MEMORIAL ON BEHALF OF APPELLANT

TEAM CODE: 46

BEFORE SUPREME COURT OF INDIA

AT NEW DELHI

Civil Appellate Jurisdiction

Civil Appeal no. 123 of 2015
(arising out of SLP(C) 456 /2015)

Under Article 136 of The Constitution of India

IN THE MATTER OF

Zayer India Ltd.

Through Thomas Ali…………………………………...……...APPELLANT

VERSUS

Kipla and Ors……………………………………...……......RESPONDENTS

MEMORIAL ON BAHALF OF APPELLANTS

 MEMORIAL ON BEHALF OF APPELLANT

TABLE OF CONTENTS

LIST OF ABBREVIATIONS…………………………………………………(iii)

INDEX OF AUTHORITIES…………………………………………….(iv)- (viii)

STATEMENT OF JURISDICTION................................................................. (ix)

STATEMENT OF FACTS............................................................................(x)- (xi)

STATEMENT OF ISSUES...............................................................................(xii)

1. THE SPECIAL LEAVE PETITION FILED BY THE APPELLANT IS

MAINTAINABLE.

A. Jurisdiction of Supreme Court under Art.136.

B. Existence of any Alternative Remedy is not a bar.

2. COMPAT BY ITS IMPUNGED DECISION WAS NOT JUSTIFIED IN

ADJUDICATING THE DISPUTE ON CONSTITUTIONAL PRINCIPLE OF

RIGHT TO HEALTH.

A. COMPAT has over-stepped its jurisdiction while pronouncing its

judgement.

B. Arbitrary and capricious acts of COMPAT are annulled by Article 14.

3. THERE IS VIOLATION OF FUNDAMENTAL RIGHTS DUE TO ULTRA-

VIRES ORDER OF COMPAT.

A. Violation of Right to Carry on Business as given in Art. 19(1)(g).

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 MEMORIAL ON BEHALF OF APPELLANT

B. The restriction imposed is not reasonable.

C. The Restriction so imposed is not in conformity with Art. 14 and Art. 21.

SUMMARY OF ARGUMENTS.........................................................................(xiii)

ARGUMENTS ……………...............................................................................1-20

PRAYER…………………………………………………….….,,……………35

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 MEMORIAL ON BEHALF OF APPELLANT

LIST OF ABBREVIATIONS

Abbreviations Full form

¶ Paragraph

& And
Anr. Another
A.P. Andhra Pradesh
A.I.R. All India Reporter
Art. Article
Assn. Association
CCI Competition Commission of India
Co. Company
CoI Constitution of India
COMPAT Competition Appellate Tribunal
Corp. Corporation
Govt. Government
Ed. Edition
HC High Court
Hon’ble Honourable
ICESCR International Covenant on Economic, Social and Cultural Rights
Ltd. Limited
Ors. Others
p. Page
R&D Research and Development
§ Section
SC Supreme Court
S.C.C. Supreme Court Cases
SEP Standard Essential Patent
SLP Special Leave Petition
TRIPS Trade-Related Aspects of Intellectual Property Rights
U.P. Uttar Pradesh
UDHR Universal Declaration of Human Rights
UoI Union of India
USP Unique Selling Point
v. Versus

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 MEMORIAL ON BEHALF OF APPELLANT

INDEX OF AUTHORITIES

LEGISLATIONS

 The Constitution Of India, 1950

 The Competition Act, 2002
 The Patents Act, 1970
 The Patent Act Rules, 2003

INTERNATIONAL TREATIES AND AGREEMENTS

 Trade-Related Aspects of Intellectual Property Rights, 1995.

 Universal Declaration of Human Right, 1948

LIST OF CASES
A
 A.R.Antulay v. R.S.Nayak, A.I.R. 1988 S.C. 1531.
 Andhra Pradesh Pollution Control Board –II v. Prof. MV Nayudu, (2001) 2 S.C.C. 62.
 Avinder Singh v. State of Punjab, A.I.R. 1979 S.C. 321.
B
 Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad A.I.R. 1969 S.C. 556
 Bachan Singh v. State of Punjab, A.I.R. 1982 S.C. 1325.
 Bennett Coleman v. UoI, A.I.R. 1973 S.C. 106.
 Bharat Petroleum Corporation Ltd.v. Maddula Ratanvali (2007) 6 S.C.C. 81
 Bishwanath Prasad Radhe Shyam v. Hindustan Metal Industries, (1979) 2 S.C.C. 511
C
 Chandrakant Patil v. State, A.I.R. 1998 S.C. 1165.
 Charan Lal Sahu v. Union of India, A.I.R. 1990 S.C. 1480.
 Chiranjit Lal Chaudhary v. UOI, A.I.R. 1951 S.C. 41.

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 MEMORIAL ON BEHALF OF APPELLANT

D
 Delhi Development Authority v. Joint Action Committee, Allottee of SFS Flats (2008) 2
S.C.C. 672, 692.
 Delhi Judicial Services Association v. State of Gujarat A.I.R. 1991 S.C. 2176
E
 Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd., (2008) 13 S.C.C. 30.
G
 Ganesh Trading Co. v. Moji Ram, A.I.R. 1978 S.C. 484.
 Gramaphone Company of India Ltd. v. Birendra Bahadur Pandey, A.I.R. 1984 S.C. 667
H
 Haryana Development Authority v. Dropadi Devi, (2005) 9 S.C.C.514; Dolly Chandra v.
Chairman Jee, (2005) 9 S.C.C. 779.
I
 Ishwar Das Jain v. Sohan Lal, A.I.R 1999 S.C. 426.
J
 Javed v. State of Haryana, A.I.R. 2003 S.C. 3057.
L
 L.I.C.of India v. Consumer Education & Research Centre A.I.R. 1995 S.C. 1811
 Laxmi Khandsari v. State of U.P., A.I.R. 1981 S.C. 873.
M
 Maeneka Gandhi v. UoI, A.I.R. 1978 S.C. 597.
 Maneka Gandhi v. Union of India, A.I.R. 1978 S.C. 597
N
 N.Suriya v. A Mohandas, (2007) 9 S.C.C. 196 200.
 Novartis AG & Ors. v. Bajaj Healthcare Ltd., CS (OS) No. 1053/2014, Delhi High Court
O
 O.N.G.C v. Assocn., N.G.C, A.I.R. 1990 S.C. 1851,
 Olga Tellis v. Bombay Municipal Corp., A.I.R. 1986 S.C. 180.
 Omkarlal Nandlal v. State of Rajasthan, A.I.R. 1986 S.C. 2146.
P

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 Pathumma v. State of Kerala, A.I.R .1978 S.C. 771.

R
 Rama Kant Rai v. Madan Rai, A.I.R. 2004 S.C. 77
 Ramsaran Das v. CTO A.I.R. 1962 S.C. 1326
 Rustom Cavasjee Cooper v. Union Of India, 1970 A.I.R. 564.
S
 Shree Cement Ltd. v. Competition Commission of India MANU/DE/1342/2014
 State of Uttar Pradesh and Ors v. Dr. Vijay Anand Maharaj, A.I.R. 1963 S.C. 946.
 Sunil Poddar & Ors. v. Union Bank of India, (2008) 2 S.C.C. 326.
 Suresh Chandra Sharma v. Chairman, A.I.R. 2005 S.C. 2021
U
 Union Carbide Corporation v. Union of India, (1991) 4 S.C.C. 584.
 UOI v. Kishorilal Gupta & Bros., A.I.R. 1959 S.C. 1362
V
 Vijay Gupta v. Paper Merchants Association, Delhi, Case No. 07/2010
 Vinita Saxena v. Pankaj Pandit, A.I.R. 2006 S.C. 1662.

FOREIGN CASES
 BP v. Commission, (1978) C.J. Comm. E. Rec. 1513
 Bunbury v. Fuller, (1854) 9 E.X. 111 (F)
 Commercial Solvents v. Commission, (1974) C.J. Comm. E. Rec. 223, (1974)
 Ismail Serugo v. Kampala City Council & Anr. [1998] U.G.C.C. 6.
 R. v. Income Tax Special Purposes Commissioners, (1889) 21 Q.B.D. 313 (G)
 Volvo v. Veng, 238/87 E.C.R. (1988)

ARTICLES

 Reasons for Patenting Your Inventions , The World Intellectual Property Organization (Sept.
15, 2015), available at http://www.wipo.int/sme/en/ip_business/importance/reasons.htm.

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 Standards concerning the availability, scope and use of Intellectual Property Rights , The
World Trade Organization ( Sept. 15, 2015), available at
https://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.html.
 Reddy Prashant, Article 300A of the Constitution: A constitutional right to
‘data exclusivity’? (Sept. 15, 2015) available at
http://spicyipindia.blogspot.com/2010/05/article-300a-of-constitution.html.
 Antitrust: Commission accepts legally binding commitments by Samsung Electronics on
standard essential patent injunctions,(29 April 2014), The European Commission, (Sept. 18,
2015) available at http://europa.eu/rapid/press-release_IP-14-490_en.htm.
 Pharmaceutical patents and the TRIPS Agreement (Sept. 2006), World Trade Organization
(Sept. 15, 2015), available at
https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e.htm.
 The Patent Act, 1970 § 48, Trade-Related Aspects of Intellectual Property Rights Art. 30,
Jan. 1 1995.
 Carlos Correa, Guidelines for the examination of pharmaceutical patents: developing a
public health perspective, ICTSD-UNCTAD-WHO ISSN 1684-9825, 8 (2007)
 Competition Commission of India, Advocacy Booklet, Intellectual Property Rights under
Competition Act, The Commission of India (2011) available at
http://competitioncommission.gov.in/advocacy/PP-CCI_IPR_7_12.pdf

BOOKS
 S.M. DUGAR, U.P. MATHUR, GUIDE TO COMPETITION, Nexis Lexis, (5th ed. 2010)
 T. RAMAPPA,COMPETITION LAW IN INDIA-POLICY, ISSUES AND
DEVELOPMENT, Oxford India Paperbacks (2nd ed. 2009)
 DURGA DAS BASU, SHORTER CONSTITUTION OF INDIA (14th ed., 2009)
 M.P. JAIN, INDIAN CONSTITUTIONAL LAW (6th ed.,2012)
 H.M. SEERVAI, CONSTITUTIONAL LAW OF INDIA (4th ed., 2008)
 HALSBURY( 2nd ed. Vol. IX)
 ARVIND P DATAR, COMMENTARY ON THE CONSTITUTION OF INDIA, WADHWA
NAGPUR, (2nd ed. 2007)

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STATEMENT OF JURISDICTION

Most Respectfully Showeth

The Petitioner has approached this Hon’ble Court with the present Special Leave Petition

filed under Article 136 of the Constitution of India in compliance with Order XXI Rule 8 of

Supreme Court Rules, 2013 against the impugned final judgment and order passed by the

Hon’ble High Court of Delhi in Writ petition filled in High Court of Delhi under Art. 226

of the Constitution of India, whereby it was dismissed.

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STATEMENT OF FACTS

1. The Lebola epidemic has claimed about 12, 000 victims world over, since its outbreak in

December 2013. In India there are about 2,500 patients of this viral hemorrhagic fever.

2. March 2014: Zayer Inc patented its recently developed drug and the only known cure for

Lebola virus, in the United States. The drug, Lebin X, was classified as an Orphan Drug in

the USA, owing to which 50% of the R&D costs of Zayer were reimbursed by the

Government. Zayer went on to obtain a patent on its drug in over 45 countries.

3. October 2014: Zayer was granted a patent in India too, pursuant to its application in April

that year. This patent was worked by Zayer India Ltd., a wholly owned subsidiary of Zayer

Inc, and Lebin X was sold at Rs. 36,000 for 60 tablets per month. Kipla Pvt. Ltd had also

undertaken R&D to produce a drug molecule, after the Lebola outbreak in 2013.

4. November 2014: Kipla sought to enter into a license agreement with Zayer India to

manufacture and sell its drug formulation, stating the growing public need and the un-

affordability of Lebin X in India. It sought to sell the drug at a price of Rs. 600 per month,

for dosage of 60 tablets. Negotiations however never took off, and ultimately, the license was

refused by Zayer India.

5. February 2015: Kipla introduced Lebocin, in the Indian market, its generic variant for

treatment of Lebola, at a price of Rs. 600 per month,. It also sought to patent its formulation

on the footing that it possessed therapeutic efficacy over existing drugs in the market. Zayer

India moved to the High Court of Delhi, in suit against Kipla, seeking protection against

infringement of its patent in the drug formulation of LebinX, seeking interim injunction

against manufacture and sale of Lebocin by Kipla.

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6. Aggrieved by Zayer’s action, Kipla moved the Competition Commission of India arguing

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.

7. CCI found that there was no prima facie case made out against Zayer India. In appeal

proceedings before the Competition Appellate Tribunal, it set aside the order of the CCI,

finding 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 recognised under

Article 21 of the Constitution of India. It noted particularly that the public would be solely

and absolutely dependent on Zayer India for access to life-saving drugs, should Kipla be

injuncted, even as a willing licensee. Such conduct by Zayer India was found to squarely fall

within the prohibition of Section 4 of the Competition Act.

8. Mr. Thomas Ali, a member of the Board of Directors of Zayer India and shareholder, moved

the High Court of Delhi under Article 226 of the Constitution of India, against the order of

the COMPAT, challenging it on the grounds that- order of the COMPAT was a nullity for

lack of jurisdiction to enforce fundamental rights and violation of the fundamental right

under Article 19(1)(g). The High Court however dismissed the petition, finding that the cost

to public health was irreparable as against the monetary losses incurred by Zayer

9. Zayer India then sought special leave to appeal against this judgment of the High Court,
before the Supreme Court of India.

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STATEMENT OF ISSUES

3. THE SPECIAL LEAVE PETITION FILED BY THE APPELLANT IS

MAINTAINABLE.

C. Jurisdiction of Supreme Court under Art.136

D. Existence of any Alternative Remedy is not a bar.

4. COMPAT BY ITS IMPUNGED DECISION WAS NOT JUSTIFIED IN

ADJUDICATING THE DISPUTE ON CONSTITUTIONAL PRINCIPLE OF RIGHT

TO HEALTH.

C. COMPAT has over-stepped its jurisdiction while pronouncing its judgement

D. Arbitrary and capricious acts of COMPAT are annulled by Article 14.

4. THERE IS VIOLATION OF FUNDAMENTAL RIGHTS DUE TO ULTRA-VIRES

ORDER OF COMPAT.

D. Violation of Right to Carry on Business as given in Art. 19(1)(g).

E. The restriction imposed is not reasonable.

F. The Restriction so imposed is not in conformity with Art. 14 and Art. 21.

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SUMMARY OF ARGUMENTS

1. WHETHER THE SPECIAL LEAVE PETITION FILED BY THE APPELLANTS

IS MAINTAINABLE.

It is most humbly submitted before this Hon’ble court that SLP maintainable as the case deals

with number of seminal issues and it is in the larger interest that an authoritative pronouncement

on its issues be made SC. It is also submitted that this Hon’ble court has jurisdiction over the

present matter and hence the petition is maintainable in this Hon’ble court and existence of any

alternate remedy is not a bar. Thus, keeping in sight the urgency of matter the SLP should not be

dismissed only on the ground that alternative remedy, if any, has not been exhausted.

2. COMPAT BY ITS IMPUNGED DECISION WAS NOT JUSTIFIED IN

ADJUDICATING THE DISPUTE ON CONSTITUTIONAL PRINCIPLE OF

RIGHT TO HEALTH.

It is most humbly submitted COMPAT made the ruling on the S.4 allegation against the

Appellant, however while applying a reasoning for doing so, it has adjudicated on the interim-

injunction sought by Appellant against Kipla in the patent infringement suit which is sub judice

in the Hon’ble HC of Delhi and has also made a finding that Appellant has an obligation to

public health and has thus violated the fundamental right to health of the general public under

Art.21 of the Constitution by seeking such interim injunction. COMPAT in doing so has over-

stepped its jurisdiction in an arbitrary and unreasonable manner resulting in a subsequent

infringement of Right to Equality of the Appellants under Art. 14 of the Constitution of India

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3. THERE IS VIOLATION OF FUNDAMENTAL RIGHTS DUE TO ULTRA-VIRES

ORDER OF COMPAT.

It is humbly submitted before this Hon’ble Court that the petitioner in the present case has

approached this Hon’ble court Thomas Ali, Member and shareholder of the Appellant co. due to

violation of their right to carry on business, it is a recognized principle that Petitioner Company

through its member can file a suit for violation of their freedoms enshrined in Art. 19. The ultra-

vires order of COMPAT is an unreasonable restriction, which would act as hindrance to their

freedom to carry on the business of the Petitioner. Moreover, patent of LebinX being the very

idea or the Unique selling point of the Petitioner, if it is tampered with or taken away, it would

have serious consequence on the carrying out its business in India and would affect its

Constitutional Right to property that is enshrined in Art. 300A of CoI. Such an act does not

satisfy the test of reasonability since the underlying basis of the restriction imposed is null and

void, there is no urgency of evil so shown by the respondents that is sought to be remedied and

the imposition is highly disproportionate as State had other legitimate means to protect and

further the public interest it is claiming. Such brooding unreasonability in the the order of

COMPAT has also resulted in violation of Art. 14 and Art. 21 of the CoI.

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 MEMORIAL ON BEHALF OF APPELLANT

ARGUMENTS

1. THE SPECIAL LEAVE PETITION FILED BY THE APPELLANT IS

MAINTAINABLE.

1.1. It is humbly submitted before this Hon’ble Court that the Special Leave Petition filed by

the Appellant is maintainable in the Hon’ble SC against final order of Hon’ble High Court on a

petition under Art. 226 questioning the validity of the decision made by COMPAT. It is

submitted that miscarriage of justice would continue if a judicial pronouncement is not made by

this SC as regards to the jurisdiction of COMPAT and the infringement of fundamental/legal

rights of the Appellant.

1.2. It is submitted that this petition has been made keeping in mind the need for speedy

justice as the matter deals with an exorbitant amount, infringement of fundamental/legal rights

and is of extraordinary circumstances. Moreover, it was expressly mentioned in various

precedents that anybody who complains of infraction of any of the Fundamental Rights

guaranteed by the Constitution, is at liberty to move the SC for its enforcement 1 and in the

instant case, the dismissal by the HC has rendered the Appellant to move the SC vide Art.136 to

enforce their fundamental and legal rights. Where the HC has already decided the point of law,

direct appeal before the Supreme Court by Special Leave is maintainable. 2 And also deprivation

of one’s statutory right to appeal amounts to denial of procedure established by law.3

A. Jurisdiction of Supreme Court under Art.136

1.3. Article 136 is an appeal, which enables the SC to interfere in the judgment of any court in

1
Chiranjit Lal Chaudhary v. UOI, A.I.R. 1951 S.C. 41.
2
Omkarlal Nandlal v. State of Rajasthan, A.I.R. 1986 S.C. 2146.
3
A.R.Antulay v. R.S.Nayak, A.I.R. 1988 S.C. 1531.

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 MEMORIAL ON BEHALF OF APPELLANT

the matter involving constitutional questions4 and when there is miscarriage of justice5. It is

humbly submitted that miscarriage of justice would continue if a judicial pronouncement is not

made by this SC as regards to the jurisdiction of COMPAT and the infringement of

fundamental/legal rights of the Appellant.

1.4. This Hon’ble Court has pronounced that to exercise this special and extraordinary

jurisdiction there must exist special circumstances to validate its interference6. Instances of such

circumstances can be:

A.I. Where HC failed to interfere when it was called for7.

1.5. The order by COMPAT while determining abuse of dominance by Zayer has been made

by over-stepping its jurisdiction and by this reason, it has resulted in a violation of the

fundamental/legal rights of the Appellant. This order was challenged before the HC vide a

petition under Art.226 but the same was dismissed without determining the scope of COMPAT’s

jurisdiction8. Thus requiring the intervention of this Hon’ble Court by way on appeal against the

impugned order of HC and COMPAT.

1.6. Though the power of High Courts under Art.226 is not confined to the prerogative writs

issued by the English Courts, it is modelled on the said writs mainly to enable the High Courts to

keep the subordinate tribunals within bounds9. Thus in the instant case, the HC needed to have

kept COMPAT within the bounds of its Statutory Jurisdiction, but by dismissal of the petition

has conferred arbitrary powers onto the said Tribunal.

4
N.Suriya v. A Mohandas, (2007) 9 S.C.C. 196 200.
5
Sunil Poddar & Ors. v. Union Bank of India, (2008) 2 S.C.C. 326.
6
Ganesh Trading Co. v. Moji Ram, A.I.R. 1978 S.C. 484.
7
Ishwar Das, Jain v. Sohan Lal, A.I.R 1999 S.C. 426.
8
Moot proposition ¶ 2 p.1.
9
State of Uttar Pradesh and Ors v. Dr. Vijay Anand Maharaj, A.I.R. 1963 S.C. 946.

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 MEMORIAL ON BEHALF OF APPELLANT

5. Where the orders of the Court below have resulted in grave miscarriage of justice10.

1.7. The High Court dismissed the petition and this dismissal has resulted in a miscarriage of

justice which requires adjudication by this Apex Court. In the instant case the FRs of equal

protection of laws, (Art. 14), freedom of trade and profession (Art. 19(1)(g)) and right to

livelihood (Art. 21) of Zayer has been infringed by the COMPAT’s order. It must, also be noted

that UDHR considers IPR to be a Fundamental Rights of all the people11 and the COMPAT’s

decision has affected the legitimate exercise of that right in its order and thus requires the

intervention of this Apex Court to ensure that justice prevails.

1.8. It is also submitted that justice, as the case requires, should be administered without undue

regard to technicalities12. Also, this Hon’ble Court in the case of Delhi Judicial Services

Association v. State of Gujarat, held that SC can even disregard the limitations contained in

Article 132-134 and can entertain a SLP, if it seems fit.13

1.9. The counsel for Appellant concede to the rule of exhaustion of remedy and submits that

the rule of exhaustion of remedy is flexible and not rigid as it is a self-imposed restriction and SC

may relax it, if special circumstances are shown to be present 14. Special circumstance may

include when the case involves a substantial point of law or when there is point regarding the

policy decisions.15

B. Existence of any Alternative Remedy is not a bar.

1.10. It is submitted that the present case involves, a number of seminal issues and it is in the

10
Vinita Saxena v. Pankaj Pandit, A.I.R. 2006 S.C. 1662.
11
Universal Declaration of Human Right, Art. 27 December 1948, 217 A (III).
12
Ismail Serugo v. Kampala City Council & Anr., (1998) U.G.C.C. 6.
13
Delhi Judicial Services Association v. State of Gujara,t A.I.R. 1991 S.C. 2176
14
Ramsaran Das v. CTO, A.I.R. 1962 S.C. 1326
15
D.D. BASU, SHORTER CONSTITUTION OF INDIA, (14thEd.. 2010) 598.

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 MEMORIAL ON BEHALF OF APPELLANT

larger interest that an authoritative pronouncement on these issues be made by this Court. Thus,

keeping in sight the urgency of matter the SLP should not be dismissed only on the ground that

any alternative remedy, if any, has not been exhausted.

1.11. Powers of the Hon’ble SC in appeals under Art. 136 of the Constitution are not restricted

by the appellate provisions enumerated under any other statute.16 Under this Article, the Supreme

Court has plenary jurisdiction. This jurisdiction is very wide and lies against any judgment or

order of any court or tribunal in spite of limitations under the specific provisions for appeal under

the Constitution or other laws to meet the needs of justice. 17 It is also submitted that no

technicality can prevent or hinder the effective exercise of such jurisdiction to meet the pressing

demand of justice.18

1.12. Thus, even if there is an alternative remedy like existence of Letters Patent Appeal, if the

decision is of single judge of Hon’ble HC, it is no ground for taking away jurisdiction of the SC

under Art. 136.19 Moreover, this Hon’ble Court has held20 that the availability of alternative

remedy of appeal under § 53T of the Competition Act to be not an absolute bar to maintainability

of writ petition in three contingencies21 namely:

a. Where the writ petition has been filed for the enforcement of any Fundamental Rights or;

b. Where there has been a violation of the principles of natural justice or;

c. Where the order or proceedings are wholly without jurisdiction or;

d. Where the vires of an Act is challenged.

The writ petition is to be maintainable on these limited grounds.

16
Chandrakant Patil v. State, A.I.R. 1998 S.C. 1165, para 7.
17
Union Carbide Corporation v. Union of India, (1991) 4 S.C.C. 584.
18
Rama Kant Rai v. Madan Rai, A.I.R. 2004 S.C. 77
19
UOI v. Kishorilal Gupta & Bros., A.I.R. 1959 S.C. 1362
20
Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, A.I.R. 1969 S.C. 556
21
Shree Cement Ltd. v. Competition Commission of India, MANU/DE/1342/2014

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 MEMORIAL ON BEHALF OF APPELLANT

1.13. Therefore, it is humbly submitted that in the present case, this Apex Court is the

appropriate forum, for remedying the violation of the Fundamental/Legal rights of Zayer and to

ensure that justice prevails.

2. COMPAT BY ITS IMPUNGED DECISION WAS NOT JUSTIFIED IN

ADJUDICATING THE DISPUTE ON CONSTITUTIONAL PRINCIPLE OF RIGHT TO

HEALTH.

2.1. It is humbly submitted before this Hon’ble SC that Firstly, COMPAT has over-stepped

its jurisdiction while pronouncing its judgement [A]; and Secondly, that this being unreasonable

and arbitrary has resulted in a violation of Article 14 of the Constitution [B].

A. COMPAT has over-stepped its jurisdiction while pronouncing its judgement.

2.2. Under § 53A(1)(a), COMPAT is empowered22 to hear and dispose of appeals against any

direction issued or decision made or order passed by the Competition Commission under § 27 of

the Act as regards to a finding of abuse of dominant position.

2.3. Thus, any allegation made against any enterprise for abuse of dominant position as

defined in § 423 of the Competition Act is to be inquired into as per § 19(4)24 of the same Act and

an order will be passed under § 2725 by the CCI and the Appellate jurisdiction of COMPAT is

confined to that impugned order of the CCI on its merits26. As per the facts CCI found that there

was no prima facie case made out against Zayer India as regards to a § 4 allegation.27

2.4. However, the COMPAT set aside the order of the CCI, finding that Zayer India’s conduct

was found to squarely fall within the prohibition of § 4 of the Competition Act as it has
22
The Competition Act, 2002, §53A(1)(a)
23
The Competition Act, 2002, §4
24
The Competition Act, 2002, §19(4)
25
The Competition Act, 2002, §27
26
The Competition Act, 2002, §53A(1)(a),
27
Moot Court Proposition, ¶6, p 1

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 MEMORIAL ON BEHALF OF APPELLANT

obligations towards public health, keeping in mind the fundamental right to health recognised

under Art. 21 of the Constitution of India. It noted particularly that the public would be solely

and absolutely dependent on Zayer India for access to life-saving drugs, should Kipla be

injuncted, even as a willing licensee28.

2.5. Though COMPAT subsequently made a ruling on the S.4 allegation against the

Appellant, however while applying a reasoning for doing so, it has adjudicated on the interim-

injunction sought by Appellant against Kipla in the patent infringement suit which is sub judice

in the Hon’ble HC of Delhi and has also made a finding that Appellant has an obligation to

public health and has thus violated the fundamental right to health of the general public under

Art.21 of the Constitution by seeking such interim injunction.

2.6. As per § 62 of the Competition Act, the provisions of the Act shall be in addition to and

not in derogation of, the provisions of any other law for the time being in force 29. Which means

that while the DHC has original jurisdiction to adjudicate on matters of patent infringements

claimed by patent holders and to subsequently grant an injunction30, COMPAT should not have

exceeded its jurisdiction while assessing a § 4 violation on part of Appellant.

2.7. It is submitted that even if COMPAT wished to protect the interests of the public at large,

the matter should have been rather referred to the Patent Authorities or the Central Government.

Subsequently, Controller who is empowered under § 92 of the Patents Act to declare Lebola as

an epidemic or in the circumstances of “national emergency” or “extreme urgency”31 could have

granted a license of LebinX to Kipla or any other manufacturer to protect the interests of the

public.
28
Moot Court Proposition. ¶1, p2
29
The Competition Act, 2002 §62.
30
The Patents Act, 1970, §108.
31
The Patents Act, 1970, §92(3).

6
 MEMORIAL ON BEHALF OF APPELLANT

2.8. Furthermore, if this matter was referred to the Controller under the Patents Act, while

settling the terms and conditions of a licence granted under § 92, the Controller shall endeavour

to secure that the articles manufactured under the patent shall be available to the public at the

lowest prices consistent with the patentees deriving a reasonable advantage from their patent

rights32. Whereas, as the COMPAT has over-stepped its jurisdiction, under the garb of protecting

public interest, it has violated the Fundamental and Legal rights of the Appellant by not

balancing its interests of with the public at large.

2.9. It is submitted that the Competition Act does not impede the remedies available under the

provisions of any other law in force. The word “derogation” means partial abrogation. The word

“abrogate” is used when a law is abolished in its entirety. It is thus clear that the provisions

contained in the Competition Act do not in any way abrogate the provision of any other law for

the time being in force.33

2.10. Thus, it is submitted that a writ of Certiorari was sought vide a petition under Art. 226 to

the HC to keep COMPAT within its bounds. ‘Certiorari’ may lie and is generally granted when a

court has acted without or in excess of its jurisdiction. The want of jurisdiction may arise from

the nature of the subject-matter of the proceeding or from the absence of some preliminary

proceeding or the court itself may not be legally constituted or suffer from certain disability by

reason of extraneous circumstances34.

2.11. At this juncture, it will pertinent to draw this Hon’ble Court’s attention to the point that

dismissal of the petition under Art. 226 has been a wrong decision of the facts and has conferred

arbitrary powers to the COMPAT. When the jurisdiction of the court depends upon the existence

32
The Patents Act, 1970, §92(1)(ii).
33
Vijay Gupta v. Paper Merchants Association, Delhi, Case No. 07/2010
34
HALSBURY(2nd ed. Vol. IX) 880

7
 MEMORIAL ON BEHALF OF APPELLANT

of some collateral fact35, it is well settled that the court cannot by a wrong decision of the fact

give it jurisdiction which it would not otherwise possess36. Therefore it is humbly submitted to

this Hon’ble Court that the COMPAT’s order be declared unconstitutional on the grounds that it

has overstepped its jurisdiction.

2.12. It would be pertinent to note that procedural irregularity has resulted in inconsistency

with constitutional norms and principles. COMPAT has clearly encroached upon the exclusive

domain that HC and SC is entrusted with for deciding upon violation of Fundamental Rights

which COMPAT is clearly not empowered with.

i. Injunction sought does not amount to abuse of dominant position.

2.13. As per the facts of the present case, there is a mere exercise of right of intellectual

property when Appellant decides to not contract with Kipla as the negotiations between the

parties could not reach a consensus and there is no mandatory requirement on his part to license

his patent to the informant party. In Volvo Case37 it was held that refusal to license does not

amount to abuse. In Renault case38 it was made clear that refusal to license is a subject matter of

IPR and does not per se constitute an abuse.

2.14. The Court followed the reasoning while holding that39 “The right of the proprietor of a

protected design to prevent third parties manufacturing and selling or importing, without its

consent, products incorporating the design constituted the very subject matter of the exclusive

right”. It is submitted that it only in pursuance of this right that Appellant had sought an interim

injunction in the patent infringement suit it filed in the DHC.

35
Bunbury v. Fuller, (1854) 9 E.X. 111 (F)
36
R. v. Income Tax Special Purposes Commissioners, (1889) 21 Q.B.D. 313 (G)
37
Volvo v. Veng, 238/87 E.C.R. (1988)
38
Supra
39
Id. n.37

8
 MEMORIAL ON BEHALF OF APPELLANT

2.15. The judgements of Commercial Solvents40 and BP41 clearly show that even undertakings

holding dominant positions are allowed to look after their commercial interests and make

profitable decisions.

2.16. As per the case at hand, the appellant party hold a valid patent of LebinX (drug used for

curing Lebola) which has been recognized valid under Indian Patents Act, thus the right to

exclude others is in furtherance of the right and no such condition exists in the relevant market

where such a patent needs to be compulsorily licensed to a third party.

2.17. It is submitted that if Kipla was indeed a “willing licensee” as held by COMPAT42, it

should have made an application under § 92 of the Indian Patents Act to the patent authorities

instead of making a vexatious allegation of abuse of dominant position on part of Appellant.m

Moreover, the Appellant have developed their respective patents by investing an exorbitant

amount of capital when it conducted research to create the drug LebinX. This justifies its claim

to profess its right over the patent on the free will.

2.18. Therefore, in the present case the Appellant denied licensing of the their patent to Kipla

on reasonable grounds which are covered by the bundle of rights provided to the patentee. In no

manner can their act be construed as an abuse of dominance.

ii. Relationship between IPR and Competition Law.

2.19. It is submitted that the patent law recognises the exclusive right of a patentee to gain

commercial advantage out of his invention. It must be noted that intellectual Property is the

creative work of human intellect, the brainchild of the authors, the fruits of labour and therefore

40
Commercial Solvents v. Commission,(1974) C.J. Comm. E. Rec. 223, (1974)
41
BP v. Commission, (1978) C.J. Comm. E. Rec. 1513
42
Moot Court Proposition, ¶1 p. 2

9
 MEMORIAL ON BEHALF OF APPELLANT

considered to be their property43. Grant of exclusive privilege to own, use or sell the method or

the product patented for a limited period stimulates new invention of commercial utility44.

2.20. Moreover, IPR and Competition laws are considered contradictory to each other as IPRs

grant exclusivity which hinders competition, but it is an established principle that the two are

complementary and focus on same goal, i.e., innovations and general welfare. Therefore, IPRs

are covered under competition laws but given special treatment in assessment.45 IPR in relation

with the lapse of licensing agreement engenders competition and does not endanger it. Not

dealing with Kipla in this case is aimed at ensuring the proper storage and distribution network

of the drug and to prevent unnecessary price fluctuation of the drug in the Indian markets.

B. Arbitrary and capricious acts of COMPAT are annulled by Article 14.

2.21. It is humbly submitted that the jurisdiction of Art. 14 extend to the prevention of arbitrary

and unreasonable actions of the State, which are “antithetical”46 to the rule of equality. The

principles of Indian law have thrown open the gates of State action to Judicial scrutiny47.

2.22. Art. 14 strikes at arbitrariness because it negates equality48 and permeates the entire

fabric of Rule of Law49. Therefore, every action of the State must be guided by reason and not by

whim, caprice, and abuse of power.50 Furthermore under the well-established doctrine of

43
Gramaphone Company of India Ltd. v. Birendra Bahadur Pandey, A.I.R. 1984 S.C. 667
44
Bishwanath Prasad Radhe Shyam v. Hindustan Metal Industries, (1979) 2 S.C.C. 511
45
Competition Commission of India, Advocacy Booklet, Intellectual Property Rights under Competition Act, The
Commission of India (2011) available at http://competitioncommission.gov.in/advocacy/PP-CCI_IPR_7_12.pdf,
46
Andhra Pradesh Pollution Control Board –II v. Prof. MV Nayudu, (2001) 2 S.C.C. 62.
47
Maneka Gandhi v. Union of India, A.I.R. 1978 S.C. 597
48
Suresh Chandra Sharma v. Chairman, A.I.R. 2005 S.C. 2021
49
Bachan Singh v. State of Punjab, A.I.R. 1982 S.C. 1325.
50
Haryana Development Authority v. Dropadi Devi, (2005) 9 S.C.C.514; Dolly Chandra v. Chairman Jee, (2005) 9
S.C.C. 779.

10
 MEMORIAL ON BEHALF OF APPELLANT

ParensPatriae, it is the obligation of the State to protect and take into custody the rights and

privilege of its citizens for discharging its obligations51

2.23. Thus, the Appellant humbly submit that even if COMPAT adjudicated on matters beyond

its jurisdiction keeping the public interest in mind, such adjudication is arbitrary when there are

other authorities specifically established under Law to look into such matters which would have

balanced the rights of Appellant with that of public at large, without being detrimental to any one

side.

2.24. The Appellant submit that it is not unknown for a Statutory Authority to exaggerate the

benefits and underplay the deficiencies while making a decision. In Avinder Singh v. State of

Punjab52 it was held that arbitrariness must be excluded from the law, for if power is arbitrary, it

is potential inequality, and Art 14 is fatally allergic to inequality of the law53. The Appellant

submits that matters of such importance cannot be adjudicated upon negligently as has been done

by the COMPAT in the present matter. Hence, it is humbly submitted that the arbitrary exercise

of jurisdiction by COMPAT is in violation of the Fundament Right to Equality under Art. 14 of

the CoI.

3. THERE IS VIOLATION OF FUNDAMENTAL RIGHTS DUE TO ULTRA-VIRES

ORDER OF COMPAT.

3.1. It is humbly submitted before this Hon’ble Court that, Firstly, there has been a blatant

violation of Fundamental Rights enshrined in Art. 19(1)(g) along with Art. 300A of the

Appellants [A]; Secondly, restrictions so imposed on the Appellants are not reasonable [B]; and

51
Charan Lal Sahu v. Union of India, A.I.R. 1990 S.C. 1480, ¶ 35.
52
Avinder Singh v. State of Punjab, A.I.R. 1979 S.C. 321.
53
ARVIND P DATAR, COMMENTARY ON THE CONSTITUTION OF INDIA, WADHWA NAGPUR, (2nd ed.
2007)

11
 MEMORIAL ON BEHALF OF APPELLANT

Lastly, restrictions imposed are not in conformity with Art. 14 as well as Art. 21, thus violative

of the same [C].

A. Violation of Right to Carry on Business as given in Art. 19(1)(g).

3.2. It is humbly submitted before this Hon’ble Court that there has been a violation of

Appellant’s fundamental right enshrined in Art. 19(1)(g) of the CoI by the impugned order

passed by COMPAT.

A.1. Corporation through Shareholders can claim Art. 19(1)(g)

3.3. It is humbly submitted before this Hon’ble Court that in the present case, Appellants are

the legitimate holder of the valid patent over LebinX and the order of COMPAT making them

liable for abuse of dominance is an unreasonable impediment on the business that they are free to

carry.

3.4. At this point it will be pertinent to mention that in the case of Bennett Coleman v UoI54

and The Bank Nationalization case55 where the view that the fundamental rights of shareholders

as citizens are not lost when they associate to form a company, was established. It was held that

the fact that the companies are the Appellants does not prevent this Court from giving relief to

the shareholders, editors etc who have asked for protection of their fundamental rights by reason

of the effect of the law and of the action upon their rights.

Thus, since Thomas Ali of this Company is a citizen of India, it is humbly submitted that

Appellants have right to claim their fundamental rights under the said Art.19(1)(g).

A.2. Violation of the Right to carry on business.

3.5. It is humbly submitted to this Hon’ble Court that it is an undisputed fact that Patents give

54
Bennett Coleman v. UoI, A.I.R. 1973 S.C. 106.
55
Rustom Cavasjee Cooper v. Union Of India, 1970 A.I.R. 564.

12
 MEMORIAL ON BEHALF OF APPELLANT

the patent holder an exclusive right to exploit the patented product in the manner the patent

holder wants to, subject to certain reasonable restriction.56 This further strengthens their market

position and felicitates their business. This is a kind of privilege which the innovator companies

have over the use and commercial exploitation of their patented product granted via The Patents

Act, 1970.

3.6. If this privilege is unreasonably conflicted by not allowing normal exploitation of the

patent and unreasonably prejudicing the legitimate interests of the patent owner, taking in

account the arbitrary interests of third parties, such unreasonable restrictions would act as

hindrance to their freedom to carry on the business of the patent holder.57

3.7. In the present case, the privilege bestowed on the Appellants is being unreasonably

restricted by the measure taken up by the COMPAT which has indeed caused trauma to members

of this respected business company, who play an important social role in providing access to

health care through huge investment in innovation.

3.8. The COMPAT in its order held Appellant to be abusive of its dominance along with

observing that if Kipla is injuncted, public would be solely and absolutely dependent on the

Appellant for access to life saving drugs.58 This order was ultra-vires and if allowed would have

three fold implications on the conduct of the Appellant’s business, being:

1. That the Appellant would have to pay exorbitant penalty as per §27(b)59, which would

2. affect the quantum of profits of company to the prejudice of rights of its shareholders

56
Reasons for Patenting Your Inventions , The World Intellectual Property Organization (Sept. 15, 2015), available
at http://www.wipo.int/sme/en/ip_business/importance/reasons.htm.
57
Standards concerning the availability, scope and use of Intellectual Property Rights , The World Trade
Organization ( Sept. 15, 2015), available at https://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm.
58
Moot proposition ¶ 6 p.1.
59
The Competition Act, 2002 §27(b).

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 MEMORIAL ON BEHALF OF APPELLANT

3. That COMPAT making an observation on the matter of injunction can have an

implication to the exclusion of High Court’ jurisdiction to adjudicate upon the matter

pending before it, if §6160 is to be strictly interpreted.

4. That the Appellants can be forced to give licence to Kipla on unreasonable and non-

consensual terms.

3.9. It is submitted that the COMPAT’s order has put anxiety in the mind of the Appellant

that it may deprive of its property of which, it is a lawful owner. It will be pertinent to note Art.

300A pronounces that nobody should be deprived of his property. It was in the case of

Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd.61, it was held that Patent are

included in the definition of property as given in Art. 300A.

3.10. It is submitted that rights over intellectual property, despite its intangible nature, deserve

to be regarded as sacrosanct and the State should not be allowed to infringe these rights of

individuals unreasonably.62

3.11. Therefore, such an order passed by COMPAT has put fear and serious apprehension in

Appellant’s mind about violation of its right to carry on the business since if the very USP that

is- its patent over LebinX, is tampered with or taken away, it would have serious consequence on

the carrying out its business in India and would affect its Constitutional Right to property.

B. The restriction imposed is not reasonable

3.12. It is humbly submitted that restrictions as mentioned above imposed on the basis of

COMPAT’s ultra-vires order cannot be held to be a reasonable restriction in any case.

60
The Competition Act, 2002 §61.
61
Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd., (2008) 13 S.C.C. 30.
62
Reddy Prashant, Article 300A of the Constitution: A constitutional right to ‘data
exclusivity’? (Sept. 15, 2015) available at http://spicyipindia.blogspot.com/2010/05/article-300a-of-
constitution.html.

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 MEMORIAL ON BEHALF OF APPELLANT

3.13. Though no set pattern of reasonableness can be laid down as applicable to all cases, 63 but

in the landmark case of Laxmi Khandsari v. State of U.P. 64, this Hon’ble Court laid down few

pointers on which Courts can check the reasonableness of a restriction, some of which are:

i. The underlying basis of the restriction imposed.

ii. The extent an urgency of the evil sought to be remedied.

iii. The disproportion of the imposition.

B. 1. The underlying basis of the restriction imposed.

3.14. In the present case it will be pertinent to first check the basis of pronouncing COMPAT’s

order imposing such a restriction. COMPAT’s order ruling that Appellants are abusing their

dominance on the baseless consideration of refusal to license drug to Kipla and Subsequent effort

to injunct it from manufacturing and selling drugs65, renders the decision unreasonable. This is

because:

a. Refusal to license the drug was valid since negotiations never took place in a reasonable

manner. The price at which Kipla sought to sell LebinX was ₹600 for 60 tablets which was

exponentially lower than the cost which Appellant ought to recover. According to § 9066,

even while granting Compulsory License, the royalty and other remuneration should be

reasonable, having regard to nature of the invention and expenditure incurred by Patentee in

making the invention, which was not respected by Kipla while seeking license in the present

matter. Moreover, Kipla took advantage of the fact that since there was no licensing

framework prescribed for negotiating licenses in Pharmaceutical Sector. For example in the

63
Pathumma v. State of Kerala, A.I.R .1978 S.C. 771.
64
Laxmi Khandsari v. State of U.P., A.I.R. 1981 S.C. 873.
65
Moot proposition ¶ 6 p.1.
66
The Patent Act, 1970 § 90.

15
 MEMORIAL ON BEHALF OF APPELLANT

67
case of Samsung EU Anti-Trust Commission provides that there should be a negotiation

period of up-to 12 months in issues pertaining to SEP’s before proceeding to any legal action.

Since in the present case there is no set time frame which should lapse for finally concluding

terms of bargain, Kipla piggybacked on this fact by approaching the Appellant just once that

too with unreasonably low terms. Such manipulation to portray itself a willing licensee aided

Kipla to win their case against Appellants before COMPAT.

b. Secondly, the effort to seek an injunction over manufacture and sale of Lebocin by Appellant

was due to legitimate apprehension of its patent infringement. From the bare reading of §

4868 along with § 108(1)69, it is inferred that it is the exclusive right of patent holder to

prevent third party, who do not have his consent, from act of making, using, offering for sale,

selling or importing the product and consequently obtain an injunction and seek either

damages or accounts of profits against any infringer. This right is also recognized as

minimum right that must be conferred by a patent under the TRIPS Agreement.70 Moreover,

the right of the originator company to file an quia timet injunction was recognized and

upheld as recently as in April, 2014 in the case of Novartis AG & Ors. v. Bajaj Healthcare

Ltd.71 Therefore, Appellant’s act to seek injunction on the sale and manufacture of Lebocin

till the time its patent is not granted is a sequitur of the rights, it has as a patent holder. Thus,

this makes the whole purpose of making such restriction null and baseless.

B.2. The extent an urgency of the evil sought to be remedied.

67
Antitrust: Commission accepts legally binding commitments by Samsung Electronics on standard essential patent
injunctions,(29 April 2014), The European Commission, (Sept. 18, 2015) available at http://europa.eu/rapid/press-
release_IP-14-490_en.htm.
68
The Patent Act, 1970 § 48, Trade-Related Aspects of Intellectual Property Rights Art. 30, Jan. 1 1995.
69
Supra § 108(1), Art. 31, Art. 36.
70
Pharmaceutical patents and the TRIPS Agreement (Sept. 2006), World Trade Organization (Sept. 15, 2015),
available at https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e.htm.
71
Novartis AG & Ors. v. Bajaj Healthcare Ltd., CS (OS) No. 1053/2014, Delhi High Court (Sept. 16, 2015),
available at http://delhihighcourt.nic.in/dhcqrydisp_o.asp?pn=79148&yr=2014.

16
 MEMORIAL ON BEHALF OF APPELLANT

3.15. It is submitted that Lebola has not yet been declared an epidemic in India due to which

there is no such situation of ‘extreme urgency’ or ‘emergency’ which could compel the

Appellant to grant its license to Kipla, without considering economic interests, it ought to reap.

It will be pertinent to mention the case of O.N.G.C v. Assocn., N.G.C72where this Hon’ble Court

held that where the commodity or service is need by consumers but that need is not so vital, a

greater consideration to profit of the producer over his cost should be given.

B.3. The disproportion of the imposition.

3.16. It is submitted that the restriction which is being imposed is inconsistent with the object

sought to be achieved.Court should bear in mind innovation is an essential prerequisite for the

very existence of medicines. Patents are a social contract between the patent owner and the

society; this is why it is necessary to explore, identify and implement mechanisms to improve the

functioning and transparency of the patent system in the interest of public health. That is to say
73
protecting the whole patent regime is also a part of public interest. The Lofty ideals of social

and economic justice, the advancement of the nation as a whole and the philosophy of

distributive justice- economic, social and political- cannot be given a go-by in the name of undue

stress on fundamental rights. Reasonableness and rationality, legally as well as philosophically

provide colour to the meaning of Fundamental rights.74

3.17. COMPAT completely overlooked the fact that Appellant’s patent being new in the

market should be given sufficient time to work which is generally three years from the date of

grant of patent. Instead it, without checking into the working of LebinX’s patent by means of

72
O.N.G.C v. Assocn., N.G.C, A.I.R. 1990 S.C. 1851,
73
Carlos Correa, Guidelines for the examination of pharmaceutical patents: developing a public health perspective,
ICTSD-UNCTAD-WHO ISSN 1684-9825, 8 (2007)
74
Javed v. State of Haryana, A.I.R. 2003 S.C. 3057.

17
 MEMORIAL ON BEHALF OF APPELLANT

Form-2775, which is critical for triggering the compulsory licensing and revocation provisions,

aided the game plan of Kipla and came into the garb of the fallacy of Argumentum ad

Misericordiam so committed by Kipla, who was merely acting in furtherance of its own malafide

interests by subverting the procedure laid down by law.

3.18. Due to this, measure adopted by COMPAT, to make the medicine for Lebola available to

general public, turned out to be inherently wrong as there were legitimate alternative routes

available with the State for achieving the same which it did not resort to, like:

a. Declaration of Lebola as an epidemic for the purpose of compulsorily licensing the drug

via notification under § 92.76

b. Passing of a price control order under the Essential Commodity Act, to regulate its prices.

3.19. The measure taken by COMPAT was extraneous as it is not within this judicial body’s

power to adjudicate upon the sphere of legislature with respect to policy for access to medicines.

Therefore, in the light of these three pointers it will be pertinent to mention that in no manner can

the restriction flowing from COMPAT’s order can be construed to be reasonable as clearly it is

not only prejudicing the legitimate rights of the Appellants but also encouraging mud-slinging

competition by Kipla.

C. The Restriction so imposed is not in conformity with Art. 14 and Art. 21.

3.20. It is submitted that in the present case, ultra-vires and unreasonable exercise of power by

COMPAT has also led to violation of Art. 14 and Art. 21 of the CoI. In the case of Maeneka

Gandhi v. UoI77, It was held that the procedure by which life and personal liberty can be taken

75
The Patent Act, 1970 § 146, Rule 131.
76
The Patent Act, 1970 § 92(3).
77
Maeneka Gandhi v. UoI, A.I.R. 1978 S.C. 597.

18
 MEMORIAL ON BEHALF OF APPELLANT

away must not only be by a procedure established by law but it must also be reasonable. The

principle of reasonableness which legally is an essential element of equality or non arbitrariness

pervades in Art. 14 like brooding omnipresence and the procedure contemplated by Art. 21 must

answer the test of reasonableness in order to be in conformity with Art 14.

C.1. Violation of Art.14

3.21. It is humbly submitted that in the sphere of contractual relations, the state, its

instrumentalities or those whose act bear insignia of public element, action to the public duty or

obligation are enjoined in a manner that is fair, just and equitable. It should act only after taking

objectively all the relevant options into consideration and in a manner that is reasonable, relevant

and germane to effectuate the purpose for public good and in general public interest. It must not

take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. 78

3.22. Reasonableness and fairness is the heart and soul of Art. 14 of the Constitution 79, since in

the present case reasonableness is inherently lacking and there is arbitrariness on part of state by

ignoring legitimate alternatives it had, the inevitable conclusion that can be drawn is that the

Appellant is being unreasonably classified and is not given equal protection of law compared to

other patent holders. Hence, there is violation of Appellants fundamental right to equality.

C.2. Violation of Art. 21

3.23. It is submitted that in the Order given by COMPAT, it laid down that ‘there would heavy

social costs permitting Zayer India to violate its obligation towards public health’80 but it has

failed to realize that Appellants being a private company do not have any obligation to protect

78
L.I.C.of India v. Consumer Education & Research Centre A.I.R. 1995 S.C. 1811; Bharat Petroleum Corporation
Ltd.v. Maddula Ratanvali, (2007) 6 S.C.C. 81.
79
Delhi Development Authority v. Joint Action Committee, Allottee of SFS Flats, (2008) 2 S.C.C. 672, 692.
80
Moot proposition ¶ 6, p. 2

19
 MEMORIAL ON BEHALF OF APPELLANT

fundamental rights, it is the duty of the State to safeguard the same.

3.24. Instead, COMPAT due to such arbitrary ruling has violated Appellant’s right to

livelihood. It is submitted that the development of Lebin X required heavy investment and long-

term research, coupled with expensive clinical trials and regulatory approval procedures. Though

in the present case, Zayer has been compensated 50% of its R&D cost by USA81, still 50% of it

is yet to be recovered. It should be noted that such an investment which is yet to be recovered, is

done in US Dollars. The price which the Appellants are asking for, is only after considering the

cost of manufacturing it in India, Investment that is to be recovered as well as a legitimate

margin of profit.

3.25. It is submitted that any attempt to compare this price with that of Kipla would be unfair

as it did not have the cost burden that the Appellants had to bear, so it can sell the drug at any

price. Denying Appellant this price, especially when there is no evidence to suggest

unaffordability, would be depriving it, its right to livelihood as they would not be able to reach

even the break-even point. This would cause the members of Appellant company huge losses and

would be in turn be depriving them of its right to life by depriving of its means of livelihood to

the point of abrogation as was held in the case of Olga Tellis v. Bombay Municipal Corp.82

3.26. Therefore, there is not an iota of doubt that by allowing such an ultra-vires and

reasonable order to prevail, would not only deter innovation for public good but also cause grave

miscarriage of justice, extinguishing the faith in the Patent and Competition law regime since it

is violative of Appellant’s fundamental rights.

81
Moot proposition ¶ 2, p. 1
82
Olga Tellis v. Bombay Municipal Corp., A.I.R. 1986 S.C. 180.

20
 MEMORIAL ON BEHALF OF APPELLANT

PRAYER

In light of the questions presented, arguments advanced and authorities cited, the counsels for the

respondents most humbly and respectfully pray before this Honorable Court to be graciously

pleased to:

I. DECLARE that the present writ petition shall be maintainable.

II. DECLARE that the order passed by COMPAT was ultra-vires and ISSUE a Writ of

Certiorari for the same.

III. DECLARE that due to ultra- vires order of COMPAT there is violation Article 14,

19(1) (g) and 21of the Constitution.

AND/ OR

Further the Court may pass any other orders in the light of justice, equity and good conscience.

And for this act of kindness, your Lordships, the respondent shall as duty bound ever humbly

pray.

Respectfully submitted,
Sd/-
(Counsel for the Appellant)