[Ip-health] A victory and a retreat on CLs

Shailly Gupta shailly.gupta at geneva.msf.org
Tue Jan 20 02:30:10 PST 2015



Jan 15, 2015 |  <http://www.downtoearth.org.in/node/123/2015-1-15> From the
print edition

Supreme Court upholds India's first compulsory licence but government baulks
at giving the second

December has been a landmark month on legal questions surrounding the
compulsory licence (CL). On December 12, the Supreme Court of India set the
seal on a three-year battle launched by multinational drug company Bayer
against the first and only CL issued so far. That was to produce the
anti-cancer drug sorafenib tosylate (Nexavar). The apex court dismissed
Bayer's special leave petition against the Bombay High Court's decision
upholding the CL granted to Indian generics firm Natco to manufacture

The ruling on Nexavar is momentous as it was a test case. The CL given to
Natco in March 2012 by the Controller General of Patents had resulted in a
nasty campaign against India's patent regime by drug MNCs who claimed that
its laws did not protect intellectual property rights (IPRs). The Nexavar
CL, although perfectly legal, was used by US pharma majors and trade lobbies
to portray India as a maverick on patents. The fact is that CLs are a
WTO-approved provision that allows governments to issue a licence to
override patents in special circumstances. The irony is that the US has
issued the highest number of CLs to date.

Bayer had first challenged the CL at the Intellectual Property Appellate
Board (IPAB), then in Bombay High Court and finally at the Supreme Court.
Analysts believe the December ruling is a major victory for access to
medicines and that the earlier judgements of IPAB and the high court have
set important guidelines for the grant of CLs.

In earlier columns, we had explained the significance of the Nexavar case
where several critical issues such as the cost of the drug, its limited
availability in India and Bayer's reluctance to manufacture it in the
country had all played a role in the issuance of the CL.

But other developments are testing the country's commitment to CLs. At the
same time that the Supreme Court gave its ruling on Nexavar another critical
case involving CLs came up in the Delhi High Court. The suit was filed by
Novartis against leading generics maker Cipla for infringing five patents
covering its Indacaterol drug (Onbrez) that is used to treat chronic
obstructive pulmonary disease (COPD). Novartis has sought damages for this

Cipla, however, was testing the waters on CL through another route (see
'Cipla's audacious move', Down To Earth, November 15-30, 2014). In November
when Cipla broke the Novartis patents by producing a low cost generic
version of Onbrez, it had also petitioned the Department of Industrial
Policy and Promotion (DIPP), the nodal agency on IPR matters, to revoke the
Onbrez patents. Cipla contended that COPD having reached "epidemic
proportions", the government should exercise its powers under Section 92 of
the Indian Patent Act to issue a CL. Cipla also argued that Novartis was not
manufacturing the drug locally and was importing only limited quantities and
thus limiting its availability. Besides, the medicine was too costly. It was
citing the very same grounds under which the Nexavar CL was issued.

DIPP, however, did not rise to the challenge. As a result, Novartis has sued
Cipla and refuted the company's claims on availability of the drug. More
pertinently, Novartis was quoted by Reutersas saying, "Cipla did not use any
of the processes provided for in the Indian legal system to either challenge
validity of the patents, establish non-infringement or to seek a license for
these patents."

The health ministry had backed Cipla's recommendation so why did DIPP refuse
to act? One reason that's been bruited around is that DIPP was not sure if
it was on firm legal ground. The other theory is that the government was
afraid of provoking the US. Most people believe this is the real reason.



Shailly Gupta

MSF Access Campaign (India)

AISF Building, First Floor

Lajpat Nagar IV

New Delhi - 110024

Ph: +91-9899976108 

Skype : shailly.17 


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