1. The question for adjudication in both the proceedings is, whether the language of Section 107A of the Patents Act, 1970 permits export from India of a patented invention, even if solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product.

2. W.P.(C) No.1971/2014 was filed seeking a mandamus to the Customs Authorities to seize the consignments for export containing products covered by Compulsory Licence including ‘SORAFENAT’ manufactured by respondent No.5 therein Natco Pharma Limited (Natco) and further seeking a direction to all the Customs Ports to not allow exports thereof.

3. It was the plea of the petitioner Bayer Corporation (Bayer) in W.P.(C) No.1971/2014 (i) that Bayer had filed CS(OS) No.1090/2011 for restraining Natco from making, importing, selling, offering for sale ‘SORAFENIB’, ‘SORAFENIB TOSYLATE’ or any other drug comprising ‘SORAFENIB’, ‘SORAFENIB TOSYLATE’ or any generic version of ‘SORAFENIB’, ‘SORAFENIB TOSYLATE’ or any other product subject matter of Bayer’s Patent No.215758; (ii) that Natco, during the pendency of the suit approached the Patent Office for grant of Compulsory Licence against the said patent; (iii) that the Controller of Patents vide order dated 9th March, 2012 granted Compulsory Licence in Patent No.215758 under Section 84 of the Patents Act to Natco on the terms and conditions contained therein; (iv) that one of the said terms was that the Compulsory Licence was “solely for the purposes of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the territory of India”; (v) that Natco was however manufacturing the product covered by the Compulsory Licence for export outside India; (vi) that the export by Natco was contrary to the terms of Compulsory Licence and amounted to infringement of the patent within the meaning of Section 48 of the Patents Act.

4. Notice of W.P.(C) No.1971/2014 was issued and vide order dated 26th March, 2014 therein, the Customs Authorities were directed to ensure that no consignment from India containing ‘SORAFENAT’ covered by Compulsory Licence was exported; however liberty was given to Natco to apply to the Court for permission to export the drug as and when it obtained permission from the Drug Controlling Authority for clinical purposes. Subsequently, on 23rd May, 2014, Natco pointed out that in fact it has already been granted a drug licence and with the consent of the counsel for Bayer, Natco was permitted to export the drug SORAFENIB TOSYLATE’ not exceeding 15 gm for development/clinical studies and trials. Natco again applied for permission to export 1 Kg. of Active Pharmaceutical Ingredient (API) SORAFENIB to China for the purposes of conducting development/clinical studies and trials. The said application was contested by Bayer.

5. Natco filed a counter affidavit in the writ petition inter alia pleading (a) that Natco had not exported any products subject matter of Compulsory Licence; the exports of which instances were given by Bayer were by third parties without notice, consent and knowledge of Natco; (b) that under the scheme of the Drugs and Cosmetics Act, 1940 (Drugs Act) permission is routinely granted for export of API to various countries upon compliance of certain conditions; there are similar provisions in the western countries as well including Europe; (c) that the Patents Act also provides that export of a patented product for generation or submission of regulatory permission is not an act of infringement; (d) that the export for which permission was sought by Natco from Court was also for regulatory purposes; (e) that such exports are not at all covered by the Compulsory Licence; (f) that the activity of conducting studies for regulatory approval is squarely cov