Bayer Vs Union of India-- Compulsory License Vs Voluntary License - Public Interest
Channel: R V Seckar
Date: 2020-07-01

BAYER Vs Union Of India  – Whether Compulsory Patent Licence can be Issued to an Indian Manufacturer against the Patented Product in the Public Interest? 
Introduction
 For the first time, after India becomes signatory to TRIPS the issue of compulsory licensing had tabled before the concerned authorities for consideration in the case of Bayer Corporation v Union of India. This was the first case where compulsory license was issued under Section 84 of Patents Act, 1970.


Facts of the Case


Petitioner Bayer Corporation was granted a subject patent by India’s Patent Office on 3rd March 2008 for their drug “Sorafenib Tosylate”that is sold in market under the name of Nexavar. The drug is used in the treatment of liver and kidney cancer. The Indian drug making company Natco approached the petitioner Bayer Corporation for grant of voluntary license to produce and sell the drug in India under its brand name at a price of Rs. 10,000 per month as against the expensive price of Rs. 2,80,428 per month that was charged by petitioner. Petitioner rejected the Natco’s application for grant of voluntary license of their drug Nexavar.
To Grant a Compulsory Licence
The patented drug can be manufactured and sold by the third party if the patent holder has granted permission for it.  After the denial of voluntary license Natco lodge an application under Section 84(1) of the Patents Act, 1970[3] to the Controller general of patent to get a compulsory license to manufacture and sell the Nexavar in India. 
Finally, on 9th March, 2012 Controller granted a non-exclusive, non-assignable compulsory license to Natco to manufacture and sell the patented drug at a price of Rs. 8,800 and also directed them to pay the royalty 6% of its net sales to petitioner Bayer till the time of patent.
Bayer Appeal Against IPAB Order
Aggrieved by it, Bayer appealed against the order of compulsory license in 2013 in IPAB intellectual property appellate board contending that the order passed was in contravention with the Patents Act. Board rejected the contention of Bayer and upheld the of Controller general of patents. Finally, Bayer challenged both the orders of 2012 and 2013 passed by the Controller general of patent and by the IPAB , on the issue of granting a compulsory license to the Natco in the Bombay High court.


Issues of the case


1] Whether the Compulsory license granted by controller is in accordance with the provision of Patents Act?


2] Did the respondent Natco make efforts to obtain voluntary license from patent holder Bayer Corporation?


Rules applied


1]Section 83: General Principle applicable to working of patented inventions


2] Section 84: Compulsory license




Analysis
The fundamental objective behind the Patent Rights is to safeguard the interest of inventor with respect to public interest. In the case at hand the personal right were superseding in the name of Patents right as patent holder were selling drugs at a much higher price.


The main issue in the case at hand is about the issuance of compulsory licensing. In granting the compulsory license all the requirements under the provisions of Patent Act were fulfilled by the Controller general of Patent for granting the compulsory license to Natco. The provisions which were analysed by the court is clause (a), (b) and (c) of Section 84(1)[9] of the Patents Act, 1970 for granting compulsory license.
Compulsory Licensing
The conditions for granting the compulsory licensing is fulfilled and the Natco’s application for compulsory licensing mentioned the issues on which the petitioner were lacking i.e. the drug was not satisfying the reasonable requirement of public with regard to its various factors, the drug was not working in the territory of India here it means the drug must be manufactured to a reasonable extent in India comprising the R&D also,on this point the court took into instance the meaning of words ‘worked in the territory of India’, Section 83(f) of the Act states that there should not be abuse of patent by patent holder in International trade. 


Whether there is a Lacunae in the Judgement ?
The patent holder were abusing his patent rights by charging too much for medicine but they also contended about R&D cost what about that, this might be a lacunae in judgment but it does not provide a strong contention to claim that judgement is not right .
High Court observed that the Articles from TRIPS agreement were not completely taken into consideration and they were superseded by the legal framework of country and court interpreted the Articles of TRIPS in literal sense and not in purposive one, but here also court took a note on Article 31of TRIPS. Under the TRIPS Agreement, governments can make limited exceptions to patent rights, provided certain conditions are met.The decision by court is a win for Natco and a slight disadvantageous to Barley corporation


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