Extracts from IPAB's Order in Bayer's Stay Application on CL Order

In its 17-page order, the IPAB has dismissed Bayer’s application for stay of the CL Order passed on March 9, 2012 by the Controller General of Patents to NATCO in connection with Bayer’s patented drug  Sorafenib Tosylate sold as ‘Nexavar’. I thank a "Frequently Anonymous" friend for sharing the order with me for the benefit of the blog's readers.

Bayer’s Arguments

1. Para 5- According to Bayer, its drug was available with 334 Medical institutions in 102 hospitals. Bayer argued that the Controller ought to have granted adjournment as provided in S.86(1) to afford Bayer time to work the invention and that the Controller’s refusal to grant the adjournment was contrary to law.

2. Bayer also argued that “work” in S.84(1)(c) includes import and not necessarily local manufacture as evidenced from Form 25. Bayer further claimed that it had provided enough evidence of “working” and that “even import of small quantity and a de minimis proof of working” is sufficient proof of working under the Act. Article 27 of TRIPS was cited to support this argument.

3. The Controller General had failed to fix a reasonable price in accordance with Section 90 of the Patents Act which requires the Controller to take into account the expenditure incurred by the Patentee.

4. Para 5, Internal Page 4- Importantly, according to Bayer, Cipla’s sale of  Sorafenib Tosylate is legal. Bayer has even argued that since the drug was being made available by CIPLA at INR 5400, there was no need for grant of a CL to NATCO. Following is an excerpt from the order which captures Bayer’s contention:

“The public interest, public requirement and supply at reasonably affordable price have all been met by CIPLA, so there was no justification for this order.”

5. In breach of the terms of the CL, NATCO was exporting the drug to Pakistan and China.

NATCO’s Arguments

1. Para 9- “It was submitted that S.84 must be seen through the prism of S.83. The argument that CIPLA meets the requirement of the public at a reasonably affordable price is a tacit admission of the Bayer’s default. If Bayer wanted CIPLA’s presence to be factored in while considering the public interest angle, then it should have included the sales of CIPLA in Form 27 for “working”

2. “It was submitted that the words “reasonably affordable” should be understood leaning towards the ordinary man to whom Rs.2.84,000 is clearly not affordable. The learned counsel referred to documents to show that even a country like UK had found the price of Nexavar too high.”

IPAB

1. Para 18- Importation is included in the definition of working, but importation alone cannot be equated with working. True scope of working would need to be decided at the final hearing.

2. Para 20- “The Act does not indicate how long the compulsory license applicant must “woo‟ the patentee to get the license, it only states that Controller shall take into account whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and whether the efforts have failed within a reasonable period as “the Controller may deem fit”.

The applicant asked, the patentee replied that it was fully compliant with the fundamental objectives of patent law and therefore it does not consider it appropriate to grant license to the applicant. Clearly “Barkis was not willin’”

3. Para 22- “The words, “reasonably affordable” must be only seen from the eyes of those who need Nexavar. The learned Senior Counsel for the appellant said that even Rs 8000/- per month will be out of reach to many Indians in view of the per capita income. True, but that cannot mean that the price shall be raised higher, for then it will go out of reach to more number of Indians.

At Rs 8000 per month, more number of HCC/RCC stricken Indians will find it reasonably affordable, than if it is fixed at Rs 30,000 per month, and of course at Rs 2,80,000 it is beyond reach. So prima facie there is no error in the Controller fixing the price at Rs, 8880/- per month.”

4. Para 27- “We are unable to understand whether, according to the appellant, CIPLA rides with them or CIPLA is its rival, whether CIPLA is a friend or foe. When the grounds of section 84(1)(a) and 84(1)(b) are raised, the appellant wants us to take into the reckoning CIPLA’s presence.

CIPLA is satisfying the reasonable requirement of the public and therefore, the Board should not look at the ground under sub-section (1)(a) and CIPLA‟s product  is available to the public at a reasonably affordable price and so, the Board should not look at the ground under sub-section (1)(b).

Therefore, for these two grounds of attack, the appellant takes the presence of CIPLA along with it, but for the ground of attack under section 84(1)(c), the appellant takes a stand that CIPLA is its enemy which prevented the appellant from entering the market. We cannot accept this mutually inconsistent stand.”

5. Para 28- “CIPLA’s presence in the first place may loosely be called a “litigious” presence. If injunction had been granted by the Hon’ble Delhi High Court, CIPLA will not be in the market. Though the appellant is fighting CIPLA tooth and nail before the Hon’ble Delhi High Court, it took great pains to urge before us that CIPLA‟s presence was a legal presence....

...Further, CIPLA is not bound by any condition that is prescribed for the 3^rd respondent NATCO by the Controller general under section 90. Tomorrow, CIPLA may withdraw its product, Soranib for commercial reasons of its own.

The Controller General who has weighed the public interest in his mind rightly refused to reckon CIPLA’s presence in arriving at his decision. It is for the appellant/patentee to show that it has fulfilled the obligation under the grant of patent and therefore, its right should be protected.”

6. Para 29- “The powers of the Controller conferred by this Chapter must be viewed with the lens of section 83. Almost every sub-section in section 83 begins with the words, “patents are granted” which means that it should be viewed only from patentee’s angle”

7. Para 30- “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”

8. Para 34- “The appellant has 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.  

As regards public interest, we have already concluded in the earlier paragraphs that CIPLA’s presence is subject to litigation and CIPLA’s supply cannot be taken note of.   If stay is granted, it will definitely jeopardise the interest of the public who need the drug at the later stage of the disease, since it is admitted that this drug improves the quality of life.

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.”