Symed Laboratories Pvt. Ltd. vs Sharon Bio-medicine Ltd.

G.P. Mittal, J.—This application under Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC) has been moved by Defendant no. 3 (Mankind Pharma Limited) for amendment of the written statement.

A suit for permanent injunction restraining infringement of rights in Patents no. 213062 and 213063 titled ''Novel Intermediates for Linezolid and Related Compounds'' and ''A Novel Process for the Preparation of Linezolid and Related Compounds'' along with damages/ rendition of accounts, etc. was instituted by the Plaintiff against the Defendants with the allegations that the Plaintiff company is a well-known name in respect of manufacture and marketing of high profile Active Pharmaceutical Ingredients. It is the case of the Plaintiff that Linezolid is a synthetic antibiotic used for the treatment of serious infections caused by gram-positive bacteria that are resistant to several other antibiotics. Linezolid is a member of the oxazolidinone class of drugs and has the chemical name N - [ [ (5S) - 3 - [3 - fluoro - 4 - (4 - morpholinyl) phenyl] - 2 - oxo - 5 - oxazolidinyl] methyl] acetamide. Linezolid is marketed by Pfizer under the tradenames Zyvox (in the United States, United Kingdom, Australia and several other countries), Zyvoxid (in Europe) and Zyvoxam (in Canada and Mexico). Linezolid is protected by various patents in all major countries worldwide, for example by US Pat no. 5,688,792 (Expiry date: May 18, 2015) in the United States and by EP Patent no. 0717738B1 in the European Convention by Pfizer. However, as Linezolid is a pre - 1995 drug, thus, there does not exist a corresponding product patent qua Linezolid in India.

According to the Plaintiff, the Plaintiff developed two novel and inventive processes for preparation and commercial production of Linezolid. The Plaintiff, therefore, moved two applications bearing nos. 1592/ CHENP/ 2004 and 797/ CHENP/ 2004 in the patents office. The Plaintiff company was granted two different patents being IN 213062 and IN 213063 respectively. Details of the said patents as stated in para 12 of the plaint are extracted hereunder: 4. It is averred in the plaint that the various patents/ applications in respect of processes for preparation of Linezolid including those of the innovator, Pfizer suffered from various shortcomings and disadvantages which have been overcome by the Plaintiff by the processes patented above.

The Plaintiff states that the Plaintiff''s rights in two patents are extremely valuable as the Plaintiff has spent large amount of money and time in inventing the process. It is averred that Defendants no. 2 and 3 are some of the customers of Defendant no. 1. It is further stated that Defendant no. 1 is involved in manufacturing of Active Pharmaceutical Ingredients for supply to its customers in domestic and international market. According to the Plaintiff, Defendants no. 2 and 3 are procuring Linezolid from Defendant no.1 which is manufactured by using the patented process of the Plaintiff. Thus, all the three Defendants are guilty of infringing the process of patents of the Plaintiff.

By an ex parte ad interim injunction order dated 01.06.2012, the Defendants through their directors, servants, agents, employees, franchisees and representatives or any one acting on their behalf were restrained from manufacturing the product Linezolid in any manner so as to result in infringement of the Plaintiff''s registered patent IN213063.

By virtue of this application under Order VI Rule 17 CPC, Defendant no. 3 wants to amend para 1, newly add paras 2 and 3 and reframe para 2 with amendments as para 4 in the written statement, which for the sake of convenience are extracted hereunder from the chart provided by Defendant no. 3:

The reason given for carrying out the amendment in the written statement is that Defendant no. 3 is neither the manufacturer nor the producer of the product Linezolid. Defendant no. 3 is merely a marketer of its product, namely, LIZOFORCE that principally contains Linezolid IP, a compound over which the Plaintiff purportedly claims to hold process patent rights. Defendant no. 3 purchases finished goods product duly manufactured from various independent manufacturers under its own brand name subject to the terms and conditions contained in the agreement duly entered between Defendant no. 3 and the said manufacturers. Defendant no. 3 also facilitates supply of raw materials to its manufacturers. According to Defendant no. 3, its manufacturers had been purchasing Linezolid IP compound from various sources including the Plaintiff. Defendant no. 3, therefore, wants to incorporate all these facts by way of amendment in the written statement.

The application is opposed by the Plaintiff primarily on the ground that Defendant no. 3 is attempting to resile from its admitted position in the written statement filed on record. According to the Plaintiff, Defendant no. 3 originally admitted to being the manufacturer of Linezolid finished formulations and has now claimed that it uses independent manufacturers to prepare the finished products. It is urged that the amendment sought is malafide and Defendant no. 3 is trying to get out of the contempt application filed by the Plaintiff against the Defendants. It is urged that Defendant no. 3 has been consistently shifting its stand in the written statement filed in defence to the suit by way of frivolous applications, the earlier application being I.A. No. 18150/ 2013 moved for amendment of the written statement and withdrawn by it and the second application being the present one under Order VI Rule 17 CPC which is the subject matter of this order. The sum and substance of the opposition to the application for amendment is that Defendant no. 3 cannot withdraw its admission and cannot be permitted to set up a new case.

The learned Senior Counsel for the Plaintiff has referred to Modi Spinning and Weaving Mills Co. Ltd. and Another Vs. Ladha Ram and Co., to urge that the amendment of written statement seeking to displace the Plaintiff from the admission made by the Defendant in the written statement is not permissible. The learned Senior Counsel also relies upon Gautam Sarup Vs. Leela Jetly and Others, , S. Malla Reddy Vs. Future Builders Co-operative Housing Society and Others, and Kali Charan Vs. Ishwar Dass, to urge that even if a Defendant may be permitted to take an inconsistent plea or alternative pleas in his defence, yet a Defendant cannot be permitted to withdraw any admission made in favour of the Plaintiff.

It is, no doubt, true that an admission cannot be permitted to be withdrawn by a party to the lis. In Gautam Sarup (supra) relied upon by the learned Senior Counsel for the Plaintiff, the law with regard to withdrawal of admissions was examined in great detail and referring to Union of India (UOI) Vs. Pramod Gupta (D) by L.Rs. and Others, , the Supreme Court held as under:

"23. Yet again in Union of India v. Pramod Gupta this Court held:

"134. .... Before an amendment can be carried out in terms of Order 6 Rule 17 of the CPC the court is required to apply its mind on several factors including viz. Whether by reason of such amendment the claimant intends to resile from an express admission made by him. In such an event the application for amendment may not be allowed. (See Modi Spg. and Wvg. Mills Co. Ltd. v. Ladha Ram and Co., Heeralal v. Kalyan Mal and Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad.)"

At the same time, the Supreme Court held that where the admissions are not withdrawn but additional facts are stated which need to be proved, the amendment can be allowed. It was also stated that in a given case, an admission may be explained or clarified. In paras 27 to 29 in Gautam Sarup (supra), the Supreme Court held as under:

"27. Recently, in Usha Balashahed Swami v. Kiran Appaso Swami this Court observed:

"26. Therefore, it was neither a case of withdrawal of admission made in the written statement nor a case of washing out admission made by the appellant in the written statement. As noticed herein earlier, by such amendment the appellant had kept the admissions intact and only added certain additional facts which need to be proved by the plaintiff and Defendants 2 to 8 to get shares in the suit properties alleged to have been admitted by the appellants in their written statement. Accordingly, we are of the view that the appellants are only raising an issue regarding the legitimacy of the plaintiff and Defendants 3 to 7 to inherit the suit properties as heirs and legal representatives of the deceased Appasao. Therefore, it must be held that in view of our discussions made hereinabove, the High Court was not justified in reversing the order of the trial court and rejecting the application for amendment of the written statement."

What, therefore, emerges from the discussions made hereinbefore is that a categorical admission cannot be resiled from but, in a given case, it may be explained or clarified. Offering explanation in regard to an admission or explaining away the same, however, would depend upon the nature and character thereof. It may be that a defendant is entitled to take an alternative plea. Such alternative pleas, however, cannot be mutually destructive of each other.

An explanation can be offered provided there is any scope therefor. A clarification may be made where the same is needed."

Turning to the facts of this case, it is nowhere the case of the Plaintiff that Defendant no. 3 (applicant herein) is the manufacturer of Linezolid. On the other hand, the case of the Plaintiff itself had been that Defendants no. 2 and 3 are procuring the Linezolid from Defendant no. 1 which is being manufactured (by Defendant no. 1) by using the patented process of the Plaintiff. Para 23 of the plaint is extracted hereunder:

"23. It is most respectfully submitted that the Defendant no.1, Sharon Bio-Medicine Limited is a Company which is involved in the manufacture and supply of APIs (Active Pharmaceutical Ingredients) for several of its customers in pharmaceutical sector both internationally and domestic. The Defendant no. 2, Alken Laboratories Limited is one of the customers of the Defendant no.1 and is involved in the manufacture, supply and marketing of generics and branded formulations. The Defendant no. 3, Mankind Pharma Limited is another customer of the Defendant no. 1 and is involved in the manufacture, supply and marketing of various pharmaceutical formulations. It is humbly submitted that both the Defendants no. 2 and 3 are procuring Linezolid from Defendant no. 1, which is manufactured by using the patented process of the Plaintiff. As a result, the Defendants are guilty of infringing the process patents which are the subject of the present suit inasmuch as no license/permission has been sought by either of the Defendants from the Plaintiff for using the patented processes for production and manufacture of Linezolid."

Thus, the case of the Plaintiff itself had been that Defendants no. 2 and 3 were infringing the Plaintiff''s patented process because they were procuring Linezolid from Defendant no. 1 which Defendant no. 1 was manufacturing by using patented process. In para 2 of the written statement, Defendant no. 3 stated as under:

"2. The answering defendant no. 3 has been engaged in manufacturing, producing and trading of various pharmaceutical products of different descriptions and varieties. It must be appreciated that during the course of its activities (manufacturing), answering defendant No.3must have used the product either as an intermediary or as a constituent to the final product by purchasing the same from market including from defendant no. 1. However, it is reiterated that when a product is bought from the market, what is required to be looked into as to whether the entity selling such product is having the requisite license issued by the competent authority either to manufacture it or to sell it or not as it is neither practical nor possible nor required to ascertain and find out as to by which process the product in question has been manufactured and whether the manufacturer is having a patent over it or some right so as to entitle it to product the product in the particular manner i.e. by using the process....."

Thus, in para 2, the sum and substance of the defence of Defendant no. 3 was that:

(a) Linezolid was being used by Defendant no. 3 as a constituent in its final product; and (b) the product Linezolid was being purchased from the market and Defendant no. 3 was not expected to inquire the process of manufacturing Linezolid from the vendor but was only expected to see if it has a requisite licence to sell the product.

In para 1 of the preliminary objections of the written statement, it had been specifically stated by Defendant no. 3 that it was neither manufacturing Linezolid nor was, in any way, involved in its manufacturing activity. Therefore, the admission made by Defendant no. 3 that the product Linezolid was purchased by it at times for being used as a constituent from the market including Defendant no. 1 is a categorical admission and the same cannot be permitted to be withdrawn. At the same time, Defendant no. 3 cannot be prohibited from making an averment that Defendant no. 3 is getting LIZOFORCE manufactured from various manufacturers subject to the terms and conditions of the agreement between Defendant no. 3 and the said manufacturers and that one such manufacturer of Defendant no. 3 had been purchasing Linezolid IP from the Plaintiff for at least four years.

Thus, the application under Order VI Rule 17 CPC is partly allowed by permitting the amendment sought except that Defendant no. 3 cannot be permitted to withdraw the admission that "answering defendant no. 3 must have used the product either as an intermediary or as a constituent to the final product by purchasing the same from market including from defendant no. 1". But, it is permitted to state that "its manufacturers must have used the product either as an intermediary or a constituent of final product by purchasing the same from the market including Defendant no. 1 and the Plaintiff". Accordingly, while making amendment in the plaint, Defendant no.3 shall specifically state the earlier admission and then make the amendment sought.

Let amended written statement in terms of this order be filed within four weeks.