement claim) within the statutory period of 120 days, leading to the injunction being made absolute on November 30, 2022.

Parties contentions

Westcoast Pharmaceutical Works Limited did not file its response (written statement) but raised the following contentions in an affidavit to explain its position:

• Mistaken belief: The defendant claimed they obtained regulatory approval to manufacture Osimertinib under the mistaken belief that it was not patented in India. They attributed this error to the government authorities responsible for preventing approvals for patented drugs.
• No legal mechanism: They argued that there is no legal mechanism in India to verify patent protection during regulatory licensing.
• No manufacturing: The defendant asserted that they had only published a promotional flyer post-approval. They had not manufactured Osimertinib and did not intend to do so until the expiry of the suit patent on July 25, 2032. They also mentioned that they had requested the cancellation of the regulatory approval on August 10, 2022.
• Jurisdiction and mediation: The defendant raised objections regarding the court’s territorial and pecuniary jurisdiction and non-compliance with pre-litigation mediation.
• Undertaking: An undertaking was given by the defendant not to launch any infringing product during the patent’s term.

AstraZeneca moved an application for summary judgment

• No prospect of defense: The plaintiffs argued that the defendants had no real prospect of successfully defending the claims made by the plaintiffs.
• Infringement of patent: The plaintiff’s novel compound, Osimertinib, protected by patent IN 297581, was being infringed by the defendant’s offer to manufacture and sell Osimertinib.
• Failure to file a written statement: The defendant failed to file a written statement within the statutory period, leading to the closure of their right to file it and the confirmation of the ex parte ad interim injunction.
• Undertaking by the defendant: The defendant had given an undertaking not to launch any infringing product during the patent’s term.

Court ruling

• History of infringing activities: The court noted that the defendant had a history of similar infringing activities. The Plaintiffs provided evidence of the defendant’s prior infringements, establishing a pattern of unlawful behavior. For instance, the defendant had previously been involved in litigation with AstraZeneca over the anti-diabetes drug Dapagliflozin, which was also protected by AstraZeneca’s patents.
• Legal expenses: The plaintiffs were compelled to incur significant legal expenses due to the defendant’s infringing activities and their subsequent conduct in these proceedings. The plaintiffs filed a statement of costs, showing that they had incurred costs of INR 719,145.
• Curbing vexatious litigation: The court emphasized that costs should be realistic and serve the purpose of curbing frivolous and vexatious litigation. This principle was reiterated by the Supreme Court in the case of Uflex Limited v. Government of Tamil Nadu and Ors.
• Decree issued: The court decreed the suit in favor of the plaintiffs and directed that a decree sheet be drawn up and awarded the cost of INR 700,000 (approx. USD 8,300).

Author’s comment

The court, in awarding the cost, considered the conduct of Westcoast Pharmaceutical Works Limited before and during the proceedings, including the extent to which they followed any relevant pre-action protocol.

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