Applications for compulsory license (CL) of patents in India: Sorafenib tosylate successful, Dasatinib rejected, Saxagliptin rejected.

IPO on its website has posted news along with the copy of the decision dated January 19, 2016 that CGPDTM (Controller General of Patents, Designs & Trade Marks) has rejected application for CL filed by Hyderabad based Lee Pharma. Before this, two CL has been filed at IPO; amongst them CL for NEXAVAR (Sorafenib tosylate) has been granted and CL for SPRYCEL (Dasatinib) has been rejected. This is for the first time that Zenvision Pharma is focusing on issues related to CL application. We want to make sure that we continuously post some interesting facts about IP through the excellent platform of this blog.   

Compulsory licenses are generally defined as "authorizations permitting a third party to make, use, or sell a patented invention without the patent owner's consent”. In this particular case, Lee Pharma filed compulsory license application, dated June 29, 2015 under section 84 (1) of the Patents Act, 1970, as amended (hereinafter referred to as the act), for the India patent number 206543 having title “A Cyclopropyl-fused pyrrolidine-based compound” which was assigned to AstraZeneca by way of Deed of Assignment by Bristol Myers Squibb company (BMS).  The application for CL in this case only be filed after 30th April 2010 i.e. three years after the grant of the patent. Renewal fees has also been paid for IN206543 till March 05, 2017.  Saxagliptin, the subject matter of this application, is used for type 2 Diabetes Mellitus (DM) and is Dipeptidyl Peptidase-4 (DPP-4) inhibitor. Saxagliptin has been marketed under the brand name ONGLYZA in the dosages of 2.5 mg and 5 mg under the brand name KOMBIGLYZE XR, also when in combination with Metformin, in the dosages of 5/500 mg and 5/1000 mg. Lee Pharma was ready to restrict the sale and manufacturing of the Saxagliptin to India only. They took necessary steps to ensure that the product is available only within the territory of India, to pay royalty as fixed by CGPDTM to the patentee, make the product available to the public at the most affordable and reasonable price (for price please refer decision) and also to be bound to any terms and conditions as imposed by the controller of patents.

A major update came in this row when Lee Pharma received notice from Controller in accordance with the rule 97 (1) of the patents rules, 2003, [as amended] that it has not made prima facie case for the CL application. Lee Pharma was invited to request for being heard within one month of 12th August, 2015 i.e. date of notice. In response to this notice, applicant’s counsel requested for hearing within one month of the notice and hearing was held on December 15, 2015 and submissions were made on the December 15 and 29 of 2015 on behalf of applicant.

Controller O. P. Gupta agreed that it has been prima facie borne out that the applicant for the compulsory license application is person interested according to section 2 (1) (t) and as required by the section 84 (1) of the act and applicant has the capacity to undertake the risk in providing capital and working the invention, if the application were granted, based on the submissions made on behalf of the applicant.  Controller as required by the clause (iv) of the section 84 (6) has taken into account whether the applicant has made efforts to obtain a licence from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period and prima facie reached the conclusion that applicant has made efforts to obtain license from patentee/respondent on mutually agreed terms for more than 13 months which were unsuccessful. Thus a reasonable period as envisaged under clause iv of the section 84 (6) had elapsed with unsuccessful efforts.

Section 84 (1) of the act provides following three grounds for making the application for the grant of compulsory license, namely: -

1.      That the reasonable requirements of the public with respect to the patented invention have not been satisfied. (under clause (a) of sub-section (1) of section 84)

2.      That the patented invention is not available to the public at a reasonably affordable price. (under clause (b) of sub-section (1) of section 84)

3.      That the patented invention is not worked in the territory of India. (under clause (c) of sub-section (1) of section 84)

These grounds can be used independent of each other for making the application. In this case Lee Pharma had relied on all of the three grounds.

Now, we will see what prompted controller to turn down the CL application: -

Ground 1. Rejection of ground under clause (a) of sub-section (1) of section 84 of the act i.e. the reasonable requirements of the public with respect to the patented invention have not been satisfied.

Controller relied upon the decision ‘Bayer Corporation Vs Union of India and Ors’ (Writ Petition No.1323 of 2013), in which the Hon’ble Bombay High Court in its judgement ruled that reasonable requirement of the public has to be considered by the authorities in the context of number of patients requiring patented drug. Controller concluded that applicant in the current case failed to prove what is reasonable requirement of the public in India in respect of Saxagliptin in the context of number of type-II DM patients requiring patented drug, comparative requirement of Saxagliptin with other DPP-IV inhibitors, authentic data/statistics of prescription by doctors in India over other DPP-IV inhibitors. Lee Pharma also failed to impress controller that Saxagliptin is the best treatment option. Finally, controller also expressed his opinion that prima facie case was not made out by the applicant that reasonable requirement of the public with respect to the patented invention are not being satisfied.

Ground 2. Rejection of ground under clause (b) of sub-section (1) of section 84 of the act i.e. the patented invention is not available to the public at a reasonably affordable price.

Controller relied upon the decision ‘Bayer Corporation Vs Union of India and Ors’ decision to arrive at reasonable affordable price on basis of the evidence led by the parties. Controller compared the prices of the Saxagliptin with other DPP-IV inhibitors (from data available to him by submissions made by the applicant dated December 15th, 2015) and found all of them in the same range and used this as one of the grounds to disagree with the Lee Pharma that Saxagliptin is not available to the public at a reasonably affordable price. Controller also cited lack of comparative side-effects of Saxagliptin and other DPP-IV inhibitors in support of his opinion. Controller also failed the arguments of the Applicant that Price of the patentee for tablets is in the range of INR 41-49 and is much larger than the import price of the tablets which is less than INR 1. To fail this argument, controller used price proposed by the applicant of INR 27-32/tablet which itself is much larger than that of the import price and is slightly on the lower side as compared to the price of the patentee.  Controller also considered the price of INR 11-16 proposed by the applicant during hearing and asked to the applicant to provide the exact number of poor people in India who were prescribed the patented drug but could not buy because of affordability issue. Applicant failed to provide these details to the controller.

Ground 3. Rejection of ground under clause (c) of sub-section (1) of section 84 of the act i.e. that the patented invention is not worked in the territory of India.

Controller relied upon the judgement of the Hon’ble Bombay High court in the Bayer Case (supra.), to manufacture in India is not a necessary pre-requisite in all cases to establish patents working in India. The patent holder is however required to establish the reason which make it impossible/prohibitive to manufacture patented drug in territory of India, particularly when patentee has manufacturing facility in country. In the present case, Lee Pharma failed to show the exact quantitative requirement of Saxagliptin in terms of Number of patients requiring it or whether it is in shortage, so it is difficult to conclude whether manufacturing in India is necessary or NOT. No authentic data, evidence, or any detailed study provided by Lee Pharma, which could clearly establish the quantitative requirement of Saxagliptin in India and accordingly its manufacturing necessity in India.

Further to add, although each ground under section 84 (1) is independently provided in the act, the Lee Pharma’s failure to prima facie make out for any of the other two grounds i.e. under clause (a) and (b) of sub-section (1) of section 84. Hence, further question for necessity of its manufacturing in India is also difficult as a prerequisite to say whether patent is worked in India.

In the recent order dated 19th Jan, 2016; controller of patents O.P. Gupta said, “As the applicant has failed to provide evidence along with application or during hearing or by supplementary submissions and failed to satisfy the controller regarding any of the grounds as specified in Section 84(1) of the Act, I am therefore of the view that a prima facie case has not been made out for making of an order U/S 84 (1) of the Act. Therefore, the application for grant of compulsory license by the applicant is hereby rejected.”

With this decision, IPO has definitely offered something to look forward to for patentees as well as investors in  R & D, and also contributed in negating the assertion by few, of India’s IP system to be ‘anti-IP’.

By: Sangram Salunke, IPM Officer at Zenvision Pharma and can be reached at sangram.salunke@zenvisionpharma.com