BAYER CORPORATION V. UNION OF INDIA
Bayer Corporation v. Union of India, is the landmark case which brought up the provision of granting of a “compulsory license under an application made under Section 84” of the Patents Act, 1970.
FACTS:
The petitioner, Bayer Corporation Ltd, established in USA, invented and developed a drug called “Nexavar (Sorafenib Tosylate)” which was used in the treatment of people suffering from Kidney Cancer (RCC). The drug has been issued an international patent in 45 countries including India. Generally, a third party can manufacture and sell the patent product with the prior permission of the patent holder.
Narco, a drug dealer, approached Bayer and asked to grant him the licence to manufacture and sell that drug. He said that he would sell the drug at a very low price of Rs. 10000/- per month in comparison to Rs. 2,80,428/- as charged by the petitioner. The request was rejected and they then applied to the Controller for a compulsory license under section 84 of the Act on the ground that the petitioner did not meet the public's fair requirement regarding the patented drug. It was issued on the condition that the applicant had to sell the drug at Rs 8,800/- per month and was asked to give royalty of 6% to the petitioners out of the total sale made out by the company from that drug.
The complainant, aggrieved by the order, approached the Intellectual Property Appellate Board (IPAB) alleging that the order passed was not in accordance with the provisions of the statute because Cipla made the drugs available at a lower price. Nevertheless, the board dismissed the arguments by stating that the petitioner hadn’t made the medication available at a cheaper price, and that the petitioner’s position was unfair to the general public who wanted the medication. The petitioner therefore preferred an appeal before the High Court.
Judgement:
The court held that to have the permanent license under section 84 of the Patent’s Act, the person or the company has to fulfil all the three conditions mentioned in section 84(1). In the present case all the conditions were satisfied. The question of reasonable requirements of the public under section 84(1) is to be determined after going through the evidences produced by both the parties. In the present case, as per the affidavits produced by the petitioner it’s evident that all the conditions weren’t fulfilled by the petitioner. The court held that the system of dual pricing under the Patient Assistance Programme wouldn’t satisfy the conditions mentioned under section 84(1)(b) and hence, it wasn’t available to the public at the normal price.
The court on the question that whether the patented drug to be worked only within the Indian boundary said that when a patent holder faces a request for a compulsory license, it is for the patent holder to prove that the patented invention / drug is worked by the producer or otherwise in the territory of India. It is not necessary that "Worked in India" should include "manufacture" if the patent holder can give legitimate reasons for not manufacturing in India bearing in mind section 83 of the Act before the authorities.