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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MOHIT S. SHAH AND M.S. SANKLECHA, JJ.
Bayer Corporation A Corporation Organized under the laws of the State of Indiana, Unites States of America 100 Bayer Road, Pittsburgh, PA 15059741, United States of America - Petitioner.
vs.
Union of India through the Secretary Department of Industrial Policy and Promotion Ministry of Commerce and Industry, Udyog Bhavan, New Delhi - Respondents.
Writ Petition No.1323 OF 2013
Decided on: 15 JULY 2014
(a) An application for compulsory licence can be made only after expiration of three years from the date of the grant of patent to the patent holder; and
(b) The applicant should have made an effort to obtain a voluntary licence of the patented invention from the patent holder on reasonable terms and conditions.
It is only on the satisfaction of the above two requirements that the controller can consider the application for compulsory licence. This application for compulsory licence must allege that all or any one of the following three conditions mentioned in Section 84(1) of the Act are not satisfied.
(i) reasonable requirement of the public for the patented invention is not being met; or
(ii) the patented invention is not available to the public at reasonably affordable price or
(iii) that the patented invention is not worked in the territory of India.
The condition (i) above would be deemed to have been met if the conditions set out in Section 84(7) of the Act are met. Section 84(7) of the Act inter alia lays down that where the supply of patented invention is not to an adequate extent and where the patent holder has refused to grant a voluntary licence to the applicant it would be deemed that the reasonable requirement of the public for the patented invention has not been met. So far as condition (iii) above viz., working in territory of India is concerned the same is to be decided having regard to the provisions of Section 83 of the Act. Section 83 of the Act provides general principles which one must have regard to while determining whether the patented invention is being worked in India. The factors to be regarded inter alia are whether the patented invention is being worked in India on a Commercial scale, the transfer of technological advances is taking place for mutual advantage of the producer and users of the technology knowledge. Besides the grant of patent should not enable the patent holder to enjoy a monopoly for import and the patent holder should not abuse his rights so as to adversely affect the transfer of international technology.
Patents Act, 1970 - Section 84 Grant of compulsory licence. In view of concurrent findings that efforts were made by applicant to obtain for voluntary licence, an application for grant of compulsory licence, allowed.
Patents Act, 1970 - Section 86 Adjournment of application for compulsory licence. An application for grant of compulsory licence, can be adjourned only on satisfaction of controller that patent holder has taken prompt steps to initiate working of patent in territory of India on commercial seals. It is only on the prima facie satisfaction of the Controller that the application will be served upon the patent holder as well as published in the official journal. On publication in the official journal, the patent holder (independently served) or any other person desiring to oppose the application could file their notices of opposition to the grant of compulsory licence). The Controller would thereafter hear the applicant and the opposition i.e. patent holder or any other person desiring to oppose application before passing the final order. In terms of Section 86 of the Act the Controller could adjourn an application for Compulsory Licence where the patent holder is able to satisfy the Controller that the patented invention is not being worked in the territory of India only because of insufficient time to enable the invention being worked on a commercial scale in India. However, the adjournment on the above ground by the Controller shall be for a period not exceeding 12 months and the adjournment will be granted only on satisfaction of the Controller that the patent holder has taken prompt steps to initiate the working of the patent in the territory of India on a commercial scale.
(Per M.S. SANKLECHA, J.)
This petition under Article 226 of the Constitution of India challenges the order dated 4 March 2013 passed by the Intellectual Property Appellate Board (Tribunal). By the impugned order the Tribunal upheld the order dated 9 March 2012 passed by the Controller of Patents (Controller) granting Compulsory License to M/s. Natco Pharmaceuticals Limited (Natco) under Section 84 of the Patent Act 1970 (the Act). This compulsory licence was in respect of the petitioner's patented invented drug Sorafenib Tosylate (compound of Carboxyaryl Substituted Diphenyl Ureas) sold under brand name Nexavar (patented drug).
2) This petition arises out of orders granting a compulsory license of the patented drug owned by the petitioner to Natco on application of the provisions of Chapter XVI and in particular Section 84 of the Act. The challenge of the petitioner is to the allowing of the application of Natco for compulsory licence and to the manner in which Chapter XVI of the Act and in particular Section 84 of the Act has been applied. We are informed at the Bar that it is for the first time after India became a signatory to Trade Related Aspects of Intellectual Property Rights (TRIPS) followed by the Doha Declaration in 2001 and the amendments to the said Act in 2003 and 2005 that the issue of compulsory licence has arisen for consideration before the authorities under the said Act and consequently also before this Court. The result of the examination of Chapter XVI of the Act and the manner of its application by the authorities under the Act would have far reaching impact as it would govern the issue of grant of compulsory license in respect of patented drugs.
I) Factual background
3) The bare facts necessary to consider the challenge in this petition are as follows:
a) The petitioner is a corporation incorporated under the laws of United State of America (USA). Consequent to its research and development (R & D) activities the petitioner invented and developed its patented drug to enable its administration to human beings. The patented drug is used in the treatment of patients suffering from Kidney cancer i.e. Renal Cell Carcinoma (RCC) and liver cancer i.e. Hepatocellular Carcinoma (HCC). The aforesaid patented drug acts more as a palliative i.e. relieves patients from pain and to an extent also slow down the spread of cancer by restricting the speed with which the cancer cells grow.
b) The aforesaid invention of the patented drug was done in USA. The patented drug is for treatment of Cancer of RCC and HCC. However, as the people suffering in America from the aforesaid cancer of RCC and HCC are rare/few i.e. less than 2,00,000 patients, the patented drug is classifiable as 'Orphan drug' in U.S.A. On classification of the patented drug as “Orphan drug”, in U.S.A. 50% of the amount spent by the petitioner on research and development of the patented drug is reimbursed to the petitioner by the Government of U.S.A.
c) On the successful invention of the patented drug in 1999, the petitioner applied for a patent in U.S.A. Thereafter, on 12 January 2000 the petitioner applied for an international patent under the Patient Cooperation Treaty (PCT) and on 5 July 2001 applied in India for grant of the patent to the patented drug in India. On 3 March 2008 the office of the Controller granted the petitioner's application dated 5 July 2001. This patent granted in India on 3 March 2008 corresponded to the patent granted to this patented drug in over 45 countries of the world.
d) As a consequence of being granted a patent, the petitioner had exclusive right to make/manufacture, use and sell the patented drug either by itself or through its licensee to the exclusion of all others for a period of 20 years from the date of its application. Thus, the petitioner had exclusive right to prevent third parties from making/manufacturing, using, selling or importing the patented drug in India without the petitioner's permission/license. This
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