## Facts

- Bayer Corporation owned an Indian patent (granted March 3, 2008) covering sorafenib tosylate, sold as “Nexavar,” used to treat renal cell carcinoma and hepatocellular carcinoma.
- Natco Pharma sought a voluntary license to sell sorafenib at under ₹10,000 per month of therapy; Bayer declined.
- After the statutory waiting period, Natco applied for a compulsory license under Patents Act, 1970 § 84(1), alleging (i) unmet reasonable public requirements, (ii) lack of reasonably affordable pricing, and (iii) failure to work the invention in India.
- The Controller of Patents granted a compulsory license (March 9, 2012), setting a royalty on Natco’s net sales and imposing a price cap (about ₹8,800 per month of treatment).
- On appeal, the Intellectual Property Appellate Board largely affirmed, increasing the royalty rate (March 4, 2013).
- Bayer filed a writ petition under Article 226 challenging the Controller’s and IPAB’s orders.
- The record reflected a large patient population needing sorafenib and a supply shortfall relative to that population, alongside a large price gap between Bayer’s product (about ₹2,80,000 per month) and lower-priced generic alternatives.

## Issues

1. Whether the Controller and IPAB correctly applied Patents Act § 84 in granting and affirming a compulsory license for sorafenib.
2. How § 84(1) should be construed for (a) “reasonable requirements of the public,” (b) “reasonably affordable price,” and (c) “worked in the territory of India,” including the role of importation.
3. Whether the agencies’ findings on demand, supply, and affordability were legally sustainable on writ review.
4. Whether the compulsory license and its terms were inconsistent with the patentee’s rights or with TRIPS obligations.

## Decision

- The Bombay High Court dismissed Bayer’s writ petition and upheld the IPAB’s decision (and the Controller’s compulsory license).
- The Court held that the § 84(1) criteria were satisfied on the record, including unmet public requirements and lack of reasonable affordability.
- The Court accepted that “working” may, in appropriate cases, be satisfied by importation, but held that limited supply and very high pricing could still amount to a failure to meet § 84(1)(c) on the facts found.
- The Court declined to reweigh factual determinations, holding that writ jurisdiction is limited to correcting legal error, perversity, or findings unsupported by evidence.
- The Court found the license structure (non-exclusive, non-assignable, time-limited, royalty-bearing, and price-capped) consistent with the Patents Act and TRIPS.

## Legal Principles

- On Article 226 review of specialized patent authorities, the court does not act as an appellate fact-finder; it interferes only for legal error, arbitrariness, perversity, or lack of evidentiary support.
- Under Patents Act § 84(1)(a), “reasonable requirements of the public” may be assessed by actual access in light of public health demand, including whether supply meaningfully serves the patient population.
- Under § 84(1)(b), “reasonably affordable price” is judged from the standpoint of the public in India; very high pricing relative to feasible alternatives can establish non-affordability notwithstanding patentee business justifications or limited assistance programs.
- Under § 84(1)(c), “worked in the territory of India” is not categorically confined to local manufacture; importation may suffice if it adequately meets demand on reasonable terms, but importation in limited quantities at very high prices may fail the statutory test.
- TRIPS permits compulsory licensing; compliance is supported where the license is granted on an individualized record, is appropriately conditioned, and preserves patentee remuneration through royalties and other terms.

## Conclusion

The Bombay High Court sustained India’s first compulsory license for sorafenib, holding that the statutory grounds in Patents Act § 84 were met and that, on writ review, the specialized authorities’ findings on unmet demand, unaffordable pricing, and inadequate working warranted no interference; the license terms were also held compatible with TRIPS.


Bayer Corp. v. Union of India, Writ Petition No. 1323 of 2013 (Bom. HC 2014)