R.M. Doshit J: 1. Heard the learned advocates. 2.

This appeal arises of the order dated 23rd March

2001 made by the learned Asstt. Judge Vadodara below Application Exh. 5 in Regular Civil Suit No. 11 of
2000. The appellant herein is the plaintiff No. 4 in the above suit. The respondents are the defendants. It
is the claim of plaintiffs that the plaintiff No. 4 appellant is a pharmaceutical `company dealing in
manufacture of various pharmaceutical products. The appellant also manufactures antibiotics. Such
antibiotics when consumed affect the normal functions of the body causing side effects like diarrhoea
womitting dizziness etc. A great deal of research is being made world over to counteract such side effects
and to minimize them. Similarly the appellant after spending enormous amount on research and
development has invented a process which is unique in its nature. The appellant has produced an
antibiotic which is successfully tested to have minimal side effects. The said antibiotic is a penicillin
product combined with a dose of lactobacilli marketed under the name of `LMX'. Ordinarily combination
of lactobacilli with antibiotic affects the lactobacilli and after certain period such lactobacilli wither away
losing their virility. With a view to preventing the antibiotic affecting the lactobacilli the appellant has
evolved a process of coating lactobacilli thereby isolating the dose of lactobacilli from antibiotic
substance by a thin protective film. Such protective film prevents antibiotic from reacting with the
lactobacilli. Such combination medicine when consumed orally even after a long time the lactobacilli are
still effective and successfully counteract the side effects caused by the antibiotic. The process evolved
by the appellant was submitted for patent before the concerned authority and after following the
procedure prescribed under the law the patent was sealed in the month of March 2000. The appellant
thus being the proprietor of a registered patent has an exclusive right to manufacture and market its
innovative medicine for a period of five years i.e. the appellant has a right to monopoly over the market
with respect to the process invented by it for a period of five years. However in utter disregard to the
appellant's right to monopoly as aforesaid the respondent No. 2 which too is a pharmaceutical company
has started manufacturing a similar combination drug in the name of Hipen LB & Hipenox LB
manufactured by following the same patented process thus infringing the appellant's patent right. The
said medicine is being marketed by the respondent No. 1. 3. The appellant and the three others
therefore they have sued the respondents for infringement of their patent by filing the above referred
Regular Civil Suit No. 11 of 2000. Pending the suit the appellant and the other plaintiffs applied for
interim injunction restraining the respondents from manufacturing the medicine `Hipen LB' & Hipenox
LB' and from selling it in the market. After granting initial ad-interim injunction under the impugned
order dated 23rd March 2001 the learned trial Judge was pleased to reject the said application and to
vacate the ad-interim injunction granted earlier. Feeling aggrieved the appellant has preferred the
present appeal under Order 43 Rule 1 CPC. 4. Mr. Dave has relied upon various provisions of the Patents
Act 1970 (hereinafter referred to as `the Act') and more particularly Sections 2 (1)(j) 5 6 7 8 9 12 13 21 22
23 24 24-A 25 64 and 107 thereof. Mr. Dave has also relied upon the various documents produced on the
records of the matter more particularly the certificate of patent dated 27th September 2000 [Mark 3/1]
and the accompanying documents; the statement of claim submitted to the competent authority the
reply affidavits made by the respondents and the opinion of Dr. Ganguli an expert in the field. 5. Mr.
Dave has submitted that the definition of `Invention' includes any new and useful improvement of
process of manufacture. The appellant has invented a process of manufacture of a combination of anti-
infecting agent with lactobacilli and thus are entitled to patent the said process under the Act. He has
further submitted that the Act provides for an elaborate procedure for application for patent submission
of complete specification examination of specification investigation for any other anticipation or
publication acceptance of complete satisfaction ; advertisement thereof and the sealing of the patent.
Any person interested is entitled to give a notice of opposition to the grant of patent within four months
from the date of advertisement of acceptance of complete specification. Thus the respondent No. 2 if
interested could have given notice to the Controller of opposition to the grant of subject patent. The
respondent No. 2 however did not choose to give such notice or to avail of the opportunity to give notice
of its opposition. The respondent No. 2 thus allowed the patent to be sealed without opposition. Even
thereafter the respondent No. 2 could have applied for revocation of patent on any of the grounds
mentioned in Section 64 of the Act. That too having not been done by the respondent No. 2 it has no
right to defend the action for infringement and the appellant cannot be deprived of the fruits of its
invention by enjoying monopoly over the market for coming five years. Mr. Dave has read out the
complete satisfaction submitted by the appellant and has demonstrated how the process invented by
the appellant is unique in its nature how it functions to justify the patent granted to the appellant. He
has also read over the opinion of Dr. Ganguli to emphasize that the process invented by the appellant is
unique all over the world. He has submitted that the appellant had applied for patent in foreign
countries also and unless the patent is protected in the home country the application for patent made in
the foreign countries shall be adversely affected. He has relied upon the judgments in the matters of
American Cyanamid Co. v. Ethicon Limited 1975 (1) All England Reporter 504; of M/s. Bishwanath Prasad
Radhey Shyam v. M/s. Hindustan Metal Industries AIR 1982 SC 1444 and of Wander Limited & Another v.
Antox India Private Limited 1999 Suppl. SCC 727. 6. In answer to the contentions raised by Mr. Dave Mr.
Thakore has relied upon Section 107 of the Act and has submitted that the defendants have a right to
defend the action for infringement on all grounds available under Section 64 of the Act. He has further
relied upon various Text-books produced alongwith the List Exh. 37 and has submitted that the process
adopted by the appellant is known to the world over for decades. Combination drugs are not unknown
to the pharmaceutical world and enteric coating of one of the ingredients is also known to the
pharmaceutical world. Thus the claim of the appellant to have invented a new process is wholly baseless
and could not have been patented. He has further submitted that the defendants have been marketing
their products `Hipen LB' and `Hipenox LB' since December 1999 and no injunction could have been
granted against the defendants restraining them from marketing their products which they have already
been marketing for quite a few months. He has relied upon the judgments in the matters of M/s.
Bishwanath Prasad Radhey Shyam v. M/s. Hindustan Metal Industries AIR 1982 SC 1444; of Standipack
Private Limited & Ors. v. Oswal Trading Co. Limited & Ors. 1999 PTC 479; of Blakey & Company v. Lathem
& Company 1889 RPC 184; of Wander Limited & Anr. v. Antox India Private Limited 1999 Suppl. SCC 727
and of Ram Narain Kher v. M/s. Ambassador Industries New Delhi AIR 1976 Delhi 87. 7. In the matter of
American Cyanamid Company [Supra] the House of Lords has held that `...the grant of an interlocutory
injunction is a remedy that is both temporary and discretionary. It would be most exceptional for your
Lordships to give leave to appeal to this House in a case which turned on where the balance of
convenience lay. In the instant appeal however the question of the balance of convenience although it
has been considered by Graham J. and decided in Cyanamid's favour was never reached by the Court of
Appal. They considered that there was a rule of practice so well established as to constitute a rule of law
that precluded them from granting any interim injunction unless on the evidence adduced by both the
parties on the hearing of the application the applicant had satisfied the court that on the balance of
probabilities the acts of the other party sought to be enjoined would if committed violate the applicant's
legal rights. In the view of the Court of Appeal the case which the applicant had to prove before any
question of balance of convenience arose was `prima facie' only in the sense that the conclusion of law
reached by the court on that evidence might need to be modified at some later date in the light of
further evidence either `detracting from the probative value of the evidence on which the court had
acted or proving additional facts. It was in order to enable the existence of any such rule of law to be
considered by your Lordship's House that leave to appeal was granted. It further held that `...where
other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are
calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something
that he has not done before the only effect of the interlocutory injunction in the event of his succeeding
at the trial is to postpone the date at which he is able to embark on a course of action which he has not
previously found it necessary to undertake; whereas to interrupt him in the conduct of an established
enterprise would cause much greater inconvenience to him since he would have to start again to
establish it in the event of his succeeding at the trail. ... If Ethicon were entitled also to establish
themselves in the market for PHAE absorbable surgical sutures until the action is tried which may not be
for two or three years yet and possibly thereafter until the case is finally disposed of on appeal Cyanamid
even though ultimately successful in proving infringement would have lost its chance of continuing to
increase its share in the total market in absorbable surgical sutures which the continuation of an
uninterrupted monopoly of PHAE sutures would have gained for it by the time of the expiry of the patent
in 1980.... that much of the benefit of the monopoly granted by the patent derives from the fact that the
patented product is given the opportunity of becoming established and this benefit continues to be
reaped after the patent has expired. 8. In the matter of Wander Limited & Anr. [Supra] the Hon'ble
Supreme Court has held that ... the interlocutory remedy is intended to preserve in status quo the rights
of parties which may appear on a prima facie case. The Court also in restraining a defendant from
exercising what he considers his legal right but what the plaintiff would like to be prevented puts into the
scales as a relevant consideration whether the defendant has yet to commence his enterprise or
whether he has already been doing so in which letter case considerations somewhat different from those
that apply to a case where the defendant is yet to commence his enterprise are attracted. It is further
held that in such appeals the appellate court will not interfere with the exercise of discretion of the court
of first instance and substitute its own discretion except where the discretion has been shown to have
been exercised arbitrarily or capriciously or perversely or where the court had ignored the settled
principles of law regulating grant or refusal of interlocutory injunctions. 9. In the matter of Bishwanath
Prasad Radhey Shyam [Supra] the Hon'ble Supreme Court has held that .. the object of Patent Law is to
encourage scientific research new technology and industrial progress. Grant of exclusive privilege to own
use or sell the method or the product patented for a limited period stimulates new inventions of
commercial utility. The price of the grant of the monopoly is the disclosure of the invention at the Patent
Office which after the expiry of the fixed period of the monopoly passes into the public domain. The
Court further held that .. the fundamental principle of Patent Law is that a patent is granted only for an
invention which must be new and useful. That is to say it must have novelty and utility. It is essential for
the validity of a patent that it must be the inventor's own discovery an opposed to mere verification of
what was already known before the date of the patent.' In paragraph 33 of the said judgment the Court
has observed that ..it is noteworthy that the grant and sealing of the patent or the decision rendered by
the Controller in the case of opposition does not guarantee the validity of the patent which can be
challenged before the High Court on various grounds in revocation or infringement proceedings. It is
pertinent to note that this position viz. the validity of a patent is not guaranteed by the grant is now
expressly provided in Section 13 (4) of the Patents Act 1970. 10. Dr. Prabuddha Ganguli the expert has
given a detailed opinion (EX-86). He is of the opinion that I therefore consider the process to be not only
novel but also inventive and further industrially applicable to constitute a valid patentable subject.' ` I
state that I have also had an opportunity of physically inspecting the products `Hipenox' and `Hipen LB'
and state that since the same comprises to a tablet in a capsule there is no other way the defendants
could have got a product in this form without infringing the process described in the patent 183097.' ` I
must also mention that the novelty and the inventive merit of the present invention is also confirmed by
the fact that the invention which is also covered under a corresponding PCT international application
under No. PCT/IB 98/00445 an on which an international search report has already been established has
failed to reveal any valid citations which could be of relevance to the novelty and inventive merit of the
claimed invention.' `I must mention that the international search report rather establishes the novelty
and inventive merit of the present invention beyond doubt. 11. I see no substance in the contention
raised by Mr. Dave that the defendant having chosen not to lodge opposition or to apply for revocation
of patent has no right to defend the action of infringement brought by the appellant and the other
plaintiffs. It is true that the defendant had all the opportunity to give notice of its opposition to the
Controller pursuant to the advertisement of acceptance published under Sec. 23 of the Act. It is also true
that the defendant has a right to apply for revocation of the subject patent under Section 64 of the Act.
Nonetheless it is equally true that under Section 107 of the Act the defendant has a right to defend the
action of infringement on all grounds that are available for revocation under Section 64 of the Act.
Section 107 expressly empowers a defendant to defend any suit for infringement of a patent. Every
ground on which a patent may be revoked under Section 64 shall be available as a ground of defence.
Hence in my view though the defendants have chosen not to give notice of opposition under Section 25
of the Act or to apply for revocation under Section 64 of the Act have right to defend the action for
infringement of subject patent on any ground on which the patent can be revoked under Section 64 of
the Act. In the present case it is an admitted fact that the subject patent is in respect of a process
evolved by the appellant for formulation of a combination of anti-infecting agent with that of micro
organism namely lactobacilli. As pointed out by Mr. Thakore from various textbooks produced alongwith
the List Exh. 37 the process of combining two drugs or of combining a chemical substance with that of a
micro organism is a well-known procedure adopted for a long time and is being used in many medicines.
It is equally well accepted that in such combinations one of the ingredients may be isolated by a coating
so as to prevent it from reacting with the other ingredient. The text books relied upon by Mr. Thakore
well establish that these are not the novel methods of preparation of a combination drug. Some of the
paragraphs relied upon by Mr. Thakore are the paragraph under caption `Layer Tablets' from the book
`Pharmaceutical Dosage Forms' [Volume-I]. Paragraph under caption `Delayed Release Coatings' &
`Enteric Coatings' from Pharmaceutical Dosage Forms [Volume-III] and the Chapter under heading
`Tablet Coating' from the Theory Practise of Industrial Pharmacy by Leon Lachman [IIIrd Edition]. 12. The
reading of the above referred paragraphs leaves no doubt that the process of making combination drugs
of a chemical material and a micro organism is a well accepted process and isolation of one of the
ingredients by giving it a coating is also a well accepted process. Hence in my view the process which the
appellant claims to have developed after years of research and development is really in use for decades.
The appellant therefore prima facie cannot be said to have evolved a new process hitherto unknown to
the pharmaceutical world. May be that the said process has been first time adopted for making a
combination drug of penicillin [an anti-infective agent] and lactobacilli [a micro organism]. But as
referred to hereinabove what is patented is the process and not the combination drug itself. If prima
facie the process evolved by the appellant is not found to be patentable the defendants cannot be
restrained from using the said process for its products and for marketing them. In the present case as
referred to hereinabove the defendants have already entered [the market with their products `Hipen LB'
& `Hipenox LB' sometime in the month of Dec. 2000. It should therefore also not be proper to restrain
them from continuing to market its products which have already entered the market for quite a few
months. I am therefore of the opinion that the learned trial Judge was justified in vacating the ex parte
ad interim injunction and in rejecting the application for interim injunction. 13. In course of delivery of
this judgment the appellant has produced Notice of Allowance issued by the United States of America
Department of Commerce Patent & Trade Marks Office on 26th April 2001. It is urged that the patent for
the same process was applied for in the United States of America also and the same has been granted by
the United States. 14. The reliance placed on the Notice of Allowance issued by the United States
Department of Commerce shall also lend no support to the appellant. First it is not shown what is the
significance of the above referred notice all allowance under the United States of America Laws and it is
also not clarified what were the claims made before the United States of America Government. It is
worth to be noted that the first claim referred to in the said notice of allowance namely' THE PROCESS
FOR THE PREPARATION OF A STABLE FIXED DOSE PHARMACEUTICAL COMPOSITION OF ANTI-INFECTIVE
AGENT/AGENTS AND MICRO ORGANISMS AS ACTIVE INGREDIENTS' is apparently not included in the list
of allowed claims. Second the said notice expressly informs that `THIS NOTICE OF ALLOWABILITY IS NOT
A GRANT OF A PATENT RIGHT.' Third it is not known what are the procedure followed before issuance of
such notice of allowance nor it is known which are the procedures yet to be complied with before the
patent is granted. 15. In view of the above discussion the appeal stands dismissed. 16. Learned advocate
Mr. Thakkar prays that the ad-interim injunction granted by the trial Court on 4th October 2000 and
continued till today be continued for a further period of ten weeks. Learned advocate Mr. Mihir Thakore
objects the proposition. On the facts and in the circumstances of the case the ad-interim injunction
granted by the trial Court and continued till today shall stand continued for a further period of ten weeks
from today on condition that in case of the appellant losing in the Supreme Court it shall indemnify the
defendants for the loss incurred by them on account of the operation of the ad-interim injunction. The
officer of the Company authorised by a Resolution of the Board in this behalf shall give an undertaking to
the trial Court to indemnify the defendants as aforesaid. Such an undertaking shall be given within
fifteen days from today. Patents Act 1970 - Section 64 & Section 107-Cases Referred:American
Cyanamid Co. v. Ethicon Limited 1975 (1) All ER 504Blakey & Company v. Lathem & Company 1889 RPC
184Bishwanath Prasad Radhey Shyam v. Hindustan Metal Inds. AIR 1982 SC 1444Ram Narain Kher v.
Ambassador Industries AIR 1976 Delhi 87Standipack Private Limited & Ors. v. Oswal Trading Co. Ltd. 1999
PTC 479Wander Limited v. Antox India Private Ltd. 1999 Suppl. SCC 727