PATENT

A patent is an exclusive right granted to a person for any product or process, which is new,
contains an inventive step and has industrial application. The patentee is entitled to deal with
his patent in the same manner as any other lovable property. Thus he can sell the whole or
part of his property, can grant licence to others to use the patented property, can assign it to
others etc.

A patent represents a quid pro quo, meaning the patentee has the monopoly and he presents
the knowledge to the public which they have not got.

Unless a patent is granted, no protection can be sought in respect of the invention. And it is
granted only when an application is made to the competent authority under the act and it
fulfils all the prescribed conditions.

the fundamental principle of Patent Law is that a patent is granted only for an invention
which must be new and useful. That is to say, it must have novelty and utility.

A patent is a form of industrial property. There is an obligation cast on the patentee to work
the invention on a commercial scale either by himself or through licences

Patent monopoly being a creation of statute the state can impose any conditions for its grant.
It must be the inventor’s own discovery as opposed to mere verification of what was already
known before the date of the patent

Object of the patent law is to encourage scientific research, new technology and industrial
progress for public good.

Patent is not granted for the benefit of patentee but for the benefit of the public at large.

The Act has been passed on the basis of the Ayyangar Committee report to replace the Patent
and Design Act 1911.

Two types of patent:-

1. Product patent as an article or substance
2. Process by which that article or substance is produced :- for pharmaceutical and
chemicals only product patent would be granted

PATENTABLE INVENTIONS

Section 2(1)(j) and 2(1)(ja) of the Patents Act, 1970

2(1)(j) "invention" means a new product or process involving an inventive step and capable
of industrial application;

2(1)(ja) "inventive step" means a feature of an invention that involves technical advance as
compared to the existing knowledge or having economic significance or both and that makes
the invention not obvious to a person skilled in the art.
2(1)(l) "new invention" means any invention or technology which has not been anticipated
by publication in any document or used in the country or elsewhere in the world before the
date of filing of patent application with complete specification, i.e., the subject matter has not
fallen in public domain or that it does not form part of the state of the art;

Section 3(p) of the Patents Act

3(p). an invention which In effect, is traditional knowledge or which is an aggregation or
duplication of known properties of traditionally known components or components.

Section 2(1)(j) requires a product to satisfy three conditions to qualify as an invention.

I)It must be 'new', that is to say it must not have been anticipated;
ii) Its coming into being must involve an 'inventive step'; and
iii) It must be 'capable of industrial application', that is to say it must be capable of being
made or used in an industry [section 2(1)(ac)].

Dhanpat Seth and Ors. v. Nil Kamal Plastic Crates Ltd. 2008

plaintiffs, filed a suit seeking grant of permanent prohibitory injunction restraining the
defendant from infringing Patent No. 195917 granted in favour of the plaintiffs The patent
has been granted in respect of a device used for manufacture of manually hauling the
agricultural produce.

Issue:- whether this change of material from bamboo to plastic and the development of
adjustable nylon straps with buckles is an inventive step falling within the meaning of Section
2(ja).

Ratio and decision:- It is, therefore, not necessary that the product developed should be a
totally new product. Even if a product is substantially improved by an inventive step, it would
be termed to be an Invention. The definition of 'inventive step' provides that when technical
advances as compared to existing knowledge take place in an existing product or there is
improved economic significance in the development of the already existing device and the
invention is not obvious to people skilled in the art, it would amount to an inventive step

It is, therefore, fundamental that for grant of patent the subject must satisfy the twin tests of
'invention' and 'patentability'. Something may be an 'invention' as the term is generally
understood and yet it may not qualify as an 'invention' for the purposes of the Act. Further,
something may even qualify as an 'invention' as defined under the Act and yet may be denied
patent for other larger considerations as may be stipulated in the Act.

After having seen the traditional Kilta and the devices of the parties and having examined the
same, we are prima facie of the view that the devices being manufactured by the parties are
only imitations of the traditional Kilta.

M/s. Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries:-

● in order to be patentable an improvement on something known before or a

combination of different matters already known, should be something more than a
 mere workshop improvement; and must independently satisfy the test of invention or
an "inventive step".
● To be patentable the improvement or the combination must produce a new result or a
new article or a better or cheaper article than before. The combination of old known
integers may be so combined that by their working inter-relation they produce a new
process or improved result. Mere collection of more than one integers or things, not
involving the exercise of any inventive faculty, does not qualify for the grant of a
patent.

We fail to understand the reasoning given by the Assistant Controller, Patents and Designs in
not taking traditionally built Kilta into consideration.

Mere grant of patent in favour of the plaintiffs by itself does not mean that the plaintiffs
are entitled to any injunction. Section 107 of the Patents Act clearly provides that in any
suit for infringement of a patent every ground on which it may be revoked under Section 64
shall be available as a ground for defence. Therefore, the defendant is entitled to argue before
this Court that the patent granted is not valid. R

under the various provisions of the Patents Act, such as Sections 64 and 107(2) even after the
patent is granted, the same can be challenged in appropriate proceedings.

We are clearly of the view that the device developed by the plaintiffs is in fact the result of
traditional knowledge and aggregation /duplication of known products such as polymers and,
therefore, cannot be said to be an invention. The plaintiffs are, therefore, not entitled to any
injunction.

Novartis Ag v. Union Of India, 2013

'Evergreening' is a term used to label practices that have developed in certain jurisdictions
wherein a trifling change is made to an existing product, and claimed as a new invention. The
coverage/protection afforded by the alleged new invention is then used to extend the
patentee’s exclusive rights over the product, preventing competition. The judgement given by
the Hon'ble Supreme Court is to prevent the ever-greening of patented products

on reading clauses (j) and (ja) of section 2(1) with section 3(d) it would appear that the Act
sets different standards for qualifying as 'inventions' things belonging to different classes, and
for medicines and drugs and other chemical substances, the Act sets the invention threshold
further higher, by virtue of the amendments made in section 3(d) in the year 2005.

3. What are not inventions.— (d) the mere discovery of a new form of a known substance
which does not result in the enhancement of the known efficacy of that substance or the
mere discovery of any new property or new use for a known substance or of the mere use of a
known process, machine or apparatus unless such known process results in a new product or
employs at least one new reactant.

It must result in enhanced efficacy. The main objective of this clause was to prevent
pharmaceutical companies from obtaining patent protection over modification of known
molecules or chemical entities
Efficacy may be shown by showing improves effect in comparison with the original
substance through objective scientific evidence

What is 'efficacy'? Efficacy means 'the ability to produce a desired or intended result'.
the test of efficacy would depend upon the function, utility or the purpose of the product
under consideration. Therefore, in the case of a medicine that claims to cure a disease, the test
of efficacy can only be 'therapeutic efficacy'

The mere change of form with properties inherent to that form would not qualify as
'enhancement of efficacy' of a known substance. In other words, the explanation is meant to
indicate what is not to be considered as therapeutic efficacy

In whatever way therapeutic efficacy may be interpreted, this much is absolutely clear: that
the physico-chemical properties of beta crystalline form of Imatinib Mesylate, namely (i)
more beneficial flow properties, (ii) better thermodynamic stability, and (iii) lower
hygroscopicity, may be otherwise beneficial but these properties cannot even be taken into
account for the purpose of the test of section 3(d) of the Act, since these properties have
nothing to do with therapeutic efficacy.

In case of chemicals and especially pharmaceuticals if the product for which patent protection
is claimed is a new form of a known substance with known efficacy, then the subject product
must pass, in addition to clauses (j) and (ja) of section 2(1), the test of enhanced efficacy as
provided in section 3(d) read with its explanation.

Decision:- We have held that the subject product, the beta crystalline form of Imatinib
Mesylate, does not qualify the test of Section 3(d) of the Act but that is not to say that Section
3(d) bars patent protection for all incremental inventions of chemical and pharmaceutical
substances.

Section 2(1)(j) defines 'invention' to mean, 'a new product or …', but the new product in
chemicals and especially pharmaceuticals may not necessarily mean something altogether
new or completely unfamiliar or strange or not existing before. It may mean something
'different from a recent previous' or 'one regarded as better than what went before' or 'in
addition to another or others of the same kind'. However, in case of chemicals and especially
pharmaceuticals if the product for which patent protection is claimed is a new form of a
known substance with known efficacy, then the subject product must pass, in addition to
clauses (j) and (ja) of section 2(1), the test of enhanced efficacy as provided in section 3(d)
read with its explanation.

The claim for patent for beta crystalline form of Imatinib Mesylate would only appear as an
attempt to obtain patent for Imatinib Mesylate, which would otherwise not be permissible in
this country.

The court observed that “it is clear from the amended section and the explanation that in the
pharmacology field, if a discovery is made from a known substance, a duty is cast upon the
patent applicant to show that the discovery had resulted in the enhancement of a known
efficacy of that substance.

In view of the findings that the patent product, the beta crystalline form of Imatinib
Mesylate, fails in both the tests of invention and patentability as provided under clauses
(j), (ja) of section 2(1) and section 3(d) respectively, the appeals filed by Novartis AG fail
and are dismissed with cost.

3M Innovative Properties Ltd v. Venus Safety & Health Pvt Ltd & Anr.

● The learned Single Judge has erroneously combined the abstract of D1, D2 and D3 to
arrive at a conclusion that the three combined teach the elements of the subject patent.
By reading the alleged prior art documents relied upon by the Respondents, a person
ordinarily skilled in the art would not be able to reach to the solution provided by the
subject patent without use of inventive ingenuity.
● As held by the Supreme Court in Bishwanath Prasad Radhey Shyam (Supra), the
proper way to construe a specification is not to read the claims first and then see what
the full description of the invention is, but first to read the description of the
invention, in order that the mind may be prepared for what it is, that the invention is
to be claimed, for the patentee cannot claim more than he desires to patent.
● The experts in the field i.e. the officials of the US Patent Office as also the officials of
the Indian Patent Office have not held that the three cited prior arts teach the elements
of the subject patent or that there is obviousness of the elements to a person skilled in
trade.
● We are of the view that the appellants have been able to show a strong prima facie
case in their favour. The appellants have denied the assertions of the respondents that
the appellants were aware that the respondents had been selling the impugned mask
since 2011. On the contrary, the assertion of the appellants is that they came across the
respondent No.1’s product on or about the second week of August, 2014 and,
immediately thereafter, the subject infringement suit was filed.
● By the ad interim order dated 19.12.2013 in the suit, the respondents were restrained
from manufacturing the impugned mask.

The principles governing patentability of an invention as laid down in Bishwanath Prasad

Radhey Shyam (Supra) can thus be summarized as under:
1. it must be the inventor's own discovery;
2. should not be a mere verification of what was already known before the date of the
patent;
3. it is a manner of new manufacture and includes an improvement and an allied
invention;
4. must also be useful;
5. not only the art, process or manner of providing, preparing or making an article but
also the article prepared or produced by the manufacture can be patented;
6. should be more than a mere workshop improvement;
7. the improvement or the combination must produce a new result, or a new article or a
better or cheaper article than before;
8. a combination of old, known integers may be so combined that by their working
interrelation they produce a new process or improved result;
9. mere collection of more than one integer or things, not involving the exercise of any
inventive faculty, would not qualify for the grant of a patent;
10. there must be novelty in the mode of application and the novelty must show
invention;
11. the new subject-matter must involve "invention" over what is old;
12. must involve something which is outside the probable capacity of a craftsman;
13. it must not be the obvious to a skilled worker, in the field concerned,
14. it must not be a natural suggestion of what was previously known;
15. Prior public knowledge of the alleged invention would disqualify the grant of a patent
and prior public knowledge can be by word of mouth or by publication through books
or other media;
 PROCEDURE FOR FILING OF PATENT APPLICATION

Lays down a procedure for grant of patent to an inventor to exploit his invention for 20 years
subject to fulfilment of certain conditions. It consists following steps:

1. Filing or submission of application

2. Publication and examination of application
3. Amendment or division of application
4. Potential infringement and controller’s power
5. Opposition proceedings to grant of patent
6. Grant of patent

Filing or submission of application:-

● application in the prescribed form for only one invention (sec 7) along with the
prescribed fee should be filed in the appropriate office of the patent office.
● Must be accompanied by a provisional or complete specification (statement of claim
based on full description of invention, method of performing, scope of invention) (sec
9-10)
● If accompanied by provisional specification (brief description) a complete
specification shall be filed within 12 months from the date of filing of application.
● If filed by assignee, assignment deed executed by the inventor has to be submitted
along with patent application

Publication and examination of application:-

● Will examine the eligibility of the applicant for patent grant under the patent
act and rules
● Examination to determine patentability of an invention
● Applicant has to file a request for examination within 48 months from date of
filing of the application or the priority date, whichever is earlier in order to
initiate the examination process
● u/s 11B the application and related documents shall be referred at earliest by
the controller to the patent examiner for making a report:- whether the
invention satisfies the patentability requirements, any lawful ground of
objection, has already been published or claimed by any other person (sec 12)
or has been anticipated by publication in india or elsewhere before the date of
filing of the applicant’s complete specification (13)
● Publication of a patent application is in the official gazette or journal of patent
office.
● Application shall ordinarily be open to public for such period as may be
prescribed (sec 11A(1))
● Application will be published on the expiry of 18 months from the priority
date
● Applicant can request the controller to public before the expiry date(sec
11A(2))
● Patent application will not be published in the following cases;-
 1. In which secrecy direction is imposed u/s 35:- to be published after expiry of
18 months or when the secrecy direction has ceased to operate (sec 11 A(4))
2. Has been abandoned u/s 9(1)
3. Has been withdrawn 3 months prior to the prescribed period (11A(3))

● Publication must include the particulars of the date of application, number of

application, name and address of the applicant identifying the application and an
abstract (sec 11A(5))
● Upon publication, the depository institution is to make the biological material
mentioned in the specification available to the public. On payment and prescribed fee,
the patent office may make the specification and drawings,if any, of such application
available to the public (11A(6)) for the purpose to give the public an opportunity of
opposing the patent application
● On and from the date of publication of patent and until the date of grant of patent, the
applicant shall have the privileges and rights as if the patent had been granted.
However, he won't be able to institute the proceedings against infringement.(Sec 11
A(7))

Amendment or division of application:-

● In respect of the application of patent received by the controller is adverse to the

applicant or requires any amendment or documents, the controller shall communicate
to the applicant and give him opportunity of being heard (sec 14)
● If satisfied that application does not comply, he may refuse or require it to be
amended to his satisfaction
● Applicant can contest the objections of the controller, amend the application, request
for hearing or withdraw his application
● If contest raised on the ground that the claim of specification relate to more than one
invention, applicant can file a further application accompanied by a complete
specification ( sec 16)

Potential infringement and controller’s power (sec 19)

● If it appears to the controller that the application of patent cannot be performed

without substantial risk of infringement of a claim of any other patent, he may direct
that a reference to that other patent shall be inserted in the applicant’s complete
specification by way of notice unless
a. the applicant shows to the satisfaction that there are reasonable grounds for
contesting the validity of the said claim of other patent
b. The complete specification is amended

● After a reference to another patent has been inserted in a complete specification:-

other patent is revoked or ceases to be in force, is amended by deletion of relevant
claim, if found that relevant claim of other patent is invalid or is not infringed by any
working of the applicant’s invention. Controller may on the application of the
applicant, delete the reference to other patent
Opposition proceedings to grant of patent

● Application which has been published but patent has not been granted may be
opposed by any person in writing to the controller u/s 25(1):- obtaining wrongfully,
prior publication, prior public use or public knowledge, lack of inventive step,
non-patentable invention etc.
● Sec 25(2):- after grant of patent but before expiry of one year, any person may give
notice of opposition to the controller, :- constitute a board and board shall submit its
recommendations. The controller shall either to maintain, or to amend or to revoke the
patent

Neon Laboratories Pvt. Ltd v. Troikaa Pharma Limited:- any person can rise objections
before the grant of patent on wider grounds of public policy and public interest viz, health,
nutrition, issue of affordability of medicine whereas sec 25(2) is restricted to objections
raised by person interested after the grant of patent, for revocation of patent.
● Further the opportunity of personal hearing is not restricted to the objections
raised at the stage of original application; it continues if the objection is raised
after the application is filed with amended/additional claims.

Indian Network for People living with HIV/AIDS v. Union of India, :- the petitioners filed
a pre-grant representation by way of opposition u/s 25(1) against a patent. The court set aside
the patent granted and stated that p. Have the right for a hearing under the patents act and
rules. The court directed the patent office not to assign the hearing to an assistant controller
who had dealt with the patent application in the first instance.

J.Mitra & Co. Pvt. Ltd. v. Assistant Controller of Patents & Design:- Objection may not
stem from any business or commercial interest, can be raised on a wider concept of public
health and nutrition and the issue of affordability of medicine at a reasonable rate to those
persons who are affected by disease

Grant of patent

1. If not refused by controller

2. Not found to be in contravention of any of the provision

● The patent shall be granted to applicant or applicants with the seal of patent
office and the date on which the patent is granted shall be entered in the
registered (sec 43)
● Controller shall publish that patent has been granted
● The date of the granted patent will be the date of filing of patent application
● On request controller will cause his name to be mentioned as inventor in the
patent granted
F. Hoffmann-La Roche Ltd. & Anr. v. Cipla Ltd.

Court held that, assuming that the plaintiffs held a patent for the product which was the
subject matter of the suit for infringement, the grant of such patent to the plaintiffs will not
ipso facto entitle them to an interim injunction if the defendant is able to satisfy the court that
there is a serious question to be tried as to the validity of the patent. In the present case, the
defendant has raised a credible challenge to the validity of the patent by raising a serious
triable and substantial question that renders it vulnerable to challenge.

The defendant has been able to demonstrate prima facie that the plaintiffs do not hold a
patent yet for the drug Tarceva, which is the Polymorph B form of the substance for which
they hold a patent. Secondly, the defendant has raised a credible challenge to the validity
of the patent held by the plaintiffs. In such circumstances, the public interest in greater
public access to a lifesaving drug will have to outweigh the public interest in granting an
injunction to the plaintiffs.
 Licensing of Patents

The scheme of Chapter XVI of the Act with regard to Compulsory Licence is that it applies
to a patented product and also a patented process. In terms of Section of the Act an
application for Compulsory Licence can be made by any person to the Controller on
satisfaction of the following two per-requirements/conditions:-
a. An application for compulsory licence can be made only after expiration of three
years from the date of the grant of patent to the patent holder; and
b. The applicant should have made an effort to obtain a voluntary licence of the
patented invention from the patent holder on reasonable terms and conditions.

It is only on the satisfaction of the above two requirements that the Controller can consider
the application for compulsory licence. This application for compulsory licence must allege
that all or any one of the following three conditions mentioned in Section-84(1) of the Act
are not satisfied.
1. reasonable requirement of the public for the patented invention is not being met; or
2. the patented invention is not available to the public at reasonably affordable price or
3. that the patented invention is not worked in the territory of India.

The controller if satisfied on the basis of above mentioned grounds, may grant licence to
applicant u/s 84(4) and section 88 (Powers of Controller in granting compulsory licence)

Section 84(7) of the Act inter alia lays down that where the supply of patented invention is
not to an adequate extent and where the patent holder has refused to grant a voluntary licence
to the applicant it would be deemed that the reasonable requirement of the public for the
patented invention has not been met.

In terms of Section 87 of the Act whenever an application is made for compulsory licence,
the applicant has to satisfy the Controller that prima facie conditions exist for a grant of
compulsory licence in respect of the patented invention.

It is only on the prima facie satisfaction of the Controller that the application will be served
upon the patent holder as well as published in the official journal. On publication in the
official journal, the patent holder (independently served) or any other person desiring to
oppose the application could file their notices of opposition to the grant of compulsory
licence.

The Controller would thereafter hear the applicant and the opposition i.e. patent holder or any
other person desiring to oppose application before passing the final order.

In terms of Section of the Act the Controller could adjourn an application for Compulsory
Licence where the patent holder is able to satisfy the Controller that the patented invention is
not being worked in the territory of India only because of insufficient time to enable the
invention being worked on a commercial scale in India.

However, the adjournment on the above ground by the Controller shall be for a period not
exceeding 12 months and the adjournment will be granted only on satisfaction of the
Controller that the patent holder has taken prompt steps to initiate the working of the patent in
the territory of India on a commercial scale.
The Controller would after considering the evidence and hearing the parties before it either
grant or refuse to grant the Compulsory Licence by a reasoned order. However, in case the
Controller does grant a Compulsory Licence the terms and conditions of the grant would be
in terms Section 90 of the Act which inter alia provides:-
1. that royalty and other remuneration to be paid to the patent holder should be
reasonable, having regard to the nature of the invention, the expenditure incurred by
the patent holder in making and developing patent;
2. that the patented invention is worked to the fullest extent by the person to whom the
compulsory licence is granted with reasonable profit to him;
3. that the patented articles are made available to the public at reasonably affordable
price; and
4. the licence granted to the applicant would be non-exclusive licence and
non-assignable

Section 92:- Special provision for compulsory licences on notifications by Central

Government.—(1) If the Central Government is satisfied, in respect of any patent in force in
circumstances of national emergency or in circumstances of extreme urgency or in case of
public non-commercial use, that it is necessary that compulsory licenses should be granted
at any time after the sealing thereof to work the invention, it may make a declaration to that
effect, by notification in the Official Gazette and thereupon following the provision:-
1. the Controller shall on application made at any time after the notification by any
person interested, grant to the applicant a licence under the patent on such terms and
conditions as he thinks fit;
2. in settling the terms and conditions of a licence granted under this section, the
Controller shall endeavour to secure that the articles manufactured under the patent
shall be available to the public at the lowest prices consistent with the patentees
deriving a reasonable advantage from their patent rights.

Sec 92(3):- Notwithstanding anything contained in sub-section (2), where the Controller is
satisfied on consideration of the application referred to in clause (i) of sub-section (1) that it
is necessary in—
national emergency or in circumstances of extreme urgency or in case of public
non-commercial use
which may arise or is required, as the case may be, including public health crises, relating to
Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis,
malaria or other epidemics, he shall not apply any procedure specified in section 87 in
relation to that application for grant of licence under this section:

Provided that the Controller shall, as soon as may be practicable, inform the patentee of the
patent relating to the application for such non-application of section 87

Section 92A:- Compulsory licence for export of patented pharmaceutical products in certain
exceptional circumstances.—
1. Compulsory licence shall be available for manufacture and export of patented
pharmaceutical products to any country having insufficient or no manufacturing
capacity in the pharmaceutical sector for the concerned product to address
public health problems, provided compulsory licence has been granted by such
 country or such country has, by notification or otherwise, allowed importation of the
patented pharmaceutical products from India.
2. The Controller shall, on receipt of an application in the prescribed manner, grant a
compulsory licence solely for manufacture and export of the concerned
pharmaceutical product to such country under such terms and conditions as may
be specified and published by him.

Bayer Corporation v. Union of India

Facts:- the petitioner rejected Natco's application for grant of voluntary license to
manufacture and sell the patented drug. However, the petitioner in its above communication
dated 27 December 2010 left the issue open by asking Natco to approach them within 14 days
in case they have anything further to add. Applicant approached controller after expiry of 3
years for grant of compulsory license the Controller directed the application to be served
upon the petitioner and also had the application published in the official journal.

Ratio :- Published in official journal:- This would enable not only the patent holder i.e. the
petitioner but also any other person interested in the issue an opportunity to oppose the
application. This was in terms of Section 87 of the Act.

Issue 1 :- Did the applicant (Natco) make efforts to obtain voluntary licence from the
Patent holder (Bayer)?

The petitioner's response dated 27 December 2010 to Natco's request for a Voluntary licence
very clearly records its refusal to grant voluntary licence to the applicant. The so-called
window in the petitioner's response for Natco to approach is illusory as it is open only if the
Natco had anything to add to the application already made.
We hold that the second condition precedent for consideration of application for compulsory
licence namely an effort to obtain a voluntary licence has been satisfied by Natco. Therefore,
the consideration of the application by Natco for grant of Compulsory Licence to the
Controller cannot be faulted nor the impugned order can be faulted on the above ground.

Issue 2 :- Have the reasonable requirements of the public been satisfied?

it for the applicant while filing an application for Compulsory Licence in terms of Section 87
of the Act to make out a prima facie case that one or all the grounds stated in Section 84(1) of
the Act are prima facie attracted/applicable in respect of a patent for which the Compulsory
Licence is sought.

The reasonable requirement of the public has to be considered by the authorities in the
context of number of patients requiring the patented drug without first determining the exact
quantum of the patented drug required by the public it is not possible to conclude that
reasonable requirement of the public is not met by the patented drug.

Therefore, we see no basis for the above grievance on the part of the petitioner even as we
hold that question of reasonable requirement of the public is to be determined on the basis of
evidence led by the parties before the authorities.
The Controller has examined the issue of reasonable requirement of the public for the
patented drug being satisfied on the basis of figures given by the petitioner in affidavits of its
Country Medical Director one Dr. Manish Garg dated 8 February 2012.
As against the above requirement the petitioner has sold only 593 number of boxes i.e.
supplied patented drug to about 200 patients in 2011.
Thus, the reasonable requirement of the public with regard to the patented drug has not been
satisfied.

Issue 3 :- Whether the supplies by infringers of the patented drug is to be

considered/taken into account to determine the satisfaction of the reasonable
requirement test?

infringer's quantity of goods cannot be taken into account only because it could stop on any
day. It is only where the patent holder accepts the infringer's participation in the market and
in fact grants him de facto licence could the infringer's supplies be taken into account.

Moreover, the obligation to meet the reasonable requirement of the public is of the patent
holder alone either by itself or through its licensees. T

The meaning to be given to the words "adequate extent"

Section 84(7) of the Act provides a deeming fiction which deems that reasonable requirement
of the public is not satisfied, if the demand for patented article is not met to an adequate
extent. The Parliament has deliberately used the word "adequate extent". The aspect of
adequate extent would vary from article to article. S

In respect of medicines the adequate extent test has to be 100% i.e. to the fullest extent.
Medicine has to be made available to every patient and this cannot be deprived/scarified at
the altar of rights of patent holder. In fact, this is the mandate of Parliament by providing for
Compulsory Licensing.

Issue 4 :- Was the patented drug available to the general; public at reasonably
affordable
price?

It is mandated by Section 90(1)(iii) of the Act that the Controller should ensure that the
patented drug is available at reasonably affordable price. We are of the view that the Act itself
does not bestow any powers of investigations with regard to the reasonably affordable price
and therefore, the authorities do not have the where withal/personnel to carry out the above
exercise. Thus, the same has to be arrived at on the basis of the evidence led by the
parties before it of their respective prices. The obligation of the authorities under the Act is
with regard to grant, control and revocation of patent and not price determination of the
patented invention.

It only directs the Controller to endeavour to ensure/secure the patented article is available
at reasonably affordable prices.

In such a case the reasonably affordable price has to necessarily be the price of the applicant
as it by itself establishes that the price of the petitioner is not a reasonably affordable price.
Thus, in the present facts it would be impossible for the authorities, in the absence of figures
being made available by the patent holder to independently determine the reasonably
affordable price of the patented drug.

In view of the above, we find no reason to interfere with the impugned order to the extent it
holds that the patented drug is not available to the public at reasonably affordable price. Thus,
attracting Section 84(1)(b) of the Act to the present facts.

Issue 5:- Has the Patented Drug been worked in the territory of India?

Patent holder has to file a statement in Form 27 with the Controller regarding the working of
the patent in India. In the aforesaid form the patent holder while giving details of patented
drug in India, has to make declaration of working in India of the patented product under two
classifications namely manufacture in India and secondly imported from other countries

This is further supported by the other considerations set out in Section 83 of the Act to be
applied in construing 'worked in territory of India'. Section 83(c) of the Act provides that
there must be transfer of technological knowledge to the mutual advantage of the producers
and users of the patented article.

it would need to be decided on case-to-case basis. It would, therefore, follow that when a
patent holder is faced with an application for Compulsory License, it is for the patent holder
to show that the patented invention/drug is worked in the territory of India by manufacture or
otherwise. Manufacture in all cases may not be necessary to establish working in India as
held by the Tribunal. However, the patent holder would nevertheless have to satisfy the
authorities under the Act as to why the patented invention was not being manufactured in
India keeping in view Section 83 of the Act

This could be for diverse reasons but it would be for the patent holder to establish those
reasons which makes it impossible/prohibitive for it to manufacture the patented drug in
India. However, where a patent holder satisfies the authorities, the reason why the patented
invention could not be manufactured in India then the patented invention can be considered
as having been worked in the territory in India even by import.

Issue 6:- Whether the application for compulsory licence ought to have been adjourned
by the Controller?

This is for the reason that Section 86 of the Act which provides for adjourning application for
compulsory licence has to essentially satisfy two conditions which are as follows:-
1. The time which has lapsed since the patent was granted and when an application for
compulsory licence was made was insufficient to enable the patent holder to work the
patented drug in India on a commercial scale; and
2. Patent holder should have taken steps towards working the patented drug in India on a
commercial scale with promptitude.

In the present case the petitioner was granted the patent in India in 2008. The petitioner also
has manufacturing facilities available in India. The petitioner has led no evidence before the
authorities to indicate what steps they have taken and with what promptitude the same have
been taken for the purposes of working the patent in India after 2008.
We find no fault with the order of the Controller refusing to adjourn the application for
compulsory licence.

Issue 7:-Terms & Conditions for grant of compulsory licence

In terms of Article 31 of the TRIPS agreement it is provided that the patent holder shall be
provided adequate remuneration while granting compulsory licence. Similar provision has
been incorporated in Section 90 of the Act which inter alia provides that while settling the
terms and conditions of the compulsory licence the Controller has to ensure that the royalty
and other remuneration, if any, paid to the patent holder should be such as would reasonably
cover the expenses incurred by the patent holder in making and/or developing and/or
maintaining patented invention.

The petitioner has not been able to show in what manner the royalty fixed at 7% is inadequate
particularly as the petitioner has led no evidence of the cost incurred by it to develop the
patented drug. In view of the above we see no reason to interfere with the royalty being fixed
at 7% of the net sale of Natco in respect of the patented drug.

The observations of the Tribunal that the proceedings under Section 84 of the Act are in
public interest is in view of the fact that the entire basis of grant of compulsory licence is
based on the objective that patented article is made available to the society in adequate
numbers and at a reasonable price. These are matters of public interest. The law of patent is a
compromise between interest of the inventor and the public. In this case, we are concerned
with patented drug i.e. medicines to heal patients suffering from Cancer. Public interest is and
should always be fundamental in deciding a lis between the parties while granting a
compulsory licence for medicines/drugs.