Astrazenceca U.K. Limited Vs. Natco Pharma Limited and Others - Court Judgment

(Circuit Bench Sitting at Delhi)

ORDER (No. 263 of 2012)

HONBLE SMT. JUSTICE PRABHA SRIDEVAN, CHAIRMAN:

This appeal has been filed against order passed on 31^st May, 2011 and “related orders dated 31^st August, 2007”. The order dated 31^st May, 2011 is an order passed in a Review Petition filed to review the orders passed on 30^th August, 2007.

2. The invention relates to “quinazoline derivative” of Formula I. According to the inventor, this invention will be used for treatment of cancer. The application was filed on 19^th April, 1996. The respondent No. 1 filed a pre-grant opposition on 6^th February, 2006. The matter was listed for hearing on 13^th June, 2006. But subsequently it was heard on 18^th July, 2006. Before orders were passed, another pre-grant opposition was filed by respondent No. 2 on 21^st November, 2006 for which hearing was filed on 26^th March, 2007. By order dated 30^th August, 2007, both the pre-grant oppositions were accepted and the grant was refused.

3. On 19^th November, 2007, the appellant filed review petition against both the orders. Hearing was granted and it was heard on 25^th November, 2009 by order dated 31^st May, 2011 both the review petitions were dismissed. Thereafter the present appeal was filed against these orders.

4. Before going into the submissions and merits of the matter, we would like to impress upon the Controllers in the IP Office that it is desirable to pass orders as early as possible after the hearing has been completed. In the present case, written submissions in the 1^st respondents opposition were filed on 18^th August, 2006. The 2^nd respondent had filed their pre-grant opposition three months thereafter. If it is possible, it is better that after the hearing is concluded, orders are passed within three months. We have already noted in our orders dated 21/09/2012 in ORA/46/2004/TM/DEL that orders must be pronounced as early as possible. We have referred to the judgement in Anil Rai vs. State of Bihar (2001) 7 SCC 318. We find that fourteen months interval between the date on which the appellant filed their written arguments and the date on which orders were passed in the review does not appear to be justified. We are also unable to understand why the appellant took four months to file their written submissions. It is preferable that written submissions come simultaneously at the time of oral arguments or at the latest 2 to 4 weeks thereafter. It is to the advantage of the counsel as well as the case in question that the matter is decided when arguments are fresh in the memory of the authority hearing the matter. With these observations on the undesirability of delay in this regard, we proceed to deal with the case on merits.

5. In the opposition, the respondent has raised several grounds to attack the grant of patent and had cited eight documents and had also produced the evidence of an expert. But from the original order, it is seen that the grounds of attack were restricted to (a) anticipation, (b) lack of inventive step, (c) prior public knowledge and (d) it is not an invention under the Patents Act, 1970 (Act in short). The Controller concluded that the inventor has proved novelty over the prior art disclosures, but the invention was obvious and it was not an invention within the meaning of section 2(1)(j) and 3(d) of the Act.

6. In the review petition, he held that the grounds in the Review Petition and the submissions made were more like an appeal and there was no ground for review and dismissed the Review Petition.

7. The Learned Counsel appearing for the appellant made detailed submissions regarding patentability. We requested her to make her submissions on the maintainability of an appeal against an order on review. According to the Learned Counsel, the party had no option but to file a review and even if the party had approached the Hon'ble High Court, the Hon'ble High Court would have sent the party back to exhaust the alternate remedy. She read out the relevant portions from the judgements to support the case. She also submitted that the Hon'ble High Court of Delhi in F. Hoffmann-La Roche Limited vs. Cipla Limited [(CS(OS) No. 89/2008) and C.C. 52/2008] held that “There is no specific suggestion or modification in EP226 regarding any useful properties by potent and promising activity to select example 51 as the lead compound”.

8. EP 226 is the prior art in the present case too. We had accepted the appellants case on the maintainability of the appeal against the Review Petition and/or the merits of the Review Petition, we would have only remanded the matter to the Controller to decide the question of patentability and therefore though the Learned Counsel had made very elaborate arguments to explain that the Controller had erred in his conclusions against the appellant, we are not dealing with the issue of patentability.

9. The Learned Counsel for the respondent on the other hand did not make many submissions on the merits. He submitted that the Act does not provide an appeal against the review and even the grounds for review do not make it a case for review.

10. In OA/34/2012/PT/CH, this Board in its order dated 08/10/2012 held that while S.91 of the Trade Marks Act, 1999 provides that any person may prefer an appeal against “any order or decision”. S.117(A) of the Act does not give such an option. The right to file an appeal is restricted to certain provisions and not against an order in a review petition passed under S. 77(1)(f). This Board had held that “appeal is a creature of statute and unless there is a specific provision for appeal against a review petition, and no appeal can be filed.” We do not see any reason to differ from this view taken by the Board.

11. However, the Learned Counsel for the appellant referred to order passed by the Hon'ble High Court of Delhi in W.P.(C) No. 332 of 2010 in M/s. UCD FARCHIM SA vs. M/s. CIPLA LTD and ORS, where the Hon'ble Delhi High Court has considered the question whether an order passed under section 15 of the Patents Act, 1970 was an appealable order. It was a bunch of writ petitions. In the writ petition filed by Eli Lilly, the petitioner had applied for a patent on both product and process claims. “On 22^nd March, 2007 the Assistant Controller of Patents and Designs, New Delhi gave a decision on the pre-grant opposition allowing the process claims 11 to 25 and 28 and declined the product claims. On 22^ndMay,2007 Eli Lilly and Co. filed a review petition as regards the rejection of its product claim. The Assistant Controller dismissed the review petition on 20^thJune 2008 on the ground that it was not maintainable. Further, Eli Lilly and Co. was directed to comply with the directions in the impugned order dated 22^nd March,2007 deleting the products and retaining the process claims by 20^thJune,2008. Since this was not done by Eli Lilly, by a decision dated 1^stJuly,2008 the Assistant Controller passed an order refusing to grant patent. On 4^thJuly,2008 Eli Lilly and Co. requested the Assistant Controller to reconsider the order dated 1^st July,2008. Thereafter, the present petition was filed by Eli Lilly and Co. under Article 226 challenging the orders dated 22^nd March 2007, 20^th June 2008, and 1^st July, 2008 passed by the Assistant Controller and for a direction to him to grant a Patent. The order refusing the grant of patent is in fact an order under Section 15 of the Patents Act which in terms of Section 117 A is an appealable order. If the appeal before the IPAB is filed by Eli Lilly and Co. within a period of two weeks from today, accompanied by an application for condonation of delay in filing the appeal, the IPAB will consider and decide such application, after hearing RLL. The IPAB will take into account the period during which Eli Lilly and Co.'s review application against the order dated 22^nd March, 2007 and thereafter the present writ petition were pending.” This order was passed on 08/02/2010. According to the learned counsel, when the appellants appeal was dismissed on 2007, and a review was filed, this judgment had not been given and therefore, the appellant genuinely believed that the only option was to file a review, which is what the appellant did. During the pendency of the review petition, the Hon'ble Delhi High Court had given this judgment. The learned counsel also submitted that according to the judgment of the Hon'ble Delhi High Court, it would be clear that even the order passed in the review was to be considered by Intellectual Property Appellate Board (IPAB) in the appeal. Therefore, the same view should be applied here and the appeal should be entertained.

12. The judgment of the Hon'ble Delhi High Court was more on the question of whether there was a remedy of appeal against a pre-grant opposition order. Till that date, the litigants were under the impression that they could only move the writ court. Since it was by this order that the Hon'ble Delhi High Court held that a refusal to grant patent should be understood as an order under S.15, the Hon'ble Delhi High Court directed Eli Lilly and Co. to file an appeal. The Hon'ble High Court really did not consider whether an order passed in a review petition was appealable.

13. However, in view of the above submissions, we will also see whether any ground for review is made out. Several grounds have been raised. Para 18 of the grounds of review contains the words that “the appellant seeks re-consideration of the decision because it is contradictory to all other patent determinations. With regard to obviousness, the grounds raised are

(a) the Controller erred in opting to select example 34(5) as the Structurally-closest prior art compound. The selection of the closest such compound is supposed to be an objective exercise but there are inevitably choices to be made in the analysis. Such choices bring in subjectivity. For example, should there only be a focus on the nature and location of the substituents on the quinazoline core structure that is present In the prior art and within the compounds of our invention or should weight be given to the nature of the substituents such as the presence of a basic substituent on the quinazoline ring;

(b) the Controller failed to recognize that the Applicant made a bona fide election of closest prior art compounds for the reasons stated on the record. The Controller has taken a different view and opts for example 34(5);

(c) the principle error in the Controller's decision concerns his disregard of and deficient assessment of the data provided in Mr. Woodburns Declaration No. II (dated 5^th January, 1995) concerning the in vivo activity of that compound of example 34(5) in an anti-tumour growth test in nude mice. The Controller notes comments about the improvements in the in vivo activity of the claimed compounds against the growth of human A-431 tumour fragments grown as xenografts in nude mice (from 4-fold to 16-fold). The Controller refers to a quote of how improvements have been referred to in terms of ED₅₀ values. He proceeds to note that the Woodburn Declaration II does not mention ED₅₀ values as such but instead provides a figure for the percentage inhibition of tumour growth at a particular test dosage. The Controller proceeds to find the information in that Declaration unconvincing for that reason.

The Controller's position does not appear properly sustainable. It should be noted that the Woodburn Declaration of January 1997 does not mention ED₅₀ values as such either but instead provides a figure for the percentage inhibition of tumour growth at each particular test dosage;

(d) the Controller failed to appreciate that in discussing ED₅₀ values, the Applicant is making a very straight-forward analysis of the data given in the declarations. If sufficient dose response experiments were carried out for each compound, an ED₅₀ value can be calculated. For example, sufficient doses of Example 1 of the present invention were administered [namely 200 mg/kg gave 92 to 100% inhibition, 100 mg/kg gave 96% inhibition, 50 mg/ka gave 77 to 91% inhibition, and 12.5 mg/kg gave 56 to 66% inhibition] for it to be seen that the ED₅₀ is slightly less than 12.5 mg/kg;

(e) the Controller also failed to appreciate that, for several compounds only a single dose was administered, in which case the % inhibition at that dose is provided. From such a single point analysis, it can be stated that the ED₅₀ is greater than or less than the test dose (dependent on whether or not the % inhibition figure is less than or greater than 50% respectively);

(f) the Controller failed to acknowledge that In Table II in the Declaration II of January, 1995, the in vivo activity of certain compounds against the growth of human A-431 tumour fragments grown as xenografts in nude mice is disclosed. The result for example 34(5) is that 200 mg/kg gave 30% inhibition. Notwithstanding that there is no express mention of the ED₅₀ value for the compound, it is implicit from the data that the ED₅₀ is greater than 200 mg/kg. Hence, by comparing these estimated ED₅₀ values, it can reasonably be stated that Example I of the present Application is more than 16-fold more potent in this in vivo test than example 34(5);

(g) the Controller has erred in not appreciating that a 16-fold potency improvement in in vivo activity provides superb evidence of an unexpected effect irrespective of whether or not the compounds have similar potencies in in vitro tests (the enzyme inhibition test or the in vitro cell growth test);

(h) the Controller also failed to appreciate that the comparison in the nude mice A-431 tumour xenografts test of the activities of Example 1 of the Application with the activities of the prior art examples 26, 41 and 64 provides an intra-test comparison with the compounds being tested in a group of tests that were conducted within a relatively short period of time. It is acknowledged that example 34(5) was tested in the nude mice A-431 tumour xenografts test at an earlier point in time. Nevertheless, an intra-test comparison can be made in that the A-431 tumour xenografts test was employed in each case. Moreover, Mr. Woodburn did declare that the data and conclusions that he was making were believed to be true. The Applicant notes that, on page 28 of the Decision, the Controller had no objection to making much less valid inter-test comparisons when he notes the activity of example 34(5) within Table I in Declaration II in the nude mice KB cell xenograft test [namely, 100 mg/kg gave 21% inhibition] and compares this to the activity of the Example 3 in the nude mice A-431 tumour xenografts test [namely, 12.5 mg/kg gave 69% inhibition];

(i) the Controller has erred in failing to recognise the reasonableness of the comparisons involving the nude mice A-431 tumour xenografts test;

(j) the Controller has also failed to acknowledge that in addition to the above, a reasonable assessment of the data shows that the in vivo activity of example 34(5) is no better than (slightly poorer than) that of examples 26, 41 and 64 that featured in the Woodburn Declaration of January, 1997, hence the Applicant's comments about the size of the potency improvements when in vivo activity is considered are justified irrespective of which compound is considered to be 'the closest prior art;

(k) a further error in the Controller's decision concerns the over-emphasis that he places on so-called ‘threshold data which was stated by Opponent to be "the first data point where a response above zero is reached”. The Applicant does not understand how this would add anything useful to the analysis. For example, testing of example 34(5) in the nude mice A-431 tumour xenografts test showed that a daily test dose of 200 mg/kg gave 30% inhibition. Lower doses would give a smaller amount of inhibition. The ED₅₀ would still be greater than 200 mg/kg. all that would have been achieved would have been the inappropriate sacrifice of laboratory animals. Such experimentation to establish the ‘threshold data for the compound would be considered to be unethical and unallowable by many animal regulatory authorities;

At the other end of the potency range, Example 1 of the present invention when administered at a daily dose of 12.5 mg/kg in several tests gave between 56 and 66% inhibition and it can readily be seen that the ED₅₀ is slightly less than 12.5 mg/kg. Lower doses would give a smaller amount of inhibition. The ED₅₀ would still be less than 12.5 mg/kg. Therefore, it does not matter whether the so-called 'threshold dose' is 1 or 5 mg/kg;

(l) the Controller has also erred in not acknowledging that it is established scientific practice that the activities of compounds are best compared by looking at estimates of their ED₅₀ activities (for in vivo tests) or IC₅₀ activities (for in vitro enzyme inhibition or cell growth inhibition tests) respectively. That is what the Applicant has sought to do when discussing the comparative activity of the claimed and prior art compounds;

(m) a further error in the Controllers decision concerns the over-emphasis that he places on a so-called ‘therapeutic index value which was stated by the Opponent to be “the ratio of ED₅₀ and the LC₅₀". The determination of lethal concentrations of test compounds is no longer used as a standard step in the analysis of test compounds. All that would be achieved would be the further inappropriate sacrifice of laboratory animals. Such experimentation would be considered to be unethical an unallowable by many animal regulatory authorities;

14. As regards patentability under section 3(d), the appellant stated that the Controller had erred in concluding that the comparison test does not establish increased efficacy. It would be apparent from the plain reading of these grounds that what the appellant wants is an appeal to be filed disguised as a review.

15. In AIR 1960 SC 137 (Satyanarayan Laxminarayan Hegde and Ors. vs. Mallikarjun Bhavanappa Tirumale) the Hon'ble Supreme Court held that “An error which has to be established by along drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments, such an error cannot be cured by a writ or certiorari according to the rule governing the power of the superior Court to issue such a writ.” The very fact that the Learned Counsel for the appellant had to labour for several hours to make her submissions would show that if there were errors in the decisions, it had to be decided only by a process of reasoning that are not apparent on the face of the records.

16. In the impugned order, the Controller had accepted the contentions of the respondent that any error which requires long drawn process of reasoning cannot be rectified in review and the authority cannot be asked to re-appreciate the findings.

17. Therefore, even if we entertain the appeal against the review, we do not find any error in the order above in the review petition. The review petition was filed as though it was an appeal, requiring the Controller to reconsider the entire matter again. Therefore, even on merits, the appeal fails.

18. Section 117(A) specifically mentions those orders against which an appeal shall lie to the IPAB. Section 77(1)(f) provides for review and the Controller while exercising the power of review has the powers of the civil court trying a suit under CPC. Therefore, the Controller was right in testing the review petition under Order 47 Rule 1 of the CPC.

19. In these circumstances, while observing that this Board had already taken a view that no appeal shall lie against the Controllers order passed in a review petition, even on merits, the appeal against the review petition fails. The appeal is dismissed. No costs.