COMPULSORY LICENSING


reasonably affordable price; or (iii) the invention has not been worked in India.


Even prior to invocation of these grounds,


Bayer was not given the opportunity to be heard in the matter for establishing a prima facie case for consideration of the compulsory licence application filed by Natco before the final disposal of the application for compulsory licence which resulted in the curtailment of the rights of the patentee.


Te main ground which formed the basis for grant of compulsory licence was that the reasonable requirements of the public were not met. Te cost of therapy of Nexavar is Rs280,428 ($5,064) per month. Te controller general held that a prima facie case had been made for grant of the licence as the quantities of Nexavar imported by Bayer in 2009 and 2010 appeared to be grossly inadequate.


On looking at the market statistics as laid down by Bayer, the controller held that there is a demand for sorafenib in at least 8,828 patients and despite the product being launched in other parts of the world from 2006 onwards, the delay in launching the product in India is not justifiable. Te annual requirement for the drug is 27,000 packs; current sales are nowhere near adequate to meet the demand.


Te question arises as to what is the yardstick for determining whether the reasonable requirements of the public have been met? Can the reasonable requirements be met only by the patentee, or can any other party, such as in the present case, pharmaceutical manufacturer Cipla (which sells generic sorafenib), also contribute?


to file an application for grant of compulsory licence on a patent at any time from three years aſter grant on various grounds mentioned in the Indian Patents Act.


Grounds for compulsory licence Compulsory


licences can be granted on


the mutually exclusive grounds that (i) the reasonable requirements of the public are not met; (ii) the drug isn’t available to the public at a


www.worldipreview.com


In the absence of an injunction operating against Cipla in an infringement proceeding before the Delhi High Court, the patentee could not have been expected to import or manufacture the product in India with no sales. Te expectation of supplying the entire market where cheaper/substitutes (whether infringing or not) are available, even when such substitutes reduce the patentee’s market share and reduce the capacity to supply the entire market, seems to be unreasonable.


Te other ground which calls for grant of a compulsory licence is when the drug is not available to the public at a reasonably affordable price. Te controller general concluded that a reasonably affordable price has to be predominantly construed with reference to the public and, in view of the fact that the price of the drug is high, it is logical that the patented drug was not available to the public because it was not


“‘AFFORDABLE TO THE PUBLIC’ IS A CONCEPT THAT THE PATENTEE FAILED TO EXECUTE BY OFFERING


DIFFERENTIAL PRICING FOR DIFFERENT CLASSES/SECTIONS OF THE PUBLIC.”


reasonably affordable. ‘Affordable to the public’ is a concept that the patentee failed to execute by offering differential pricing for different classes/ sections of the public.


On a fair perusal of the controller general’s order, it is difficult to understand whether the patentee is required to sell the drug at a ‘reasonably affordable’ price or at the ‘lowest affordable’ price, given that millions are spent on research and development for the development of a new drug and given the expenditure incurred by the patentee in keeping the patent in force.


On the ground of the patented invention not being worked in India, the controller general held that the different clauses of Section 84 have to be harmoniously interpreted and, therefore, the removal of the concept of local manufacturing in India from Section 90(a) in the amended act cannot be seen in isolation.


Te controller went further to state that even under the Paris Convention, importation of patented articles does not entail forfeiture of the patent and therefore, suggests that importation could entail something less than forfeiture, such as compulsory licence. It was held that a combined reading of all the provisions relating to compulsory licences clearly indicates that the patentee’s invention has to contribute towards transfer and dissemination of technology which can only be achieved by manufacturing the product in India or by granting a licence to any other person for manufacturing in India. Terefore, what follows is that ‘worked in the territory of India’ implies ‘manufactured in India to a reasonable extent’.


Te controller also held that if the licensee cannot import the patented product under Section 90(2)


Life Sciences Intellectual Property Review 2012 61


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