Compulsory Licensing under Section 84 – Overview

Section 84 of the Patents Act, 1970 allows any person to apply for a compulsory license after 3 years from the date of grant of a patent if certain conditions are met:

Grounds for compulsory licensing (Section 84(1)):

Reasonable requirements of the public with respect to the patented invention are not being met.

The patented invention is not available at a reasonably affordable price.

The patented invention is not being worked in India.

Section 100 & 101 provide further details on powers and terms.

Objective: Balance patent rights with public interest, especially for essential medicines and technology.

Key Tests Courts/Controller use:

Reasonable Requirements of the Public:

Quantity and availability of the product in India

Accessibility to all sections of society

Affordability Test:

Price must not be “exorbitant”

Comparisons with global pricing sometimes considered

Working of Patent in India:

Mere importation or limited production is insufficient

Patent must be “worked” in India to meet local demand

Important Cases on Section 84 Compulsory Licensing

1. Bayer Corporation v. Natco Pharma (2012) – Sorafenib Tosylate Case

Background:

Natco applied for a compulsory license for Bayer’s patented anti-cancer drug Nexavar (Sorafenib Tosylate).

Drug cost: ~ ₹2,80,000 per month, unaffordable for most patients.

Controller’s Analysis:

Reasonable requirements of public not being met (very few patients could afford).

Drug was available in India but at unaffordable price.

Patent was being “worked” but supply was inadequate for Indian needs.

Decision:

Controller granted the first-ever compulsory license in India to Natco.

Natco required to pay 6% royalty to Bayer.

Principle Laid Down:

High price + limited availability = grounds for compulsory licensing.

Affordability and working in India are key public interest factors.

Importance:

Landmark case showing public interest can override patent monopoly for essential medicines.

2. Lee Pharma v. Cipla & Natco (2013) – Apixaban Dispute

Background:

Lee Pharma held patent for blood-thinner drug.

Multiple applicants (Cipla, Natco) applied for compulsory license alleging high price and insufficient availability.

Controller’s Analysis:

Reasonable requirements not satisfied due to limited quantity and high cost.

Evidence of Indian market demand supported compulsory licensing.

Decision:

Controller granted license after evaluating affordability and access.

Principle Laid Down:

Affordability and access to life-saving drugs are central to Section 84 disputes.

Multiple applicants may challenge a patent if public interest is impacted.

Importance:

Reinforces that Section 84 is primarily public welfare oriented, not punitive.

3. Roche v. Cipla (2012) – Erlotinib Dispute

Background:

Cipla sought a license for Roche’s patented Tarceva (cancer drug).

Ground: Exorbitant price, limited Indian production.

Controller’s Observation:

Roche’s production met only a small fraction of Indian demand.

Price significantly higher than global standards.

Outcome:

Controller initially rejected the application, citing some domestic supply.

Court emphasized that “reasonable requirements” must be meaningful for all patients, not just some.

Principle Laid Down:

Compulsory license granted only when actual public demand unmet, not theoretical supply.

Importance:

Clarifies the threshold for “reasonable requirements” in Section 84 disputes.

4. Bayer v. Cipla – Sorafenib Appeal (2013)

Background:

Bayer appealed against the compulsory license to Natco.

Supreme Court/High Court Analysis:

Examined pricing, accessibility, and working of patent in India.

Court upheld the Controller’s decision, emphasizing social impact over corporate profit.

Principle Laid Down:

Section 84 protects public health and access, especially for life-saving medicines.

Affordability is a legitimate ground for compulsory licensing.

5. Lee Pharma v. Cipla (2014) – Compulsory Licensing Appeal

Key Point:

Reinforced that importing the drug alone does not satisfy “working in India”.

Domestic production necessary to ensure consistent and affordable supply.

Principle Laid Down:

Mere patent holding or importation is insufficient; working in India is mandatory for public access.

6. Novartis v. Union of India (Gleevec Case, 2013)

Background:

Although primarily a section 3(d) / patentability dispute, it has implications for compulsory licensing.

Observation Relevant to Section 84:

Novartis’ drug Gleevec was high-priced and partially accessible.

Controller noted that unaffordable drugs can be subject to compulsory license if patent granted.

Principle Laid Down:

Section 84 ensures that patent monopoly does not obstruct public health access.

Section 84 is complementary to Section 3(d) safeguards.

Key Principles from Section 84 Case Law

Stepwise Test for Section 84 Compulsory Licensing

Check three-year post-grant period

Assess if reasonable requirements of public met

Examine availability at affordable price

Determine if patent is worked in India

Consider royalty and license terms

Section 84 disputes often revolve around evidence of pricing, availability, and production capacity.

✅ Conclusion

Section 84 is India’s unique mechanism to balance patent monopoly and public health.

Courts and Controller consistently emphasize:

Public interest > corporate profit

Affordability, access, and local production are crucial

First compulsory license (Natco-Bayer) set strong precedent

Subsequent disputes follow the public health and access framework established by Natco, Lee Pharma, Roche, and Bayer cases.