The judgment of the High Court of Bombay in Bayer Corporation vs. Union of India and Others (2014)[1] (commonly referred to as the Bayer vs. Natco case) is universally regarded as a watershed moment in Indian patent jurisprudence. It reinforced India’s commitment to balancing patent protection with public interest, particularly access to essential medicines.
The case related to India’s first compulsory license for a cancer drug. It drew significant international attention and sparked intense debate between innovators and public health advocates. The decision demonstrated India’s willingness to force compulsory licensing as a policy mechanism, prioritizing affordability in line with the TRIPS Agreement and the Doha Declaration on Public Health.
The dispute pertained to Bayer’s patented life-saving drug, Nexavar (Sorafenib Tosylate),which was used in the treatment of advanced liver and kidney cancer. Nexavar was sold in India at an exorbitantly high price, which made it unaffordable for most patients.
Natco Pharma applied in 2011 for a compulsory licence under Section 84 of the Patents Act, 1970, on the grounds that the patent owner, Bayer, had failed to meet the reasonable requirements of the public; that the drug was not available at an affordable price; and, that the patent was not “worked” in India.
Further, Natco proposed to sell its generic version at a fraction of Bayer’s price, besides paying Bayer a reasonable royalty based on net sales. In March 2012, the Controller General of Patents granted Natco Pharma a compulsory license to manufacture a generic version of the drug.
The controller found that Bayer had supplied the drug to only a small fraction of patients to whom it was prescribed. It also observed that the price was prohibitively high and unaffordable. Further, the patented invention was not being ‘worked’, that is, manufactured in the territory of India. Bayer had instead relied largely on imports.
Hence, the controller concluded that Bayer had failed to meet reasonable public requirements.
Bayer challenged the decision of the controller General before the Intellectual Property Appellate Board (IPAB). In 2013, the IPAB upheld the controller’s ruling. The IPAB emphasized that patent rights in India are not absolute and must be balanced against public health considerations. It clarified that “reasonably affordable price” must be assessed from the perspective of the public and not the patentee’s global pricing strategy.
Bayer subsequently appealed to the High Court of Bombay, which dismissed the challenge in 2014 and affirmed the IPAB’s findings. The court declared that Bayer had failed to satisfy the statutory requirements under Section 84, and that, hence, compulsory licensing was a legitimate mechanism to ensure access to life-saving medicines.
The high court rejected Bayer’s argument that local manufacturing was not mandatory, observing that “working” of a patent in India ordinarily implies local production, especially when public health is involved. The judgment affirmed that the right to health and affordable medicine takes precedence over patent monopolies.
The judge further observed as follows:
“...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...Public interest is and should always be fundamental in deciding a lis between the parties while granting a compulsory licence for medicines/drugs."
Thereafter, Bayer filed a special leave petition in the Supreme Court of India, which dismissed the petition in December 2014, thereby finalizing the grant of the license while leaving broader legal questions open for future cases. The court’s refusal to interfere effectively brought the litigation to an end.
This landmark judgment established a legal framework for balancing intellectual property rights against public health needs in developing nations. As a precedent, it enabled thousands of Indian patients to access life-saving cancer treatment previously out of financial reach. The ruling also reinforced India’s policy commitment to using TRIPS flexibilities to ensure affordable healthcare.
On the whole, the case set a critical precedent on affordability; working of patents; and, the scope of compulsory licensing in India, thus shaping the country’s approach to patent enforcement, particularly in the field of pharmaceuticals.
At BLAZEVENTURES, we have elaborate processes and qualified professionals to strategically advise parties on seeking the grant of compulsory licenses for patented inventions in public interest.
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[1] AIR 2014Bom 178
