India: Compulsory Licence Decisions: A Comparative Study Of Facts

Last Updated: 4 March 2014
Article by Swati Varshney

It is now been almost two years the first compulsory license was granted by the Controller General of India to Natco Pharma Ltd., an Indian generic drug manufacturer. The first application for Compulsory License under Section 84(1) of The Patents Act 1970 was filed on July 29, 2011 in respect of the Patent No. 215758 granted on March 03, 2008 to Bayer Corporation., a US based company for the salt 'Sorafenib tosylate', sold under the brand name NEXAVAR for the treatment of the advanced stages of kidney and liver cancer.

The applicant Natco Pharm Ltd., approached the Patentee with a request for a voluntary license to manufacture and sell the drug as per requirements prescribed in Section 84 of the Indian Patents Act, 1970 the, which did not materialize. The Applicant proposed to sell the drug at a price of Rs.8800/- for one month therapy as compared to the price of about Rs.2,80,428/-, which was being charged by the Patentee at the time of making the Application.

Since at the time filing first application for CL, the three years from the date of grant of Patent had already been lapsed and the Applicant was also a person interested within the meaning of the Act. Upon arriving at a conclusion that a prima facie case under Section 87(1) of the Act has been established, vide Controller General's (CG) order dated August 9, 2011. After a series of procedural events and a three day hearing, the CG found in favour of Natco on all counts and issued a license in their favour. India's first CL was granted to Natco Pharm Ltd., by an order dated March 9, 2012. The Patentee Bayer Corporation was disappointed with the said decision, therefore filed an Appeal against the Controller General decision before the Intellectual Property Appellate Board (IPAB) on May 4, 2012. On March 4, 2013 the Intellectual Property Appellate Board (IPAB) issued their order and upheld the country's first compulsory licence. The only benefit the Patentee got from IPAB decision is hiked in royalty from 6 per cent to 7 per cent.

Inspired by the decision of the Controller General of Patents as well as the IPAB, a Mumbai-based BDR Pharmaceuticals had filed an application for CL on the very same day of the IPAB decision in favour of Natco (4th March 2013), under Section 84 of the Patents Act, 1970, with Patent Controller's office in Mumbai, seeking the grant of a compulsory licence for patent number 203937 granted to Bristol Myers Squibb (BMS) on November 16, 2006 for the drug Dasatinib used in the treatment of a chronic myeloid leukaemia (CML) patient. In its application, the BDR Pharmaceuticals had assured that the drug Dasatinib will be made available to the public at a proposed price of Rs.135 per tablet working out to Rs.8100 per month for the treatment of a chronic myeloid leukaemia (CML) patient which as compared to patentee's rate was very less to the patient.

As per the requirements of section 84 of the Indian patents Act 1970, BDR initially sent a request for a voluntary license to BMS, a multinational pharma company that owned the patent over Dasatinib, an anticancer drug on February 02, 2012. BMS responded with a series of questions (such as whether BDR had the necessary wherewithal to produce good quality API etc.) on March 13, 2012. BDR did not answer any of these queries, but filed a CL application on March 04, 2013 i.e. after a year of its initial request for voluntary licence.

Under Indian patent law, a CL applicant must first attempt to procure a voluntary license from the patentee. If this attempt does not succeed ordinarily within 6 months (as prescribed by the Indian Patent Law) of the initial request, the applicant is free to file a CL application.

In the notification dated May 04, 2013 issued by the Controller General that upon consideration a prima facia case under section 87 has not been made out for the application for CL under section 84 of the Act. Since, the applicant has not negotiated in good faith with the patentee in the prescribed time under the Indian patents Act. On receiving this notification, on May 10 2013 and May 13, 2013, the applicant replied to the patentee letter dated March 13, 2012 as well as replied to the Controller's notification and requested for hearing, respectively. The applicant also filed petition(s) for condonation of delay in responding procedural irregularities. After filing written submissions followed by other procedural actions a formal Hearing was held on September 16, 2013.

After the Hearing, the Controller General of Patents, Chaitanya Prasad has issued an order dated 29-10-2013 stating that the applicant did not follow the scheme of the law as well as the procedure mandated by the law. It has been held that BDR had not really made any sincere attempt to procure a CL and therefore could not be said to have satisfied the statutory requirement prescribed under the Indian Patents Act. The application was dismissed at the threshold itself. The application for compulsory licence, along with all the petition(s) for condonation of delay/irregularity, is hereby rejected, Controller General of Patents, Chaitanya Prasad, in his order dated October 29 2013.

After the first Compulsory License issued in favour of a Generic company, the Indian Patent office gained a negative impression internationally and alleged to be worked under impression of Government of India, since the Controller General of Patents comes under Ministry of commerce and industry, Department of Industrial policy and promotion. Now the second order of Controller General of Patents rejecting an application for CL has been issued which overturns the impression posed by the India's first CL.

These two orders issued by the Controller General of Patents came in difference of one and half years, are contradictory in nature. On analysing the facts of both the matters we can see the decisions in both the cases are purely based on the facts and requirements prescribed under Section 84 of the Indian Patents Act, 1970 and not under influence of any Governing body. In future, companies seeking a CL should demonstrate that there were adequate negotiations done by companies with the innovators for seeking a voluntary licence.

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

Click to Login as an existing user or Register so you can print this article.

Swati Varshney
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.