Bayer Corporation and Ors. v. Cipla, Union of India, 162 (2009) DLT 371
In this case the appellants had approached the court to issue directions to Director Controller General of India (DCGI) to retrain them from giving license relating to manufacture of a drug to any other company and to the respondents to prevent them from manufacturing and selling that drug because the appellants had a patent over it.
Rejecting the appellant’s plea, this keenly followed judgement had been delivered by the Delhi High Court denying the drug patent linkage mechanism which was followed in USA to be applicable in India.
The facts of the case are as follows:
- Bayer Pharmaceuticals Limited had been granted patent over the drug “sorafenib tosylate” which it transferred to Bayer HealthCare LLC, a wholly owned subsidiary of Bayer Corporation in India.
- The Patent Officer granted Bayer HealthCare LLC, the patent regarding the said drug for a period of 20 years on 3rd March 2008 and DCGI granted them permission to import the said drug on 8th Jan 2008 to 31st Dec 2010.
- In July 2008 the appellant came to know that DCGI was granting license relating to “soranib” to Cipla which would act as a substitute for “sorafenib tosylate”.
- Appellant wrote to DCGI not to allow Cipla to hold a license in this respect.
- They also prayed that Cipla shall be asked to produce an undertaking that soranib was not a substitute for sorafenib tosylate and hence was not its imitation.
- Bayer wrote to Cipla seeking a reply if they had filed an application with DCGI but did not receive any reply.
- Bayer then filed an inventive writ petition in Delhi High Court to issue directions to Director Controller General of India (DCGI) to retrain them from giving license relating to manufacture of a drug to Cipla and to Cipla to prevent them from manufacturing and selling soranib.
In deciding this matter following issues had been raised before the court:
- Whether licence can be granted by DCGI for marketing of a drug to any other company on which some company already has a patent.
- Whether grant of such marketing approvals derogates provisions of Patent Act.
- Whether linkage can be established between Patent Act and DCA. This issue had been made based on a combined reading of Section 2 of the DCA and Sections 48 and 156 of the Patents Act, 1970.
- Whether the term “spurious drugs” include any drug or formulation which infringes previously granted patents. This issue was important to be discussed because spuriousness of drug would amount to infringement of patent.
The court rejected the plea of appellants and laid down following landmark judgement:
- First issue was decided in favour of respondents stating that such interpretation that DGCI cannot allow marketing of a drug on which patent has already been granted to someone is based on incorrect reading of S. 156 of Patent Act.
- DCGI can sufficiently allow the generic drugs to be marketed even though patent has already by taken on it. By allowing this, DCGI is not abetting the infringement of patent but it is only liable for not allowing spurious drugs to be marketed in order to prevent the patent infringement.
- In fact S. 48 of the Act provides for a private right and negative right because of which even the patent holder needs to seek permission from DCGI to import and market the drugs.
- Further, it was also observed that reading of S. 2 of DCA is based on misconception that DCGI shall be liable to account for the provisions of Patent Act.
- Therefore no linkage could be established between DCA and Patent Act.
- If there could be any linkage made between the two acts then various provisions of Patent Act would become infructuous.
- The parliament while enacting DCA never intended to place patent superintendence, or policing powers, with Drug agencies.
- Enacting any provision to establish linkage between the two acts would be like overstepping the law making bounds of the courts. The parliament has intentionally avoided establishing any such relation and so it would not be right for the court to do so.
- Hence it was held that DCGI is not obligated to enforce patents granted under Patent Act.
- The issue of ‘spurious drug ’ was also decided in the favour of the respondents. Hence Cipla was not held to be spurious drug.
- The court while deciding on this issue stated that spuriousness means an attempt to deception and imitation and to represent themselves as someone else. Providing a substitute does not suffice the meaning of this term.
- The court thus rejected the contentions of the appellants and also ordered them to pay 6.75 lakh as a substantial sum to deter any such applications to be made in future.
- The court further observed that drug patent linkage mechanism as followed by USA cannot be made applicable in India looking forward to the India’s policy relating to public health.
- The problem in patent linkage in India is that it would block entry of generic medicines in the market. This basically affects the poor and marginalised sections of the society who cannot afford very costly medications.
- Patented medicines are generally very costly and con not reach all the needy people in the society. Therefore it is necessary that generic medicine substitutes shall be made available in the market so that they can be sold at a lower cost and the benefit of better medical facilities can be availed by all including the poor and marginalised people of the society.
- This exception was allowed to be given to generic medicines in pursuance of the ‘Bolar Exception”, which was recognized by the HWA, following the ruling in the case of Roche vs. Bolar Pharmaceuticals.
- The Controller of Patent has exclusive authority to determine patent standards in India.
- It was further opined by the court that market approval of drugs does not amount to infringement of Patents.