India: Compulsory License: The Most Happening Section Of The Patents Act, 1970

Case review: Lee Pharma vs. AstraZeneca’s ‘Saxagliptin’

In a year 2012, when Patent office issued India's first Compulsory license (CL) to Natco for Nexavar - sorafenib tosylate, Indian Patent law has gained lot of importance worldwide. Some countries are against the decision of granting of CL and some are in their favour. Pertinently, at the stage of grant of CL, India has faced lot of challenges among Pharma industry mainly on the issues of Intellectual Property. Grant of Natco compulsory license has brought a new hope in the Pharma industry and in the country where high prices of life saving drugs are just meant for few wealthy patients and not to the poor and needy.

The article will throw light on the laws prevailing with respect to the Compulsory license in Patents Act, 1970 and the reasons stated by the Controller in light of Section 84 of the Patent Act, 1970 for holding the CL application made by the Lee Pharma.


Compulsory licenses are generally defined as "authorizations permitting a third party to make, use, or sell a patented invention without the patent owner's consent." Under Indian Patent Act, 1970, the provision with regard to compulsory licensing is specifically given under Chapter XVI. The conditions which need to be fulfilled in order for a compulsory licence to be granted are laid down under Sections 84 and 92 of the Act. As per Section 84, any person who is interested or already the holder of the licence under the patent can make a request to the Controller for grant of Compulsory Licence on patent after three years from the date of grant of that patent on the existence of conditions mentioned in the Section 84 of the Patents Act, 1970. While granting the compulsory licence, the Patent office will take into account few measures such as the nature of the invention, any measures already taken by the patentees or any licencee to make full use of the invention, ability of the applicant to work the invention to the public advantage and time elapsed since the grant of the patent i.e. worked or not worked.


Section 841:

(1) At any time after the expiration of three years from the date of the grant of a patent, any person interested may make an application to the Controller for grant of compulsory licence on patent on any of the following grounds, namely:—

(a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or

(b) that the patented invention is not available to the public at a reasonably affordable price, or

(c) that the patented invention is not worked in the territory of India.


After the successful grant of CL to Natco, many Pharma companies are now trying to grab the benefit of Compulsory licenses in order to make highly expensive drugs at a very low price and easily accessible to public.

Recently, Lee Pharma, a Hyderabad based Indian Pharma Company, filed a Compulsory Licensing (CL) Application for selling and manufacturing the compound on June 29, 2015 at the Patent office, Mumbai. The CL was filed against one of the patented drug 'Saxagliptin' protected under the Patent number 206543 in the name of AstraZeneca with tile as "A CYCLOPROPYL-FUSED PYRROLIDINE-BASED COMPOUND". As informed the 'Saxagliptin' was used for treating Type II Diabetes Mellitus.

Section 84(1) of Patents Act 1970 states that after the expiration of three years from the date of grant of patent any person may make an application for grant of compulsory licence on three grounds - the reasonable requirements of the public have not been satisfied or the patented invention is not available to the public at an affordable price or the patented invention is not worked in the territory of India3. According to the notice issued by the Patent office in August, 2015 the Controller has informed that the Lee Pharma failed to make out prima facie case for the CL application. Various reasons have been mentioned by the Controller where the Lee Pharma has failed to be as prima facie in the said CL application.

Earlier in the year 2014 Lee pharma has requested the AstraZeneca for license of the patented drug 'Saxagliptin'. The AstraZeneca then replied in response to the Lee pharma letter and provide the clarification for not giving any license along with the details of the availability of said drug. Further for not receiving the appropriate reply from the AstraZeneca, despite of the fact that AstraZeneca has send the email reply to Lee and Lee pharma was in fact that no reply has been received from AstraZeneca, the Lee pharma send many reminders to AstraZeneca and later approached to the Patent office for seeking the grant of compulsory license.

As per the Controller's decision in holding the application, the first request for license made by the Lee pharma to the AstraZeneca, was more than 13 months prior to the filing of the application at the Patent office. As per the time frame mentioned in section 84(4) of the Patents Act, 1970 is 06 months which has elapsed in the subject case without any efforts being successful. This is the first reason for holding the CL application of Lee pharma and denied the request.

As per the Section 84(1)(a) where reasonable requirements of the Public with respect of Patented invention has not been satisfied, in view of this, the Controller stated that the Prima facie case has not been made out by the Applicant to the effect that Lee pharma was unable to make out the reasonable requirements of the Public with respect of Patented invention. The Controller has noted the presence of equally efficacious DPP-4 inhibitors that can be substituted for Saxagliptin in treating Type II Diabetes Mellitus, and found that it was impossible for Lee to make assumptions about the demand for Saxagliptin without accounting for these substitutes4. This is the second reason for holding the CL application of Lee pharma and denied the request for CL.

Further the Lee pharma has also failed to Prima facie show that the patented invention is not available to the Public at a reasonable affordable price and thus no case has been made in such respect. This reason of Controller has been guided by the Bayer vs. UOI5 where the price difference quoted by the applicant and respondent was very high. i.e. Rs. 2,84,000 and Rs. 8,800 whereas in the present case, the price quoted by the Lee pharma was marginally cheaper than AstraZeneca's and thus the Controller has been unable to find that the patented product is not available at an affordable price as per Section 84(1)(b) of the Patents Act, 1970. Lastly as per Section 84(1) (c) of the Patents Act, the Lee pharma again failed to Prima facie show that the Patented invention is not worked in the territory of India and thus the reason for upheld the CL application for 'Saxagliptin' in India. In this section the Controller cited Bayer CL case where it was mentioned that local working does not entail local manufacturing in all cases. According to Controller, the patentee is only obligated to furnish reasons that make it prohibitive to manufacture the product locally, and that even this requirement holds particularly in those situations where the patentee possesses manufacturing capabilities in India. The Controller also held that in the absence of any data concerning AstraZeneca's local manufacturing capability provided by Lee pharma, they cannot accept that a prima facie case under this provision has been made out.


In reviewing the compulsory license case, there is one more section which is very important for the CL in India. Section 146(2) of the Patents Act, 1970 read with Rule 131 of the Patent Rules, 2003 compels every patentee and her licensee to make an annual disclosure as to how far and to what extent they have commercially worked their patent6. In this respect recently Delhi High Court issued notice to the Government of India in a PIL (Public Interest Litigation) filed by the petitioner7. This notice has been issued because most of the major pharma MNC's routinely violate patent working norms and the Indian Patent office has not taken any step in violating such norms to these companies. Before going further, there is a need to understand how section 146 related to the compulsory license. As per section 146(2) of the Patents Act, 1970 every patentee and her licensee has to make an annual disclosure as to how far and to what extent they have commercially worked their patent in India or abroad.


(1) The Controller may, at any time during the continuance of the patent, by notice in writing, require a patentee or a licensee, exclusive or otherwise, to furnish to him within two months from the date of such notice or within such further time as the Controller may allow, such information or such periodical statements as to the extent to which the patented invention has been commercially worked in India as may be specified in the notice.

(2)Without prejudice to the provisions of sub-section (1), every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India.

(3)The Controller may publish the information received by him under subsection (1) or sub-section (2) in such manner as may be prescribed.

In our Patent laws section 146 i.e. working statement plays an important role at the time of compulsory licensing cases. With the help of working statement [which are required to be filed before the expiration of 31st March of every year] the details provided by the Patentee or their licensee one can estimate whether the patentee has fulfilled the reasonable requirements of the public by interalia selling the patented product at an affordable price or at higher price violating the section 84 (1)(b) of the Patents Act. This information played a critical role in the Lee Pharma Ltd. Versus AstraZeneca and Bayer vs. Natco compulsory licensing dispute, where these details helped the Controller in getting the decision related to grant or rejection of Compulsory license when applied. In the first grant of CL application, Natco obtained the details from the working statement filed by the Bayer that its super expensive patented drug for kidney/liver cancer was reaching just about 2% of the patient population and sold at a very high price violating the section 84 norms of the Patents Act.

In this way, if the patentee fails to fulfil this important statutory information, the penalty in the form of compulsory licensing and revocation of Patent will come and this will take such companies in loss of Patent and also it is impossible to determine whether a patentee has satisfied the reasonable requirements of the public, an important precondition for compulsory licensing in India.


It is believed that this era will bring more challenges in terms of grant/ rejection of CL for more patented drugs. More rivalry is yet to be seen between Indian pharma giants and larger MNCs. The functioning of Indian Patent office in dealing with CL case will also bring more clarity about the future of CL in India and the rules prevailed such laws in India.

In the present case, it is to be understood that the Controller has not fully denied the CL application of Lee pharma rather the Controller has only inform the Lee pharma that they have not made out the prima facie case for the order under Section 84. As per the notice issued by the Controller, under Rule 97 (1), Lee pharma has one month from the date of notification to request for the hearing, if it wants to proceed with the application and if request for hearing is not made, Controller shall refuse the application.

Now it's time to watch how Lee Pharma prepare them for Grant of India's 2nd CL, the Controller's final decision in grant or rejection of such compulsory license and the impact of petition filed in respect of non submission of working statement details to those companies who are not following the proper submission of working disclosures.









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.

Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
Singh & Associates
Singh & Associates
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
Singh & Associates
Singh & Associates
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions