Bayer Corporation v. Union of India & Ors.

Relevant Acts and provisions

Patents Act, 1970

Section 83Section 84Section 86Section 87

Provisions considered: Sections 83, 84, 86 and 87 of the Patents Act, 1970, on compulsory licensing.

Brief facts

Bayer held a patent for Sorafenib Tosylate, marketed as Nexavar, used to treat kidney and liver cancer. Natco Pharma applied to the Controller of Patents under Section 84 for a compulsory licence, alleging that Bayer had not made the drug available at a reasonably affordable price, had not worked the patent in India, and had not met the reasonable requirements of the public. The Controller granted India's first compulsory licence in 2012, and the Intellectual Property Appellate Board largely affirmed that order. Bayer then filed a writ petition before the Bombay High Court challenging the Appellate Board's order.

Issues before the Court

1. Had Bayer failed to meet the reasonable requirements of the public within the meaning of Section 84(1)(a)?
2. Was the patented invention available to the public at a reasonably affordable price under Section 84(1)(b)?
3. Was the invention worked in the territory of India under Section 84(1)(c), given that Bayer imported rather than manufactured the drug locally?

Court's findings

The Court held that the grant of a patent carries a corresponding obligation on the patentee to work the invention in India and to make it available to the public at a reasonably affordable price, and that these obligations are integral to the statutory scheme of Chapter XVI of the Patents Act.

The Court held that Bayer's very limited sales figures demonstrated that the reasonable requirements of the public for the drug were not being met, and that the price at which Bayer sold Nexavar was not reasonably affordable to the Indian public when compared with the price at which Natco proposed to sell its generic version.

The Court held that working in the territory of India under Section 84(1)(c) requires local manufacture to a reasonable extent commensurate with demand, and cannot ordinarily be satisfied merely by importation, rejecting Bayer's contention that import alone amounted to working the patent.

Decision

Writ petition dismissed; the order affirming the grant of India's first compulsory licence to Natco Pharma for Sorafenib Tosylate under Section 84 was upheld.

Keywords

Compulsory Licence Public Health Reasonably Affordable Price Section 84 Working of Patent