By - GIIP: A pioneer Institute in IP Training | IP Courses | IP Education | IP Program
India’s first compulsory licence has
been granted by the Indian Patent Office to Hyderabad-based drug-maker, Natco.
The compulsory licence allows Natco to manufacture the active ingredient as
protected by Bayer’s patent on Sorafenib
Tosylate, IN 215758
(granted in 2008).
Bayer’s
drug Nexavar, containing active ingredient, Sorafenib Tosylate, was first
launched in 2005 for the treatment of Kidney Cancer which, later, in 2007, also
received approval for the treatment of Liver cancer. Nexavar, although is not a
life saving drug, has shown to extend life of a patient for around 4-5 years in
kidney cancer and around 6-8 months in liver cancer.
Bayer
had received the approval for importing and marketing the drug in India in 2008 and had always been marketing the
drug in India
by importing the drug. Natco received DCGI licence to market the drug in India, in April
2011. Subsequent to Natco receiving DCGI licence, Natco had approached Bayer to
seek a voluntary licence for manufacturing and marketing the drug in India. Natco’s
request for voluntary licence never materialized, following which Natco filed
for a compulsory licence in July 2011.
LANDMARK JUDGMENT
The 62-page judgment by the
Controller of Patents (Mr. P.H. Kurian), under the amended Indian Patents Act
(2005), allows Natco to make and sell a similar version of Bayer's Nexavar in India. The
judgment reasoned that the patent-holder, Bayer, had not met the reasonable
requirement of the public. It had not “worked the patent” or manufactured it to
a reasonable extent in India.
Also, the drug was not available at an affordable price. With the compulsory
licence granted, Natco will have to pay Bayer a royalty fixed at six per cent
of net sales, every quarter. The order
also makes it obligatory for Natco to supply the drug free of cost to at least
600 needy patients per year.
COMPULSORY LICENCE
A compulsory licence is an
authorization granted by the government in accordance with the grounds
described under section 84 of the Indian Patent Act, 1970.
Section 84(1) of the Indian
Patent’s Act allows any interested person to make an application to the
Controller for grant of compulsory licence on a patent after the termination of
three years from the date of grant of the patent on any of the following
grounds:
(a) that the reasonable
requirements of public with respect to the patented invention have not been
satisfied, or
(b) that the patented invention is
not available to the public at a reasonably affordable price, or
(c) that the patented invention is
not worked in the territory
of India.
REASONING BY THE CONTROLLER
The Controller gave his reasoning
separately on each of the above grounds and concluded that all the grounds are
satisfied in granting a compulsory Licence against Bayer. Following are the
reasoning cited by the controller:
84 (1) (a): Reasonable
requirements of public are not satisfied
Controller noted that the drug is
available to little above 2% of the eligible patients in India and thus reasonable
requirements of the public are not satisfied. One of the reasons given by Bayer
for lesser sales of the patented drug by Bayer in India was that Cipla makes a
similar infringing drug for Indian market at a lesser price. However, The
Controller did not take this into consideration saying that the demand in the
market for the patented drug has to be fulfilled by the patentee and not a
third party. The Controller stressed on the fact that Form 27 (Working of
invention statement) filed by Bayer in 2009 and 2010, show only an
insignificant quantum (only Rs. 2 Crore for 2009) of possible sales for the
eligible patients.
84 (1) (b): Non-availability at
reasonably affordable price
The drug by Bayer has to be taken
by the patient throughout his lifetime and the cost of therapy is Rs.
2,80,428/- per month and Rs. 33,65,136/- per year. The applicant submitted that
the price of the patented product is too high and simply not affordable by
common man making the product inaccessible and out of reach. The applicant
further said that it is an abuse of monopolistic rights and such a practice is
unfair and anti-competitive. The
patentee argued that the price includes the R&D costs as well as it pays
for the pipeline (for future innovation). Also, “reasonableness” is a relative
term which needs to be interpreted as per circumstances. “Reasonably” should
mean reasonable to the ‘patients’ and ‘patentee’ as well. The Controller after
going through all evidences said, “I am of the view that reasonably affordable
price has to be construed predominantly with reference to the public… I
conclude beyond doubt that the patented invention was not available to public
at a reasonably affordable price and that Section 84(1)(b) of The Patent Act,
1970 is invoked in this case”
84 (1) (c): Non-working in the territory of India
The Controller after consulting
the international agreements on intellectual property including TRIPS,
Paris convention and the Indian Patent Act, concluded that Bayer failed to work
on the patent in the territory
of India. He further
said, “In the instant case, the Patent was granted in the year 2008. It is an
admitted fact that the Patentee does have manufacturing facilities for
manufacturing drugs in India,
including oncology drugs. However even after the lapse of four years from the
date of grant of patent, the Patentee failed to do so. The Patentee has also
failed to grant a voluntary licence on reasonable terms to anyone including the
Applicant herein to work the invention within the territory of India.
Accordingly, I hold that Section 84(1)(c) is attracted in this case..”
ORDER
The Controller granted a
compulsory licence under Section 84 of Indian Patent Act, 1970 to M/s Natco
Pharma Ltd., Hyderabad
for Bayer’s Patent IN215758 on 9th of March 2012. Natco’s compulsory licence
would make the drug available to public at a much reduced price. The drug which
costs patients around Rs. 2.8 Lakhs/ month through Bayer, would now be
available to public at just around Rs. 8800/month.
IMPACT
This grant of compulsory licence
will trigger other companies to file their applications against patented
products of MNCs in same lines. Also, this decision may make the MNCs to
consider the differential pricing structure for selling drugs for different
(rich/intermediate/poor) segments of people in India. This decision will
definitely have positive impacts on the patients suffering from kidney and
liver cancers in India,
who were not able to afford high treatment cost previously.
Incidentally, this was Mr.
Kurian’s last assignment. He has now handed over the charge of The Controller
at Patent Office to Mr. Chaitanya Prasad.
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