[A big thanks to Praharsh for his inputs on the post.]
On 02 August 2024, a three judges bench of the Supreme Court (“SC”), consisting of Justices Dr D Y Chandrachud, J B Pardiwala and Manoj Misra, in the matter of Novartis AG v. Natco Pharma Limited (pdf), dismissed the Special Leave Petition (SLP) over validity of Novartis’s Eltrombopag Olamine (EO) patent (Patent No. IN 233161 (IN 161)) on the grounds that the patent in question had expired by May 21, 2023. In this case, the SC noted that the Division Bench (DB) of the Delhi High Court (DHC) was reviewing an appeal against a Single Judge Bench (SB)’s injunction granted on 13 December 2021. However, by the time the DB issued its judgment on 24 April 2024, the underlying patent had already expired on 21 May 2023. Given that the patent had lapsed, the SB’s injunction had effectively become moot. The DB’s detailed review thus became unnecessary. Consequently, the Court decided to set aside both the DB’s and the SB’s judgments, stating that neither should be cited as precedent in future cases. The case brings to light critical issues regarding the role of interim orders in IP litigation, particularly how they are treated as precedents, and since they are, should they be? This post will explore these considerations as food for thought.
To Be or Not To Be (A Precedent)?
As also noted above, the DHC had granted an interim injunction in favour of Novartis in a previous order (covered here), ruling that Natco had not sufficiently challenged Novartis’s patent claims. This decision was subsequently overturned by the DB, which found that Natco had indeed raised a credible challenge, thus nullifying the SB’s interim injunction. An important implication that flows from this order, as highlighted by Dr Sachin Malik here, is that after the SLP is dismissed, the Applicants will need to follow the guidance set by the SC’s 2013 ruling in Novartis A.G. v. Union of India, which established principles regarding application and scope of section 3(d) of the Patent Act, 1970. Vaibhav Victor Tandon’s insightful post (here) discusses this case, dubbed as ‘Novartis II,’ where the Supreme Court has broadly noted that the DB of the DHC incorrectly held that there is no presumption of validity for granted patents, allowing for validity challenges at any stage, including during infringement actions. The SC also affirmed that genus and species patents must align in terms of coverage and disclosure, rejecting the notion that a gap between them could be permissible. It also ruled that a compound covered by a broad genus patent and fully disclosed therein cannot be separately patented, as this would be vulnerable to challenge under Section 53(4) of the Patents Act. These aspects are now anticipated to hold precedential value for any other cases whose factual matrix falls in line with Novartis’s.
However, it is evident that the SC has dismissed the SLP without delving into these nuanced issues, asserting that merely the patent’s expiration has rendered the injunction irrelevant. This dismissal raises an important question: Should the SC have acknowledged the DB’s correction of the SB’s assessment? Especially when the Single Judge order has been cited as a precedent (see here). The interim injunction orders’ significance in IP cases, where interim rulings are frequently cited as precedents, warrants a more nuanced consideration than the SC has given in this case. The SC’s approach, while efficient, overlooks the impact of such injunctions on the trajectory of IP litigation in India in practice. When a higher court corrects an interim injunction, it highlights a significant judicial correction that could influence future IP cases. The SC’s decision to sidestep this issue might seem a bit too simplistic, given the potential precedential value of interim orders has been seen to have in the recent past.
Or Should it Rather Just Not Be?
While the practical angle on the usage of interim orders as precedents is something that is entrenched in how our litigation system currently functions, the SC’s ruling that the DB and SB orders should not be cited as precedents might just be a more fitting approach. The rationale here is that interim injunctions, by their very nature, are not meant to serve as long-standing precedents. Their primary purpose is to provide temporary relief until a full hearing can be conducted. The fact that interim orders are passed on only a prima facie evaluation reinforces the notion that these interim orders should not bear precedential weight. Judicial decisions must be reasoned to avoid arbitrariness to align with Article 14 of the Constitution and the principles of natural justice. Since courts may not always provide detailed reasons due to the early stage of proceedings in interim orders, giving precedential value to them might not be the best of ideas. This argument was also highlighted and discussed by Pranjali here.
Take for instance, when the DHC in Universal City Studios LLC and Ors. v. Dotmovies.baby passed a dynamic injunction order against the defendants to pre-emptively shield the plaintiff’s future works from infringement claims. Reva, in this post here, expressed concerns about how giving an unfairly broad scope to usage dynamic injunctions in the interim order could actually set a problematic precedent by imposing extra burdens on plaintiffs to prove ownership of future works and prolong the legal process.
Moreover, Adarsh Ramanujan notes here how interim orders in IP cases specifically do contain thorough analyses and legal conclusions more often than not. His analysis here was concerned with how though interim orders don’t, as a general rule, constitute a precedent to be followed to the tee, they may/may not be considered by the court, specifically by the same court in the final decision. So, a judge could theoretically adopt a different view in a final ruling, even if the interim order’s arguments are exhaustive and no new legal references are introduced, or alternatively, the court can incorporate an interim order reasoning into a final judgment, provided that the court has provided a fair opportunity to the parties to present their cases. He noted how procedural fairness becomes key when giving precedential value to interim orders and, if adopted arbitrarily, it could undermine a party’s ability to defend their case.
However, this perspective complicates the understanding of how interim injunctions are treated in the legal system. If interim injunctions are not meant to be precedential, then their citation in future cases could be misleading. The SC’s ruling indirectly highlights an essential point: interim injunctions should not be misconstrued as establishing long-term legal principles. Their role is to provide immediate, albeit temporary, relief and should not influence the broader judicial landscape once the primary matter at hand—such as the patent in this case—has expired or become irrelevant. This is not a new observation as the court in State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha (para 10) also expressed that: “A precedent is a judicial decision containing a principle, which forms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings, are only tentative. Any interim directions issued on the basis of such prima facie findings are temporary arrangements to preserve the status quo till the matter is finally decided, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing.”
Another aspect that must be brought out here is how there is a distinction between how there are different ways in which an interim injunction can set precedents. One way is by establishing general principles that apply broadly to similar future cases. This type of decision has broad precedential value because it sets a rule or guideline that other cases can follow equally. On the other hand, a court’s decision to grant or deny an injunction might be more tailored to the specific facts of that case. If a court decides not to grant an injunction in a particular case, this decision might be based on unique circumstances that don’t necessarily set a general rule for all similar cases. This type of decision is more about the specific details and less about creating a rule that will apply to all future cases. So, to what extent should a court be distinguishing between the precedential value of an interim order based on what type of principle it has established is a rather tricky area.
Well, the SC’s handling of the Novartis v. Natco SLP application might be commendable for aiming to limit the future use of interim orders as precedents. However, it remains a matter of deliberation regarding whether this approach aligns well with the current functioning of the IP litigation system in India.