PRABHA SRIDEVAN,CHAIRMAN - (1.) "Compulsory licence" is not an unmentionable word. It is found in our Patents Act. Under a different name, it was there in the TRIPS (Trade -related Aspects of Intellectual Property Rights) too where it is called, "Other use without authorization of the right holder". It has been there even in the Paris Convention of 1883 "to prevent abuse which might result from the exercise of exclusive rights". The TRIPS Agreement did not give a carte blanche to the Members in the grant of compulsory licence but it hedged this other use with sufficient conditions and authorization of this use would be considered only on a case to case basis of individualness'. This appeal challenges the compulsory licence ordered by the Controller -General.
(2.) PATENT rights were created "not in the interest of the inventor, but in the interest of the national economy", says the Report on the Revision of Patents Law by Shri Justice N.Rajagopala Ayyangar (in short, Ayyangar Report'), quoting from Michel on Principal National Patent Systems. The report also quotes from Patents and Designs Amendment Bill which says that the monopoly is granted to the benefit of trade and industry to enlist the cooperation of the capitalist in this endeavour to bring in new invention. The Code of Federal Regulations of US says that "patent by its very nature is affected with the public interest". Therefore, we have to understand the perspective from which the Chapter of Compulsory Licence was introduced and is still there in the Patents Act, 1970 as amended by the Patents (Amendment) Act, 2005. The Ayyangar Report is the document we refer to when a question of importance arises. It says, "There is no uniformity in the economic problems which confront different countries at any time or even the same country at different periods of its history and account has therefore to be taken of the actual conditions in the matter of devising the precise adjustments which are needed to rectify the imbalance which the patent system is apt to produce if left uncontrolled".
(3.) IN this case, several very important questions of pure law arise. The facts are relevant but we will deal with the facts very briefly. The drug for which the patent was granted is marketed by the appellant under the name, Nexavar, but the drug is Sorafenib Tosylate. It is said to be a palliative drug for patients suffering from Renal Cell Carcinoma (RCC) and Hepato -Cellular Carcinoma (HCC) at stage IV. US Patent was filed on 13.1.1999. PCT application was filed on 12.1.2000. The date of National Phase entry is 5.7.2001. The patent was granted on 3.3.2008 (Patent No.215758). The appellant obtained all the statutory approvals in India in January, 2008. Before applying for a compulsory licence, an applicant should approach the patentee for the grant of a licence. This is a sine qua non for exercise of the powers of the Controller in this regard. The third respondent addressed a letter on 6.12.2010. It was stated to be in compliance with this statutory requirement. The appellant filed C.S.No.1090 of 2011 on 5.5.2011 before the Hon'ble Delhi High Court against the third respondent herein for infringement of its patent. It had earlier filed C.S.No.523 of 2010 against CIPLA Limited for infringement. CIPLA's presence and the relevance thereof will be dealt with by us later. The 3rd respondent herein applied for compulsory licenceon 28.7.2011 and it was granted. This appeal is against that order. Pending this appeal, the appellant had asked for stay which was not granted by us. Learned senior counsel Mr.P.S.Raman appearing for the appellant submitted that the compulsory licence order was vitiated by several errors; (i) Under Section 87(1) where the Controller should have arrived at prima facie satisfaction that a case has been made out, notice was not given to the appellant herein which is a grave miscarriage of justice; (ii) The compulsory licence application is not supported by any evidence; (iii) The appellant had sought for adjournment to enable the invention to be worked to the fullest extent and this was not granted which is against the law; (iv) While deciding whether the reasonable requirement of the public has been satisfied, the Controller ought to have taken into reckoning the presence of other player, CIPLA (not before us) and the supply made by CIPLA and by totally ignoring its presence, injustice has been caused; (v) The Controller ought to have ascertained what is the reasonable price and thereafter, decided the issue of granting compulsory licence; and (vi) The controller was in error in concluding that the manufacture in India was necessary to meet the "working" requirement under Section 84(1)(c) of the Act. The learned senior counsel also referred to the conduct of the third respondent in not mentioning the presence of CIPLA in its application which was a relevant fact and in contending that it had obtained a process -patent for manufacturing the invented product, which it had not. According to the learned senior counsel, these two factors disentitle the 3rd respondent from obtaining compulsory licence. The Controller was in error in not taking note of Patient Assistance Programme (PAP) which is a relevant factor for deciding whether the reasonable requirement of the public had been met. It was submitted that this provision was a discretionary power granted to the Controller under certain circumstances laid down in the Act and not a penal provision. Finally, the learned senior counsel submitted that even assuming without accepting that compulsory licence ought to have been granted, the manner in which the terms and conditions were fixed was totally arbitrary.;