Bristol Myers Squibb Company and Anr. v. V.C. Bhutada & Ors.

Bristol Myers Squibb Company and Anr. v. V.C. Bhutada & Ors. 

CS(OS) No. 2801 of 2012

before the Hon’ble High Court of Delhi at New Delhi

Decided on: 11.10.2013

The Plaintiffs (Bristol Myers Squibb Company and Bristol Myers Squibb India Pvt. Ltd.) filed a suit against the Defendants, i.e. V.C. Bhutada, (Defendant No. 1), Shilpa Medicare Ltd. (Defendant No. 2 ) and Natco Pharma Ltd. (Defendant No. 3) towards infringement of their Patent No. 20393 covering DASATINIB(API). The action was a quia timet action as the drug at the time of filing of the suit was not available in the market. However, the Defendant No. 1 & 2 has obtained a manufacturing license by the Drug Controller Licensing Authority, Karnataka for manufacturing DASATINIB bulk drug. The allegation against the Defendant No. 3 was that it had approached Defendants 1 and 2 for procuring bulk DASATINIB (API) and, therefore, the Plaintiffs had a real and reasonable apprehension that Defendant No. 3 would continue to infringe the invention of the Plaintiffs with the assistance of Defendants 1 and 2.

Defendant No. 2 filed an application under Order VII Rule 10 of the Code of Civil Procedure, 1908 seeking return of plaint and contended that the present suit is liable to be returned for want of jurisdiction as Defendant No. 2 has not entered into any commercial understanding with any of its customers located in Delhi and, therefore, no cause of action arose against Defendant No. 2 within the territorial jurisdiction of the Court. No document to at least substantiate prima facie the existence of any commercial understanding between the Defendant Nos. 2 and 3 and also between the Defendant No. 2 and its customers has been produced. Defendant No. 2 stated that it is located in Raichur, Karnataka and has no principal or subordinate office within the territorial limits of this Court and therefore no cause of action arises within the state of Delhi.

Defendant No. 2 further contended that the manufacturing license has been granted to it by the State Drugs Control Department, Karnataka for it’s manufacturing unit located in Raichur, Karnataka. Defendant No. 2 neither has a registered office nor a branch office in Delhi and, therefore, the Court does not have any territorial jurisdiction to entertain the suit.

Defendant No. 2 referred to the decision in Dhodha House v. S.K. Maingi  which held that mere sale through a commission agent or otherwise of the goods will not satisfy the requirement of the expression “carries on business” occurring in Section 20(a) CPC. Such a defendant would have to be shown to be a special agent exclusively working for his principal and for no other person which may be in control of the principal. It was further held in Dhodha House that only because the Defendant’s goods have been sold at that place would “evidently not mean that it carries on a business at that place.”

As the Patents Act, 1970 does not have a long-arm provision of jurisdiction like Section 62(2) of the Copyright Act, 1957 and Section 134(2) of the Trade Marks Act, 1999, it was Section 20 of the Code of Civil Procedure, 1908 that was found to be relevant for jurisdiction in the present case.

As it was a quia timet action, the question that run large on the mind of the Hon’ble Court was whether the mere apprehension of the Plaintiff or its perception of a threat of infringement by the Defendants of its patent occurring within the local limits of this Court is sufficient to attract the jurisdiction of this Court.

The Court held that the question of jurisdiction in the present case is a mixed question of law and fact. At the stage prior to the trial, where a Defendant is in a quia timet action seeking the return of the plaint for want of jurisdiction, the Court will have to take the allegation contained in the plaint to be correct. Also, in a quia timet action the averments in the plaint would invariably express only an apprehension of an infringement, the Court can only examine whether such apprehension is prima facie credible enough for entertaining the suit, postponing the testing of the veracity of such averment to the stage of trial.

Relying on the averments made in the plaint, in paragraph 36 (first expression of the apprehension), paragraph 40 (Defendant No. 2 intends to supply API to various generic manufacturers in India and abroad), paragraph 41 (Defendants 1 and 2 have numerous commercial arrangements by virtue of which they supply bulk API especially oncology APIs to various generic companies located within the jurisdiction of this Court), paragraph 41(2) (If Defendant Nos. 1 & 2 start supplying, DASATINIB (API), the same would be available within the jurisdiction of this Hon’ble Court) the Hon’ble Court dismissed the application of the Defendant No. 2 and held that at this stage, the Plaintiff can at best refer to the fact that Defendant No. 2 supplies oncology APIs to various generic companies and that the said APIs are sold in Delhi. The apprehension that such oncology APIs may in the near future include the infringing product which is also an oncology API cannot, in the circumstances, be characterized as lacking credibility and having been asserted merely to attract the jurisdiction of the Court. The averments in the present plaint, which is in a quia timet action, are prima facie sufficient to show that Defendant No. 2 “carries on business” in Delhi and that the prima facie the cause of action arises within the jurisdiction of this Court.

The Hon’ble Court stated that a specific issue concerning territorial jurisdiction of the Court will be framed for determination at the appropriate stage and the application under Order VII Rule 10 of the Code of Civil Procedure, 1908 for return of plaint was dismissed.

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