First things first, I thank a
whole bunch of friends and well-wishers who were kind enough to share a copy of
the Bayer-NATCO Appeal Order of the IPAB , which has been made available
on the IPAB’s website. Also, I thank Amshula for sharing with me the salient
observations of the IPAB in the order.
By this 48-page order of March
4, 2013, the IPAB had affirmed the Controller’s order (of March 2012) of grant
of compulsory license to NATCO on Bayer’s patented drug ‘Sorafenib Tosylate’
which goes by the name, Nexavar. The drug is used as a palliative to treat
advanced stages of kidney and liver cancer. While Bayer’s drug was priced at
INR 2,80,428, NATCO’s version is priced at INR 8,800.
In this post, I will cover the first ground of Bayer's appeal addressed by the IPAB.
Ground
1: No Opportunity for Hearing Provided to Bayer before forming a prima facie opinion on need for CL
This ground deals with Section 87(1)
of the Patents Act, which states that “where
the Controller is satisfied, upon consideration of an application under Section
84, or Section 85, that a prima facie case has been made out for the making of
an order, he shall direct the applicant to serve copies of the application upon
the patentee and any other person appearing from the register to be interested
in the patent in respect of which the application is made, and shall publish
the application in the official journal.”
A reading of the subsequent
sub-sections of Section 87 clarifies that there is no duty cast on the
Controller to notify the patentee before a prima
facie opinion is formed. This could be because firstly, the opinion itself
is prima facie, meaning thereby only an
arguable case had been established by the applicant for the CL. Secondly,
except for notifying the patentee of the application for CL, there is no
prejudice that is caused to the patentee by mere formulation of a prima facie opinion by the Controller
since the patentee is subsequently given an opportunity to rebut the prima facie opinion.
If the formation of a prima facie opinion led to suspension of
the patentee’s rights until rebuttal of the prima
facie opinion, considering such an adverse consequence, it would have made sense
to provide for an opportunity to the patentee to be heard. But since the
formulation of a prima facie opinion
leads to no such adverse consequence, the Legislature appears to have deemed it
fit to not provide for a hearing.
For instance, under Section 14,
the Act requires the Controller to hear the patent applicant if the report of
the examiner is adverse to the patent application. Clearly, the
legislature has provided for a hearing wherever an adverse consequence
is in the offing for a patent applicant/patentee. This is expressly reflected
in Rule 129 of the Act.
Since no adverse consequence, such
as abridgment of the patentee’s rights, follows in the immediate aftermath of
the prima facie opinion being formed
under Section 87(1), there is no express right of hearing provided for under
the Section, nor would the Controller be wrong in choosing to not exercise his
discretionary power under Rule 129.
This is the sum and substance of
the IPAB’s opinion on this ground, which is extracted below:
“9.
At the stage of Section 87(1), the Controller has two options. Even on
the face of it, he may decide that the compulsory licence cannot be
granted. This may be for various obvious reasons like, the application
having been made before the lapse of the three years mandated by law. The
Controller has another option. On the face of it, he may decide that this
is a matter where the parties have to be heard before a decision is arrived
at. It does not mean that the Controller has decided one way or the
other. It means only that on going through the application and considering the
facts alleged, he is of the opinion that the other side should be heard.
Therefore, he directs the applicant to serve copies on the other side. It is
clear from S.87(1) that prima facie satisfaction precedes the direction to
issue notice to the patentee or other persons. Therefore, it is futile to
contend that for arriving at prima facie satisfaction, the other side should be
heard. The hearing of the other side arises only after notice of
opposition is filed and Section 87(4) stage is reached. After hearing
both the parties, the Controller again has two options. He may reject the
application for licence or he may grant the licence. At the stage of
87(1) no such determination of rights is contemplated and all that is
contemplated at that stage is whether this application deserves to be granted a
hearing. Therefore, this
ground is rejected.”
I will deal with the rest of the grounds in
the posts to follow shortly.
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