India Grants the First Compulsory License

In Insights, Uncategorized

30 March, 2012

The Compulsory License Application No. 1 of 2011, the first of its kind in the history of the Indian Patents Act 1970, concerns the anti-cancer drug Sorafenib, where the patentee is Bayer Corporation and the applicant for a compulsory license is Natco Pharma Limited.

The anti-cancer drug Sorafenib, sold under the brand name NEXAVAR, is used for treatment at advanced stages of kidney and liver cancer. The drug is not a life-saving drug, but a life extending drug. The cost of the drug is very high – around Rs. 280,000 per month, a sum that is unaffordable to many of the patients in India. Natco wanted to sell the drug for around Rs. 8880 per month.

According to the Indian patents act, a compulsory license is to be granted at any time after the expiration of three years after the grant of the patent, on any one of three grounds:

(a)    that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or

(b)   that the patented invention is not available to the public at a reasonable affordable price, or

(c)    that the patented invention is not worked in the territory of India.

According to the decision, the requirements for each of the three grounds were separately met and a compulsory license was granted. In view of the fact that India has such a huge population and also a huge pharmaceutical industry, the decision to grant a compulsory license is of great importance.

The Controller General of Patents was in the decision influenced by the high price and low sales by Bayer, and concluded: “It stands to common logic that a patented article like the drug in this case was not bought by the public due to only one reason, i.e. its price was not reasonably affordable to them”.

Regarding item (c) above, this, according to the decision, is to be construed in that the drug must be manufactured in India, i.e. not imported to India, since it was concluded by the Controller General of Patents that ‘worked in the territory of India’ means ‘manufactured to a reasonable extent in India’.

The conditions of the license were many, including for instance that the price of the drug covered by the patent, sold by the licensee shall not exceed Rs. 8880 for a pack of 120 tablets, required for one month’s treatment, and that a royalty at the rate of 6% of the net sales of the drug is to be paid by the licensee.

The decision can, and will be most probably, appealed by Bayer. I look forward to the outcome of a future appeal!

Jeanette Jakobsson, European Patent Attorney

You may also be interested in:

Danish Copyright Act – You may (still) lawfully use copyrighted works for parody purposes

An amendment to the Danish Copyright Act will enter into force on July 1, 2024. The amendment codifies a


Media Vs. Technology – More U.S. Newspapers sue OpenAI and Microsoft

In a significant turn of events, in December 2023, the New York Times took legal action against OpenAI and


Sweden’s Proposed Patents Act

On 11 April 2024, the Swedish Council on Legislation was presented with a new Swedish Patents Act proposal. The


Mobile Sliding Menu