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:
(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.