In Merck Sharp & Dohme Corp. & Anr. vs Ranvir Kumar Bindeshwari Singh & Ors. [CS(COMM) 1075/2018], the Delhi High Court awarded compensatory damages, exemplary damages, and legal costs to the patentees of the anti-diabetic molecule Sitagliptin and its pharmaceutically acceptable salts, notwithstanding the fact that the suit patent (IN 209816) had expired during the pendency of the proceedings. The decision is significant for its treatment of damages in patent infringement actions where injunctive relief becomes infructuous due to patent expiry, and for recognising export data as a basis for quantifying infringing profits in ex parte proceedings.

The plaintiffs discovered that the defendants were advertising a Sitagliptin-containing product marketed as “SEPAMET-XR” on third-party websites and had exported the allegedly infringing products outside India. In response, the plaintiffs instituted the infringement suit seeking permanent injunction, damages, rendition of accounts, delivery up and costs.

The defendants initially entered appearance and filed a written statement disputing infringement, territorial jurisdiction, and the maintainability of the suit on the ground that the alleged acts constituted export activities. However, the defendants subsequently ceased participating in the proceedings and ultimately, the defendants were proceeded ex parte.

The plaintiffs relied upon export data obtained from a trade data provider, which showed exports of the infringing product between September 2017 and November 2017. Based on the export figures for those three months, the plaintiffs extrapolated the value of infringing sales for the entire infringement period extending until the grant of ex parte ad interim injunction order in August 2018.

The estimated annual turnover from infringing exports was calculated at approximately Rs. 1,97,77,800. The plaintiffs estimated that the profit margin earned by the defendants was 25%.  Accordingly, compensatory damages were claimed at Rs. 49,44,450.

Since the suit patent had expired, the Court confined the case only to damages and costs. In determining damages, the Court relied upon:

• Rule 20 of the Delhi High Court Intellectual Property Rights Division Rules, 2022, which permits courts to consider profits earned by the infringing party while computing damages;
• Koninklijke Philips N.V. vs Amazestore & Ors., where damages were quantified on the basis of profits derived from infringing activities; and
• the principle that reasonable estimates supported by foundational evidence may suffice where the figures remain unchallenged.

Therefore, the Court awarded Rs. 49,44,450 as compensatory damages.

The plaintiffs also sought punitive and exemplary damages on the basis that the defendants continued advertising the infringing products even after the interim injunction order.

The Court accepted these submissions and noted that:

• the affidavit evidence supporting exemplary damages remained unrebutted; and
• the defendants had chosen not to participate, after they were proceeded ex parte, despite substituted service and notice issued by the Court.

Accordingly, the Court awarded Rs. 10 lakhs as exemplary damages.

The plaintiffs also substantiated the actual litigation expenses comprising:

• Court fees: Rs. 1,98,000;
• Filing and incidental expenses: Rs. 1,20,731.21; and
• Legal fees: Rs. 18,48,343.30.

Based on unrebutted evidence of Court fees and legal expenses incurred by the plaintiffs, the Court awarded Rs. 21,67,074 as litigation costs.