Legal Update: Insufficient Apprehension of Litigation Not a Valid Cause of Action for Suit

##Legal Update: Insufficient Apprehension of Litigation Not a Valid Cause of Action for Suit

In a recent decision, the Supreme Court of India held that a mere apprehension of litigation is not a valid cause of action for filing a suit. The judgement came in a dispute between Cadila Healthcare Ltd. and F.Hoffmann-La Roche Ltd., where Cadila filed a suit for injunction against Roche’s alleged attempts to threaten and harass them with a potential patent infringement lawsuit.

###Background of the Case

Cadila is a pharmaceutical company that launched a generic version of Roche’s cancer drug, Tarceva, after the patent for the drug had expired. Roche, on the other hand, holds a patent for the drug in India until 2026. Despite the expiry of the patent, Roche continued to market and sell the drug at a premium price, leading to a decline in Cadila’s market share.

Cadila, in October 2015, filed a suit in the Delhi High Court seeking to restrain Roche from ‘looming patent litigation’ and issuing warning letters to retailers and distributors about the alleged infringement of their patent. The High Court dismissed Cadila’s plea, stating that there was no cause of action for the suit since Roche had not taken any concrete steps to initiate a patent infringement suit against Cadila.

###Appeal to the Supreme Court

Cadila then approached the Supreme Court, contending that Roche’s alleged threats and intimidation amounted to a sufficient cause of action for a suit. They argued that the mere apprehension of a patent infringement lawsuit against them by Roche had caused them financial loss and mental harassment.

The court observed that the settled position of law is that a mere threat to initiate legal action or apprehension of a lawsuit is not a valid cause of action for a suit. The court further noted that Cadila had not pleaded any specific act of infringement by Roche, nor had they referred to any specific threat of litigation by Roche.

###No Violation of Civil Liability for Negligence

Cadila also contended that Roche’s actions amounted to a violation of their civil liability for negligence and sought damages on that basis. The court, however, dismissed this argument, stating that there was no specific act of negligence on the part of Roche that had caused financial loss to Cadila.

The court highlighted that there was no established relationship between the parties that would create a duty of care on Roche’s part towards Cadila. Any apprehension of economic loss due to alleged acts of negligence cannot be considered a valid cause of action for a suit.

###Infringement Should be Established for a Cause of Action

The court reiterated that a valid cause of action for a suit requires the existence of a legal right in favour of the plaintiff and the violation of that right by the defendant. In a patent infringement suit, the infringing act itself is the cause of action, as it violates the exclusive rights of the patentee.

The court further noted that the mere apprehension of infringement, without establishing its actual occurrence, does not give rise to a cause of action for the plaintiff. In this case, since Cadila failed to establish any act of infringement by Roche, their suit lacked a valid cause of action.

###Conclusion

The Supreme Court, in its judgement, emphasized the significance of a valid cause of action for filing a suit. It held that the mere apprehension of imminent legal action is not a valid ground for a suit and the plaintiff must establish the existence of a legal right and its violation for a valid cause of action to arise.

This ruling sets an important precedent in intellectual property law, particularly for patent infringement suits, where the plaintiff must demonstrate specific acts of infringement by the defendant to establish a cause of action. It also highlights the need for a clear and specific pleading of facts in a suit to ensure a valid cause of action.