Roche v DCGI: Delhi High Court on Rejection of Plaints and Doctrine of Passing Off

The Delhi High Court, in F Hoffmann-La Roche & others v. Drugs Controller General of India & others (2023:DHC:6522), dismissed applications filed by Cadila Healthcare and Hetero Drugs seeking rejection of the plaints in Roche’s suits pertaining to the dispute over the biosimilar versions of cancer drugs Trastuzumab and Bevacizumab. The judgment reinforced the judicial precedents on the rejection of plaints under Order VII Rule 11 CPC, and it also recognised the doctrine of ‘extended passing off’ in relation to an expired patent.

Factual Matrix

The Plaintiffs/Roche are innovators of two cancer drugs ‘Trastuzumab’ (INN, short for International Non-Proprietary Name) with its brand names Herceptin as well as 'Bevacizumab' (INN) with its brand name Avastin. The plaintiffs' patent rights with respect to the reference drug Trastuzumab had lapsed in 2013, and the plaintiffs did not have a patent in India for the reference biologic Bevacizumab. In 2016, the plaintiff filed separate suits against the defendants (Cadila Healthcare Ltd. and Hetero Drugs Ltd.) seeking a declaration that approvals granted by the Drugs Controller General of India (DCGI) to Cadila’ and Hetero’s drug for pre-clinical/ clinical trial protocols and marketing its drug claimed to be biosimilar version of Trastuzumab and Bevacizumab respectively, be declared invalid.

The plaintiff also sought a permanent injunction restraining the defendants from representing its drugs as biosimilar versions of Trastuzumab and Bevacizumab, respectively. The drug regulator DCGI had also been made a party to respective suits, and the plaintiffs argued that the defendants had violated provisions of the Biosimilar Guidelines and the applicable laws (the Drugs Act/Rules).

Defendants’ Application 

In response to the suits filed by the plaintiffs, the defendants filed applications under Order VII Rule 11 CPC for rejection of the plaints on the following grounds – 

(a) the plaints were barred by law on account of the failure of the plaintiffs to avail the remedy of appeal under Rule 122DC of the Drugs Rules;
(b) the plaints disclosed no cause of action, and the plaintiffs had no locus standi to institute the suits;
(c) competence of the drug regulatory authority, i.e., DCGI and its exercise of discretion, but it cannot be challenged in a Court of ordinary original civil jurisdiction since DCGI regulates the manufacture and marketing of biosimilar drugs in India under the Drugs Act and Drugs Rules, which are a complete code, with inbuilt mechanisms of regulation and remedies; and
(d) suit against Cadila is barred by Section 10 CPC on account of an earlier suit filed by it before the Bombay High Court.

Court’s Analysis

On examining the defendants’ applications, the Delhi HC observed that the applicants had invoked sub-rules (a) and (d) of Order VII Rule 11 as given under: 

11. Rejection of plaint: The plaint shall be rejected in the following cases:—

(a) where it does not disclose a cause of action;
(d) where the suit appears from the statement in the plaint to be barred by any law

Regarding whether any law barred the plaint, the High Court held that the remedy of appeal under Rule 122DC was not a path available to the innovators such as the plaintiffs. The said appeal was available only to the person/party before the regulator DCGI in the first instance and was directly aggrieved by the order of the Licensing Authority. The approvals granted in favour of biosimilars are not notified to the innovators of the drug. Also, as DCGI does not determine the rights of innovators at the time of granting approvals to new drug manufacturers, the plaintiffs were entitled to file a civil suit to protect their rights in relation to their drug Trastuzumab/ Bevacizumab, in the absence of any other alternative and efficacious remedy being available.

The Delhi HC further added that “if in a given case (regulatory) approvals are questioned, then as observed by the Court in the Reliance suit, plaintiffs cannot be prevented from enforcing a right to enjoin the defendants till they accomplish the onerous task of establishing that the approvals for manufacturing, distributions and sales were in consonance with the biosimilar regime in the form of Drugs Act/Rules and Guidelines. In these circumstances, Civil Court’s powers can be invoked to interdict the resultant consequences of impugned actions.”

Regarding the cause of action, relying on judicial precedents set by the Supreme Court, the Delhi HC held that only averments in the plaints would be examined, and pleas taken by the defendants in defence would be wholly irrelevant at this stage. The High Court perused the plaints, and it held that the following averments by the plaintiffs disclosed the cause of action:

• The defendants' drugs have been approved for manufacturing and distribution by the DCGI without following the procedures and under the Drugs Act, Drugs Rules and Biosimilar Guidelines. Combining or skipping various phases of clinical trials is not permissible.
• Defendants claim similarity with plaintiffs’ innovator drug Trastuzumab/Bevacizumab without establishing bio-similarity through appropriate tests and conditions under the applicable laws. In view of inherent differences in the compositions of alleged biosimilar drugs and innovators' biological drugs and inadequate testing, defendants' drugs should not have been approved, and they should be restrained from promoting and marketing their respective drugs.
• The impugned actions of defendants are classic textbook cases of extended passing off and amount to dilution of the formidable and globally known reputation and goodwill of the plaintiffs’ innovator drugs, at the same time giving unfair and undue advantage to defendants; the potential deficiencies in the defendants' drugs will not only dilute and damage plaintiffs' reputation but will be detrimental to the public interest as the patients and the medical community will be misled into believing that the defendants' drugs, claimed to be biosimilar are associated with plaintiffs' world known innovator drugs.
• Without adequate testing and assessment pertaining to safety, efficacy, quality, and composition, using INNs is legally impermissible and adds to public confusion.

The HC further added that "it is the pleaded case of the plaintiffs that they are not asserting rights under the patent, which has expired in 2013 as also that plaintiffs have no objection to the manufacture and sale of the impugned drugs by Cadila and Hetero as long as they are not claimed to be biosimilar and/or the parties do not use the INN, in the absence of the alleged non-compliance with the applicable laws. Looking at the plaints, there are enough averments in the plaints which brings to fore cause of action on a mere demurrer and supported by documents filed with the plaints.”

Decision

The HC finally rejected the defendants’ applications by noting that "the facts in the present cases are completely different where the plaintiffs have no remedy under the concerned applicable laws and therefore, they cannot be precluded from invoking the ordinary civil jurisdiction of this Court.”

Conclusion

While deciding an application under Order VII Rule 11 CPC, what is to be seen is if a right is asserted by a plaintiff with supporting material and whether he is entitled to relief in law, albeit the plaintiff may not ultimately succeed in getting the relief. Supreme Court has consistently held that rejection of a plaint is a drastic power, and it is the duty of the Court to tread with caution and terminate the litigation only when it is found to be wholly meaningless or abortive. In this case, the Court also noted that the plaintiff's suit is not a trademark action nor an attempt to enforce the plaintiff's patent. Rather, the suit is an action for extended passing off and to prevent the defendants from using the plaintiffs' data and improper reference to its drugs, Trastuzumab and Bevacizumab.