The absence of evidence in NATCO’s CL application for Nexavar

There has been considerable world-wide interest over NATCO’s compulsory licensing application for Indian patent number 215758 i.e. Bayer’s patent for Sorafenib, which is marketed under the brand Nexavar. It’s the first such application post 2005 and is widely seen as the test case. Considering that the patent belongs to an American company it is likely that this issue will reverberate at the WTO. We had earlier blogged on this CL, over here and here. NATCO’s CL application is available over here. (Image from here)

Given the attention that this case is getting and its importance to the generic pharmaceutical industry, one would have expected NATCO to have approached this application with some degree of seriousness. In my opinion, the contents of the CL application and the supporting evidence or rather the lack of it is pretty surprising. Before moving onto the specifics, let me just provide you with the larger context. Here is a generic pharmaceutical company attempting to extract intellectual property (worth at least a few hundred million) of a Fortune 500 company and the only evidence that it depends upon is 6 or 7 articles which have been printed from the internet! Seriously?! That’s evidence?!

Let’s not forget the fact that CL proceedings, such as the present proceedings, are ‘factual’ determinations and the applicant is required to provide ‘evidence’ establishing the veracity of such facts in a manner recognized by the law i.e. the Evidence Act, 1872. The burden of proof is on NATCO, not Bayer because it is NATCO which is seeking a CL.

Moving on to the specifics now:

(i) Inadmissibility of all computer printouts: According to the Indian Evidence Act, 1872; computer printouts are admissible as evidence only when the conditions of Section 65B of that Act are fulfilled. This section basically requires the filing of a rather modest affidavit by a person who can certify that the computer printout is a genuine reproduction of the electronic version and has not been manipulated. There is no mention of any such affidavit in NATCO’s application, as published by the Patent Office. This would mean that a portion of NATCO’s evidence, which consists of only computer print-outs, is inadmissible.

(ii) The quality of the documentary evidence cited in the CL application:

(a) The number of Indians suffering from liver and kidney cancers: NATCO starts of its application by trying to establish the number of people suffering from liver cancer and renal cancer, since these are the two cancers that are sought to be treated by Bayer’s Nexavar drug. In order to establish these statistics NATCO has relied on printouts from the websites of (i) Mayo Clinic Report, (ii) World Cancer Report (2008), (iii) GLOBOCAN 2008, (iv) Harvard Center for Cancer Prevention: Your Disease Risk: Kidney Cancer (v) American Foundation for Urological Diseases (vi) Cancer Research UK. Most of this evidence seems to be inadmissible under Section 60 of the Evidence Act, 1872. I could be wrong on this point but as per my understanding if you want to use to some specific academic reports as evidence it is necessary to have the authors of those reports depose as expert witnesses. There are of course limited exceptions to the rule. It is simply not permissible for NATCO’s representative to depose on anything in those reports when they are not the authors of the report. Moreover, if the intention was to establish the large number of Indians suffering from these particular types of cancer, would it not have made sense to get an expert witness affidavit from the National Cancer Registry Programme that is administered by the Indian Council of Medical Research? Why cite dated foreign studies?

(b) The question of ‘limited availability’: The basic grounds for being granted a CL under S. 84 is the fact that the patented invention is not being made available to the general public in adequate numbers. In its application NATCO states that “It is estimated that though the Patentee sells the product, it reaches less than 1% of patients and almost 99% of patients who are unable to afford the drug are left to die every year. According to GLOBOCAN data at least 30,000 patients are diagnosed every year who suffer from Liver and Kidney cancer. It is estimated that nearly 1,00,000 patients are currently suffering in India on these diseases. Of these, less than 1% of patients are catered to by the Respondent Bayer. The remaining 99% of the patients do not receive any medication and thereby fall victim and die on account of this dreaded disease.” And what is the evidence cited by NATCO to back up these claims? The answer is ‘nothing’! They’ve not cited any evidence! The application does not provide any evidence to suggest that 99% of patients suffering from liver and kidney cancer do not have access to the drug in question. How then does NATCO hope to convince the Patent Office that the Bayer’s drug has only limited availability in India? Also, why in God’s name hasn’t NATCO even referred to the Form 27 i.e. the ‘statement of working’ filed by Bayer for this particular patent. Shamnad had earlier got out the Form 27 for this particular patent and put it up on the SpicyIP website. It’s available over here. All that NATCO was required to do was to ask the Patent Office for a certified copy of the same. Why haven’t they done it?

(c)Product imported: NATCO is also trying to argue that Bayer’s drug is imported and not locally manufactured in India and hence liable for compulsory licencing. To this end, NATCO states “It is learnt that the Patentee Bayer Corporation imports and sells the drug Sorafenib in India. To the knowledge of the Applicant, this product is not manufactured in India by the Respondent”. I mean seriously – how is ‘knowledge’ & ‘learnt’ any replacement for hard evidence? How difficult was it to get this information from a Form 27 or the product label?

(d) High price: NATCO also states in its application that Bayer’s drug is extremely expensive and states the price of the drug. Once again, it does not cite any evidence to establish this price of the drug. How difficult is it to file a bill showing the purchase of the drug from an authorized retailer? NATCO then concludes that it’s a high price and hence inaccessible. While this conclusion is most likely true, you need to establish this fact through evidence – an expert economist or doctor who can depose on the cost of treatment vis-à-vis per capita income. A bald averment has no evidentiary value unless backed up by an expert opinion or other evidence.

(e) Proposed Terms and Conditions: Rule 96 of the Patent Rules, 2003 states that the CL applicant “shall set out the nature of the applicant’s interest and terms and conditions of the licence the applicant is willing to accept”. This basically requires NATCO to inform the Patent Office of the royalty that it is willing to pay Bayer and also any other terms and conditions. NATCO’s application is completely devoid of any such ‘terms and conditions’. How exactly is Bayer going to oppose this application when it doesn’t state anything?

Conclusion: Under the Patent Rules, 2003 the Controller can dismiss this present CL application on the grounds that it fails to make out a prima facie case. However that is unlikely to happen for the obvious political reasons. It’s an absolute pity that NATCO has learnt no lessons from the CL battles fought by the music industry before the Copyright Board. In that case both the radio stations and the music companies had led evidence on pricing and royalties through expert witnesses such as Dr. Bibek Debroy. The rate of royalties was ultimately fixed on the basis of the evidence led forth by the expert witnesses. As things stand now, it does not appear to me that NATCO has any case for a CL. The CL application does not ask for leave to file any additional evidence and the Patent Rules, 2003 does not allow for the filing of any additional evidence without the prior permission of the Controller. Even then, evidence can be filed only to back up the averments in the application and if there are no averments in the application (for e.g. proposed royalty rate) there is no question of filing additional evidence on those points.

Given the political baggage that CL applications come along with, it is likely that the Controller, on instructions from the Central Govt., will issue the CL but there is no denying that NATCO’s shoddily drafted CL application has opened itself to a series of multiple appeals to either the IPAB or the High Court.

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15 thoughts on “The absence of evidence in NATCO’s CL application for Nexavar”

  1. While agreeing that Natco could have done much better, I just want to know the plausibility of strict application of procedural statutes which you mentioned in your post in CL proceedings? How much it matters that the patent office follow the same threshold of evidence indicated in relevant laws?

  2. Hi Anon,

    In my opinion the Indian Evidence Act is the default legislation that applies to all legal proceedings. Why should the bar be any lower for patent office proceedings especially when they are forcefully appropriating private property.


  3. Hi Prashant,

    I agree that the Evidence Act should apply to all legal proceedings by default. I do not know whether you are aware of this or not, the documentary evidences filed with statement of oppositions (both pre and post) are mostly internet printouts. If one cites a US patent as prior art, he simply annexes a printout of the patent as available online.
    Technically one should annex an authenticated copy of the patent or the patents should be accompanied by an affidavit, which has never been the case.

  4. Hi Anon,

    You’re absolutely right. Patent lawyers in this country are treating the patent office like a panchayati court where procedural laws are of a mere nuisance value.


  5. I agree that Evidence Act should be applicable in all legal proceedings but there is difference between court proceedings and those of patent offices. You have mentioned elsewhere that patent office is receiving and accepting printouts though the same is not recognized under procedural laws. A strict application of Evidence Act in proceedings out of court room setting is an established and recognized practice. What is admissible and what can be exhibited and who can testify – all these questions are asked and followed strictly in courts but we do not see same level of adherence at other forums. Patent office does a number of non-judicial functions in administrative stream. Courts are exclusively there for legal and judicial dispensation. It is rather difficult for patent office official to quickly switch from administrative bosses into legal offices and start relying on Evidence Act.

  6. You are right Anon. This takes us back to an earlier point that we had made on the blog and that is the fact that CL proceedings and opposition proceedings are purely judicial functions which cannot be discharged by an Executive body such as the patent office.

  7. Prashant:

    apropos of your comment on internet print-outs, have you pondered the point from another angle?

    Can you please give me one strong reason on why in a pre-grant/ post-grant or even IPAB proceeding is the need for putting in an authenticated copy of a US or EP Patent document OR a journal article?

    Are you telling me that any person – in a patent office proceeding- will actually make a ‘fake’ patent document or journal article?

    NOTE: I am NOT saying that Affidavits should not be notarised.. any evidence such as expert witness statements/ one of photographs needs authentication – BUT not US / EP patent documents or journal articles…

    Once you consider this from a practice perspective, look at the bulk of the documents submitted in any Indian opposition – they are US / EP/ WO patent publications – no special argument for authenticating them.

  8. Hi Anon,

    I think the Evidence Act does prescribe a certain procedure to authenticate documents of foreign governments and the USPTO and EPO are agencies of foreign governments. I agree the process may be too cumbersome but that is the law.

    Nevertheless, I think attorneys should atleast ensure compliance with Section 65B of the Evidence Act. Also the patent office should probably notify the websites that it recognizes for the purpose of proceedings before it. For example in the Supreme Court you can file printouts from only SCC online. Other databases are not recognized. There needs to be similar rules from the patent office.


  9. Prashant:

    I don’t think that you gave me any cogent reason for ‘authenticating’ a print out of a US or EP patent, besides repeating your earlier position.

    Likewise, I do not see any strong/ clear rationale on arguing that Evidence Act is the law without linking the same on a fundamental basis on a (strictly) quasi-judicial forum like the IPO opposition proceeding.

    How is my request/ position any different from putting normal/ photocopies judgments at ITAT or any high court? How many advocates, for e.g., put just copies of judgments from the PTC – versus actually authenticated orders of the cases cited?

    Please give a reason rather than repeating ad-hominem – HOW is a pdf of a US patent different from a case from the PTC?

    IPO harassed 🙁

  10. Dear IPO Harassed,

    Let’s get back to the basics. When you produce a US Patent before the patent office you are using it as documentary ‘evidence’ to prove a question of fact i.e. obviousness. If you are leading documentary evidence it has to be as per the standard prescribed by the law governing evidence i.e. the Evidence Act, 1872 unless the particular authority in question has its own rules of evidence. The ‘cogent’ reason that you are looking for is the simple fact that the LAW requires it.

    Producing a judgment before the Court or the patent office is a completely different proposition. You are not proving a fact through a judgment, you’re merely restating the law. Citing judgments is not the equivalent of leading documentary evidence. Even then, most forums prescribe certain basic rules regarding which court reporters are allowed. For example a lot of a judges never used to accept printouts of Manupatra.

    Hope I’m clear enough this time.


  11. I’d like to add another two points:

    (i) USPTO and EPO documents are foreign documents and in order to be proved as ‘evidence’ under the Evidence Act, you have to fulfill the requirements of Section 78(6) which I reproduce as follows:

    “(6) Public documents of any other class in a foreign country, –
    by the original, or by a copy certified by the legal keeper thereof with a certificate under the seal of a notary public, or of 7an Indian consul or diplomatic agent, that the copy is duly certified by the officer having the legal custody of the original and upon proof of the character of the document according to the law of the foreign country.”

    (ii) As for internet printouts of these documents from the website of the USPTO or the EPO, Section 65B of the Evidence Act, 1872 lays down certain minimum criteria to establish the veracity of the document and regardless of whether you agree with the logic of the provision, it is the LAW.


  12. Dear Sandeep,

    1. Its no longer a hypothesis, I’m pretty sure that the Evidence Act does apply to all proceedings before the Patent Office. If you are willing to offer any evidence in rebuttal I would be happy to reconsider this conclusion of mine.

    2. The practices of the two biggest Delhi patent law firms are absolutely no indicator of the right position on the law. I think both of us aware of the deplorable standards before the patent office.

    3. Section 79 of the Patents Act, 1970 lays down only the procedural requirements, not the substantive law requirements which will still be guided by the Evidence Act, 1872. So basically you can swear on affidavit and lead a particular patent document as evidence through your affidavit but then the admissibility or otherwise of that particular patent document can be objected to by both the opposite side and the patent office. You can therefore printout a US patent and lead it through evidence but I can object to its admissibility on the grounds that it has not been authenticated as per Section 65B of the Evidence Act.


  13. I read this post very late I think. I have some doubts here.

    a. Are the pre grant or post grant opposition proceedings and other proceedings before the patent office a quasi judicial proceedings or a judicial proceedings where strict laws of evidence need to be applied? In quasi judicial proceedings before Adminstrative Authorities strict rules of evidence do not apply and they should follow the principles of natural justice and fair play. Do we have any case law on this point as of this moment that says that the proceedings before the Patent Office are judicial proceedings where strict rules of evidence apply? A reference to Section 77 that the Patent Office will have the functions of the civil court does not make the proceedings judicial proceedings. In fact the phrase “judicial proceedings” do not appear in the patent act and the word judicial also does not appear in the patent act. All that is said is that the controller shall have the powers of a civil court. That does not automatically make a proceedings before an administrative authority a judicial proceedings. There are numerous adminstrative authorities who have the powers of a civil court and who hear disputes between two parties and pass orders and it goes to appellate courts. All such proceedings are not held to be judicial proceedings but only as administrative proceedings as far as my very limited knowledge goes.

    I’m not aware of any such case law that has already declared that the proceedings before the Patent Office are judicial procedings and would be very interested to have knowledge about it. Only when it is so declared what you have written would become the LAW and not otherwise.

    My comments continue in the next post due to space constraints.

  14. My comments continue:

    b. Section 65(B)(4) is the relevant section as per your post.

    Please see this

    “(4) In any proceedings where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say,—

    (a) identifying the electronic record containing the statement and describing the manner in which it was produced;

    (b) giving such particulars of any device involved in the production of that electronic record as may be appropriate for the purpose of showing that the electronic record was produced by a computer;

    (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate,

    and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it.”

    In any case of production of electronic records, like patent documents, the person producing the record should certify that is the accurate record of the print out. This is what is needed to comply with the statute. I think in all oppositions where references are made to documents an affidavit is filed referring to the fact that the document is a US Patent or European Patent and a print out of the same from the website is made and is listed as document No D1 etc. I think this satisfies the certifying requirement. No separate affidavit certifying that the each such document is a genuine one is not made compulsory by a mere reading of the statute. Nor am I aware of any such separate affidavit requiring procedure. All it says is the need to certify. that can be done in the affidavit where the evidence is introduced. What is the problem?

    I do concede that my knowledge is very limited and I do not go through judgments of all the courts but would appreciate your thoughtfl views on this point.

    Thank you for your excellent post but it only shows that by picking holes we can defeat a case. This is always not the case and courts in my limited experience have gone on to look at substantive points and try to render justice and not be deceived by legal loopholes. After all Judges have a superior intellect and knowledge than most lawyers.

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