Bayer Vs Cipla

BAYER Vs CIPLA & UNION OF INDIA

Does a combined reading of the Drug Control Act and the Patents Act lead to an inference that no marketing approvals can be granted to a third party for a drug/formulation for which a patent exists? This was a primary question before the Delhi High Court in a recent case involving, inter alia, Bayer & Cipla as the opposing parties.

There has been a long standing controversy on linking patent status with the drug regulatory/marketing approval process. As it happens, the drug regulatory/marketing body is separate from the patent granting body and there is naturally a grey area between the two over their functional overlap while allowing/disallowing a patented drug to get a marketing approval prior to the patent expiration. While countries like USA has a well defined ‘Patent Linkage’ system that allows a patent holder to link his patent rights with generic drug approval process (FDA mandates a patent expiration or patent validity challenge before giving any such market approvals), in countries like India, there has been no such policy bridging the regulatory and the patent approval systems gap.

The facts of the Bayer Vs Cipla case are as under:

Bayer was granted a patent in India for Sorafenib in March 2008. (vide Patent No.  215758). The patent is schedule to expire in 2020. Bayer manufactures and markets its Sorafenib product as Nexavar in India. The background for the current case started when Cipla filed an application with the Drug Controller General of India (DCGI) for a license to manufacture, sell and distribute a generic version of Sorafenib. Bayer opposed it in the court citing a potential patent infringement in case Cipla’s application for marketing approval is accepted.  Bayer particularly cited (a) its right to stop third parties to make, use, offer to sale, or import its patented product without its consent (Section 48 of the Patent Act) and (b) DCGI power not to approve the marketing right for a product that is ‘spurious’ (Section 2 of the Drugs & Cosmetic Act). Bayer’s contention was that an attempt by Cipla to manufacture Sorafenib will make Cipla’s drug a ‘spurious’ drug under the provisions of the Drugs & Cosmetic Act. Going further, Bayer demanded a Patent Linkage based system, wherein the DCGI does not approve the marketing rights for a drug for which a patent exists.

Cipla, along with the other respondents, the DCGI (represented by the Union of India), in its reply, relied on the logic that merely by granting a marketing approval the DCGI or Cipla, would not be infringing the patent rights accorded to Bayer in any manner as the act does not fall under the purview of making, using, offer to sale, or importing its patented product. Further, an act of infringement is established only by a court of law and not merely by a statement by the patentee. In the present case, the DCGI was not a competent authority to decide if the drug for which the marketing approval was sought was infringing any existent patent or not. The mandate of the DCGI is only to assess the safety and efficacy data related to the drug and either approve or disapprove the drug for marketing within in the Indian territory based on these assessments. Whether or not, the drug in question would be potentially infringing any patented product in India, is something which is beyond the scope of DCGI. Also, the Patents Act provides that a drug manufacturer can conduct experiments on a patented drug to meet the requirements of a drug controlling body (Section 107A). Cipla went a step further to claim that the Bayer’s patent is invalid and that Cipla is ready to challenge its validity.

On the ‘spurious’ drug issue, Cipla contends that Bayer’s counsel has failed to rightly interpret the word ‘spurious’ in the actual context that it is purported to be used. The addition of ‘spurious’ drug, Cipla maintains, was to prevent any substitute drug that could be passed off as the original one by use of deceptive marks or packaging. Cipla, on the other hand, is making a generic copy of the drug and not trying to pass off its product over Bayer’s product.

Cipla’s contention also extended to Bayer’s plan to introduce the system of ‘Patent Linkages’ in India. The former came down heavily upon the latter by accusing Bayer to trying to introduce a new system in India, which is only possible by bringing legislative amendments.

Counsel for DCGI maintained that vide Section 107A of the Patents Act, a provision is made to experiment on the patented products for the purpose of submitting data to a drug controlling body. Further, it argued that a patent right, which is a private right, cannot be enforced by a public entity (DCGI). Hence, the idea that the DCGI should also peep in the patent status and then grant the approvals is also not sustainable. DCGI role is restricted to disallow spurious, adulterated and mis-branded drugs and allowing other drugs for market distribution if its meets other experimental requirements.

Based on the arguments of both the parties, Justice Ravindra Bhat of the High Court of Delhi, concluded the following:

  1. The Drugs & Cosmetic Act and the Patents Act are divergent in their objectives and serves very different purposes. While the former was framed to avoid any spurious or adulterated drugs to enter into the market, the latter was framed to allow an innovator company to stop third parties to commercialize their (innovator’s) product/process. The Officials enforcing the provisions of one Act is not technically competent to deal with the provisions of the other Act.
  2. By accepting Bayer’s proposition to allow a Patent Linkage and stop Cipla/DCGI to approve the marketing rights for a drug, judiciary would be attempting to enter a legislative role, which it should not be doing.
  3. Expecting DCGI to take patents into consideration while granting marketing approvals would not only be stretching too much of its normal reach but also an attempt to interpret the Drugs & Cosmetic Act beyond its intended boundaries.
  4. The Patents Act has been amended many a times, latest being in 2005. Had there been any intention by the legislation to bring any changes relating to Patent Linkages, it would have found a place in the amended Act.
  5. On the issue of spurious drug, Judge Bhat was in agreement with Cipla’s contention.

Justice Bhat concluded that the present case was an attempt by Bayer to ‘tweak’ public policies through court judgments. He came down heavily upon Bayer and dismissed the suit with costs.

CURRENT STATUS: Bayer filed an appeal before a division bench of the High Court. Later, the division bench ruled against Bayer, thus paving the way for the launch by Cipla. Bayer has now approached the Supreme Court.

REMARKS: The Judiciary at least seems to be very clear about the separate role and functioning of the Drugs & Cosmetics Act and the Patents Act. It sees a clear cut distinction between scope that one Act allows and the boundaries the other Act sets. The idea of introducing Patent Linkages was of interest to the Big Pharma Players and this decision, if in their favor, could have led to a formal introduction of the Patent Linkages concept in India. Undoubtedly, it would have added to the monopoly of these Big Players. The judgment, therefore, is timely and keeps in mind the larger interest of public. Moreover, it also acts as a warning signal for companies like Bayer and Novartis, which had repeatedly tried to tweak with Indian legislation via court rulings.

Case N0:  WP ( C ) No. 7833/2008

About the Author: Mr. Abhishek Sahay, a Senior Patent Consultant in Institute of Intellectual Property Research & Development (IIPRD) and can be reached:  abhishek@iiprd.com.

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