Bayer Intellectual Propertys Vs Alembic Pharmaceuticals Ltd: The Bolar Exemption Under Indian Patent Law:
Case Title: Bayer Intellectual Property Gmbh & Anr vs Alembic Pharmaceuticals Ltd.
Date of Order: 8th March 2017
Case Numbers: W.P.(C) No.1971/2014 & CS(COMM) No.1592/2016
Court: High Court of Delhi at New Delhi
Judge: Hon'ble Mr. Justice Rajiv Sahai Endlaw
Introduction:
The Bolar Exemption, derived from the US case Roche Products, Inc. v. Bolar Pharmaceutical Co., and incorporated into Indian law through Section 107A of the Patents Act, 1970, provides that certain acts related to patented inventions, if performed solely for obtaining regulatory approvals, do not constitute patent infringement. The landmark case Bayer Intellectual Property Gmbh & Anr vs Alembic Pharmaceuticals Ltd critically examines the scope of the Bolar Exemption, particularly whether it allows for the export of patented inventions from India for the purpose of securing regulatory approvals in foreign jurisdictions. This decision has significant implications for the Indian pharmaceutical industry, balancing patent rights and the need for timely access to generic medicines.
Factual Background:
- Bayer Corporation, a global pharmaceutical giant, held the Indian patent (No. 215758) for Sorafenib Tosylate, a drug used in the treatment of liver and kidney cancer. Natco Pharma Limited obtained a compulsory license in 2012 under Section 84 of the Patents Act to manufacture and sell the drug within India. Bayer, however, alleged that Natco was exporting the patented drug for clinical trials abroad, thereby infringing its patent rights.
- Simultaneously, Alembic Pharmaceuticals Ltd. was accused of exporting another patented drug, Rivaroxaban, also held by Bayer, to jurisdictions like the European Union and the United States for regulatory purposes. Bayer sought to enjoin Alembic from exporting the drug, claiming that such exports were beyond the scope of the Bolar Exemption provided under Section 107A.
Procedural Background:
- Bayer filed W.P.(C) No.1971/2014, seeking a direction to the Customs Authorities to prevent the export of Sorafenat (manufactured by Natco) covered under the compulsory license.
- Bayer also instituted CS(COMM) No.1592/2016 against Alembic Pharmaceuticals Ltd., seeking an injunction against the export of Rivaroxaban.
- Natco and Alembic defended their actions under Section 107A of the Patents Act, asserting that their exports were for regulatory approvals and thus protected under the Bolar Exemption.
Issues Involved:
- 1. Interpretation of Bolar Exemption under Section 107A: Does Section 107A allow the export of patented inventions for regulatory approvals outside India?
- 2. Interplay between Compulsory Licensing and Bolar Exemption: Does obtaining a compulsory license limit the scope of the Bolar Exemption available to the licensee?
- 3. Territorial Scope of Section 107A: Whether the phrase "or in a country other than India" under Section 107A permits the sale (export) of patented inventions to foreign jurisdictions for regulatory purposes.
Submissions of the Parties:
Bayer’s Submissions:
- Bayer contended that Section 107A allows only domestic activities related to obtaining regulatory approvals and does not extend to exports.
- It was argued that the absence of the word “export” in Section 107A indicates the legislative intent to confine the Bolar Exemption within the territory of India.
- Bayer relied on Raghunath Rai Bareja v. Punjab National Bank (2007) 2 SCC 230, emphasizing that the literal rule of statutory interpretation must prevail, and any act not explicitly stated in the statute should not be implied.
- Reference was also made to the TRIPS Agreement, particularly Article 31(f), to argue that compulsory licenses are predominantly for domestic supply and not for export, and thus, the Bolar Exemption should also be interpreted restrictively.
Alembic’s Submissions:
- Alembic asserted that the word “selling” in Section 107A includes selling through export, as sale inherently involves the transfer of property, which can occur across borders.
- They relied on Padma Ben Banushali v. Yogendra Rathore (2006) 12 SCC 138, advocating a harmonious interpretation of Sections 48, 84, and 107A of the Patents Act.
- Alembic argued that the purpose of the Bolar Exemption is to ensure that generic manufacturers are ready to enter the market immediately after patent expiry, which necessitates obtaining regulatory approvals during the patent term, even in foreign jurisdictions.
- Citing the TRIPS Agreement, they emphasized that member states have the discretion to adopt measures necessary for public health, and the Indian legislature, by including the phrase “or in a country other than India,” intended to allow exports for regulatory purposes.
Discussion on Judgments Cited:
- Roche Products, Inc. v. Bolar Pharmaceutical Co. (572 F. Supp. 255 (E.D.N.Y. 1983)): The seminal case that gave rise to the Bolar Exemption, where the US court initially ruled against the use of patented products for regulatory approval, leading to legislative amendments through the Hatch-Waxman Act.
- Hiralal Ratanlal v. STO (1973) 1 SCC 216: Reaffirmed the principle of literal interpretation of statutes.
- Padma Ben Banushali v. Yogendra Rathore (2006) 12 SCC 138: Highlighted that statutory provisions must be interpreted harmoniously to give effect to the legislative intent.
- TRIPS Agreement, Articles 7, 8, 30, and 31: Provided the international legal framework for balancing patent rights with public health, allowing member states flexibility in implementing exceptions like the Bolar Exemption.
Reasoning and Analysis by the Judge:
- The court undertook a meticulous examination of Section 107A and its legislative intent:
- The Judge noted that the Bolar Exemption is intended to prevent patentees from extending their monopoly beyond the patent term due to delays in obtaining regulatory approvals.
- The judge emphasized that the phrase “or in a country other than India” under Section 107A clearly indicates the legislature’s intent to permit the export of patented inventions for regulatory purposes.
- Citing the TRIPS Agreement, Justice Endlaw underscored that Indian patent law aligns with international obligations, allowing for measures that promote public health and socio-economic welfare.
- The judgment clarified that while Section 48 provides patentees with exclusive rights, Section 107A acts as a statutory exception, permitting certain acts during the patent term, including exports, if solely for obtaining regulatory approvals.
Ruling on the Bolar Exemption:
- The court held that Section 107A of the Patents Act permits the export of patented inventions for the purposes of obtaining regulatory approvals in other countries.
- The Court emphasized that the legislative intent behind the Bolar Exemption is to facilitate the timely entry of generic drugs into the market post-patent expiry, including in international markets.
- The defendants, Natco and Alembic, were directed to file undertakings ensuring that their exports were solely for regulatory purposes and not for commercial exploitation.
- Bayer was granted the right to seek remedies if it could prove that the exported patented inventions were used for unauthorized purposes.
- Conclusion:This judgment reaffirms the significance of the Bolar Exemption under Indian patent law, ensuring that generic manufacturers can undertake necessary regulatory procedures during the patent term, both domestically and internationally. The decision strikes a balance between protecting patent holders’ rights and fostering an environment conducive to public health and access to affordable medicines, aligning with India's international commitments under the TRIPS Agreement.
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Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
