The Delhi High Court, allowed an application of the Defendant, SMS Pharmaceuticals, under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908 (CPC), seeking modification of the ex-parte ad interim order, dated 21^st October, 2020 passed by the Court.  

Merck Sharp and Dohme Corporation (“the plaintiff”) has, by a suit, sought injunction against infringement, by the defendant, of the plaintiff’s Indian Patent No. 209816 (“IN’816”), whereby the plaintiff’s invention, is Sitagliptin.  In said suit an ex-parte ad interim injunction order was passed.  The defendant in said application under Order XXXIX Rule 4 of the CPC prayed for being extended the benefit of Section 107A of the Patents Act, and sought permission to export the drug, Sitagliptin for research and development purpose

The Plaintiff assert that::-

• If the interim order dated October 21, 2020 was to be vacated/modified, the Defendant would resume its infringing activities and may soon even launch their infringing product in the domestic market.
• Once the drug is permitted to be exported, it is impossible for the plaintiff to verify or investigate whether it is ultimately being used for research and development or is being commercially exploited.
• Even if the foreign entity, to whom the defendant proposes to sell Sitagliptin, were to engage in commercial exploitation thereof, and, consequently, to infringe the plaintiff’s patent, the plaintiff would have no remedy against such foreign entity.
• Exports of Sitagliptin by the defendant have been continuing since 2016, much before the patent is slated to expire in 2022. Almost 800 kg have been so exported. Such transactions could not be treated as being aimed at research and development.

In its defense the Defendant asserts that:-

• A joint venture was executed between the defendant and some foreign companies, for development and manufacturing of certain products, so that they could be launched in the market after patent terms expired.
• This, is after obtaining due permissions from Governmental and Drug Control Authorities and within the parameters of patent laws.
• No manufacture or production of these drugs for commercial purpose was undertaken, the sole intent being to launch them in generic form at affordable price after the patents
• Section 107A of the Patents Act, along with the judgment of this Court in Bayer Corporation v. U.O.I. , clearly hold that the activities of the defendant (export for research) were permissible, as the defendant was only engaged in sale and export of Sitagliptin Hydrochloride for the purposes of research and development.
• The exports being sought to be effected are not to companies of dubious lineage, but to well-established entities engaged in research and development, located in Spain and Switzerland.
• The fact that the quantities of Sitagliptin Hydrochloride exported by her client in the past are much less than the quantities permitted to be exported by the Drug Control Authorities, clearly indicating that the exports were not for commercial exploitation.
• Exports, in any lesser quantities, would be commercially impractical, given the cost of shipment.
• There is no requirement, either in Section 107A or in the judgment of this Court in Bayer Corporation v UOI, that exports for research and development purposes should only be to sister concerns.

The Court allowed the application of the defendants but with certain conditions and in summary held that:: –

• Jurisprudentially, a right conferred by a statute cannot be denied by a Court, save and except on considerations which emanate from the statute itself, or from any judicial precedents dealing with the issue.
• It is not permissible for a Court to withhold, from a litigant, the magnanimity which a statute extends, merely on the ground of an apprehension of possible misuse, unless such apprehension is manifestly credible and real.
• It is clear that Section 107A neither prohibits export of the patented invention, so long as such export is to an entity engaged in research and development or for research and development purposes, nor requires there to exist any relationship between the applicant seeking the benefit of the provision and the foreign importer, to whom the API may be exported.
• The Bayer Judgement of the  Division Bench, as well as the learned Single Judge, that have been referred have categorically upheld the right, conferred by Section 107A of the Patents Act, as inviolable. Even while so holding, the Division Bench in Bayer Corporation vs UOI does require the Court, concerned with a prayer for export of a patented product for research purposes, under Section 107A, to be sensitised regarding the bona fides of the request and the circumstances of the case before it.
• The present application of the defendant, I am unable to find any such cogent material on the basis of which the grant, to the defendant, of the benefit of Section 107A of the Patents Act can be denied.
• Though, Plaintiff, has drawn attention to instances in which similar permissions were granted by the Court and were misused, he, with his customary fairness, accepts that none of these instances relates to the present defendant.
• The mere fact that, in certain cases, the liberty granted by the Court may have been unfairly exploited, cannot, quite obviously, be a basis for the Court to deny, wholesale, such liberty when sought.
• Courts must, therefore, aim at expanding, rather than constricting, the width and amplitude of the Bolar exception, which is actuated by laudable public purpose.
• For all these reasons, the defendant’s prayer, for being extended the benefit of Section 107A of the Patents Act, deserves to be allowed. The defendant is permitted, therefore, to export the API Sitagliptin to Chemo and Verben, as prayed.
• For this purpose, the defendant shall, however, file, before such export, an affidavit, before this Court, setting out the quantities of Sitagliptin/Sitagliptin Hydrochloride being cleared and exported by the defendant. The affidavit shall also contain an undertaking that the exports are intended only for the purposes of research and development by the foreign buyers Chemo and Verben.
• The affidavit shall also undertake to comply with all the safeguards contained in the judgement of the Division Bench in Bayer Corporation vs. UOI.