1. Landmark case of
Compulsory Licensing in
India
October 16,20151
Presented by:
Kiran Patange

2. Following is the brief mention of the provisions of section
84 and 92 of the Act.
Section 84 of Compulsory licenses:
At any time after the expiration of three years from
the date of the grant of a patent, any person
interested may make an application to the Controller
for grant of compulsory license on patent on any of
the following grounds, namely:
 That the reasonable requirements of the public with
respect to the patented invention have not been
satisfied, or
That the patented invention is not available to the
public at a reasonably affordable price, or
 That the patented invention is not worked in the
territory of India. 2
Indian provisions relating to Compulsory Licensing

3. Natco v/s Bayer was the first Landmark case of compulsory
licensing being obtained in India in pharmaceutical field
of discipline
Patentee: Bayer Corporation
Applicant: Natco Pharma Limited
API: Sorafenib tosylate
Dosage form: Tablet; Oral
Brand name: Nexavar
Strength: 200mg
Category: Anticancer (liver and kidney cancer treatment)
Patent no. IN215758
3
Landmark case of Compulsory Licensing in India

4. Natco, a generic drug manufacturing company
requested Bayer for giving it a voluntary license
The request was denied and so Natco filed an application
in the Controller of Patents Court for grant of a
compulsory license
In accordance with the provision of Indian Law’s Section
84 of the Patent Act, the Indian Controller of Patents
started with competing claims of both the patentee
(Bayer) and the compulsory license applicant (Natco)
And finally Natco received a license from the Drug
Controller General of India for manufacturing the drug in
bulk and marketing in form of tablets (200mg) in April
2011 on the basis of following grounds;
4
Case Background

5. 5
Reasonably affordable price
Nexavar cost - The cost of cancer drug Sorafenib in 200mg
tablet varies vastly in branded and generic category.
Branded Category- Rs 280,428 per patient per month.
The generic drug:
1) Sorafenib was available from Cipla for Rs 27,960
2) Natco is providing the same at Rs 8,880/-. After the
judgment for grant of compulsory license Cipla has
slashed its price further and now it is available for Rs
6,600/- per patient per month.
Per Capita Income of India (PCY) in 2011 - $1575/-
Cost of Bayer’s Nexavar PP/Year in 2011 - $69,000/-
Cost of Natco’s Sorafenib PP/Year in 2011 - $2,120/-
Bayer was charging almost 45 times the Per Capita Income of
India of India.

6. Requirement of about 23,000 bottles per month.
No bottles of Nexavar were imported in India in the
year 2008 and 200 bottles were imported in 2009. In
the year 2010 there were no imports of Nexavar.
The importance of the time period lies in the fact that
the Government of India granted Bayer a patent on
the drug Nexavar in the year 2008 after assessing
that Bayer would fulfil the “Reasonable requirements
of the Public” during that period. Also, Bayer did not
manufacture the drug in India as it focused on
imports of its bottles.
6
Reasonable requirements

7. The Controller also cited that the invention
(Nexavar) was not “worked” in India. Natco argued
that even though Bayer had manufacturing facilities
in India, it did not manufacture the drug in India.
Bayer said it did not do so because of economic
reasons and argued that “worked in the territory”
could not mean “manufactured in India”.
Bayer added that the “strategic decision” of
manufacturing the drug in Germany was valid as had
the drug had “small global demand”.
7
Patented invention is not worked in the territory

8. On 9th March, 2012, The Controller of Patents in his
judgment awarded the first compulsory license in the
pharmaceutical industry in India under new WTO rules. The
Compulsory License for the drug Sorafenib/ Nexavar is
granted by the controller on the basis of the following
terms:
The applicant Natco has very limited rights to manufacture
and commercially sell the drug.
Natco cannot sublicense to another party. It is a non-
assignable and non-exclusive license with no right to import
the drug.
The compulsory licensed drug can be sold only for the
treatment of liver and renal cancer. Natco cannot use this
license for alternate or subsequent use of the drug.8
Landmark decision

9. Natco has to pay the royalty for the drug at a rate of 6%
of net sales to the patent owner Bayer. This is in
consonance with Article 31(h) of TRIPS Agreement read
with Section 90(1) of the Act.
For one month treatment, the controller has set the price
of the Natco’s drug at Rs.8800/-.
Natco, as committed before, has to provide the drug free
of cost to at least 600 “needy and deserving” patients
per year
Natco cannot or it has no right to “represent privately or
publicly” that the product manufactured by it is the same
as Bayer’s Nexavar.
Bayer has no liability for the drug to be manufactured by
Natco, which must be physically distinct from Nexavar
dosage form
9

10. Following the grant of the CL to Natco, Bayer has filed a
petition with the Intellectual Property Appellate Board
(IPAB) to order a stay on the compulsory license.
On Friday, 14 September 2012, IPAB issued Order (No. 223 of
2012) in the case between Bayer versus the Union of India,
The Controller of Patents, and Natco dismissing Bayer's
request for a stay on the compulsory license granted to
Natco.
Bayer, in its petition said that Indian Drug manufacturer
Cipla was selling its product Soranib, at a maximum retail
price of Rs.6,840 in India for one month’s treatment, lesser
than Natco’s price.
Bayer also argued that, its drug Nexavar was made
available at Rs. 30,000 to patients on the recommendation
of the oncologist. 10

11. Bayer argued that as the drug is already available in the
market at a reasonably affordable price and the patentee is
not necessarily the supplier, then Section 84(1)(b) of the
Patents Act will not arise.
As also some other company is supplying the drug and as
the public requirement is met, even then Section 84(1)(a)
will not arise.
Additionally, there was no burden for Cipla in doing
research and development, Cipla can sell the drug at any
price. Therefore, Section 84(1)(c) could not arise either.
The decision noted that "The patentee, Bayer has to prove
that, the patentee by its own supply has satisfied the
requirements of the public.
11

12. 12
Other CL cases in India
BDR pharmaceuticals vs. BristolMyersSquibb's
Patentee: Bristol Myers Squibb's
Applicant: BDR pharmaceuticals
API: Dasatinib
Dosage form: Tablet; Oral
Brand name: SPRYCEL
Strength: 20MG, 50MG, 70MG, 100MG, 80MG, 140MG
Category: Anticancer (Chronic Myleoid leukemia(CML)
Patent no. IN203937
Controller decision: applicant has failed to make out a
prima facie for the making of an order under sec 87 of the
Act. The application for compulsory licence, along with all
the petitions for condonation of delay/irregularity, is
hereby rejected.

13. 13
AstraZeneca vs Lee Pharma
Patentee: Astrazeneca
Applicant: Lee Pharma
API: Saxagliptin
Dosage form: Tablet; Oral
Brand name: Onglyza
Strength: EQ 2.5MG BASE, EQ 5MG BASE
Category: Antidiabetic (Diabetes Mellitus (life management)
Patent no. IN206543 (granted in 2007 to Bristol-Mayers
Squibb, which later assigned the patent to AstraZeneca)
Saxagliptin CL Round 1: Controller shoots down Lee Pharma

14. Thank You
14