Bayer Corporation v. Union of India, et al.

Bayer Corporation (Bayer) challenged the order(s) of 2012 and 2013 passed by the relevant statutory authority, the Controller of Patents (the Controller), granting a Compulsory License to Natco Pharmaceuticals Limited (Natco) of the drug Nexavar.

Bayer developed the drug to treat patients suffering from kidney cancer. In 2008, the Controller granted a patent to Bayer giving Bayer the exclusive right to make, manufacture, use, and sell the drug in India.

In 2008, Natco applied to the Controller under section 84(1) of the Patent Act 1970 for a compulsory license to make/manufacture and sell the drug in India. Natco’s application was on the basis that all the relevant conditions for the grant of a Compulsory License were fulfilled, i.e that the reasonable requirement of the public with regard to the drug was not being satisfied; that the drug was not available to the public as a reasonably affordable price; and that the drug was not worked in the territory of India.  In March 2012, the Controller granted a Compulsory License to Natco to make, manufacture and sell the patented drug.  Bayer challenged the Compulsory License in 2013, but the court upheld the order granted by the Controller.

Bayer filed a case in the High Court challenging the Compulsory License on the basis that the orders granted by the Controller were without jurisdiction.

The Court held that it had no reason to overturn the Compulsory License granted to Natco by the Controller. The Court reasoned that the Compulsory License should not be overturned for the following reasons:

• Natco had made efforts to obtain a voluntary license from Bayer under Section 84(6) of the Act.
• The reasonable requirement of the public for the patented drug had not been satisfied by Bayer. The court pointed to evidence that 8,842 patients could require the drug, but only 593 boxes of the medicine had been sold.
• Bayer was not making the medicine available to the public at a reasonably affordable price.
• In order for the drug to work in India, it did not necessarily need to be manufactured in India but could be imported.
• There was no merit in the assertion that the Controller should have stayed the application until Bayer had time to work the patented drug on a commercial scale in India.

The Court also held that with reference to Article 31 of Trade Related Aspects of Intellectual Property Rights (TRIPS), the patent holder had been granted adequate remuneration for the giving of the Compulsory License to Natco.

“[T]he total availability would be only for 5279 packets which even according to the figures of petitioner would not any where meet the annual requirements of the patients. Thus, the reasonable requirement of the public with regard to the patented drug has not been satisfied.” Para. 13(c).

“Whether the invention is being worked in territory of India has to be looked at through the prism of Section 83 of the Act which contains the legislative guidelines to govern the meaning of the words ‘worked in the territory’ of India… where a patent holder satisfies the authorities, the reason why the patented invention could not be manufactured in India then the patented invention can be considered as having been worked in the territory in India even by import.” Para. 15(b).