S. Ravindra Bhat, J.

This judgment will decide two appeals: one from the decision of the learned single judge in a writ petition, W.P.(C) No.1971/2014 ["the writ petition"], filed by the appellant [hereafter called "Bayer"] against the respondent (hereafter "Natco") in LPA No. 359/2017 and the other, in a suit decided in CS (OS) (Comm) 1592/2016 filed by Bayer against the respondent in RFA(OS)(Comm) 6/2017 (Alembic Chemicals Ltd, the defendant in the suit, hereafter called "Alembic"). Both judgments deal with an identical issue, concerning the correct interpretation of Section 107A of the Patents Act, 1970 ("the Act") which is commonly known as the "Bolar provision".

2. Facts in the appeal arising out of the judgment in the writ petition (i.e. in LPA No359/2107) are that Bayer filed a suit [CS(OS) No.1090/2011] for injunction against Natco from making, importing, selling, offering for sale "Sorafenib", 'Sorafenib Tosylate' ("Bayer drugs") or any generic version or any other drug or product thereof which was a subject matter of Bayer's Patent No.215758. When the suit was pending, Natco applied to the Patent Office for grant of compulsory licence against that patent. This application was granted, on 09.03.2012, by the Patent Controller, under Section 84 of the Patents Act 1970 (hereafter "the Act"). The compulsory licence granted was solely for the purposes of making, using, offering to sell and selling the drug covered by the patent within the territory of India. However, inter alia, apart from producing the drug for the Indian market, Natco manufactured the product covered by the compulsory licence for export outside India. Bayer filed a writ petition seeking a direction to the Customs Authorities to seize the consignments for export containing products covered by compulsory Licence including 'Sorafenat' ("Natco" drugs hereafter) manufactured by Natco. Notice of writ petition was issued by a learned single judge of this court; the customs authorities were directed to ensure that no consignment from India containing 'Sorafenat' covered by compulsory licence was exported. At the same time, Natco was given the liberty to apply to the court for permission to export the drug. Later, on 23.05.2014, Natco pointed out that in fact it has already been granted a drug license and it was permitted to export the drug Sorafenib Tosylate not exceeding 15 gm for development/clinical studies and trials.

3. Natco next applied for permission to export 1 Kg of Active Pharmaceutical Ingredient (hereafter "API") Sorafenib to China to conduct clinical studies and trials for development of drug for regulatory purposes. That application was rejected by Bayer, which argued in its writ petition, that if permission were granted to Natco, it would be contrary to Section 107A and that such a transaction would be a commercial sale and hence, a patent infringement. According to Bayer, Section 107A was not applicable, because Natco was not conducting research. The sale of API, therefore, amounted to infringement of its patent. Bayer's interpretation of Section107A was that the provision mentions the word "sale" and also "import", but the legislature consciously excluded the term "export". Bayer relied on a German decision Polpharma as well as the US history of the Bolar Exemption (that allows sale only within the United States) and canvassed a restricted - as opposed to a liberal interpretation- of Section107A.

4. Natco'S counter affidavit in the writ petition among others urged that it did not export the finished product Sorafenat to any party outside India for commercial purpose. It further argued that the words "sale" for the purpose of drug development i.e. "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" clearly pointed to the legislative