29 Petitioner

TC: 29

Before THE HON’BLE SUPREME COURT OF INDIA In the Matter of SPECIAL LEAVE PETITION (CIVIL) (________/ 2015)

ZAYER INDIA

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APPELLANT

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v. KIPLA AND ANR.

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RESPONDENTS

MEMORANDUM FOR THE APPELLANTS

-Table of Contents-

-Appellant-

TABLE TABLE OF CONTENTS

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II

STATEMENT OF JURISDICTION

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VIII

STATEMENT OF FACTS

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IX

STATEMENT OF ISSUES

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XII

SUMMARY OF PLEADINGS

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XIII

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1

I. A.

THE INSTANT SPECIAL LEAVE PETITION IS MAINTAINABLE. THE INSTANT SLP RAISES IMPORTANT QUESTIONS OF LAW. -

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THAT THE APPELLANT HAS SUFFERED GRAVE INJUSTICE.

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THE DECISION OF THE HON’BLE HIGH COURT IS PATENTLY ERRONEOUS.

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II. A.

THE DECISION OF THE HON’BLE HIGH COURT SHOULD BE REVERSED. 8 THAT THE COMPAT’S ORDER IS A NULLITY DUE TO LACK OF JURISDICTION TO ENFORCE

I INDEX OF AUTHORITIES

PLEADINGS AND AUTHORITIES

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B.

FUNDAMENTAL RIGHTS THAT THE INTERPRETATION MADE BY THE

C.

UNREASONABLE RESTRICTION ON THE RIGHT UNDER ARTICLE 19 (1) (G). 8 THAT TAKING RECOURSE TO A LEGAL REMEDY CANNOT TANTAMOUNT TO AN ABUSE OF DOMINANT POSITION.

PRAYER

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HON’BLE DELHI HIGH COURT

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XIV

-MEMORANDUM FOR THE PETITIONERi

-Statement of Jurisdiction-

-Petitioner-

INDEX OF AUTHORITIES CASES CITED S. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

CASE NAME Anisminic Limited v. Foreign Compensation Commission, (1969)2 AC 147. Arunachalam v. Sethuratnam, AIR 1979 SC 1284. Aspen Highlands Skiing Corp. v Aspen Skiing Co., [1982] 472 US: 611. Atari v Nintendo, 975 F.2d 932 (9th Cir. 1992). Bennet Colman & Co. v. Union of India, AIR 1973 SC 106. Berkey Photo v. Eastman Kodak, 603 F.2d 263 (2nd Cir. 1979). Bhagwati Developers v. The Peerless, [2013] 178 Comp Cas 1 (SC). Bihar Legal Support Society v. Chief Justice of India, AIR 1987 SC 38. Blueberry Books v. Google India Pvt. Ltd., 205 (2013) DLT 228. Carbodium Universal Ltd. v. Central Board of Direct Taxes, 1989 (Supp- 2) SCC 462. CCE v. Venus Castings (P) Ltd, AIR 2000 SC 1568. CIT v. PJ Chemicals Ltd., AIR 1994 SC 2727. Continental Bag Co. vs. Eastern Bag Co., 210. US 405 (1909). Cont’l Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405 (1908). CSU, L.L.C. v. Xerox Corp., 203 F.3d 1322 (Fed. Cir. 2000). Data General Corp. v. Grumman Systems Support Corp., 36 F.3d 1147, 1182 (1st Cir. 1994). Dayaram v. Sudhir Batham, 2011 (11) SCALE 448. Delhi High Court Bar Association & Anr. v. Govt. of NCT of delhi, 203(2013)DLT129. Dhannalal v. Kalawatibai AIR 2002 SC 2572. Dodge v. Ford Motor Company, 170 NW 668 (Mich 1919). Durga Shankar v. Raghuraj, AIR 1954 SC 520. E. States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 600 (1914). Esher Singh v. State of A.P., AIR 2004 SC 3030. Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993). Himmat Lal v. State of Madhya Pradesh AIR 1954 SC 403. IMS Health GmbH & Co. OHG v NDC Health GmbH & Co. KG., (Case C-418/01). Jhummamal v. State of MP, AIR 1988 SC 1973. Jindal Steel and Power Ltd. v. Steel Authority of India Ltd. -MEMORANDUM FOR THE RESPONDENTSii


29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.

-Petitioner-

[2012]107CLA278(CCI). K. Veeraswami v. Union of India & ors., (1991) 3 SCC 655. Kuriakose v. State of Kerala, AIR 1977 SC 1508. L. Chandrakumar v. UOI, 1997 (2) SCR 1186. Magill ITP, BBC and RTE v. Commission, Cases C241/91 and C242/91 (1995), ECR I-743. Mathai v. George, (2010) 3 SCR 533. Matsushita v Zenith, [1986] 475 US 574. Namit Sharma v. UOI, No. 2309 of 2012 Supreme Court of India. Natco v. Bayer, MANU/IC/0108/2012. Needle, Inc. v. Nat’l Football League, 130 S. Ct. 2201, 2208 (2010). Oscar Bronner GmbH & Co. KG v. Mediaprint Zeitungs, , Case C7/97, 1998 E.C.R. I-7791, [1999] 4 C.M.L.R. 112. Parke Davis v. Probel ECJ 29 FEB 1968. Pazhassi Raja Charitable Trust v. Union of India, AIR 2010 SC 218 Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, Appeal (civil) 992 of 2002 Supreme Court of India. R. K. Jain v. Union of India, 1993 (4) SCC 119. R.D. Shetty v. UOI, Ajay Hasia v. Khalid Mujib. Radhey Shyam & Anr vs Chhabi Nath & Ors, CIVIL APPEAL NO.2548 OF 2009. Raghubar v. UOI, AIR 1952 SC 263 (274). Rajasthan State Road Transport Corporation v. Bal Mukund Bairwa (2009) 4 SCC 299. Rajendra Singh Yadav And Ors v. State Of U.P. And Ors, 1990 SCR (2) 171. Sajid Ali v State 2013 VII AD (Delhi) 670; Re Special Reference No. 1 of 2012, 2012 (9) SCALE 310: (2012) 10 SCC 1. Sakal Papers ltd. v. Union of India 1962 AIR 305. Sampath Kumar and Ors. v. UOI, AIR 1987 SC 386. Smt Ganga bai v. Vijay KumarAIR 1974 SC 1126. Sodan Singh v. New Delhi Municipal Committee (1989) 4 SCC 155. Som Prakash v. Union of India, AIR 1981 SC 212. State of Assam v. Barga Dewani (1970) 3 SCC 236. State of Bihar v. Kameswar, AIR 1952 SC 252. State of MP v. Ramakrishna Ganapat Rao Limsey, AIR 1954 SC 20. State of U.P. v. Indian Hume Peipe Co. Ltd. AIR 1977 SC 1132. State of UP v. Harish Chandra, (1996) 9 SCC 309. T. C. Basappa vs T. Nagappa And Another, 1955 SCR 250. The Director General v. M/s. Ingersoll-Rand (I) Ltd., Bangalore and -MEMORANDUM FOR THE RESPONDENTSiii


61. 62. 63. 64. 65. 66. 67. 68. 69. 70.

-Petitioner-

Anr. Union Of India v. R. Gandhi, [2010] 6 S.C.R. US v Colgate & Co, [1919] 250 US 300. US v Grinnell, [1966] 384 US 563. VERIZON COMMUNICATIONS INC. V. LAW OFFICESOF CURTIS V. TRINKO, LLP (02-682) 540 U.S. 398 (2004) 305 F.3d 89. Verizon Communications v. Law Offices of Curtis V. Trinko, 540 U.S. 398, 408 (2004). Verizon v Trinko, 540 U.S. 398. Volvo v. Veng, EUECJ C-238/87. Western India Plywood Ltd. v. P. Ashokan (1997) 7 SCC 638. World Phone India Pvt. Ltd v. WPI Group Inc USA, [2013] 178 Comp Cas 173 (Del). Zee Telefilms v. Union of India, Writ Petition (civil) 541 of 2004. Supreme Court of India

STATUTES AND RULES CITED S. No. 1.

BIBLIOGRAPHICAL INFORMATION The Constitution of India, 1950

2.

Indian Patents Act, 1970

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Competition Act, 2002

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Delhi High Court Rules

ARTICLES REFERRED S. NO. 1.

2.

BIBLIOGRAPHICAL INFORMATION Competition and Regulation Issues in the Pharmaceutical Industry, available at http://www.oecd.org/competition/sectors/1920540.pdf Competition: Antitrust procedures in abuse of dominance, available at http://ec.europa.eu/competition/publications/factsheets/antitrust_procedures_102_en.pd f -MEMORANDUM FOR THE RESPONDENTSiv


-Petitioner-

3.

Per Commission Vice President, Joaquin Almunia, ‘Antitrust: Commission fines Servier for curbing entry of cheaper versions of cardiovascular medicine’ (Brussels, 9 July, 2014), at http://europa.eu/rapid/press-release_IP-14-799_en.htm

4.

RAMA SARMA, Commentary on Intellectual Property Laws, (1st Edn.), at p. 28.

BOOKS REFERRED 1.

HALSBURY’S LAWS

OF INDIA,

COMPETITION LAW AND TRADE PRACTICES CONFLICT OF

2.

LAWS COURTS,( Vol. 10, Lexis Nexis Butterworths, New Delhi 2007). T. RAMAPPA, COMPETITION LAW IN INDIA, POLICY, ISSUES AND DEVELOPMENTS (Second

3.

ed., Oxford University Press, 2009) (2006). COMPETITION LAW TODAY, CONCEPTS, ISSUES,

4.

ed., Oxford University Press, 2008) (2007). GAUTAM BANERJEE, GUIDE TO THE COMPETITION LAW, (Commercial Law Publishers

5.

(India) Pvt. Ltd., 2011). S M DUGAR, U P MATHUR, DINESH AGNANI, PUBLISHER’S EDITORS BOARD, GUIDE TO

6.

COMPETITION LAW, ( 5 ed., Vol. 2, Lexis Butterworths Wadhwa, Nagpur, 1979) (2010). DURGA DAS BASU, COMMENTARY ON THE CONSTITUTITON OF INDIA, ( Hon’ble Mr. Justice

AND

THE LAW IN PRACTICE, (Vinod Dhall

C.K. Thakker ed., Hon’ble Mr. Justice S.S. Subramani ed., Hon’ble Mr. Justice T.S. Doabia ed., Hon’ble Mr. Justice B.P. Banerjee ed., Vol. 5 LexisNexis Butterwoths Wadhwa, Nagpur 7.

1950) (2009). KEVIN COATES, COMPETIITON LAW AND REGULATION OF TECHNOLOGY MARKETS, (Oxford

8.

University Press 2011). M P JAIN, INDIAN CONSTITUTIONAL LAW (Samaraditya Pal rev., Justice Ruma Pal rev., 6

9.

ed., Vol. 2, 2010) (1962). H. M. SEERVAI, CONSTITUIONAL LAW IN INDIA, ( Fourth ed., Vol. 1, Universal Law

Publishing Co. Pvt. Ltd. 2007) (1967). 10. DURGA DAS BASU, COMMENTARY ON THE CONSTITUTITON OF INDIA, ( Hon’ble Mr. Justice C.K. Thakker ed., Hon’ble Mr. Justice S.S. Subramani ed., Hon’ble Mr. Justice T.S. Doabia ed., Hon’ble Mr. Justice B.P. Banerjee ed., Vol. 2 LexisNexis Butterwoths Wadhwa, Nagpur 1950) (2009). 11. ABIR ROY, JAYANT KUKMAR, COMPETITION LAW IN INDIA, (Second ed., Eastern Law House, 2014).

-MEMORANDUM FOR THE RESPONDENTSv

-Statement of Jurisdiction12. MANOHAR

AND

-Petitioner-

CHITALEY, THE AIR MANUAL, CIVIL

AND

CRIMINAL, (6th ed.,Vol. 10, All

India Reporter Pvt. Ltd. Nagpur 2004). DATABASES REFERRED  

http://www.manupatra.com http://www.westlawindia.com

STATEMENT

OF JURISDICTION

The counsels on behalf of the petitioner, in the matter of Amit Sharma v. Govt. of NCT of Delhi and others, have filed the present Special Leave Petition under Article 136 1 of the Constitution of India challenging the orders of denial of bail to the petitioner passed by the Sessions Court and the High Court and also against the order of refusal to club FIRs passed by the Sessions Court.

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Article 136 of the Constitution of India, Special leave to appeal by the Supreme Court: (1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any Court or tribunal in the territory of India (2) Nothing in clause ( 1 ) shall apply to any judgment, determination, sentence or order passed or made by any Court or tribunal constituted by or under any law relating to the Armed Forces.

-MEMORANDUM FOR THE RESPONDENTSvi

-Statement of Facts-

-Appellant-

STATEMENT

OF

FACTS

BACKGROUND An epidemic like situation was triggered as soon as the vicious haemorrhagic fever “Lebola” broke out in December, 2013. Almost 30,000 patients were diagnosed with the Lebola virus, 12,000 of them succumbed to this deadly virus. In India alone, there are approximately 2500 confirmed patients suffering from Lebola.

THE DRUG In March of 2014, Zayer Inc. developed a drug “LebinX”, the only known cure for Lebola virus and patented the same in USA. The USA government classified LebinX as an orphan drug and reimbursed 50% of the R&D costs. Zayer Inc. patented the same formulation in India in October 2014 with the help of its wholly owned subsidiary “Zayer India”. LebinX was sold at INR 36,000 for 60 tablets per month.

LICENCE Kipla Pvt. Ltd. one of India’s largest pharmaceutical brands, sought to enter into a licencing agreement with Zayer Inc. with an offer to manufacture and sell LebinX at a price of INR 600 for the same dosage of 60 tablets. But the negotiations couldn’t take off as a result of which the licence was refused by Zayer India. THE INFRINGING DRUG & SUIT In February 2015, Kipla introduced a generic version of LebinX at a price of INR 600 for 60 tablets and sought to patent its formulation on the grounds that their drug, “Lebocin” possessed therapeutic efficacy over the existing drugs in the market. Zayer India, was quick in moving to the High Court in an original suit seeking an interim injunction and protection against infringement of its patent. BEFORE ‘CCI’ Aggrieved by the suit, Kipla moved the Competition Commission of India (“CCI”) stating that Zayer India’s refusal to license and subsequent effort to injunct Kipla from manufacturing and -MEMORANDUM FOR THE RESPONDENTSvii

-Statement of Facts-

-Appellant-

selling amounted to a gross abuse of the dominant position considering the increase in the number of deaths due to Lebola. The CCI however did not find a prima facie case against Zayer India. Kipla then moved the Competition Appellate Tribunal (“COMPAT”) in an appeal arguing that CCI should have recognised the impact on public health as a result of the abuse of dominant position exercised by Zayer India. COMPAT’S ORDER The COMPAT set aside CCI’s order citing that there were immense social costs in allowing Zayer India to violate its obligations towards public health enshrined under Article 21 of the Constitution. It noted that if Kipla is injuncted even as a willing licensee, the public will then be “solely and absolutely” dependent on Zayer India for access to life-saving drugs, and this fall squarely within the prohibition that Section 4 of the Competition Act. BEFORE THE HON’BLE HIGH COURT OF DELHI Zayer India moved the Delhi High Court under Article 226 challenging the order of COMPAT on a number of grounds, chief amongst them being the fact that COMPAT’s order was a nullity for lack of jurisdiction and the violation of the Fundamental Right under Article 19(1)(g). The High Court dismissed the petition citing the cost to public health as irreparable against the monetary loss of Zayer India. SPECIAL LEAVE PETITION

BEFORE THE

HON’BLE SUPREME COURT

A. Zayer India sought Special Leave to appeal against the order of the Hon’ble Delhi High Court. When the SLP came up for admission the Hon’ble Apex Court issued notices to Kipla Pvt. Ltd. and also to the Attorney General to present the views of the Union Government on the instant matter. The special leave has now been listed for final disposal.

-MEMORANDUM FOR THE RESPONDENTSviii

-Statement of Issues-

-Appellant-

STATEMENT OF ISSUES The following issues are presented before the Hon’ble Supreme Court of India:I.

WHETHER THE INSTANT SPECIAL LEAVE PETITION IS MAINTAINABLE OR NOT?

II. WHETHER THE DECISION OF THE HON’BLE HIGH COURT SHOULD BE UPHELD OR NOT?

-MEMORANDUM FOR THE RESPONDENTSix

-Pleadings and Authorities -

- Appellant-

SUMMARY I.

OF

PLEADINGS

The Appellant most humbly submits before the Hon’ble Supreme Court that the Special Leave Petition is maintainable since there exist an unsettled position of law i.e. whether COMPAT can enforce fundamental rights or not, refusal to license amounts to abuse or not etc., there has been grave injustice caused to the appellant as it hurts the very purpose for which a person indulges in business and there is a patent error in the judgment, which has been made clear through plethora of cases that technical member as in COMPAT cannot decide issues pertaining to fundamental rights.

II. The Appellant most humbly contends before the Hon’ble Supreme Court that the decision of the Hon’ble High Court should be reversed as COMPAT’s order is nullity due to lack of jurisdiction to enforce fundamental rights as it consist of technical members who have been considered to be not competent to decide issues of constitutional importance, there has been an unreasonable restriction imposed as right to refusal is enshrined under article 19(1)(g) and recourse to legal remedy cannot tantamount to be abuse of dominant position.

-MEMORANDUM FOR THE PETITIONERx


- Appellant-

PLEADINGS AND AUTHORITIES I.

THAT THE INSTANT SPECIAL LEAVE PETITION IS MAINTAINABLE.

1.

The appellant most humbly submits that the special leave petition filed before the Hon’ble Supreme Court, against the order of the Hon’ble Delhi High warrants the exercise of the Supreme Court’s extraordinary powers under Article 136 and qualifies the tests laid down by this Hon’ble court for the grant of special leave to appeal. This is so because the appeal raises important questions of law [A], grave injustice has been inflicted upon the appellant [B] and the decision of the Hon’ble High Court of Delhi is patently erroneous [C]. A. The instant SLP raises important questions of law.

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It is most humbly submitted that the instant appeal posits a question of law of public importance before the Hon’ble Supreme Court. It is relevant to note that the Hon’ble Supreme Court being the apex judicial body in the country has the power and the prerogative to pronounce a judgment to put questions of law of general importance to rest. 2 Laying down the law for the nation is one of the key functions of the Hon’ble Supreme Court3 thus a petition that raises a question of law is held to be maintainable.4

3.

In the instant matter, the respondent’s central contention is that, “Zayer India’s refusal to license the drug to it, and the subsequent effort to injunct Kipla from manufacturing and selling the drug, amounted to a gross abuse of its dominant position”5 This contention has been upheld by the decision of the Hon’ble COMPAT which has been affirmed by the Hon’ble Delhi High Court.

2

CCE v. Venus Castings (P) Ltd, AIR 2000 SC 1568, see also CIT v. PJ Chemicals Ltd., AIR 1994 SC 2727. Bihar Legal Support Society v. Chief Justice of India, AIR 1987 SC 38; See also, State of U.P. v. Indian Hume Peipe Co. Ltd. AIR 1977 SC 1132; Western India Plywood Ltd. v. P. Ashokan (1997) 7 SCC 638. 4 Mathai v. George, (2010) 3 SCR 533. 5 Moot Proposition, para 6. 3

-MEMORANDUM FOR THE PETITIONER1

-Pleadings and Authorities 4.

- Appellant-

In effect, the impugned decision conceives the exercise of a patent right and pursuit of a legal remedy, i.e. injunction, to be illegal and abusive. In light of such a decision, this appeal raises a profound question of law before this court, i.e. whether a refusal to license a patent and seeking the legal remedy of injunction can tantamount to an abuse of dominant position.

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As a matter of principle, the right of an intellectual property owner to prevent third parties from manufacturing and selling or importing, without his consent, products incorporating

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the protected subject matter constitutes “the very essence of his exclusive right”.6 World over, the inherent tension between the right to exclude under the patent laws and the prospect that a unilateral refusal to deal could give rise to antitrust liability has perplexed jurists and legal scholars.7 The Federal Circuit in the U.S.A. recently held that unilateral refusals to license intellectual property rights are virtually never antitrust violations. 8 However, the U.S.A. Supreme Court has recognized that blanket legality for refusal to license patents could have serious implications for competition and innovation. 9

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The question as to whether refusal to license IPR and taking recourse to legal remedies for their protection can tantamount to an abuse of dominant position requires immediate attention of this court and demands final disposal. In light of the long standing practice to

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Case 238/87, Volvo, 1988 ECR 6211, para 8; Case 53/87; see also, Verizon Communications v. Law Offices of Curtis V. Trinko, 540 U.S. 398, 408 (2004). 7 Sébastien J. Evrard, H. Stephen Harris, Jr., Geoffrey D. Oliver, Shinya Watanabe, and Dr. Johannes Zöt, International Licensing of IPR, available at http://www.jonesday.com/files/Publication/d3dfd2cf-850c-47f0-964cfe4f5a64b925/Presentation/PublicationAttachment/1a0fe1d0-7e71-443e-b8cd-0f3273d50219/International %20Licensing.pdf. 8 Cont’l Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405 (1908) (holding that patentee acting unilaterally has no duty to license acquired and unused patent). On unilateral refusals, see also, 3B PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶¶ 770–74 (3d ed. 2007); on unilateral refusals to license IP rights, seeHERBERT HOVENKAMP ET AL., IP AND ANTITRUST §13.2 (2d ed. 2010); cf. Am. Needle, Inc. v. Nat’l Football League, 130 S. Ct. 2201, 2208 (2010) (distinguishing unilateral from concerted refusal to license trademark rights; antitrust liability for unilateral action is narrower and reachable only when it monopolizes); see also, 35 U.S.C. § 271(d)(4) (2006). 9 Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993); see also, E. States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 600 (1914).



- Appellant-

grant leave where the question raised was a question of law10, the instant appeal may be held to be maintainable. B. That the appellant has suffered grave injustice. 8.

It is the humble submission of the appellant that the judgment rendered by the Hon’ble High Court inflicts grave injustice upon the appellant. The Hon’ble Supreme Court has repeatedly held that leave will be granted where there is grave, blatant and atrocious

9.

miscarriage of justice.11 Zayer India Ltd., in the pursuit to protect its legal rights that have been put in peril by the acts of the respondent, moved the Delhi High Court in an original suit for infringement and also sought an injunction. The very effort of the appellant to redeem the remedy provided to it by law has been condemned as being anti-competitive by the impugned

10.

judgment. The Hon’ble COMPAT yields the authority under the Competition Act, 2002 to impose penalties and to direct the enterprise held liable for abuse of dominant position to discontinue such abuse.12 The order of the COMPAT and the Hon’ble Delhi High Court, in effect, rob Zayer of any legal means to give effect to the rights conferred on it by law,

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defeating the very purpose of the rights and rendering Zayer absolutely defenseless. This Apex institution of justice has categorically held that to preclude a person from the grievance redressal system and to disallow any effort to approach the court for enforcement of rights and dispute resolution will be the gravest travesty of justice and will take away all credibility from the justice system.13

10

State of U.P. v. Indian Hume Pipe Company Ltd., AIR 1977 SC 1132; See also Western India Plywood ltd. v. P. Ashokan, 1997 (7) SCC 638. 11 Bihar Legal Support Society v. Chief Justice of India, AIR 1987 SC 38, see also State of Assam v. Barga Dewani (1970) 3 SCC 236. 12 Section 27 13 Supra note 11.



- Appellant-

The appellant humbly submits that such grave injustice warrants the exercise of power by the Hon’ble Supreme Court under Article 136. Couched in the words of the eminent constitutional law jurist, D.D. Basu, “Its [Article 136] limit, when it chases injustice, is the sky.”14 In Esher Singh v. State of A.P. said that when the judgment of the high court has led to serious miscarriage of justice, the Supreme Court may not refrain from doing its duty and abstain from interfering.15 12.

Notably, there are only 2,500 persons who are ailing from Lebola. Thus, obtaining an injunction order against the alleged unauthorized sale of the generic variant of Zayer’s medicine by Kipla is crucial for Zayer in order to safeguard its interests, else the small consumer base will be seized by Kipla causing irreparable damage to Zayer, even if the

13.

infringement suit is decided in its favour. This profit motive gets furthered by the grant of a patent over a product where the inventor is granted an exclusive right for a limited period, which is a carefully crafted bargain that

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rewards an inventor in lieu of his contribution towards the society.16 If Zayer’s effort of seeking protection of its patent rights and seeking an injunction are held to be abusive and illegal, it is imperative that its economic interests will be defeated in light of Kipla producing the generic variant of its medicine at the price of 600 for 60 Tablets. This would mean that Zayer’s market share will be swallowed by Kipla along with the profits accruing therefrom, even if the infringement suit is subsequently decided in Zayer’s favour. This would lead to an irreparable act of injustice being inflicted on Zayer which must be cured by this court by exercising its jurisdiction under Article 136. C. The decision of the Hon’ble High Court is patently erroneous.

14

Basu D D, page 5754 Volume 5; LexisNexis Butterworths Wadhwa, Edition 8, 2009. Esher Singh v. State of A.P., AIR 2004 SC 3030; see also Durga Shankar v. Raghuraj, AIR 1954 SC 520; Arunachalam v. Sethuratnam, AIR 1979 SC 1284 16 Natco v. Bayer. 15



- Appellant-

15. It is the humble contention of the appellant that the High Court’s decision in the instant matter suffers from glaring errors and is in stark contrast to settled principles of law. It is now a settled proposition that the Supreme Court will intervene in cases where the High Court’s decision is in flagrant violation of the law.17 16. The appellant contends that the Hon’ble Delhi High Court’s decision that Zayer’s refusal to license and that its efforts to enforce its patent rights by seeking an injunction is an abuse of its dominant position dismantles the sacred principle of ubi jus ibi remedium which is deeply entrenched in our legal system. Further, holding that COMPAT has jurisdiction to enforce fundamental rights is in clear contravention of Article 14 of the Constitution as made clear by the decisions rendered by this Apex Court. 17. The classic case of Ashby v. White 18 had laid down what is now a well-known principle of law, that ‘where there is a right there is a remedy’. This doctrine is deeply ingrained in the Indian Constitutional scheme also.19 Highlighting the importance of the doctrine, the Apex Court in Bhagwati Developers v. The Peerless20 observed, “If a man has a right he must have the means to vindicate and maintain it.”21 18. In the context of enforcement of intellectual property rights, the Delhi High Court in Blueberry Books v. Google India Pvt. Ltd. 22 observed that the owner of the IPR has a right to protect his interests and initiate proceedings against any infringement irrespective of where the infringing activities take place. Sans these remedies, these rights have no meaning.

17

State of Assam v. Barga Dewani (1970) 3 SCC 236. State of Justice In India: Issues of Social Justice edited by Ranabir Samaddar 19 Sajid Ali v State 2013 VII AD (Delhi) 670; Re Special Reference No. 1 of 2012, 2012 (9) SCALE 310: (2012) 10 SCC 1; Dayaram v. Sudhir Batham, 2011 (11) SCALE 448; (2012) 1 SCC 333; Pazhassi Raja Charitable Trust v. Union of India, AIR 2010 SC 218; Rajasthan State Road Transport Corporation v. Bal Mukund Bairwa (2009) 4 SCC 299. 20 [2013] 178 Comp Cas 1 (SC); See also dhannalal v. Kalawatibai AIR 2002 SC 2572; Smt Ganga bai v. Vijay KumarAIR 1974 SC 1126 21 [2013] 178 Comp Cas 1 (SC) 22 205 (2013) DLT 228 18



- Appellant-

19. The impugned decision renders Zayer’s every effort to effectuate its legal rights offensive by holding it to be an abuse under section 4 of the Competition Act, 2002. Despite the fact that Kipla started to manufacture and sell the generic variant of Zayer’s medicine without any license, clearly derogating Zayer’s rights, the impugned judgment terms Zayer’s effort to injunct Kipla an abuse. Effectively, Zayer’s rights have become a farce since there is no way it can enforce them. 20. Thus the High Court’s decision conspicuously leaves Zayer’s rights meaningless and derogates the rule of law principle which is central to Article 14. Such manifest error apparent on the face of the proceedings when it is based on clear ignorance or disregard of the law must be corrected by the Supreme Court23. 21. It is most humbly submitted before this Hon’ble Supreme Court that it has been the practice of this court to grant leave where the High Court “acts perversely or otherwise improperly” 24 or when the decision is “patently erroneous”.25 22. It is further submitted by the appellant that the impugned judgment that holds that COMPAT can decide on issues pertaining to constitutional interpretation and enforcement of fundamental rights stands in blatant contravention of the law laid down by the Supreme Court in various landmark judgments. 23. This is so because the COMPAT comprises of two technical members as against one judicial member.26 Unlike courts who are exclusively manned by judges, tribunals consist of members who possess no knowledge of the constitution and thus absolutely incompetent to adjudicate upon disputes concerning its interpretation and enforcement. 27 24. The judgment of the Hon’ble Delhi High Court ignores the mandate of the 7 judge bench of the Apex Court laid down in the landmark judgment of L. Chandrakumar v. UOI 28 any 23

Radhe Shyam and Anr. v. Chaabi Nath & Ors; See also T.C. Basappa vs. T. Nagappa State of MP v. Ramakrishna Ganapat Rao Limsey, AIR 1954 SC 20. 25 Jhummamal v. State of MP, AIR 1988 SC 1973. 26 Section 53 C., Competition act, 2002 27 R. Gandhi v. Union of India 28 1997 (2) SCR 1186 24



- Appellant-

weightage in favor of the service members or expert members and value- discounting the judicial members would render the tribunal less effective and efficacious than the High Court. The Act setting up such a tribunal would itself have to be declared as void under such circumstances. 25. The same principle has been reiteranted and upheld by this Apex Court in the case of R. K. Jain vs. Union of India, 29 Namit Sharma v. UOI and in Union of India v. R. Gandhi, President, Madras Bar Association30. 26. It is also settled that where the appeal is pending before the Supreme Court and when the court also finds that there is patent error in the judgment of the High Court, the argument that the appeal should have been filed before the Division Bench of the High Court is not acceptable.31 27. Thus, in light of the patent irregularity in the decision of the Hon’ble High Court, the SLP may be rendered maintainable. II.

THAT THE DECISION OF THE HON’BLE HIGH COURT SHOULD BE REVERSED

A. THAT THE COMPAT’S ORDER IS A NULLITY DUE TO LACK OF JURISDICTION TO ENFORCE FUNDAMENTAL RIGHTS.

28. It is humbly submitted by the appellant that the order of the COMPAT holding Zayer India Ltd. liable for abuse of dominant position, founded on the ground that, “There were heavy social costs to permitting Zayer India to violate its obligations towards public health, keeping in mind the fundamental right to health recognized under Article 21 of the Constitution of India”32 is a nullity in law since COMPAT does not yield the authority to interpret and enforce fundamental rights.

29

1993 (4) SCC 119 (2010) 11 SCC 1 31 State of UP v. Harish Chandra, (1996) 9 SCC 309; See also Carbodium Universal Ltd. v. Central Board of Direct Taxes, 1989 (Supp- 2) SCC 462. 32 Moot proposition para 6. 30



- Appellant-

29. The argument proffered is twofold: that the COMPAT comprises of a majority of technical members who possess no expertise or experience in the field of constitutional law [A]. An arguendo is also forwarded, that the fundamental rights cannot be enforced against Zayer, which is a private entity not falling within the definition of ‘state’ as per Article 12. [B] i. That the COMPAT comprises of a majority of expert members who possess no expertise or experience in the field of constitutional law. 30. The appellant humbly contends that the COMPAT, a body comprising of a majority of expert members, cannot be handed over with the task of interpreting and enforcing fundamental rights since it is predominantly composed of expert members, who are not required to possess any know-how about the constitution and the enforcement of fundamental rights. 31. In the instant matter, the sole justification employed by COMPAT to affix liability under section 4 of the Competition Act, 2002, is that Zayer is violating “…its obligations towards public health, keeping in mind the fundamental right to health recognized under Article 21 of the Constitution of India.”33Thus, the Hon’ble COMPAT’s order purports to effectuate the fundamental right to health guaranteed to all persons under Article 21 and uses the ‘violation’ of the same as a ground to hold Zayer liable for abuse of its dominant position. 32. It is the appellant’s vehement contention that the COMPAT has clearly overstepped its jurisdiction. In the case of Anisminic Limited v. Foreign Compensation Commission 34, the House of Lords gave a very broad connotation to the concept of 'jurisdictional error'. It has been laid down in Anisminic that a tribunal exceeds jurisdiction not only at the threshold when it enters into an inquiry which it is not entitled to undertake, but it may enter into an enquiry within its jurisdiction in the first instance and then do something which would

33 34

Moot proposition para 6. (1969)2 AC 147



- Appellant-

deprive it of its jurisdiction and render its decision a nullity. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. 33. In the instant matter too, while it may appear that the COMPAT possessed the jurisdiction to hear the matter, it has conspicuously treaded in the area of interpretation and enforcement of the constitution, basing its decision on the ground of fundamental right violation clearly transgressing the jurisdiction conferred upon it by the Competition Act, 2002 which establishes it. The lack of jurisdiction becomes further profound owing to the fact that the COMPAT comprises of a majority of expert members 35, who are required to possess no qualification, expertise or experience in dealing with constitutional law matters whatsoever.36 34. With the advent of ‘tribunalisation’ in our nation, the concerns regarding the efficacy of these tribunals and the competence of persons who man them has heightened. The Supreme Court has expressed its displeasure towards tribunals being manned by expert members in excess of judicial members at a plethora of occasions. 37 The report of the Arrears Committee (198990)38 delves into the issue of competence of judges sitting in tribunals and makes the following observation, “A tribunal must inspire confidence and public esteem that it is a highly competent and expert mechanism with judicial approach and objectivity. What is needed in a tribunal, which is intended to supplant the High Court, is legal training and experience, and judicial acumen, equipment and approach.”39 35. It is clear from a cursory reading of the Competition Act, 2002, that it contemplates the composition of the COMPAT with two expert members and only one judicial member.40 This

35

Section 53C, Competition Act, 2002. Id. 37 Rajendra Singh Yadav And Ors vs State Of U.P. And Ors 1990 SCR (2) 171. 38 MINISTRY OF LAW, GOVERNMENT OF INDIA, COMMITTEE ON REFORMS OF THE CRIMINAL JUSTICE SYSTEM (MALIMATH COMMITTEE (2003). 39 Id at p. 164 ¶ 13.3 40 Section, Competition Act, 2002. 36



- Appellant-

is a clear additional weight added in the favor of expert members as against judicial members which has been condemned by the Malimath Committee. 36. Importantly, a seven judge bench of the Apex Court in the case of L. Chandrakumar v. UOI 41 also quoted richly from the Malimath Committee Report and endorsed the aforementioned statements. The Apex Court, held that whenever an issue of interpretation of a statute in conjunction with the Constitution is faced, it must be heard and decided by at least a 2 judge bench out of which at least one should be a judicial member. 37. Notably, there is no such mandate on the COMPAT, which comprises of a majority of expert members, therefore each of its decisions which entrenches upon constitutional interpretation is open to challenge on the ground of lack of competence and expertise to decide the same. 38. It is pertinent to note here that the COMPAT has itself recognized that the remedies of fundamental right enforcement and abuse of dominant position are distinct and disparate. 42 Typically, the COMPAT has refrained from enforcing fundamental rights in a plethora of cases where violation is claimed, tacitly conceding to the objection raised therein that the COMPAT is not the correct forum for enforcement of Fundamental Rights.43 39. In the recent case of Namit Sharma v. UOI44, in the context of the Right to Information Act, 2005, the court stated, “While applying its mind, it has to dwell upon the issues of legal essence and effect. The Commission has to resolve and balance the conflict between the ‘right to privacy’ and ‘right to information’”45 40. Analogously, COMPAT’s decision in the instant matter invariably involves balancing the rights of Zayer to earn profits under Article 19 (1) (g) against the right to health of the public under Article 21. In this situation, appreciation and application of legal principles is a sine qua non to the determinative functioning of the Commission as it can tilt the balance of 41

L. Chandrakumar v. UOI Jindal Steel and Power Ltd. v. Steel Authority of India Ltd. [2012]107CLA278(CCI) 43 The Director General v. M/s. Ingersoll-Rand (I) Ltd., Bangalore and Anr. 44 Namit Sharma v. UOI, Para 104 45 Id at para. 60. 42



- Appellant-

justice either way.46 “The decision of the question would depend upon the interpretation of the Constitution and the laws and this would preeminently be a matter fit to be decided by the judiciary, because it is the judiciary which alone would be possessed of expertise in this field.”47Majority of COMPAT’s members, however, are ill equipped to deal with such complex questions of law that are bound to be raised before them. 41. This implies that questions of “Constitutional importance that even baffle judges of the Supreme Court and the High Courts”48 would be decided by persons who possess no expertise, knowledge, qualification or prior experience to help them with coming to a decision which is in accordance with the standard principles of adjudication. 42. The Framers of the Constitution were apprehensive about delegating power to interpret and enforce fundamental rights to even the High Courts, which is clear from the words of Shri Rohini Kumar Chaudhary, “Such power of delegation should be exercised very sparingly because after all the personnel of the Supreme Court would no doubt be more qualified than the personnel of a High Court.”49 43. The Apex Court in Union of India v. R. Gandhi 50 the court held that tribunals should be manned by persons who are able to discharge judicial functions properly and inspire confidence. COMPAT, in the present matter, has taken upon itself to enforce the fundamental rights of the citizenry, unmindful of the fact that the decision rendered by it is a nullity for lack of jurisdiction to enforce fundamental rights since it is composed of a majority of members who have no know how as to the interpretation and enforcement of fundamental rights.

46

Id at para.106. Sampath Kumar and Ors. v. UOI, AIR 1987 SC 386. 48 R K Jain v. UOI 1993. 49 Constituent Assembly Debates, 50 UNION OF INDIA v. R. GANDHI, PRESIDENT, MADRAS 865 866 BAR ASSOCIATION SUPREME COURT REPORTS [2010] 6 S.C.R., [Paras 37 and 39] 47



- Appellant-

44. In light of the above, the appellant submits that the decision of COMPAT is a nullity in law for want of jurisdiction to enforce Fundamental Rights. ii. Arguendo: That Zayer does not fall under the ambit of ‘state’ as under Article 12. 45. It is humbly submitted before the Hon’ble Supreme Court that even if, for the sake of argument, it is conceded that COMPAT can enforce fundamental rights, it’s judgment would remain perverse inasmuch as it enforces fundamental rights against a private entity which, by no stretch of imagination be considered to fall under the ambit of ‘state’ as under Article 12 of the Constitution. 46. It is submitted that the order of the COMPAT rests on the reasoning that Zayer India could not be allowed to “violate its obligations towards public health, keeping in mind the fundamental right to health recognized under Article 21 of the Constitution of India.” 51 Article 21, it goes without saying, is available only against the state and it is the state’s prerogative to not to violate a person’s right guaranteed under Article 21. The COMPAT’s order, however, clearly imposes such an obligation on Zayer, which is a private organization. 47. It is humbly contended that Zayer does not satisfy the tests laid down by this Hon’ble Court which are essential to render an entity state. Zayer is neither created by a statute nor financially assisted by the state. It does not enjoy a monopoly conferred by the state and is not created by virtue of transfer of a government-owned corporation. Manufacture and sale of medicines for sale can also not be called ‘public functions’. Thus it is easily discernable that none of the tests prescribed by this Hon’ble court in various cases are applicable. 52 Public functions, even if performed are not sufficient to render Zayer ‘state’ since it is categorically clear that Zayer is not financially, functionally and administratively dominated by or under

51 52

Moot Proposition, para 6. R.D. Shetty v. UOI, Ajay Hasia v. Khalid Mujib, Som Prakash v. Union of India, AIR 1981 SC 212.



- Appellant-

the control of the Government.53 Thus, even if COMPAT were to enforce fundamental rights, it is incomprehensible as to how a private entity like Zayer could be held to owe ‘obligations towards public health’. Thus, the appellant humbly submits that the order of the Hon’ble Delhi High Court which affirms the order of COMPAT be reversed. B. THAT THE INTERPRETATION MADE BY THE HON’BLE DELHI HIGH COURT UNREASONABLE RESTRICTION ON THE RIGHT UNDER ARTICLE

IMPOSES AN

19 (1) (G).

48. It is humbly submitted by the appellant that the Hon’ble Delhi High Court’s order holding that Zayer India Ltd. has abused its dominant position has the effect of abridging its rights under Article 19 (1) (g) by purporting to impose an unreasonable restriction over it. 49. The right to enter into a contract relating to property or business is a fundamental right guaranteed by Article 19 (1) (g).54 Such a right is so intricately connected with the right to carry on business, that it can be claimed to be in reality and substance nothing but an instance of the exercise of the named fundamental right. 55 A decision that infringes a fundamental right is unconstitutional and must be interfered with. 56 It is the assertion of the appellant that the right to refuse to enter into a contract and to protect its own patent rights lie at the center of its right to carry on business under Article 19 (1) (g).57 The decision of the Hon’ble Delhi High Court which affirms the order of the COMPAT, holds that the refusal to grant license amounts to abuse of its dominant position. In effect, the order negates the appellant’s right to put down a request for license and mandates that the request be accepted. 50. Such a decision directly and substantially sabotages the capacity of Zayer to carry on its business and protect its interests. It is pertinent to note here that firms such as Zayer that 53

Pradeep Kumar Biswas vs Indian Institute of Chemical Biology, Zee Telefilms vs Union of India. Basu D D, Constitution of India, Page 2838, Volume 2. 55 Raghubar v. UOI, AIR 1952 SC 263 (274); State of Bihar v. Kameswar, AIR 1952 SC 252; Kuriakose v. State of Kerala, AIR 1977 SC 1508 (para 6). 56 Himmat Lal v. State of Madhya Pradesh AIR 1954 SC 403. 57 Berkey Photo v. Eastman Kodak, 603 F.2d 263 (2nd Cir. 1979). 54



- Appellant-

operate in the pharmaceutical sector are faced with special difficulties and heightened risks. High sunk costs and exorbitant expenditure on research and development are hallmarks of the industry and as such, exclusivity of production is both, the sole most important incentive and also the most valued right.58 The ability to claim exclusivity and recognition for an invention is the lifeblood of business in the pharmaceutical industry and is not just well within the ambit of Article 19 (1) (g)59 but is also a human right.60 51. The appellant humbly submits that such a right is snatched away when its refusal to license and subsequent effort to injunct Kipla for violation of its rights is held to be abusive and illegal by the Hon’ble Delhi High Court. It is humbly submitted that the ability to exclude competitors from the use of a new patent “may be said to have been of the very essence of the rights conferred by the patent, as it is the privilege of any owner of property to use or not use without question of motive.”61 52. In the instant case, Zayer’s rights under Article 19 (1) (g) have been restricted on the pretext that they offend section 4 of the Competition Act, 2002. It is pertinent to note that the grounds provided under section 4 are exhaustive 62 and new grounds cannot be interpreted so as to impose a restriction other than those provided for in the law. In the instant matter, the interpretation of section 4 made by the COMPAT, which has received the affirmation of the Hon’ble Delhi High Court, holds refusal to grant license and exerting a legal right by way of a suit seeking infringement to be offensive and abusive is unreasonable and impinges upon the essence of the right contained under Article 19 (1) (g).

58

William Kok, “Facing the Challenge: The Lisbon Strategy for growth and employment,” Report, November 2004. Supra note 27. 60 Article 27(2) of Universal Declaration of Human Rights: “everyone has the right to protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.” 61 Continental Bag Co. vs. Eastern Bag Co., 210. US 405 (1909). 62 ABUSE OF DOMINANCE UNDER THE COMPETITION ACT, 2002, available at http://www.cci.gov.in/images/media/Advocacy/Awareness/Abuse_Dominance.pdf 59



- Appellant-

53. It is humbly contended that the ‘essential facilities doctrine’ (EFD) which is nascent to Indian competition law jurisprudence can also not be employed to justify the setting liability on Zayer under section 4 of the Act. 54. Zayer’s refusal per se does not affect competition, because the entrants are not prohibited from using a substitutable cure for the virus and ‘compete on merits’. That is, if an incumbent holds monopoly power because of competition on the merits, in normal course of doing business, competition law would not sanction its conduct63 55. In US v Grinnell64, the U.S. Supreme Court held that monopolization includes the willful acquisition or maintenance of monopoly power as distinguished from growth or development as a consequence o f a superior product, business acumen, or historic accident. Globally, Courts have held that a monopolist’s refusal to license its internally generated IPR to competitors is not an act of monopolization65. 56. US v Colgate & Co66 held that antitrust law does not restrict the right of a business entity to freely exercise his independent discretion as to the parties with whom he will deal. Further, in Aspen Highlands Skiing Corp. v Aspen Skiing Co.67, the U.S. Supreme Court held, that a firm possessing market power has no duty to co-operate with its business rivals. 57. In the famous case of Volvo v. Veng 68, it was held that the refusal to grant license to third parties even in return for reasonable royalties cannot in itself be regarded as anticompetitive. It should not be regarded as abuse but mere right to trade, which comes with the ownership of the product due to registration of any IP rights. The judgment in the above case rests on the sound reasoning that Veng only wanted to supply the consumers the same product that 63

The Supreme Court in Verizon [2004] 02 US 682 also emphasized: “to safeguard the incentive to innovate, the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct.” 64 [1966] 384 US 563: 571 65 Data General Corp. v. Grumman Systems Support Corp., 36 F.3d 1147, 1182 (1st Cir. 1994). 66 [1919] 250 US 300. 67 [1982] 472 US: 611 68 EUECJ C-238/87.



- Appellant-

Volvo was supplying. In addition, Volvo could show its sunk costs in developing the car market, which contributed to the establishment of the market for Volvo car’s wings. Veng was clearly a free rider in a ‘competing but non-innovative’ market. 58. The given rule is of much importance to the instant case. It is to be noted that Kipla wished to supply the consumers the same product as was being provided by Zayer making out a clear case of free riding and evading competition on merits. Further, the pharmaceutical industry is marked with high sunk costs, which Zayer too has incurred for developing the drug for Lebola in such a short span of time. In such a circumstance, existence of intellectual property rights would have no meaning if the right of refusal to license were not exercised.69 59. In CSU, L.L.C. v. Xerox Corp.70, Federal Circuit Court held that, in the absence of any illegal tying, fraud in the patent and trade mark office or sham litigation, the patent holder may enclose the statutory right to exclude others from making, using or selling the claimed invention free from liability under the antitrust laws. 60. To attract the applicability of the EFD, the element of ‘new product’ in a ‘downstream market’ are well recognized and are the touchstone in determining whether the refusal would amount to abuse or not. The European Court of Justice in IMS case 71 expressly recognizes that the intellectual property right should constitute, an indispensable factor in the downstream supply of a (secondary) product and the potential licensee should intend to produce new goods or services not offered by the owner of the right. 61. Similarly, in Magill,72the ECJ stipulated that the existence or the exercise of an IPR might become an abuse when there is a consumer demand for a new product and the refusal to supply has reserved to the incumbent the secondary market by excluding all competition in that market. Kipla, in the instant case, neither proposed to sell a new product, nor was its 69

Supra note 4. 203 F.3d 1322 (Fed. Cir. 2000). 71 (Case C-418/01). 72 Magill ITP, BBC and RTE v. Commission, Cases C241/91 and C242/91 (1995), ECR I-743. 70



- Appellant-

product in any way going to be placed in a downstream market. Thus the EFD cannot be applied to curb the right to freely contract ensured the appellant under Article 19 (1) (g).It thus becomes clear that the EFD does not find application in the instant case. 62. In Verizon v. Trinko73, Justice Scalia said: “Firms may acquire monopoly power by establishing an infrastructure that renders them uniquely suited to serve their customers. Compelling such firms to share the source of their advantage ... may lessen the incentive ... to invest in those economically beneficial facilities. Enforced sharing also requires antitrust courts to act as central planners, identifying the proper price, quantity, and other terms of dealing - a role that they are ill suited. Moreover, compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion” 63. In Bronner, after summarizing the shortcomings of EFD in both the US and Europe the court stated, “In the long term it is generally pro-competitive and in the interest of consumers to allow a company to retain for its own use facilities which it has developed for the purpose of its business. Thus while competition was increased in the short term it would be reduced in the long term. Moreover, incentive to invest in efficient facilities would be reduced if its competitors were, upon request, able to share the benefits...”74 The U.S. Supreme Court in 2004 expressed its own displeasure with the doctrine in the Trinko case 75 and held that the defendant did not have a general duty to deal with rivals with whom it had not dealt before. 64. Finally, it is submitted that Kipla cannot claim equity due to the operation of the concept of “unclean hand” propounded in Atari v Nintendo. 76 In light of the above it becomes clear that there is no justification for curbing the right to refuse license of the appellant thereby violating the fundamental right of the appellant under Article 19 (1) (g). 73

540 U.S. 398. Oscar Bronner GmbH & Co. KG v. Mediaprint Zeitungs, , Case C-7/97, 1998 E.C.R. I-7791, [1999] 4 C.M.L.R. 112.para. 57. 75 540 U.S. 398 (2004) 76 975 F.2d 932 (9th Cir. 1992) 74



- Appellant-

C. THAT TAKING RECOURSE TO A LEGAL REMEDY CANNOT TANTAMOUNT TO AN ABUSE OF DOMINANT POSITION. 65.

It is the humble submission of the appellant that the impugned decision renders the very institution of the suit seeking injunction as abuse, thereby rendering recourse to a legal remedy can tantamount to abuse of dominant position.

66.

According to the Black’s law dictionary, legal recourse means, “Lawful pursuit for justice or decision under the law, typically leading to proceeding within the jurisdiction’s court system. An entity accuses another for an unlawful action, to protect an entity’s rights from violation.”77 The question as to whether a mere effort to obtain a legal remedy can ipso facto be deemed to be abusive assumes significance since the principal function of the judiciary is to provide legal remedies against infringement of personal and property rights of persons.78 Seeking a remedy provided in law is implicit in the rule of law notion as under Article 14 and hence embargos on their redemption must be imposed with the highest caution.

67.

Recourse to Court by law is a concept firmly entrenched in the Constitutional scheme of India. In case of infringement of a legally recognized right, recourse to law cannot be denied and the rule of law enshrined in Article 14 of the Constitution will enable any person including a non-citizen to approach the legal forum of the country for redressal of his grievances.79 Accessing institutions of justice for redressal of grievances is a matter of human rights.80 This Hon’ble court has emphatically held that if this opportunity to approach the court for a legal remedy is restricted or not given, the community would lose

77

John Black, Black’s Law Dictionary, 4th Edition. http://gujarathighcourt.nic.in/articles/roleofjudicary.htm 79 http://www.legalservicesindia.com/article/article/the-role-of-indian-judiciary-with-special-reference-to-global-ipregime-797-1.html. 80 Delhi High Court Bar Association & Anr. v. Govt. of NCT of delhi, 203(2013)DLT129. 78



- Appellant-

its faith in the courts, their very existence will cease to have any meaning and people will return to the law of the jungle for settling their dispute on the streets.81 68.

The decision of the Hon’ble Delhi High Court affirming the Hon’ble COMPAT’s decision that the very institution of the suit of infringement against Kipla is an abusive and illegal act, renders the right of the defendant to pursue the remedy of injunction for an alleged infringement nugatory and worthless. It purports to extinguish a remedy provided under law and declares its exercise offensive.

69.

It may be added here that the injunction is sought against the manufacture and sale of Lebocin, a drug, which is admittedly a generic variant of LebinX82 for which there is no license, compulsory or voluntary, making a prima facie case of infringement and thus grant of injunction. It is a mere assertion that the impugned drug possesses therapeutic efficacy.83 However, even in light of the above circumstances, which make out a robust case for the appellant, the Hon’ble Delhi High Court has affirmed that the very effort to resist Kipla from impinging upon the legal rights of Zayer by seeking an injunction constitutes abuse under section 4 of the Competition Act, 2002.

70.

In light of the above, the appellant contends that such a decision is in derogation of the principle of ‘Rule of Law’ which is embedded in the fundamental right under Article 14 and thus unsustainable in law.

81

K. Veeraswami v. Union of India & ors., (1991) 3 SCC 655. Moot Proposition, para 5. 83 Id. 82



- Appellant-



- Appellant-

PRAYER Wherefore, in the light of facts presented, issues raised, arguments advanced and authorities cited, counsels on behalf of Appellant humbly pray before this Hon’ble Court to kindly declare and adjudge that: 1. The present Special Leave Petition is maintainable. 2. The decision of Hon’ble High Court be reversed and supplementally a writ of certiorari be issued against the order. And pass any other order which this Hon’ble Court may deem it fit in the light of justice, equity and good conscience. And for this act of kindness of your lordship the respondents shall as duty bound ever pray.

On behalf of Zayer TC-29 Counsels for the Appellant


29 Petitioner

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