A question of adjudication came up before the High Court of Delhi, whether Patents Act, 1970 permits export of a patented invention from India. The petitioner, Bayer Corporation (Bayer) filed a writ petition in the High

CS Professional · Intellectual Property Rights - Law and Practice · PYQS · December 2024
A question of adjudication came up before the High Court of Delhi, whether Patents Act, 1970 permits export of a patented invention from India. The petitioner, Bayer Corporation (Bayer) filed a writ petition in the High Court of Delhi contending that Natco was granted a Compulsory Licence by the Controller of Patents for the drug 'Sorafenib Tosylate' under section 84 of the Patents Act, subject to certain terms and conditions contained therein, wherein one of the terms was that the Compulsory Licence was solely for the purposes of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the territory of India. However Natco was manufacturing the product covered by the Compulsory Licence for export outside India and that the export by Natco was contrary to the terms of Compulsory Licence and amounted to infringement of the patent within the meaning of Section 48 of the Patents Act. Natco filed a counter affidavit in the writ petition inter alia pleading (a) that Natco had not exported any product (subject matter of Compulsory Licence); (b) that under the scheme of the Drugs and Cosmetics Act, 1940 (Drugs Act) permission was routinely granted for export to various countries upon compliance of certain conditions and that there were similar provisions in the western countries including Europe; (c) that the Patents Act also provided that export of a patented product for generation or submission of regulatory permission was not an act of infringement. Bayer contended that, the acts of a non-patentee (Natco) of making, using offering for sale, selling patented products would be infringement of patent and that the patentee was entitled to approach the Courts to prevent the non-patentee from doing the said acts. Natco argued (i) that the exports intended by Natco were only for research and development purposes and for obtaining the drugs regulatory approvals in the countries to which exports were intended (ii) that Natco was not intending export of the product covered by the Compulsory Licence for commercial purposes and that research and development activity with respect to patented drugs, for which submission of data to the Drug Regulatory Authority. In furtherance to this an issue was raised during the proceedings in the Court related to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement). India as a party to the TRIPS agreement has agreed to give effect to the provisions thereof without being obliged to implement in its law more extensive protection than is required by it, provided that such protection does not contravene the provisions of the TRIPS Agreement. Else, India is free to determine the appropriate method of implementing the provisions of the TRIPS Agreement within its own legal system and practice. The objective of the TRIPS Agreement, as per Article 31 of the TRIPS Agreement, member countries may allow use of patented product/process for certain purpose, vide Clause (f) which provides that such use should be predominantly for the supply of the domestic market of the member country authorizing such use. The submissions of both the parties traverse the contours of the Patents Act and TRIPS Agreement. Answer the following questions. Discuss the relevance of Art. 31 (f) of the TRIPS Agreement in the instant case.

Answer & Explanation:

Section 107A of the Patents Act, 1970 is not an exception that is carved out to the exclusive rights conferred by the grant of a patent. The exclusive right conferred by the grant of patent with respect to selling, offering for sale and thereby profiteering and earning from the patent is confined only during the term of the patent. Section 107A, permits sale of a patented product during the term of the patent but only for the purpose of obtaining regulatory approvals for manufacturing and marketing the patented product after the expiry of the term of the patent. The purchaser/s of a patented product for such a purpose would be few and negligible in comparison to the consumers of the patented product. There is nothing in the provisions of the TRIPS Agreement to suggest that reading the word 'selling' in Section 107A as including by way of export', would be in violation of the TRIPS Agreement. TRIPS Agreement specifically vests discretion in the member countries to adopt measures in their laws which are necessary to promote public interest in sectors of vital importance to their socio-economic development. Even if it were to be considered that clause (f) of Article 31 thereof allows domestic operation only, the Indian Parliament while enacting the Patents Act, 1970 was entitled to, having regard to the extent of the Indian Generic Industry, permit export for purposes of Section 107A. As per the TRIPS Agreement, Article 31 (f) merely states that compulsory licensing should cater predominantly to the domestic market and places no further restriction on the export of products manufactured under compulsory license. Article 31 (f) of TRIPS Agreement allows for compulsory licensing subject to conditions such as: where attempts to obtain voluntary licenses on reasonable commercial terms are unsuccessful; non exclusive use use predominantly for domestic supply temporary use subject to the special circumstances that warranted the licensing, and subsequent to payment of adequate remuneration to the title holder. Patents Act is concerned with the protection of the rights of the patentees in India only and not outside India. Neither the legislature nor the Courts in India can impose any conditions on the use of the goods exported once they reach the destination country or ensure that such goods continue to comply with the laws in India. The use of the goods in a foreign country would be subject to the laws of that country and cannot be regulated by laws of India or orders of the Courts in India. Even if it were to be believed that the patented invention once exported from India for the purposes prescribed in Section 79 and 107A may be used for other purposes, it is for the patentee to enforce its rights if any in that country. The laws of India are only concerned with the sale by way of export from this country being for the purposes prescribed. As long as the sale by way of export is declared to be for purposes of Section 107A and there is nothing to suggest that it is otherwise, no fetters can be imposed.

Topics: Patent Law

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic