PHARMA LICENSING


(approximately US $185) for a month’s dose of 120 tablets; and to distribute its drug free of charge to at least 600 disadvantaged patients each year. All the while Natco is to ensure that its product is distinct from Bayer’s drug in the market and that production is restricted to its own manufacturing facilities (with no window for outsourcing or importation, etc). Bayer, in turn, has been afforded the liberty to grant licences to third parties.


In the present circumstances, inconceivable though it may be that Natco would fritter away this unprecedented compulsory licence, Bayer may do well to ensure that its patent is indeed worked, as another two years of non-working will give rise to the threat of revocation actions being filed by any interested party.


Te patent office’s order is appealable before the Intellectual Property Appellate Board. Whether Bayer will exercise this option remains to be seen, primarily in the context of the patent office upholding all three grounds argued by Natco.


India fulfilled its TRIPS obligations in 2005 by allowing product patents in all fields of technology. However, there were many challenges aſter the dawn of the product patent regime. With the statute containing provisions for compulsory licensing, the test of these provisions with respect to pharmaceutical patents in India was a story waiting to unfold. Te message for patent holders, especially pharma patent holders, cannot be clearer: availability and affordability of the drug are vital to maintaining and safeguarding patent rights.


sections/classes of the society. Tese arguments gained notional acceptance with the patent office but failed to secure a ruling in Bayer’s favour.


Significantly, it was also held that mere importation of Bayer’s drug into India did not amount to ‘working’ as envisaged under the Patents Act 1970. While it appears that Natco did not strictly plead that importation cannot amount to working, the patent office in its order assiduously referred to the Paris Convention, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement and various provisions in the Indian patent statute to arrive at the conclusion that ‘working’ cannot mean importation, and that the phrase ‘worked in the territory of India’ means ‘manufactured to a reasonable extent in India’.


For its part, Natco has been enjoined, inter alia: to pay Bayer a royalty calculated at 6 percent on its net sales each quarter re the licensed drug; to cap the price for its medicine at INR 8,800


www.worldipreview.com


On the issue of price, the concept of differential pricing may be adopted so that the question of affordability does not arise. In the wake of this order, in what may be interpreted as a pre-emptive measure, Roche has announced price cuts for two of its cancer drugs in India: Herceptin and Mabthera.


As regards the ruling that importation does not amount to working of a patent in India, this aspect raises more questions than it answers, especially in light of patents in other areas.


With the prologue in place, the tale will continue. n


Ranjna Mehta-Dutt is a partner at Remfry & Sagar. She can be contacted at: remfry-sagar@remfry.com


Shukadev Khuraijam is a managing associate at Remfry & Sagar. He can be contacted at: remfry-sagar@remfry.com


World Intellectual Property Review Annual 2012 43


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