## Facts

- Bayer Corporation owned an Indian patent covering sorafenib tosylate, marketed as Nexavar, used to treat certain cancers.
- Natco Pharma Ltd. obtained a compulsory licence under the Patents Act to manufacture and sell sorafenib tosylate in India, over Bayer’s objection.
- Bayer later learned Natco had manufactured the drug for export outside India and approached Indian authorities seeking to stop such exports.
- Natco sought permission to export limited quantities to China for clinical studies and trials connected to regulatory approval.
- Bayer contended that exporting any quantity infringed its patent and violated the compulsory licence’s India-only scope, and it sought directions to customs and other authorities to seize or block export consignments.
- Natco argued the exports were not commercial sales but were for research and regulatory filings, and therefore fell within the statutory research/regulatory exception in Patents Act § 107A (the “Bolar” provision).
- A single judge of the Delhi High Court dismissed Bayer’s writ petition and read § 107A to allow qualifying regulatory-purpose activity, including export when necessary for foreign regulatory processes.
- Bayer filed a Letters Patent Appeal (LPA No. 359/2017). The Division Bench decided this appeal together with a companion appeal involving Bayer and Alembic Pharmaceuticals because both raised the same question about the scope of § 107A.

## Issues

1. Whether Patents Act § 107A(a) can treat export of a patented product from India as non-infringing when the export is solely for uses reasonably related to developing and submitting information required under Indian law or foreign regulatory law.
2. Whether a compulsory licence limited to manufacture and sale within India prevents the licensee from relying on § 107A(a) to export limited quantities for foreign clinical trials or regulatory submissions.
3. What constraints apply to ensure the § 107A(a) exception is used for genuine regulatory objectives and not as a cover for commercial export.

## Decision

- The Division Bench dismissed Bayer’s appeal and affirmed the single judge’s refusal to grant broad directions blocking Natco’s exports.
- The court held that § 107A(a) is not confined to Indian regulatory regimes; it can apply to acts directed to generating and submitting information required by regulators “in India, or in a country other than India.”
- The court accepted that export can be part of the protected activity where it is linked to the regulatory purpose and the quantity and surrounding circumstances match that purpose.
- The court rejected Bayer’s position that the compulsory licence’s territorial language automatically made any export infringing; § 107A(a) operates as a separate statutory non-infringement provision for qualifying acts.
- The court indicated that the protection is purpose-limited and fact-dependent, and that verification mechanisms (such as maintaining records and showing the regulatory need for quantities exported) are relevant to policing misuse.

## Legal Principles

- Patents Act § 107A(a) creates a non-infringement safe harbor for making, using, selling, or importing a patented invention solely for uses reasonably related to the development and submission of information required under a law regulating products in India or in another country.
- The statutory reference to “a country other than India” allows reliance on § 107A(a) for activities connected to foreign regulatory approval, not just Indian filings.
- Export is not automatically outside § 107A(a); it may fall within the exception when export is a functional part of the regulatory process and the export quantities and documentation support a regulatory (not commercial) purpose.
- A compulsory licence governs authorized commercial exploitation on its own terms, but it does not eliminate the availability of § 107A(a) for separate, qualifying regulatory-purpose acts.
- Whether conduct is protected turns on evidence of the stated purpose and proportionality of the quantities exported to that purpose; large-scale or market-facing shipments are unlikely to satisfy the “solely” requirement.

## Conclusion

The Delhi High Court held that § 107A(a) can cover export of patented drugs from India when the export is limited to bona fide foreign regulatory or clinical-trial requirements, and it refused to treat Natco’s compulsory licence’s India-only commercial scope as a bar to invoking this independent statutory exception, while stressing that the safe harbor remains subject to close, fact-based scrutiny.


Bayer Corp. v. Union of India & Ors, LPA No. 359/2017, CM Nos. 17922/2017, 20160/2017, 33383-84/2017, 47167/2017 & 660/2018 (2019)