Bayer Challenges "Prima Facie" Determination in Compulsory Licensing Case

The term “prima facie” counts as one of my favourite legal expressions. Not least because it appears to be the only place where the law expresses an unabashed preference for “appearances” (which in the real world can, and is often, deceptive). Certainly a problematic expression when it comes to the law of injunctions, particularly IP injunctions where our judges continue to shoot in the dark. But more of this later.
For now, it may interest you to note that the term “prima facie” has reared its ugly head in the famed Natco Compulsory Licensing (CL) case. Our statutory scheme is such that once a compulsory licensing application is filed citing any of the section 84 grounds, the Controller “shall direct the applicant to serve copies of the application upon the patentee…. and shall publish the application in the Official journal” only if “the Controller is satisfied, upon consideration of an application under section 84… that a prima facie case has been made out for the making of an order.” (Section 87 (1))

In other words, the discretion to examine whether the CL application has any merit or not lies solely with the Controller. If he finds absolutely no merit in the application, he may reject it outright. Else, he has to publish it and afford the opportunity to the patentee and others to challenge the application, as he did in Natco’s case.

Bayer recently challenged this action of the Controller in the Mumbai high court, arguing that no “prima facie” case had been made out in Natco’s application and that it ought to have been “heard” before such a determination was made by the Controller.

I’m not sure I agree with this interpretation: a plain reading of the provision indicates that the Controller can make this determination after examining the application as filed. Insisting on a hearing at this stage does nothing more than the delay the proceedings. If compulsory licenses are unduly delayed through protracted proceedings, the very purpose of the regime is lost. I’m reminded of a CL case from India about three decades ago (Catalysts and Chemicals India v Imperial Chemical Industries Imperial case), where the proceedings were so protracted that the patent term expired by the time the compulsory licensing application was finally decided (after multiple court proceedings that finally culminated in the Supreme Court of India).

It’ll be interesting to see which way the Mumbai High Court goes. In the meantime, I’m given to believe that Bayer applied for a month’s extension to respond to Natco’s application and was granted this by the Controller (this extension appears to be in conformity with the law, given that the statute suggests that a patentee has to file its counter within two months of the application, extendible by a month at the discretion of the Controller).

One hopes that all such provisions that provide fodder for strategic delays be reviewed and amended, where necessary. Only then can our CL regime come alive, without remaining a mere letter of the law destined to die a slow unsung death.

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.


  1. AvatarRajita Sharma

    In my view Bayer cannot ask for a hearing before the Controller seeking that he determine whether or not a prima facie case has been made out. The way I read section 84 is that on receiving the application, the Controller has an obligation (not a mere discretion) to decide whether or not there is a prima facie case. If there is none, then he has to reject the application. If there is, then the next steps are to be taken. It is a pity that the neither the Act nor the Manual clarifies what is meant by “prima facie”. If we take guidance from other legislations and the common general meaning of the term it is ” a case that has sufficient evidence to support it” or that “it is sufficiently apparent from the evidence that is presented”. If it is correct that Natco in its application has failed to adduce even the most basic evidence in support then it should be held that there is no prima facie case made out and the application should be turned down. Otherwise it would be unjust.

    In my view Bayer would have to wait until the hearing to argue the “prima facie” point.

    Rajita Sharma, Partner, Finers Stephens Innocent

  2. AvatarHersh Sewak

    What are the principles which guide the determination of “merits”? That is, how does the Controller judge whether there are merits.

    Prima Facie as has been enunciated by Courts for Courts to provide injunction or exercise discretion is a matter different from that should be exercised by the executive, in this case, Controller.

    I agree that this section may need amendment, but for two purposes, first to ensure that the task given to the Controller by the legislature is carried out to the fullest by providing a more precise principle on which he has to determine initially whether the application deserves merit and second to prevent any challenge under “arbitrary exercise” interpretation of article 14 (EP Rowappa).

    A more precise worded letter of law could quicken the pace of CL applications as well as ensure that everyone is doing the task as they are supposed to.
    eg. That Controller of Patents on receiving the application must check whether evidence to establish the case under the CL requirements has been provided.
    (The exact requirements, doctrine and ‘leeway for discretion’ is definitely open to discussion.)

  3. AvatarShamnad Basheer

    tks for your comments rajita and hersh,

    hersh: you’re right: the prima facie standard here cannot be the same as a temp injunction standard. a temp injunction is a powerful remedy–and therefore there has to be greater “meat” to the prima facie determination during this stage. the CL section on the other hand appears to merely suggest that the complaint should not be a frivolous one. which is why it is essential to amend this and make it clear that:
    i. no hearing is required
    ii. the determination is merely limited to seeing that the CL application is not a frivolous without any merit whatsoever.

    Natco’s application may be shoddy and may lack strong evidence in some instances,. however, overall, there is some merit to the application and is clearly not frivolous as to be outrightly dismissed at this “prima facie” stage

  4. Avatarrajeev

    Refer to the discussion on usage of term Prima facie in the case of CL case. The argument that the term Prima Facie could imply deception or be an instrument for grant of interim injunction in the hands of court is belittling the IPR system.
    In every dispute we members of patent fraternity tend to miss the big picture. The role of Controller is that of a quasi-judicial nature and the role of Controller is to take a judicious view in the matter concerned. Further the matter of CL is only applicable after the minimum conditions of three years , affordability and other conditions are met. Hence in the case of CL the question of frivolous application would be discounted at the time of consideration by the patent office.
    When the question of consideration of CL is done by the Controller the ACT is very clear and attributes certain confidence on the Controller to make a pre-emptive judgment based on envisaged role of an adjudicator and a person of eminence. Note that the term prima facie is mentioned prominently in the case of role envisaged by the Controller. Prima facie is a reflection of confidence put on by the legislatures and should not be sorted as deception. Further what is the alternative. Should the Controler forward it directly for hearing or should reject it.
    Prima facie is an term which may seem subjective but is an reflection of judicial intellect and intuition developed on years of experience.
    Patent agent

  5. AvatarRajita Sharma

    The issue is not whether the applciation is frivolous. The requirement is that the Applicant presents a prima facie case. For that it is incumbent that the applicant at the time of the application provides evidence to support its applciation/grounds of application. Without the evidence there is no prima facie case made. The simple analogy would be that a claimant cannot file an action for trade mark infringement without attaching the basic proof that a trade mark has been copied. If the plaintiff fails to produce the evidence, then no matter how meritorious the claim, the court is duty bound to reject the action on the grounds that no prima facie case has been made out. Evidence is the fundamental requirement of common law. My point was that if Natco has not adduced the evidence on any of the grounds then the Cintroller has to reject the application.

    Separately, I am of the view that compulsory licences should not be available on commercial grounds. They should be preserved for national emergencies/extraneous circumstances. The remedy for not working patents or abuse of monopoly rights should be revocation (as in trade marks). It is not as if the rich generic companies are acquiring rights for charitable purposes. Why should the smaller, indigenous manufacturer be reclused from utilising the technology just because it does not have the wealth or power of the rich generics. Why are brands not compulsorily licenced to the best bidders if they are not used in India!

    And how on earth can the Controller of Patents in India grant a decree or sanction a licensee of patents to export patented products to other countries. How would that in any conceivable way be enforceable in another jurisdiction.

    The mind, as usual, boggles.

  6. AvatarAnonymous


    I think the Natco CL document is in public domain as Shamnad has also mentioned.

    I agree with him to the extent that while the CL request- is not upto the highest standard of drafting- it certainly crossed the minimum threshold (or the prima facie standard) for the Controller to be satisfied for initiating proceedings.

    The Issue here is not whether the CL itself will be issued or not… that comes at a later date, after looking at the actual evidence, availability price etc.

    The only issue at present was whether Natco had (on check list approach) shown all the requirements for the CL application to be processed further. That- they clearly did.

    I will now look at your second point:
    ‘that compulsory licences should not be available on commercial grounds’

    Why don’t you look at what is happening in the US on non-pharma patents where the US Govt is intervening between tech companies and forcing the companies to issue royalty bearing license to ‘potential defendants’? How is this any different from a CL- Natco is also ready to pay royalties, right?

    Finally, ‘how on earth can the Controller of Patents in India grant a decree or sanction a licensee of patents to export patented products to other countries’
    This is a 2 part issue. In the present, if my understanding is correct, Natco is seeking a CL only for India. If you are talking generally, the procedure for issuance of CLs further to a patent in India is already there in the Patent Act- I don’t see what’s the grey area here. If there is or is not a patent in the market being exported – that’s another story altogether.

    Freq. Anon.

  7. AvatarShamnad Basheer

    Tks for all your comments. Like FA, I’m not sure I see why a prima facie cannot be said to be established here. At the very least, the non working ground ought to suffice as a good enough ground. The drug is being imported into India. And if you carefully peruse various provisions of the Indian Patents Act, you’ll find that the Act uses the term “import” in contradistinction to the term “working”. And this evidence (lack of local manufacture of some sort) is one that is on file with the patent office: form 27’s.

    Rajita; i’m a little lost here. If i make certain claims in my CL application (eg. that the patentee is not adequately supplying the market), without backing it up with some evidence, I’d call that a “frivolous” application. Wouldn’t you??

  8. AvatarRajita Sharma

    Hi Shamnad and Anon

    I do not principally disagree as such with what you both say. And perhaps I should have articulated better. I believe the point of difference between us may be the threshold required to qualify as “prima facie”. My argument is about fair interpretation and implementation.

    To first answer your point on whether “frivolous” means “without evidence” or whether to show “prima facie” case it is enough to show that the application is not frivolous. Generally, frivolous actions are construed as those that have no weight, no relevance, of a silly nature or filed to create a nuisance value.

    So on that basis I would not say that Natco’s application is “frivolous”. I believe that Natco has not adduced sufficient evidence in support of the grounds upon which it seeks a CL. It lacks factual evidence and lacks pertinent figures which in my view are necessary for a prima facie case.

    My view is that it is not sufficient to merely state that the product is not manufactured in India and is imported and not back it up with solid evidence, even if it most obvious.

    My view also is that the threshold of “prima facie” in CL actions has to be high if you are intending to take away patent rights on grounds of public policy and which are subjective.

    On the interpretation of working the patents in India. This is another 3(d) monster. Why should it be limited to just manufacture and not include use whether through manufacture or import. I recall that when the interim “marketing” provisions were in place, import was included.

    More Anon.

  9. AvatarAnonymous

    Rajita/ More Anon.

    I am not sure if I get you here.
    As I understand the Statute, the practical implementation would be a 2 stage mechanism.

    At stage 1, any person filing the CL app only has to give enough details – based in the Statutory language- to show that there is a ‘prima facie’ position that they should be given a CL.
    The Controller has to look at this and admit the app/ reject the same – kind of like the pre-grant Opp filed u/s 25(1).

    ‘ fair interpretation and implementation’ at this stage would not have, in fact, allowed the Controller to reject Natco’s CL app – this was decently drafted and had a basis. The Law does NOT require any thing more than that at the admission stage.

    At stage 2, the Controller looks at the judicial merits of the case for / for not granting the CL. This is an inter-partes proceeding and the Controller has to consider the overall case – after he has given the chance to patentee to respond.

    As I understand, at the end of the 3 year term, any person could approach for a CL, and draft a reasonable CL. But that would be hardly a big thing… I think the prima facie standard does NOT require heightened burden of proof. In this particular case, the Natco filing is actually decent and the Controller could not find it frivolous.

    The BIG thing (and we should all be debating) is what happens now.. when the Controller comes in a judicial role – does he find the arguments/ facts put forth by Natco reasonable enough or not…

    Here, ‘believe that Natco has not adduced sufficient evidence in support of the grounds upon which it seeks a CL’ is where the Controller would look at the documents submitted and the fitness of the same, vis-a-vis the legal standard.

    Remember, in the earlier Natco/ Pfizer CL case, the CL was not issued even though the CL app was admitted at the ‘prima facie’ stage.

    Coming back to your arguments on ‘figure/ facts’, do we as a country even have a reasonably correct number of cancer or HIV patients… where does a company like Natco go for this detail… they can only get MRP of the Innovator drug, likewise, they can get a ‘sample’ number from Cancer Patients Association etc… but again this number would not be acceptable to others since this does not have statutory backing. These are sample style numbers.

    Like wise ‘view is that it is not sufficient to merely state that the product is not manufactured in India and is imported and not back it up with solid evidence, even if it most obvious. ‘
    The fact is that Natco can use this ground as its allowed by Statute. If at the substantive hearing, the Controller finds that Natco is not able to prove it or that the drug is in fact made in India, he will NOT grant the CL … where is the harm at this ‘admission’ stage??

    ‘working the patents in India.. Why should it be limited to just manufacture and not include use whether through manufacture or import.’
    Let me put it to you this way, our Law has the language and its what Natco is arguing.. If any country has problem, they can approach the WTO DSB… each country has its law and if the same are NOT in WTO compliance, then the other partners can and will approach the DSB… Countries – across the board- eg US- also are caught in WTO DSB cross hairs.. likewise, our own EMR mechanisms came in when such DSB threats came in… so, my thoughts or your thoughts are not law .. the law is already there (and is what Natco used… they did not take a ground that is NOT in the statute) … the only thing we can do is look at its interpretation and implementation as practitioners …
    other sovereign nations can complain/ use diplomacy to see that the law gets challenged.

    Freq. Anon.

  10. AvatarAnonymous

    Rajita/ More Anon:

    I think the order pasted by SpicyIP in this link

    also supports the notes put above.

    Freq. Anon.


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