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Alert 338 India - Court describes Bayer 'patent linkage' litigation as a 'speculative foray'
The pharma industry war in India, is already fierce, and is getting fiercer. In one of the latest high profile battles, Bayer took action to prevent the Drug Controller General of India (DCGI) granting marketing approval for Cipla's version of the patented drug 'Nexavar'. Bayer's argument that 'patent linkage' should be read into India's legislation was roundly rejected by the Court, which characterised the litigation as a 'speculative foray'.
'Patent linkage' is the practice of linking marketing approval for generic medicines to the patent status of the original product. Although some countries, such as China and the US, make specific legislative provision for 'patent linking', no such specific provisions exist in Indian legislation.
The Indian Drugs & Cosmetics Act (the Drugs Act), which controls the manufacture and marketing of drugs in India, prohibits the manufacture of 'spurious' drugs. Bayer argued that because Cipla's drug infringed Bayer's patent rights, it constituted a 'spurious' drug for the purposes of the Drugs Act. The provisions of the Drugs Act and the Patents Act, when read together, introduce the concept of 'patent linking'; when granting marketing approval, the DCGI is bound not to derogate from the provisions of the Patents Act. Here, a grant of marketing approval would lead to infringement of Bayer's patent.
Cipla argued that the drugs regulatory system and the patent system are two separate systems. Grant of marketing approval does not amount to infringement of the patent; patent infringement must be established in a court of law in accordance with the provisions of the Patents Act. Further, the Patents Act exempts from infringement acts of making, using or even selling a patented invention that are necessary for the purposes of filing an application for marketing approval (the Bolar/early working exemption). Cipla also argued that the reference to 'spurious drug' in the Drugs Act is not a reference to drugs that infringe, or may infringe, a patent. The term must be read in the context of 'mislabelling that is likely to lead to deception'. Cipla's drug is not being 'passed-off' as Bayer's and cannot be regarded as a 'spurious drug' for the purposes of the Act. Finally, as a practical matter, regulatory authorities granting manufacturing licences lack the resources and manpower to check the patent status of each product i.e. whether the patent is valid and being infringed.
The Court was of the view that 'patent linkage' must be specifically provided for by legislation. As no such provisions exist in India, it is not open to the Court to provide them. To do so would be to overstep the Court's 'obvious interpretive bounds'. The Court was further of the view that in the Indian context 'patent linkage' would have the following undesirable results:
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Regulatory authorities, who do not have the appropriate expertise, would be required to police patent rights.
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The enforcement of patent rights would no longer be up to the patent owner, but could be undertaken by public authorities.
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The 'Bolar/early working' exemption, designed to enable quick access to generic medicines on expiry of the patent term, would be undermined.
It is interesting to note that in this case the Court varied its normal practice of making a costs order for only a token amount and ordered Bayer to pay costs of INR 675,000 (approx. US$ 14,000). It also criticised the litigation as having been a 'speculative foray' and an attempt to 'tweak' public policy through court mandated regimes.
For more information, email india@iprights.com.
