IPAB dismisses Bayer’s appeal against compulsory license

The Intellectual Property Appellate Board (IPAB) has rejected a petition of Bayer Corp., seeking a stay on an order of the Controller, granting compulsory licence to Natco Pharma Ltd., for Nexavar, a drug (Sorafenib Tosylate) to treat renal cell and hepato-cellular carcinoma (cancer).  Shamnad had earlier blogged about the grant of the compulsory license here and here.  A copy of the judgment is available here.  
The judgment is penned by none other than Justice Prabha Sridevan, with technical member: DPS Parmar.  This case is another important one that can be added to the list of several important cases including Yahoo vs. Controller & Rediff, Tata vs. Unilever and Financial Times vs. Times Publishing House decided by the Hon’ble Justice.   
In a previous post analyzing Natco’s compulsory license application, we had opined that Bayer may take certain proactive steps to avoid the issuance of the compulsory license.  These included reduction in price and issuance of a license to a generic manufacturer to make the drug available in India at a reasonable price and thereby rendering the CL application moot.  Given that the current case revolves around Bayer’s failure to provide the drug at a reasonable cost, and to ensure availability, it stands to reason that pharma companies would benefit by being proactive rather than being reactive!    
Facts leading to the case before IPAB:  Sorafenib Tosylate is the patented drug at issue and is sold under the trade name of Nexavar.  Bayer got a patent in India on Nexavar in 2008.  At the time when Natco filed the  compulsory license application, Bayer was selling the drug at Rs 2,80,000/- per month. However, CIPLA who was not a party to the compulsory license application, sold Bayer’s patented drug in the Indian market as Soranib at Rs. 30000/- per month; and presently at Rs.5400/- per month. 

Bayer’s suit against CIPLA is pending before the Delhi High Court and no injunction has been granted and Cipla continues to sell the patented product.  And in the suit before the IPAB, Cipla has sought for revocation of the patent.   Understandably, Natco also is seeking revocation of the patent covering the drug.

In the CL order issued by the then Controller General of Patent, a price of Rs.8800/- was fixed at which Natco was supposed to sell the patented drug, and in turn pay a standard royalty rate of six percent calculated the net price /manufacture.
Bayer appealed against the Controller’s order before the IPAB and pointed that because the drug was available at a much lower price (reasonable price) than the one directed by the Controller (sale by Cipla @ 5400 / month), the compulsory license was rendered unnecessary.
Decision: Rejecting the contention of Bayer, the IPAB held that if Bayer was granted a stay, it will jeoperdize the interests of the public who are in need of the drug; and that Bayer had not adequately met its burden of proving its case. 
Bayer essentially argued that if the drug is made available in the market at reasonably affordable price and not necessarily by the patentee, then S.84(1)(b ) of the Patents Act will not arise. And if public requirement is met even by someone other than the patentee, even then S.84(1)(a) will not arise.  Additionally, because Cipla did not have the burden of conducting research and development, Cipla could choose to sell the drug at any price.  Therefore, section 84(1) (c) could not arise either. 

Rejecting Bayer’s contentions, the IPAB held that Bayer had not made out a prima facie case for the grant of stay, since even its own admission is that it is CIPLA which is supplying the drug to satisfy the needs of the public.  It is not the case of the appellant that its supply is at a reasonably affordable price and satisfies the reasonable requirement of the public

In particular, the IPAB pointed out: “Therefore, when we look at section 84 of the Act, having regard to section 83, as we are directed by that section, it is clear that it is the duty of patentee to show that the patentee by its own supply has satisfied the reasonable requirement of the public and by its supply, the drug is made available at a reasonably affordable price. The appellant cannot ride piggyback on CIPLA‟s sale, particularly when the appellant is fighting CIPLA before another forum regarding the same invention and the same drug.”
“Therefore, the right of access to affordable medicine is as much a matter of right to dignity of the patients and to grant stay at this juncture would really affect them and further, it would in effect amount to deciding the main petition itself. Though this is not a reason why we are not granting stay, yet this is an additional factor.”

Rajiv Kr. Choudhry

Rajiv did his engineering from Nagpur University in 2000 in electronics design technology. He has completed his LL.B. from Delhi University, Law Center II in 2006, while working as an engineer at ST Microelectronics in NOIDA. After his LL.B., he went on to The George Washington Univeristy, Washington DC to do his LL.M. in 2007. After his LL.M., he has worked in the US at a prestigious IP law firm based out of Philadelphia. Till 2014, he was Of-Counsel to a Noida based IP law firm where he specialized in advising clients on wireless, telecommunication, and high technology. Rajiv is the founder of Tech Law Associates, a New Delhi based law firm specializing in IP law, with a focus on high - technology, and patent law. His core IP interest areas are the intersection of technology and IP, Indian IP policy, innovation, and telecommunications patents. He is also an inventor with pending applications in machine-to-machine communications domain (WO2015029061).

One comment.

  1. Anonymous


    I am a little confused here. The title suggests that “IPAB dismisses Bayer’s appeal against compulsory license”, but the content of the post and the attached judgment relate to the dismissal of an application for stay of the order pending appeal. As per my understanding the appeal is yet to be decided, and this is merely an interlocutory application that has been rejected. In that light, the title appears to be misleading.

    Could you please clarify if my reading is correct, or if it is fact the appeal itself which has been dismissed?



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