Breaking News: India Rejects Compulsory Licensing Application at Threshold

In an earlier email message to the SpicyIP group of subscribers around two weeks ago (as below), I’d reflected on the delay accompanying the processing of India’s second CL application filed by BDR Pharma against Dasatinb, an anticancer drug patented by BMS. And contrasted that delay with the speed with which India’s first CL application dealing with Nexavar had been decided by the erstwhile Controller General (CG), PH Kurian.

Thankfully, the matter has now been decided. In a fairly comprehensive and well reasoned order dated 29-10-2013, Chaitanya Prasad, the Controller General of the Indian Patent Office (IPO) held that BDR had failed to make out a “prima facie” case for the grant of a CL. This is a threshold requirement to be satisfied before the IPO can even engage with the merits of a CL application.

Under Indian patent law, a CL applicant must first attempt to procure a voluntary license from the patentee. If this attempt does not succeed within 6 months of the initial request, the applicant is free to file a CL application. BDR initially sent a request for a voluntary license to BMS, a multinational pharma company that owned the patent over Dasatinib, an anticancer drug. BMS responded with a series of questions (such as whether BDR had the necessary wherewithal to produce good quality API etc).

BDR did not answer any of these queries, but filed a CL application after a year of its initial request letter. BDR claimed that the attorneys for the patentee had written an article in a reputed IP magazine contending that the best way to handle a CL application was to delay the negotiation process by asking a series of questions. The Controller General (CG) however was not satisfied and held that anything written or held forth by an attorney (who acts for multiple clients) cannot be attributed to the patentee, BMS.

The CG held that BDR had not really made any credible attempt to procure a CL and therefore could not be said to have satisfied the statutory requirement that the applicant must have negotiated in good faith for 6 months at least. Therefore, BDR did not make out a “prima facie” case for the grant of a CL and the application was dismissed at the threshold itself.

BDR now has two routes open to it. One is to mount a legal challenge to this order. The second (and I think the more pragmatic option) is to renegotiate the license with BMS, comply with the 6 month time period and come back with a fresh application. Only time will tell which way it proceeds. Stay tuned!

Earlier Email Message on IPO Delay with BDR Application

From: Shamnad <[email protected]>

Subject: Re: Bayer challenges Compulsory Licensing Order before Bombay High Court

Date: 15 October 2013 10:25:42 PM GMT+10:00

To: spicy ip <[email protected]>

Predictably, Bayer has challenged the IPAB decision upholding India’s first post TRIPS compulsory licensing order. A writ has been filed before the Mumbai High Court. We’ll bring you more as the matter proceeds. Thanks to Praveen Raj for drawing our attention to this.  See news articles here and here.

As of date, our understanding is that Bayer continues to charge the same price as earlier (Rs 2.8 lakhs per month). If any of our readers can confirm or correct this, we’d be grateful.

In the meanwhile, India’s second CL filed by BDR Pharma for Dasatinib continues to languish before the IPO. A hearing for condonation of delay was held on the 16th last month as we had blogged about here.

And yet, despite the efflux of a month, no order has been passed. Is the Patent Controller deliberately delaying this application?  A sharp contrast to the earlier Controller who speedily disposed off the application with a very well reasoned order. Lets do a quick comparison of the dates here:

I. Bayer vs Natco (Nexavar)

1. Bayer CL application filed on: August 28, 2011

2. Controller hears both parties and  issues decision on: March 9, 2012

3. Total time taken: less than 6 months!

 (matter was then appealed to the IPAB and decided in March 2013)

II. BMS vs BDR (Dasatinib)

1. BDR application filed: March 2013

2. Prima Facie Determination: still pending as of today (more than 6 months have gone by)!

In short, while the first CL application was disposed off on merits in less than 6 months, the second one has been languishing at the “prima facie” stage for more than 6 months! More worryingly, we are given to believe that despite a month going by, a decision on a procedural condonation of delay petition has not been taken!

What ails? Is this delay purely at the government end or are the parties to blame as well? Does this have anything to do with the mounting pressure from the US, a country which continues to issue de facto CL orders through their courts. A point I reflect on in this Hindu editorial:

The more the delay and the more the legal impediments thrown up, the greater the disincentive faced by prospective CL filers. And so long as the  CL provisions are on the statute book, the government must ensure that they are speedily processed so as to not frustrate the process.

 One must not forget that India’s compulsory licensing order is not a purely “discretionary” rabbit pulled out of the governments hat. But effectively a statutory entitlement in favour of third parties who activate section 84. In other words, if the section 84 conditions are invoked and met by a third party (such as Natco), the compulsory license has to necessarily issue. If the government fails to issue this, it can be taken to court.

ps: at the time that the first CL application was filed for Nexavar, there were two other  potential CL applications as well. Cipla had applied for a voluntary license application for Merck’s Isentress. Does anyone have news on these applications and what came of them? Our blog article in this regard is here:

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