Case Study: Bayer Corporation V. Union Of India[1]

Introduction

Intellectual Property Rights has demonstrated itself to be important in all fields. It has increased gigantic fame in the ongoing past. It is the thing that propels individuals to make and enhance their creativity and provides them due rights for their innovation. For the first time, after India becomes signatory to TRIPS the issue of compulsory licensing had tabled before the concerned authorities for consideration in the case of Bayer Corporation v Union of India[2]. This was the first case where compulsory license was issued under Section 84 of Patents Act, 1970.

Facts of the Case

Petitioner Bayer Corporation was granted a subject patent by India’s Patent Office on 3rd March 2008 for their drug “Sorafenib Tosylate”that is sold in market under the name of Nexavar. The drug is used in the treatment of liver and kidney cancer. The Indian drug making company Natco approached the petitioner Bayer Corporation for grant of voluntary license to produce and sell the drug in India under its brand name at a price of Rs. 10,000 per month as against the expensive price of Rs. 2,80,428 per month that was charged by petitioner. Petitioner rejected the Natco’s application for grant of voluntary license of their drug Nexavar.

The patented drug can be manufactured and sold by the third party if the patent holder has granted permission for it.  After the denial of voluntary license Natco lodge an application under Section 84(1) of the Patents Act, 1970[3] to the Controller general of patent to get a compulsory license to manufacture and sell the Nexavar in India. Finally, on 9th March, 2012 Controller granted a non-exclusive, non-assignable compulsory license to Natco to manufacture and sell the patented drug at a price of Rs. 8,800 and also directed them to pay the royalty 6% of its net sales to petitioner Bayer till the time of patent.

Aggrieved by it, Bayer appealed against the order of compulsory license in 2013 in IPAB intellectual property appellate board contending that the order passed was in contravention with the Patents Act. Board rejected the contention of Bayer and upheld the of Controller general of patents. Finally, Bayer challenged both the orders of 2012 and 2013 passed by the Controller general of patent and by the IPAB[4], on the issue of granting a compulsory license to the Natco in the Bombay High court.

Issues of the case

1] Whether the Compulsory license granted by controller is in accordance with the provision of Patents Act?

2] Did the respondent Natco make efforts to obtain voluntary license from patent holder Bayer Corporation?

Rules applied

Provisions from the Patents Act, 1970 was applied in the case at hand. The prime provisions which were applied while deciding this matter are as follow

1]Section 83: General Principle applicable to working of patented inventions[5]

2] Section 84: Compulsory license[6]

3] Section 87: Procedure for dealing with applications under sections 84 and 85[7]

4] Section 90(1) (iii): Terms and condition of compulsory license.[8]

Analysis

The access versus benefit banter is an overall wonder in the pharmaceutical business and India is no exception. As of late in any case, India’s undeniably noticeable, master get to position has grown new teeth. In a spate of patent cases, the legal executive has clarified that open intrigue is of prime significance and India won’t endure the misuse of its masses by tranquilize goliaths hoping to receive rewards. The fundamental objective behind the Patent Rights is to safeguard the interest of inventor with respect to public interest. In the case at hand the personal right were superseding in the name of Patents right as patent holder were selling drugs at a much higher price.

The main issue in the case at hand is about the issuance of compulsory licensing. In granting the compulsory license all the requirements under the provisions of Patent Act were fulfilled by the Controller general of Patent for granting the compulsory license to Natco. The provisions which were analysed by the court is clause (a), (b) and (c) of Section 84(1)[9] of the Patents Act, 1970 for granting compulsory license.[10]

The conditions for granting the compulsory licensing is fulfilled and the Natco’s application for compulsory licensing mentioned the issues on which the petitioner were lacking i.e. the drug was not satisfying the reasonable requirement of public with regard to its various factors, the drug was not working in the territory of India here it means the drug must be manufactured to a reasonable extent in India comprising the R&D also,on this point the court took into instance the meaning of words ‘worked in the territory of India’, Section 83(f) of the Act states that there should not be abuse of patent by patent holder in International trade.The case at hand was the first case which exclusively dealt with the concept of compulsory licensing. The decision primae facie seems right but is it, really right? Yeah, to some extent it is as it is in accordance with the Patents Act, 1970 Natco get the compulsory license for the drug from Indian Patent Office but the Barley approached two forums as they were aggrieved by order of controller. Both the forum  ruled in the favour of Natco and also from the facts it is evident as the patent holder were abusing his patent rights by charging too much for medicine but they also contended about R&D cost what about that, this might be a lacunae in judgment but it does not provide a strong contention to claim that judgement is not right .

The decision in the case at hand will pave a long way to ensure that the safeguard of public interest is drowned by reason of self-benefit, personal interest of the patent holder in certain circumstances. Each coin has two sides,  in the present case also when we get to see the international framework about IPR, the Articles from TRIPS agreement were not completely taken into consideration and they were superseded by the legal framework of country and court interpreted the Articles of TRIPS in literal sense and not in purposive one, but here also court took a note on Article 31of TRIPS. The decision by court is a win for Natco and a slight disadvantageous to Barley corporation

Conclusion  

The court accurately and rightly dismissed the petition. The judgement clarified once again that no matter what the subject matter is, the public interest is at the top most priority, the issue in the case was affecting the public at large. Objective behind incorporation of Patent Act is to promote the innovation, to safeguard the credit of inventor and to prevent them from any damage or infringement of their patent. But it can’t be misused by the patent holders as the main aim behind all the legal framework related to IPR is the mutual benefit for both the public and inventor also. The case at hand presented us a situation where personal interest were dominating over public interest just for earning profit on the patent that was invented by the patent holder, but court clarify that no one can misuse the rights of patent and the greater good will always prevails over the profiteering motive. Hence the case petition of Barley Corp. dismissed and the court upheld the earlier decision of IPAB.

References:

1] Fathima Mehendi, ‘5 Leading Cases of IPR’, <https://www.legalbites.in/5-leading-cases-intellectual-property-rights/#_ftn3>

2] Global Health and Human Rights Database, ‘Bayer Corporation v. Union of India & Ors’ ( 2014)<https://www.globalhealthrights.org/asia/bayer-corporation-v-union-of-india-and-ors/#gsc.tab=0>  accessed 9 June, 2020

3] Ankit Rastogi, ‘Bayer Corporation v Union of India & Ors.’,<https://indiancaselaws.wordpress.com/2020/04/08/bayer-corporation-ors-v-union-of-india-ors/>

4] the Patents Act, 1970 <http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_31_1_patent-act-1970-11march2015.pdf>

5] Patent Case Brief, <http://notesforfree.com/2018/01/18/patent-case-brief-bayer-v-union-india/>

6]Bayer Corporation v. Union of India 2014 SCC Online Bom 963: (2014) 5 AIR Bom R 242


[1] 2014 SCC OnLine Bom 963

[2]AIR 2014 Bom 178

[3] The Indian Patents Act, 1970 Available  at: http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_31_1_patent-act-1970-11march2015.pdf

[4] Intellectual Property Board.

[5] Ibid

[6] Ibid

[7] Ibid

[8] Ibid

[9] Ibid

[10] From: https://indiancaselaws.wordpress.com/2020/04/08/bayer-corporation-ors-v-union-of-india-ors/

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