Biosimilar;

The global landscape of pharmaceutical intellectual property (IP) is defined by a fundamental tension: the need to incentivize costly and high-risk research and development through patent monopolies versus the public health imperative to ensure widespread access to affordable medicines. This conflict is nowhere more pronounced than in the realm of biologics complex, large-molecule drugs derived from living organisms and their lower-cost successors, biosimilars. India stands at the critical nexus of this global debate. It is simultaneously a vital market for innovator pharmaceutical companies and the world's foremost supplier of affordable generic and biosimilar medicines, often referred to as the "Pharmacy of the World".¹

The recent judgment of the Delhi High Court in E. R. Squibb and Sons, LLC & Ors. v. Zydus Lifesciences Limited serves as a landmark case study that illuminates the nuances of this dynamic.³ The case, concerning a quia timet injunction to prevent the launch of a biosimilar version of the blockbuster cancer biologic Nivolumab, reveals a sophisticated and robust patent enforcement regime in India. While the country's laws provide clear and expansive pathways for biosimilar development, this decision demonstrates that its judiciary offers powerful, decisive protection for validly granted innovator patents. The ruling challenges simplistic narratives of India as merely a pro-generic jurisdiction and highlights the unique, litigation-centric model it employs to manage the core conflict between innovation and access, with significant implications for global pharmaceutical strategy.

Anatomy of a Biosimilar Patent Dispute: The Squibb v. Zydus Judgment

The Delhi High Court's detailed judgment in Squibb v. Zydus provides a masterclass in the practical application of Indian patent law to a complex biosimilar dispute. The court’s reasoning on procedural triggers, technical claim construction, and the burden of proof for invalidity challenges illustrates a mature and rigorous judicial approach.

1.1. The Power of a Quia Timet Injunction

The lawsuit was strategically filed as a quia timet action, a legal maneuver seeking an injunction to prevent an apprehended or threatened wrong in this case, the commercial launch of a biosimilar rather than to remedy an infringement that has already occurred.³ The plaintiffs, E. R. Squibb and Ono Pharmaceutical (collectively "Squibb"), initiated the action based on a series of activities by the defendant, Zydus Lifesciences ("Zydus"). These included Zydus's application for clinical trial approval from the Central Drugs Standard Control Organisation (CDSCO), its registration of the trial with the Clinical Trial Registry of India (CTRI), and credible market intelligence suggesting an imminent launch of its biosimilar product.³

The court found these preparatory steps sufficient to establish a credible threat of infringement. It affirmed the legal principle that regulatory filings are not trivial matters but are "the product of careful planning and work," providing a concrete basis to infer an intent to launch commercially.³ This finding is crucial, as it establishes a clear trigger for innovators to seek preemptive legal protection in India.

Furthermore, the court decisively dismissed Zydus's argument that Squibb had unduly delayed filing the suit. The court reasoned that Zydus's earlier activities, such as conducting clinical trials, were permissible under the Bolar Exemption of Section 107A of the Patents Act. Therefore, a cause of action for commercial infringement did not arise until the threat of a commercial launch became tangible and imminent in 2024. This interpretation protects patentees from accusations of laches while respecting the statutory safe harbor provided to generic and biosimilar developers for research purposes.³

1.2. The Art of Claim Construction: Defining "Specifically Binds"

At the heart of the technical dispute was Zydus's non-infringement argument, which hinged on the interpretation of a single word in the patent's claims. The patent claimed an antibody that "specifically binds" to the Programmed Death-1 (PD-1) protein. Zydus interpreted "specifically" to mean exclusively, presenting experimental data showing that its product and, critically, Squibb's own product, Opdivo® exhibited some minor cross-reactivity with other proteins in the CD-28 family.³

In resolving this, the court employed the established legal method for claim construction: begin with the ordinary meaning of the words, but refer to the complete patent specification to clarify any ambiguity.³ The court meticulously examined the "Disclosure of the Invention" section of Squibb's patent, which described the antibody as having "high affinity binding to human PD-1, but lacking substantial cross-reactivity" with other proteins.³ It also highlighted the specification's own definition of an "isolated antibody," which explicitly stated that it "may, however, have cross-reactivity".³

Based on this textual evidence from the patent document itself, the court concluded that "specifically" does not mean "exclusively" or "only." An antibody with high specificity for its primary target (PD-1), even with some non-substantial binding to other receptors, falls squarely within the patent's scope. This purposive construction, grounded in the patentee's own description, was pivotal in dismantling Zydus's primary non-infringement defense.³

1.3. The Biosimilarity Paradox: Turning Regulatory Data into an Admission of Infringement

One of the most insightful aspects of the judgment is how the court leveraged Zydus's regulatory strategy against it. Zydus had openly admitted that its product, ZRC-3276, was a biosimilar of Squibb's Nivolumab and had used Nivolumab (marketed as Opdivo®) as the reference product in its regulatory filings with Indian authorities.³

The court then connected this admission to India's official "Guidelines on Similar Biologics, 2016," which mandate that a biosimilar must be "similar in terms of quality, safety and efficacy" to its reference biologic.³ Most critically, the guidelines stipulate that the "target amino acid sequence of the Similar Biologic should be confirmed and is expected to be the same as for the Reference Biologic".³

This created a powerful logical chain for the court:

1. Zydus claims its product is a biosimilar of Nivolumab.

2. To be approved as a biosimilar under Indian regulations, its amino acid sequence is expected to be the same as Nivolumab's.

3. Through a detailed claim mapping exercise, the court established that the specific, unique amino acid sequences defining Nivolumab are explicitly claimed in Squibb's suit patent.³

4. Therefore, by claiming biosimilarity for regulatory purposes, Zydus had effectively admitted that its product incorporates the patented sequences. As the court noted, "any reference to Nivolumab by the defendant would constitute infringement of the suit patent".³

This creates a significant legal paradox for biosimilar applicants in India: the very data required to prove biosimilarity to the regulator can be weaponized as prima facie evidence of patent infringement in court. This forces biosimilar firms into a precarious position where satisfying the CDSCO makes them acutely vulnerable to an injunction from the judiciary. To compound this, the court also used Zydus's own comparative binding affinity test results which showed both products had high specificity for PD-1 as further proof that Zydus's product fell within the patent's claims.³

1.4. The High Bar for Invalidity Challenges

The court demonstrated a strong deference to the validity of the granted patent, emphasizing that Zydus bore the burden of raising a "credible challenge" supported by "acceptable scientific material".³ Significant weight was given to the fact that the patent had been granted after a thorough examination and had already survived four separate pre-grant oppositions, creating a strong presumption of validity.³

The court systematically analyzed and dismissed Zydus's prior art arguments (documents D1-D7). It found that while earlier patents disclosed the concept of using anti-PD-1 antibodies for cancer treatment, none of them disclosed the specific, novel amino acid sequences of Nivolumab that were the subject of the suit patent's claims.³ This distinction between a broad method or process patent and a specific product patent was critical.

The court also implicitly rejected Zydus's "evergreening" defense, which was based on other patents held by Squibb in different jurisdictions. The court found that those patents claimed the method of use for treating cancer with an anti-PD-1 antibody, whereas the Indian suit patent claimed the product (Nivolumab) itself. The court recognized Nivolumab as a new substance with novel sequences, not merely a new form of a previously known antibody. This finding aligns with the spirit of India's strict anti-evergreening law, Section 3(d), by recognizing genuine product innovation as distinct from minor modifications of existing substances.³

This judicial stance reinforces a de facto requirement for biosimilar applicants to "clear the way" before launching. While India lacks a formal pre-launch patent resolution system like the US "patent dance," the court's emphasis on the defendant's failure to invalidate the patent before preparing for launch effectively mandates proactive litigation by the challenger. Zydus's sister concern had already filed a post-grant opposition, demonstrating full awareness of the patent.³ By proceeding towards a commercial launch before this opposition was resolved, Zydus was seen as not having prudently cleared the path, a factor that weighed in favor of granting the injunction.³

The Pillars of Indian Pharmaceutical Patent Policy

The Squibb judgment does not exist in a vacuum. It is the product of a carefully constructed legal and policy architecture designed to navigate the complex interplay between public health, industrial policy, and international IP obligations. Understanding the key pillars of this framework the Bolar Exemption, the anti-evergreening doctrine, and compulsory licensing is essential to contextualizing the court's decision.

2.1. The Bolar Exemption (Section 107A): A Broad Safe Harbor for R&D

Section 107A of the Patents Act, known as the Bolar Exemption, provides a "safe harbor" from infringement for certain activities.⁷ It allows the making, using, selling, or importing of a patented invention "solely for uses reasonably related to the development and submission of information required under any law," either in India or in another country. The legislative intent is to enable generic and biosimilar manufacturers to conduct the necessary R&D and clinical trials to be ready for market launch immediately upon patent expiry, thus preventing an unintended extension of the patent holder's monopoly.⁹

Indian courts have interpreted this provision expansively. In the landmark case of Bayer v. Union of India, the Delhi High Court held that Section 107A protects the export of a patented drug if it is for the purpose of seeking regulatory approval in an overseas market.⁸ This broad interpretation has cemented India's role as a global hub for generic and biosimilar R&D, not just for its domestic needs but for the world. In the

Squibb case, the Bolar Exemption provided the legal shield for Zydus's clinical trial activities, explaining why Squibb did not and could not sue for infringement at that earlier stage.³

2.2. The Anti-Evergreening Doctrine (Section 3(d)): A Gatekeeper Against Trivial Patents

Section 3(d) of the Patents Act is arguably India's most famous and controversial contribution to global patent law. It prevents the patenting of "the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance".⁵ This provision is designed to combat "evergreening," the practice of extending patent life through trivial modifications to existing drugs.⁶

The doctrine's power was cemented by the Supreme Court of India in the seminal 2013 case, Novartis AG v. Union of India. The court rejected a patent for a new crystalline form of the cancer drug Imatinib Mesylate (Glivec).⁶ The key finding was that for pharmaceuticals, "efficacy" under Section 3(d) must be interpreted as "therapeutic efficacy." This means that improvements in physical properties like stability or bioavailability are insufficient for patentability unless they translate into a demonstrable, significant improvement in the drug's actual therapeutic effect on the body.⁵

While Section 3(d) was not directly litigated in Squibb v. Zydus, its principles form the backdrop to the court's validity analysis. The court's finding that Nivolumab was a genuinely new substance with novel amino acid sequences, rather than a mere modification of a known antibody, implicitly placed it outside the ambit of Section 3(d)'s prohibition. This underscores that the battle for a patent's survival in India is often won or lost during prosecution. Squibb's patent was robust enough to survive four pre-grant oppositions, where such validity questions are fiercely contested, giving it a powerful presumption of validity that proved difficult for Zydus to overcome in subsequent litigation.³

2.3. Compulsory Licensing: The Ultimate Policy Backstop

Consistent with Article 31 of the TRIPS Agreement, India's Patents Act contains provisions for granting compulsory licenses. Under Sections 84 and 92, the government can authorize a third party to produce a patented product without the patentee's consent if the invention is not being worked in India, is not available to the public at a reasonably affordable price, or in circumstances of national emergency.¹³

This power is not theoretical. In 2012, India granted its first and only compulsory license to date to Natco Pharma for the production of Bayer's patented cancer drug, Sorafenib Tosylate (Nexavar). The decision was based on the grounds that the drug was priced exorbitantly and was not being supplied in sufficient quantities to meet public demand.¹³

The rarity of its use demonstrates that compulsory licensing is not a routine measure but a powerful policy tool held in reserve. It functions as a crucial backstop to address market failures and serves as a potent deterrent, encouraging patent holders to price and supply their products reasonably to avoid triggering its application. Together, these three pillars, the Bolar Exemption, Section 3(d), and compulsory licensing form a coherent, two-sided policy framework. They create a clear, legal pathway for competition while simultaneously setting powerful incentives for genuine innovation and reasonable market behavior by innovators.

A Global Comparative Analysis: India's Model in Context

India's approach to resolving biosimilar patent disputes is unique and best understood when benchmarked against the frameworks in the United States and the European Union. While all three jurisdictions operate under the umbrella of the WTO's TRIPS Agreement, they have chosen divergent paths to balance innovation and access.

3.1. The TRIPS Agreement: The Foundation of Global IP and India's Justification

The TRIPS Agreement establishes minimum standards for intellectual property protection that all WTO members must adhere to. However, it also contains crucial "flexibilities" that allow member states to design their laws to meet domestic public health and development objectives.¹⁶ The 2001 Doha Declaration on TRIPS and Public Health powerfully affirmed this principle, stating that the agreement "can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all".¹⁷

India has adeptly used these flexibilities to construct its patent regime. The Bolar Exemption is a permitted exception to patent rights; Section 3(d) is India's sovereign interpretation of the patentability criteria of novelty and inventive step; and the compulsory licensing provisions are explicitly contemplated in TRIPS Article 31.¹³ The robust enforcement of a valid patent, as seen in the Squibb case, is also fully compliant with TRIPS obligations to provide effective enforcement mechanisms.

3.2. Contrasting Pathways: The US "Patent Dance" vs. the EU's Regulatory-Led System

The US and EU have developed highly structured systems to manage the entry of biosimilars, contrasting sharply with India's approach.

• United States (BPCIA): The "Patent Dance"
  
  

The Biologics Price Competition and Innovation Act (BPCIA) established a complex, statutory information exchange process known as the "patent dance".20 This multi-stage procedure is designed to identify and narrow patent disputes before a biosimilar is launched. It involves the biosimilar applicant sharing its confidential marketing application with the innovator, followed by rounds of listing relevant patents and exchanging legal arguments. This process culminates in an agreement on which patents to litigate in a "first wave" of litigation.20 The goal is to create a predictable, albeit procedurally intensive, pathway for resolving patent issues early in a court-centric process initiated by formal information exchange.

• European Union (EMA): Centralized Approval and Decentralized Enforcement

The European Medicines Agency (EMA) provides a centralized scientific pathway for biosimilar approval. The core of the process is a comprehensive "comparability exercise" to demonstrate that the biosimilar is highly similar to the reference medicine in terms of quality, safety, and efficacy.22 The EMA does not adjudicate patent disputes; enforcement is handled by national courts or the Unified Patent Court. However, the EMA has a strong pro-biosimilar stance, officially considering approved biosimilars to be interchangeable with their reference products.23 The agency is also moving to streamline requirements further, potentially waiving extensive clinical studies if analytical and pharmacokinetic data are sufficiently robust, thereby lowering barriers to entry.25

3.3. India's Model: Litigation as the Primary Resolution Mechanism

India's system deliberately separates regulatory approval from patent enforcement, making the judiciary the sole arbiter of patent rights. There is no "patent linkage" system that would prevent the drug regulator (CDSCO) from approving a biosimilar due to an existing patent.¹¹ The CDSCO's mandate is strictly limited to assessing safety and efficacy.

Consequently, the entire burden of patent resolution falls on the parties through the court system. As the Squibb case demonstrates, the innovator must monitor the market and file a quia timet suit to prevent a launch, while the challenger must either prove non-infringement and/or invalidity in court or risk a pre-launch injunction. This litigation-driven model, underpinned by the "clear the way" doctrine, creates a high-risk, high-stakes environment where legal strategy and judicial outcomes are paramount.

The following table synthesizes these different approaches:

Strategic Implications and The Path Forward

The Squibb v. Zydus judgment and the legal framework it operates within have profound strategic implications for all stakeholders in the pharmaceutical ecosystem. It solidifies India's dual identity as both a powerhouse for affordable medicines and an increasingly robust enforcer of intellectual property rights.

4.1. India's Dual Identity: The "Pharmacy of the World" and a Maturing IP Enforcer

India's legal policies have been instrumental in its rise as the "Pharmacy of the World," supplying approximately 20% of global generics and a growing share of biosimilars.¹ Provisions like the Bolar Exemption and the historical absence of product patents created the conditions for this industrial growth. However, the Squibb decision represents a significant evolution. It shows that as India's own domestic industry moves up the value chain toward innovation, its legal system is maturing in parallel to provide strong, sophisticated protection for high-value patents.²⁷

This creates a dual reality: a world-class manufacturing hub for low-cost medicines that is also a jurisdiction where innovator IP is vigorously enforced when deemed valid. This duality is not without friction. While India is a critical partner for the global drug supply chain, particularly for the US and Europe, its domestic regulatory standards and quality control mechanisms have faced international scrutiny, creating a persistent tension between its role as a low-cost provider and global expectations of quality and IP protection.¹

4.2. Actionable Insights for Stakeholders

This evolving landscape demands refined strategies from all players.

• For Innovator Companies (e.g., Squibb):

• Prioritize Patent Prosecution: The first line of defense is a meticulously drafted patent. Investing heavily in defending the patent during pre-grant oppositions in India is a critical strategic move, as a "clean" grant history creates a powerful presumption of validity in later litigation.³

• Enforce Proactively: Innovators must actively monitor regulatory databases like the CTRI for signs of biosimilar development and be prepared to file a quia timet action swiftly upon detecting a credible threat of commercialization.

• Leverage the Biosimilarity Paradox: In court, innovators should strategically use the defendant's own regulatory filings and claims of biosimilarity as potent evidence of infringement, following the successful template set by the Squibb judgment.

• For Biosimilar Manufacturers (e.g., Zydus):

• Recognize the "At-Risk" Launch Dilemma: Launching a biosimilar in India before the innovator's patent is invalidated or has expired is an extremely high-risk strategy. The Squibb case shows that the probability of facing a pre-launch injunction is very high if the patent appears strong.

• "Clear the Way" Proactively: The most prudent, though costly, approach is to initiate a revocation action or seek a judicial declaration of non-infringement well in advance of a planned launch. Relying on the outcome of a pending post-grant opposition is insufficient protection against an injunction.³

• Understand the Bolar Shield's Limits: The Bolar Exemption is a shield for R&D and regulatory activities only. It is not a sword that grants a right to launch commercially and will not protect against an injunction blocking that launch.³

• For Policymakers (India and Global):

• Acknowledge the Model's Success and Friction: India's model has largely succeeded in balancing access and innovation, but its heavy reliance on high-stakes, costly litigation creates uncertainty for both sides.

• Consider a "Softer" Patent Dance: While a full US-style procedural system may be undesirable, Indian policymakers could explore introducing a more structured, non-binding pre-litigation information exchange to help narrow disputed issues and encourage earlier, more efficient resolutions.

• Strengthen Regulatory-Judicial Dialogue: Fostering a better understanding between the judiciary and regulatory bodies like the CDSCO is crucial. Ensuring courts can appreciate the scientific basis of regulatory decisions (e.g., what "similarity" entails for a biosimilar) will promote more consistent and predictable application of law and science.

The Delhi High Court's decision in E. R. Squibb v. Zydus is far more than a single patent dispute; it is a definitive statement on the contemporary state of pharmaceutical IP enforcement in India. It confirms that the country's legal framework is not a one-way street favoring generics but a carefully calibrated system that provides both a clear runway for biosimilar development and powerful, court-enforced barricades to protect valid patents. The judgment's astute weaponization of biosimilarity data and its stern reinforcement of the "clear the way" doctrine present a formidable challenge for would-be infringers. For global stakeholders, the message is unequivocal: India has evolved from being merely the "pharmacy of the world" into a sophisticated and consequential arena for high-stakes patent litigation, where both innovation and competition are subject to the rigorous and discerning scrutiny of the law.