Patent

Dial B For “Bonafide” Patent Working: The Natco Irony


 

 

 

 

 

Did you ever think that Natco would oppose patent working disclosure norms? After all, they benefitted from it when they applied for India’s first compulsory license. And used Bayer’s patent working information (Form 27 filings) to demonstrate that Bayer was not meeting the reasonable requirements of the public through their patented anti-cancer drug, Nexavar. Based on this assertion, they were granted the compulsory license and began selling their version of Nexavar at a much cheaper price. Why then are they opposed to it now? Seems an ironical mystery to me.

Natco’s Intervention Application: Gross Misrepresentation?

Natco’s  intervention application in our patent working PIL was argued by their lawyer Rajeshwari Hariharan on the 18th of January before a bench comprising Acting Chief Justice of the Delhi High Court Gita Mittal and Justice Hari Shankar.

Rather than simply sticking to the issue on merits, Natco begins by attempting to discredit me. In para 9 of its application, Natco states: “The petitioner is no crusader of public interest but has filed the petition for personal gain and private motive”. On the other hand, the respondent is “bonafide”.

Natco’s “bona fide” application then goes on to note: “The writ petitioner has made gross misrepresentations to this Hon’ble court and painted a picture of complete non-compliance by all the patentees/licensees and state of complete inaction by the patent office. The respondent submits that these facts are entirely incorrect and baseless.”

And later, Natco states: “The position advocated by the petitioner calling for action against ….allegedly errant patentees is not even provided for in law” (para 8)

This left me a tad bit surprised, to say the least! For the government’s counsel (Amit Mahajan) candidly admitted to the court that the government had indeed failed to take any action in this regard. However, he argued that their hands were tied since there were no enabling “rules” to prosecute errant patentees. I’d noted all of this in an earlier post.

Secondly, in our writ petition, we demonstrated empirically how a significant number of patentees had either not  complied or had filed defective forms (Form 27’s). How then is our claim a “gross misrepresentation” as Natco alleges? And why does a “bona fide” Natco feel the need to defend this statutory breach by other patentees? Especially when Natco is only seeking to intervene and is not a main party to this petition (as I understand, Natco’s application for intervention has not yet been accepted by the court).

But more curiously, why is Natco not supporting a strong patent working disclosure norm? After all, Natco relied significantly on Bayer’s Form 27 filings to stake its claim to India’s first ever compulsory license (in the post TRIPS era). As readers may recall, the noble Natco took on a belligerent Bayer and demanded a compulsory license over their patented anti-cancer drug Nexavar on the ground that it was excessively priced and not available to a majority of the Indian patient population. Natco intelligently relied on Bayer’s Form 27 filings to demonstrate that Bayer was only supplying a minuscule portion of the patient population with its patented drug. It was on the basis of this argument that the Controller General of Patents (PH Kurian) granted a license to Natco. Why then would Natco not want to support a stronger disclosure norm? And instead work against its own interest by saying what it did in the intervention application i.e. suggesting that all is well and that nothing more needs to be done on the patent working disclosure front. Worse still, claiming that the law does not provide for any penalty against errant patentees! Really? How can a corporate like Natco with its fine array of competent counsel be ignorant of Section 122 of the Patents Act which clearly provides for such penalty?

Am I missing something here?

But keeping all this aside, let’s consider Natco’s claims on merits. Natco took issue with our claim that they had not filed the requisite “working” information pertaining to their sales of the generic version of Bayer’s patented anti-cancer drug Nexavar.

Natco and a “Bona Fide” Compliance with Patent Working?

While granting India’s first ever (post TRIPS) compulsory licensing order in favour of Natco, the Controller General of Patents specifically directed that Natco submit quarterly reports of the sales of it’s generic drug. Effectively this meant that Natco now had two sets of obligations to fulfil on the  “working disclosure” front:

  1. To submit information on the quarterly sales of their drug under the terms of the compulsory licensing order.
  2. To file the relevant Form 27 applications under the terms of Section 146 (2), just as any other licensee would do (since a “compulsory” licensee is also a licensee)

In our writ petition, we’d stated that Natco did not file this information, since this is what the patent office told us. In response to our RTI application…not once but twice!

We first filed an RTI application on 10 Feb, 2014 asking if Natco had submitted this information. The response (from the Asst. Controller General) clearly stated thus: “I would like to inform you that as on today no details are available….”

We then filed another RTI the following year (19 Jan, 2015) asking for the same details in the hope that they may have filed it subsequently (i.e., after 12 Feb, 2014). But on 06 Feb, 2015, the Asst. Controller responded with the same response: “I am to inform you that as per records no details are available to furnish under RTI.”

Natco now claims in its intervention application that it did submit this information to the patent office. And annexed documents to prove the same, in the form of letters that they sent to Bayer with a “cc” to the patent office. Four questions/issues arise from this:

  1. If Natco had indeed submitted this working information in time, why did they simply not file a one page note to the court stating so? Rather than launching a personal attack against me and worse still, showcasing to the whole world that they are now opposed to transparency and to patent working disclosure norms: the same norms that helped them gain a compulsory license in the first place?
  2. Secondly, whey did they not bring it to the attention of the Delhi High Court  in 2015-16 or even 2017? After all, we made this allegation in our patent working PIL filed in 2015 itself. And our pleadings were in the public domain. In fact, our blog posts summarising the key points in the pleadings were also publicly available and I assume that a corporation with deep legal pockets such as Natco would have had competent lawyers scurrying to bring this to their notice. After all, they came rushing to the court and filed an intervention in this case only because they had seen our blog post on the court order.
  3. The Patent Office clearly informed us (officially through an RTI response) that no information on Natco’s working was on file with them. To this extent, we didn’t make any false claim. We simply relied on the patent office assertion. And for all official purposes, there was no such filing from Natco. But something appears to be amiss here. My counsel kept meticulously tracking the patent office website: and even as late as Jan 10th, there were no records of any letters from Natco to the Patent Office or Bayer containing this sales/working information.
  4. Has Natco compled with the mandate to submit working information under Form 27?  Not so! In their intervention application filed before court, they’ve attached Form 27 filings in this regard for 2015 and 16, but not for the previous years (2013 and 2014). They admit that they hadn’t filed this for some years. So clearly, by their own admission, they are not in full compliance. And yet they have the temerity to allege that I made false allegations against them for personal private gain! While they are “bonafide”! Here again, something appears to be amiss, since when we checked the patent office website as late as 2016, we didn’t see any Form 27 filings from Natco for the year 2015.

Whither Public Interest?

Interestingly, Natco questions why I (the petitioner) was so interested in patent “working” information. This is also reflected in Natco’s application which reads thus:

 “The respondent also submits that the present writ is not bona fide and seeks to obtain information which is otherwise not available in public domain. The petition as such is not affected in any manner by the filing of working statements. The petitioner has no locus standi to file the present petition.” (para 9)

Natco appears to have forgotten that the compulsory license order in favour of Natco was issued only because the reasonable requirements of the public were not met through Bayer’s patented drug Nexavar. That “public” necessarily means all of us including “me”. Patents are twenty year monopolies and the public are entitled to know whether they are being worked to the public benefit. And if a compulsory licensee steps in claiming that they can work the patent better than the patentee, they too must be open to the public. For if despite the compulsory license, the patented invention is still not being worked to the fullest and the reasonable requirements of the public are not met, the patent is susceptible to a revocation under Section 85 of the Patents Act! We’d pointed all of this out in our petition.

For those interested, I’ve been tracking this compulsory license dispute ever since its inception. And had even put together a comprehensive report on Bayer’s Form 27 filings and the various gaps in it (to see the report co-authored with the wonderful Rupali Samuel, click here). So clearly, a demonstrable and long lasting academic interest in this dispute. But perhaps, Natco is right. I do have a slight personal/private interest in these Form 27 filings. Often times, during the deepest darkest hours of the night, when sleep eludes me, I flip over Form 27s in the hope of inducing some sweet slumber.

Natco’s Defamation Suit

As I’d stated in my defence to Natco’s defamation suit, I have, in the past, praised Natco for single handedly taking on the political might of pharma MNCs and demanding a compulsory license over Bayer’s anticancer patent. However, in equal measure, I also condemned Natco when it lied to a court of law. This “lie” is not a figment of my imagination, but can be objectively ascertained from their very own court filings. Where in order to avoid an injunction, Natco clearly stated that they were not interested in producing an allegedly “infringing” drug; when, at that very moment, they had a pending drug regulatory application for the drug. If this is not perjury, then what is? For all we know, that statement could have been a negligent one inserted by one of their counsels. But if this is the case, they should come upfront and state so! Rather than suing those that point this out. And this brings me to my last point.

Killing Transparency?

Towards the end of the court hearing, Natco’s counsel took umbrage at the fact that all our pleadings were in the “public domain” (given that we posted the patent working petition and other related documents on SpicyIP)! A tad bit ironical, given that these were public interest proceedings to begin with!

For the record, we’ve been documenting Form 27 lapses on our blog since 2011 (with our Form 27 investigations going as far back as 2008). See our previous posts here. The mainstream press also picked up on our investigative reports on this count. See this TOI article by Rupali Mukherjee.

In other words, almost all the arguments we’ve advanced in this public interest petition were already in the public domain (SpicyIP blog) from 2011 onwards! Given our wide readership and the deep legal pockets of corporations, I assume that Natco and others were in the know.

We intend to continue fighting this as a public interest battle. For the public have a right to know what transpired. Just the same way they have a right to know how a patent (a twenty year monopoly) has or has not been worked. To this end, we’ve uploaded all the documents pertaining to this petition on our resource page here.

Ironical perhaps, that when the rest of the world is moving towards more “light” in legal proceedings, some are keen on keeping us in the “dark”. A recent PIL filed by Indira Jaising asks for a live streaming of court proceedings; and one hopes that it makes some headway.

Conclusion

To conclude, this public interest petition on patent working is meant to serve a larger cause, than simply singling out patentees and their limited instances of non-compliance. The patentees and the aberrations we cite are merely illustrative of the larger point that the patent working requirement is not taken seriously at all. By both patentees and the patent office. We want this to be taken more seriously. Given that it greatly enhances transparency within the innovation ecosystem. It is a provision unique to India, and we must do all we can to retain this (pressure from US/EU governments and various industry groups notwithstanding).

The matter is now listed for the 1st of March. One hopes that the government files a detailed affidavit by then outlining a tight time bound framework for putting in place robust rules etc to enforce the patent working mandate. As I’d stated earlier, we’ve suggested that no action be taken for past infractions. But that all patentees and licenses be provided a future window within which to comply.  And on that positive note, let me end this post.

ps: Pursuant to Natco’s counsel clarifying that all the statements/assertions made against the petitioner (both in the intervention application as well as orally in court) were made under instructions from Natco, specific references to the counsel have been removed from this post.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is 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 Professor Basheer joinedAnand 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. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

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