AREA: Compulsory Licencing, Patents, TRIPS
FACTS:
Bayer Corporation is a global pharmaceutical company; it deals with the making of Aspirin drugs. Whereas Natco Pharma is an Indian pharmaceutical company that deals with the production and manufacturing of cheap and affordable drugs. The reason for the dispute between the two companies was a drug named Nexavar “Sorafenib tosylate” which is used to treat kidney cancer. This was the first case in India in which a compulsory license was granted to Natco Pharma for a Kidney cancer drug named “Nexavar”. Following the grant of the compulsory license, Natco was directed by the Controller to manufacture and sell the patented drug thereby paying a royalty at 6% of its net sales of the patented drug under its brand name, to the original patent holder. The drug was allowed to be sold at a price of Rs.8800/- for 120 tablets for a month-long treatment. The grant of compulsory licence to Natco was considered to be non-exclusive, non-assignable and for the balance term of the patent. Being aggrieved to the afore-mentioned order, the appeal was sought by Bayer before the IPAB who on 4 March 2013 had upheld the order dated 9 March 2012 of the Controller thereby granting the compulsory licence to Natco. The only difference that was noticed in the judgment was a rise in the royalty payable by Natco to the petitioner (6 to 7%] under its brand name.
ISSUES:
Whether Bayer Corporation had failed to abide by the reasonable requirements of the public with regard to the drug?
Whether Nexavar was made unavailable to the public at a reasonably affordable price, thereby making it inaccessible?
Whether compulsory licenses be granted to a generic medicine producer while the same is already patented and used by a registered user?
ANALYSIS:
The grant of compulsory licence reflects proof of the exception that has been introduced under the TRIPS agreement. In accordance with the patent laws in India, the provisions of compulsory licensing range from Sections 84, 86, 89 to 93.
The compulsory licence also helps in limiting the misuse of the monopoly rights that are attained by the patent holder upon being conferred with registration for his invention.
Natco Pharma argued that Bayer was failing in its arguments under Section 84 (b) of the Indian Patent Act, 1970. This was because the company was offering the drug at an unaffordable high price to the public thereby restraining access to the same.
The argument from the side of Bayer Corporation was that they believed that this whole trend of issuing compulsory licences violates Section 83 of the Indian Patents Act, 1970 as it degrades research and development.
Another prime contention raised by the respondent was a restriction in the process of research and development that will be initiated if a compulsory licence is given its way.
JUDGMENT:
The final judgement of the controller of the patents was to grant a compulsory licence to Natco Pharma for the drug “Nexavar”. The controller gave his judgement under Section 84 of the Patents Act of 1970 because Bayer wasn’t able to meet any of the requirements of the section. The first requirement given in Section 84 (1)(a) was not being fulfilled as the reasonable requirements of the public were not being fulfilled with regard to this drug. Each country has the right to grant a compulsory licence to benefit the general public.
The court observed that there would always be a play of Audi Alteram Partem i.e. both sides would be heard and the IPAB also stated that before filing for the compulsory licence both parties should make significant efforts and settle terms for a potential voluntary licence. The main problem wasn’t just granting compulsory licences to the third parties it was to ensure that in each and every circumstance the benefit of the people and the society is favoured.
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