28 July 2014

Bombay High Court upholds grant of compulsory licence for cancer drug

The Bombay High Court on 15-7-2014 has upheld the decision of the Controller and IPAB to grant compulsory licence (CL) for a cancer drug. The court in this regard, considering the TRIPS Agreement, Doha Declaration and various provisions of the Patent Act, 1970, rejected the writ petition filed by the patent holder (Bayer Corporation). Submission that efforts to obtain voluntary licence, as prescribed in Section 86(4) of the Patents Act, were not made by the respondent company, was rejected by the court noting the correspondence between the parties conveying refusal of voluntary licence by the patent holder-petitioner to the applicant-respondent. Concurrent finding of the authorities below was also noted by the court in this regard.

Observing that the applicant seeking CL was required to make a prima facie case that reasonable requirement of public was not satisfied, it was held that such exercise can never be carried out on mathematical basis but was to be determined on the basis of evidence led by the parties before the authorities. Evidence as placed before the authorities regarding number of patients requiring the drug and number to whom it was supplied was taken into consideration by the court in this regard. Further, while holding that even quantity of goods supplied by infringers cannot be taken into account for this purpose (as such supply could stop any day, case of infringement being pending) it was observed that obligation to meet the reasonable requirement of the public is of the patent holder alone. The question of meeting public requirement was concluded to state that ‘adequate extent’ test as laid down in Section 84(7) of the Patents Act has to be taken as 100% in the case of medicines.

On the question of price being affordable, it was held that the price of the applicant-respondent was much lower than that of the patent holder-petitioner and hence would be the reasonably affordable price. It was also noted that the petitioner had not made available balance sheets to determine price of the product and though some medicine was given free based on certain purchases and as per the discretion of the petitioner, such exceptional price was not the price at which the patented drug is made available to the public.

Considering provisions of Section 83, the court upheld the findings of the IPAB that manufacture in India may not be necessary in all cases to establish working in India and that it can be established even by imports, but the patent holder would have to satisfy the authorities as to why the invention was not being manufactured in India. Submission seeking providing of more time before grant of compulsory licence was also rejected by the court after taking note of Section 86 and absence of steps taken for working the patent in India.


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