On March 9, 2012, the Indian generic pharmaceutical industry got
a shot in the arm when Indian Patent Office, by invoking the
compulsory license (CL) provisions of the Patents Act, allowed
NATCO PHARMA LTD, an Indian generic drug manufacturer to
manufacture and sell generic version of the blockbuster cancer drug
Sorafenib Tosylate (sold as Nexavar) patented by the German health
care giant, BAYER CORP. The Patent Controller held that the sales
of the drug, exorbitantly priced at about Rs. 2,80,000 for a
month's treatment, constitutes a fraction of the requirement of
the public and therefore, logically deducting, the drug was not
bought by the public due to only one reason i.e. its price was not
reasonably affordable to them. While granting the CL to Natco, the
Patent Controller imposed certain conditions. This included that
the price of the drug shall not exceed Rs. 8,880 for a month's
treatment, and that the licence is non-exclusive and
non-assignable. In addition, Natco must pay royalty at the rate of
6 per cent on net sales, manufacture on its own and sell only in
India, and supply the drug free of cost to 600 needy and deserving
patients each year. Predictably, Bayer appealed against the order
before Intellectual Property Appellate Board (IPAB).
Meanwhile, CIPAL Ltd, the Mumbai-headquartered generic drug
maker slashed the price of its generic version of Sorafenib
Tosylate to offer the drug at Rs. 6840 for a month's treatment
(cheaper than Natco). According to information, Bayer said
CIPLA's new price "will render Natco's price
unreasonable and defeat the purpose of compulsory
Both the parties, as observed by the two-member bench of IPAB,
Justice Prabha Sridevan, and DPS Parmar, Technical Member
(Patents), Bayer and Natco advance their arguments as if they were
arguing the appeal itself, however the Board concerned itself only
with the stay petition and therefore the Board dealt with them only
on a prima facie consideration. The main weapon in Bayer's
armour was reliance on CIPLA's to meet both the affordability
and the reasonable requirement test. However Bayer's contention
that CIPLA adequately supplying the drug at a reasonably affordable
price (lower price than fixed by the Compulsory License order for
Natco) does not warrant grant of compulsory license as public
interest is not being jeopardized, did not find favour with the
Board. It viewed the argument as taking shelter under CIPLA's
It is pertinent to note here that CIPLA is already facing an
infringement action by Bayer, which is pending adjudication before
Delhi High Court. The Board in pertinent part thus observed
..........Though the appellant is fighting CIPLA tooth and nail
before the Hon'ble Delhi High Court, it took great pains to
urge before us that CIPLA's presence was a legal presence. The
presence of CIPLA is subject to the outcome of the suit where the
appellant alleges that CIPLA is infringing its invention. It is
true that the Hon'ble Delhi High Court refused to grant
injunction, but the issue of infringement by CIPLA will be decided
at the end of trial. Further, CIPLA is not bound by any condition
that is prescribed for NATCO by the Controller General under
section 90 of the Patents Act. Tomorrow, CIPLA may withdraw its
product, Soranib for commercial reasons of its own. It is for the
appellant/patentee to show that it has fulfilled the obligation
under the grant of patent and therefore, its right should be
Dismissing the stay petition, the Board, being mindful of the
right of access to affordable medicine, held the view that to grant
stay at this juncture would jeopardize the interests of the public
who need the drug at the later stage of the disease.
With this preliminary view of IPAB, it is not difficult to
foresee the fate of Bayer's appeal against the Compulsory
License order, however it will be interesting to see in what way
IPAB speaks it out.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This article enunciates the recent, much awaited, and landmark judgment delivered on September 16, 2016 by Hon'ble Delhi High Court throwing light on the important provisions of the Copyright Act, 1962.
Department of Industrial Policy and Promotion recently issued an office memorandum pursuant to receiving representations from various stakeholders for guidance with respect to the applicability of the provisions of Section 31D of the Copyright Act, 1957.
An Invention Disclosure Form is the documentation of the invention. This is a means to document particulars of your invention and submitting it to the patent attorney who is filing your patent application.
The Patents Act 1970, along with the Patents Rules 1972, came into force on 20th April 1972, replacing the Indian Patents and Designs Act 1911. The Patents Act was largely based on the recommendations of the Ayyangar Committee Report headed by Justice N. Rajagopala Ayyangar. One of the recommendations was the allowance of only process patents with regard to inventions relating to drugs, medicines, food and chemicals.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).