Introduction

• This case deals with the compulsory licenses under section 84(1) the Indian Patent act.

Facts

• The petitioner initiated legal proceedings before the court challenging the Intellectual Property Appellate Board's decision to issue a compulsory license to Natco Pharmaceuticals Ltd. under Section 84 of the Patents Act, 1970 (Act of 1970).
• The petitioner, a United States based corporation, had developed a patented drug for treating Kidney Cancer, which alleviated pain and inhibited cancer spread.
• Natco Pharmaceuticals had requested a voluntary license from the petitioner to manufacture the drug in India, proposing to sell it at Rs 10,000, significantly lower than the petitioner's price of Rs. 2,80,428.
• However, the petitioner declined the offer.
• Subsequently, after three years, Natco applied for a compulsory license under Section 84 of the Act of 1970.
• The Intellectual Property Appellate Board granted the license at a rate of 7%, differing from the Controller's opinion that compliance with Section 84 (1) (c) of Act of 1970 would only occur if the patented drug was manufactured in India.

Issues Involved

• Whether Nacto made an effort to obtain voluntary licence?
• Whether reasonable requirements of the public have been satisfied under Section 84 (1) (a) of Act of 1970?
• Whether the patented drug available to the public at reasonably affordable price?

Observations

• The Court observed that the letter provided by the petitioner clearly showed that refusal of voluntary licence.
• The Court said the requirement of any drug at reasonable price must be considered by the authorities with the context of the number of patients requiring patent drug.
• The figures provided by the petitioner do not meet the annual requirements of patients and thus reasonable requirement of the public with regard to the patented drug has not been satisfied.
• The Court explained that Section 90(1)(iii) of the Act of 1970 does not instruct authorities to set a specific price but urges them to try to make the patented item available at a reasonably affordable cost.
• According to Section 90(1)(iii) of the Act of 1970, only the money spent on research and development for the patented medicine should be considered when deciding the terms for a Compulsory License.
• The petitioner has not made available anywhere the quantum of reimbursement received.
• The Court said the argument raised on the basis of differential pricing can apply to a situation of Section 84 (1) (a) but not to Section 84 (1) (b) of Act of 1970.

Conclusion

The case finally set a landmark example by granting a compulsory licence in the pharmaceutical sector and finally held that compulsory license was granted to Natco Pharma with certain conditions in relation to Section 90 of the Act of 1970.