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THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA
The Curious Case of Compulsory
Licensing in India*
Naval Satarawala Chopra
Amarchand, New Delhi
naval.chopra@amarchand.com
Tn a move that has alarmed the pharmaceutical
.industry, in March 2012 the Indian Patents Office
granted its first compulsory licence, for the manufacture
and sale of Bayer's patented drug Nexavar, in Natco
Pharma Limited v Bayer Corporation (Natco v Bayer).'
This article analyses the compulsory licence issued in
Natco v Bayer and discusses the possibility of a similar
compulsory licence being issued under the provisions
of India's competition legislation, the Competition Act,
2002 (Competition Act). In doing so, we debate the
scope of a potential refusal-to-license abuse under the
Competition Act and outline a possible approach for
the Competition Commission of India (CCI) to adopt
if it should decide to issue compulsory licences.
Intellectual property and competition law:
inherent conflict?
The relationship between competition law and
intellectual property (IP) rights can be best described
as a 'tale of uneasy bedfellows'. The application and
enforcement of competition law to IP rights is highly
topical and hotly debated. The reason for the debate is
that while IP laws, such as patent laws, confer exclusive
rights, competition law seeks to ensure a competitive
market place. The monopoly granted to a holder of
an IP right can create barriers to entry and give rise
to market power, the abuse of which is prohibited by
competition law. As a result, some courts, academics
and practitioners see an inherent conflict between
these two bodies of law and have traditionally sought to
balance the need for incentivising innovation through
exclusivity protection with the efficiency benefits of
open access competition.
This view, however, is overly simplistic and short-
sighted. Whilst IP laws grant exclusivity and, in doing
Dinoo Muthappa
Amarchand, New Delhi
dinoo.muthappa@amarchand.com
so, may inhibit competition, both IP and competition
law share the common aim of encouraging innovation,
enhancing consumer welfare and encouraging
allocative efficiency. Academic literature on the
subject has recognised IP and competition law as being
mutually complementary and re-enforcing. 2
Moreover, competition law does not seek to prohibit
exclusivity per se; it aims to prevent the misuse or abuse
of exclusivity in certain circumstances. This is evidenced
by the prohibition of exclusivity agreements only where
enterprises in a vertical relationship enjoy market
power or where exclusivity arrangements are imposed
by a dominant enterprise. This is also illustrated in the
seminal judgment of Consten & Grundig,3 where the
European Court ofJustice (ECJ) distinguished between
the existence of an IP right and the improper exercise
of the same. Accordingly, IP and competition laws are
being viewed as complementary.
Natco v Bayer
IP laws in India have long made provision for the
grant of a compulsory license. However, section 84
of the Patents Act, 1970 (Patents Act), the provision
under Indian patent law that provides for the issue of
a compulsory licence, was enforced for the first time
in Natco v Bayer, in relation to Bayer's patented drug
'sorafenib tosylate'.
Bayer sells sorafenib tosylate, which is used for the
treatment of the advanced stages of kidney and liver
cancer, under the brand name 'Nexavar'. Nexavar is
a life-enhancing and not a life-saving drug; it seeks to
extend the life of a patient afflicted with the last stages
of kidney or liver cancer. Bayer launched Nexavar in
2006 and was granted a patent by the Indian patents
authority on 3 March 2008. Bayer then sold the drug
to patients in India suffering from the advanced stages
COMPETITION LAW INTERNATIONAL August 2012
 THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA
of kidney and liver cancer at a cost of Rs 280,428
(approximately US$5,278) per month.4 Natco, an
Indian pharmaceutical company, had applied to Bayer
for a voluntary licence to manufacture and sell the
drug, and proposed to sell sorafenib tosylate at a price
of Rs 8,800 (approximately US$167) for a month's
therapy, a fraction of the price being charged by Bayer.
However, Natco's request was refused by Bayer. Three
years after the grant of Bayer's patent for sorafenib
tosylate, Natco filed an application for the grant of a
compulsory licence at the Indian Patents Office.
Under the Patents Act, a compulsory licence may be
granted after the expiration of three years of the grant
of a patent, on any of the following grounds:'
(i) that the reasonable requirements of the public
with respect to the patented invention have not
been satisfied; or
(ii) that the patented invention is not available to
the public at a reasonably affordable price; or
(iii) that the patented invention is not worked in the
territory of India.
In Natco v Bayer, the Controller General of Patents,
Designs and Trademarks of the Indian Patents Office
(Controller) concluded that all three grounds on which
a compulsory licence could be granted under section 84
of the Patents Act were satisfied.6 A compulsory licence
for the manufacture and sale of sorafenib tosylate was
granted to Natco for the balance term of the patent,
subject to the payment of a royalty of six per cent of
the net sales of the drug to Bayer.
Many in India believe that Bayer's failure to
substantiate the costs involved in developing Nexavar
was one of the principal reasons why the Controller
found reason to issue the compulsory licence.
Accordingly, IP law practitioners in India were not
surprised that the Controller relied on grounds (i)
and (ii) above, as Nexavar was accessible to only two
per cent of the total number of potential patients,
despite four years having lapsed since the grant of
the patent.' However, the Controller's reliance on
ground (iii), that is, 'that the patented invention
is not worked in the territory of India', has caused
much consternation. The Controller interpreted
the expression 'worked in the territory of India' to
imply that a patented product must be manufactured
in India to a reasonable extent or that the patentee
must grant a licence to third parties to manufacture
the patented product in India. However, this
interpretation sets a dangerous precedent, where the
availability of a patented product solely by imports as
opposed to domestic manufacturing justifies the grant
of a compulsory licence under the Patents Act, even if
the reasonable requirements of the public are being
satisfied at a reasonable price.
COMPETITION LAW INTERNATIONAL August 2012
It is also relevant to note that the Controller
found that Bayer failed to contribute to the transfer
and dissemination of technology, so as to counter-
balance the exclusive rights granted by a patent with
the obligations of a patentee that arise under the
Patent Act.' It appears, therefore, that similar to a
competition authority, the Controller balanced the
interests of a patent holder, on the one hand, with the
interests of promoting and sustaining competition,
on the other hand.
Interestingly, whilst Bayer has filed an appeal
before the Intellectual Property Appellate Board,
the Controller's decision triggered a price war in the
cancer-drug market. Cipla,9 an Indian pharmaceutical
company, has slashed the price of its cancer drugs,
including sorafenib tosylate, which it now offers at Rs
6,840 (approximately US$128) per month. The Swiss
company Roche has also slashed prices of some of its
life-saving drugs. Natco, of course, as recorded in the
Controller's decision, is committed to sell the drug at
no more than Rs 8,880 (approximately US$167) for
a month's dosage, the initial price Natco offered in
its earlier application to Bayer for a voluntary licence
for the drug. News reports suggest that Bayer is itself
considering a price reduction for Nexavar.
Compulsory licensing and competition law
Just as it is generally considered appropriate for a
competition authority to order a divestiture of physical
assets as a condition to approving an otherwise anti-
competitive merger, a divestiture of IP assets could be
considered as a remedy for anti-competitive behaviour.
However, the history of non-merger compulsory
licensing by competition authorities, both in the EU
and in the US, has been inconsistent and at odds with
the current global approach to IP and competition laws.
Competition authorities in foreign jurisdictions have
granted compulsory licences under the competition
provisions of their respective statutes, notwithstanding
similar provisions in IP laws. Compulsory licences
have been issued in cases concerning an abusive
refusal to supply, to correct the anti-competitive
practices resulting from the exclusivity granted by an
IP right, and where the refusal prevents demand for a
new product. This is done after a careful comparative
analysis between the need to encourage innovation
and the goal of promoting and fostering competition,
as will be discussed below.
In the Indian context, whilst there is currently no
guidance on whether, and under what circumstances,
the CCI would grant a compulsory licence, such a
remedy appears to be within the CCI's ambit. In
addition, recent decisions of the CCI and the Preamble
THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA
to the Competition Act, which will be discussed in
detail below, raise concerns that the CCI may follow
the approach of the Controller in Natco v Bayer.
Before we discuss the possible Indian approach, we
outline the approach in the European Union (EU) and
the United States (US) in issuing compulsory licences
under competition law.
The EU approach
Generally, the holder of an IP right has no obligation
to license their intellectual property and, in most
circumstances, will not be held to violate EU
competition law by unilaterally refusing to license
their IP right to competitors.
The circumstances that characterise the exercise
of exclusive rights as abusive conduct were discussed
by the Court of First Instance (CFI, now the General
Court) in the Magill TV guide case.i On appeal, the
ECJ12 held that it is only in 'exceptional circumstances'
that the exercise of an exclusive right by the holder
of an IP right results in an abuse of dominance. Such
exceptional circumstances were said to exist when:
* the refusal relates to a product or service
indispensableto the exercise of a particular activity
on a neighbouringmarket;
* the refusal is of such a kind as to exclude any effective
competition on that neighbouringmarket, and
" the refusal prevents the appearanceof a new product
for which there is potential consumer demand."3
Once it is established that such exceptional
circumstances are present, a dominant undertaking's
refusal to grant a licence may constitute an abuse of
dominance, unless such refusal is objectively justified.
These conditions were reiterated by the ECJ in IMS
Health, where a refusal to license IP rights was held to
amount to an abuse only when a competitor wished
to produce new goods or provide new services on a
neighbouring market using such IP, for which there is
14
potential consumer demand.
In Microsoft,"5 where the CFI was again confronted
with the issue of a compulsory licence for a protected
IP right, the CFI did not require the European
Commission to follow a strict application of the
,new product on a neighbouring market' test.
Instead, the CFI observed that if competitors were
granted access to Microsoft's copyright, 'far from
merely reproducing the Windows systems already
on the market' competitors would offer products
which 'will be distinguished from those (Microsoft)
systems with respect to parameters which consumers
consider important'.i" Thus, the CFI found that
the new product test was readily satisfied, insofar
as the products offered by competitors differed
from those offered by Microsoft in terms of
advanced performance, security and functionality.
Consequently, the CFI judgment in Microsoft waters
down the new-product test, as it held to be sufficient
that such new products vary from the existing
products in terms of certain capabilities. It was not
necessary to show the creation of an entirely new
product on a separate market.
The CFI's benign application of this 'new product'
requirement in Microsoft has been criticised by
academics and practitioners alike. 7 In contrast, in
Magill TV guide, there was clearly a new product,
different in conception to all existing guides. In
IMS Health, the ECJ found that refusal to license
intellectual property 'may be regarded as abusive
only where the undertaking which requested the
license does not intend to limit itself essentially to
duplicating the goods or services already offered on
the secondary market by the owner of the intellectual
property right, but intends to produce new goods or
services not offered by the owner of the right and for
which there is potential consumer demand'." The
new-product requirement stems from the balance
that needs to be achieved between protecting IP
rights and the incentives to innovate versus the
'protection of free competition'." 9 The secondary
market requirement thus serves as an additional
condition when IP rights are at stake and provides
an additional ground of protection to the dominant
undertaking holding the IP right, in order to ensure
that the compulsory licence is not merely issued to
duplicate goods or services offered by the dominant
undertaking. However, the CFI's lenient approach to
the new product test seems to suggest a lesser degree
of protection of IP rights than previously afforded in
Magill TV guide and IMS Health.
The American approach
In the US, compulsory licensing is a well-established
remedy to address competition concerns arising from
proposed mergers, as it involves the consent of parties
and usually the grant of only a single licence. US cases
involving compulsory licences outside the merger
context have a long but contradictory history.
The general rule under US antitrust law is that there
is no general duty to deal with competitors. 20 However,
liability under section 2 of the Sherman Act (provisions
governing abuse of dominance in the US) will accrue
when the refusal by a holder of an IP right enjoying a
dominant position in the relevant market constitutes
exclusionary conduct. The more recent judgments of
Trinko21 in 2004 and Linkline22 in 2009 endorse the view
that 'under certain circumstances, refusal to cooperate
COMPETITION LAW INTERNATIONAL August 2012
 THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA

with rivals can constitute anti-competitive conduct' but India: the curious case
that courts should be very cautious in recognising such
In enacting the Competition Act, India has come a
exceptions to the general rule that even monopolists
long way from the days of the prior Monopolies and
may choose with whom they deal.23 It must be noted that
Restrictive Trade Practices Act regime. Whilst under the
though Trinko and Linkline did not involve intellectual
old regime, big was bad, the Competition Act, in line
property, they condition US jurisprudence on refusals
24 with regimes around the world, focuses on companies
to license Ip.
only when they are dominant and prohibits an abuse of
Though US Courts of Appeal have considered
such dominance. This change in approach is reflective
whether a unilateral refusal to license would amount
of the changing social, economic and political attitudes
to a violation of section 2 of the Sherman Act, their
in India.
decisions have been divergent. In Kodak, the Ninth
However, India remains a country with socialist goals.
Circuit Court of Appeals found that if the patent
This is reflected in the Preamble to the Competition
holder is not genuinely exercising their IP rights
Act, which provides for 'the establishment of a
and if the intent is not to enforce such rights, the
Commission to prevent practices having adverse effect
presumption of the legal exercise of IP rights will not
on competition, to promote and sustain competition
apply.25 In contrast, in Xerox, the Court of Appeals
in markets, to protect the interests of consumers'. The
for the Federal Circuit questioned the benefit of
CCI, in its decisions as well as public statements, places
examining intention and imposed a different standard
greater emphasis on the interests of the 'common man'
in holding 'in the absence of any indication of illegal
than on competitors or the competitive process.
tying, fraud in the Patent and Trademark Office or
Such an approach, especially in light of the
sham litigation', the patent holder should be immune
Controller's decision in Natco v Bayer, gives rise
from antitrust law. 26 Thus, a firm would not be held
to serious concern that the CCI may consider the
to abuse its dominance unless:
grant of a compulsory licence even in the absence
* the refusal was a part of an illegal tie-in;
of 'exceptional circumstances' and that consumer
* the patent was obtained by fraud; or
welfare/socialist considerations may skew the balance
* the patentee instituted litigation with the intent
between the protection of IP and free competition.
to interfere with a competitor's business.
Compulsory licences under IP laws are generally
The US precedents on abusive unilateral refusal to
granted on public interest considerations, whereas
license are, therefore, inconsistent. The Trinko and
compulsory licences under competition law are
Linklinejudgments may indicate that courts would be
typically based on the need to restore effective
more likely to endorse the Federal Circuit's view in Xerox
competition in the market place. However, the CCI
than the Ninth Circuit's view in Kodak.27 Accordingly,
would certainly note with interest the change in market
the likely standard may be one that finds an abuse in
dynamics following the Natco v Bayer decision. As was
very narrow circumstances, when a patentee attempts
highlighted earlier, the compulsory licence granted to
to enlarge the scope of their IP right.
Natco triggered a price war," resulting in enhanced
Some jurisdictions take a broader approach to
competition in the cancer drug market - a result a
defining anti-competitive behaviour than the EU and
competition authority may seek to achieve through
the US.2 While Western jurisdictions consider the
remedies. However, by no means do we imply that this
protection of IP rights as sacrosanct and may find
would be a correct approach.
that too much regulation amounts to protectionism,
Under the Competition Act, an enterprise is guilty of
this is not necessarily true of the developing world.
abusing its dominant position if, inter alia, it imposes
Competition law in developing economies may be
unfair prices, limits the production of goods or services,
guided by objectives that are inherently dissimilar
restricts the technical or scientific development of
from the aims of antitrust in Western jurisdictions. In
goods or services, or denies market access. 2 Whilst
fact, there is a school of thought that suggests that in
there have been no CCI decisions to date dealing with
a developing economy, too much competition may
a refusal to license IP rights, the CCI's approach in
impair development. 9 Therefore, there is a genuine
the cases discussed below appears to suggest that the
concern that competition authorities in developing
CCI may evolve novel concepts to address perceived
countries may issue remedies they deem appropriate
consumer harm.
to promote development, notwithstanding years of
As stated earlier, the Controller in Natco v Bayer
competition jurisprudence and case law from more
granted a compulsory licence, inter alia, on the
mature jurisdictions, especially where IP exclusivity
ground that Nexavar was not available to the public at a
results in economic inequity and negligible social
reasonably affordable price. In doing so, the Controller
contribution.

COMPETITION LAW INTERNATIONAL August 2012

THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA
in Natco v Bayer construed the term 'reasonably
affordable price' predominantly with reference to the
price to the public and not with reference to Bayer's
costs. It is not inconceivable that a complaint could
potentially be filed against a dominant pharmaceutical
company, alleging that the price charged is an unfair
price, as it is unaffordable to the public or because
other manufacturers could produce and make available
the same drug at cheaper prices, in violation of section
4(2) (a) (ii) of the Competition Act.
In fact the CCI has, in MCX Stock Exchange Ltd &
Ors v National Stock Exchange of India Ltd & Ors,3"
interpreted the term 'unfair pricing' in relation to
the costs of competitors. Similar to the Controller's
decision, in arriving at its conclusion that NSE abused
its dominant position, the CCI failed to consider the
cost structure of the NSE. Contrary to international
principles, the CCI abandoned the as-efficient-
competitor test. Instead, the CCI held that NSE's
prices were unfair vis-A-vis its competitor, MCX-SX,
who, despite having a larger market share in the
relevant market, in the CCI's view would be unable
to compete.14 It should be noted that the CCI did
not find NSE to have engaged in predatory pricing,
but simply 'unfair pricing', implying a new abuse of
non-predatory low pricing. If the CCI were to follow a
similar approach in relation to the prices of drugs of
a dominant pharmaceutical company, it could lead to
disastrous results and potentially encourage the CCI
to follow an approach similar to that of the Controller.
A refusal to license IP exclusively held by a
dominant enterprise may also be considered as a
constructive refusal to supply under the provisions of
the Competition Act. Such a refusal may be construed
to limit the 'production of goods or provision of
services or market', or restrict the 'technical or
scientific development relating to goods or services to
the prejudice of consumers', or result in the 'denial of
market access', all three of which amount to abusive
conduct under sections 4(2) (b) (i), 4(2) (b) (ii) and
4 (2) (c) of the Competition Act, respectively.
As discussed earlier, in the EU such a refusal
would be considered abusive only in 'exceptional
circumstances', when the refusal prevents the
emergence of a new product on a secondary market
for which there is potential consumer demand. Such
a refusal would be subject to a stricter standard still
in the US. Whether the CCI will follow either the
EU or US approach remains to be seen; however,
both the Controller's Natco v Bayer decision and the
general attitude of the CCI seem to suggest a more
consumer-oriented approach in India. The CCI's
concern over the exploitation of the Indian consumer
by dominant enterprises was especially highlighted in
Belaire Owner's Association v DLF Limited and HUDA,35
where the CCI's primary concerns revolved around
the treatment of apartment allottees by the dominant
real estate enterprise, DLF. The CCI was particularly
critical of the terms and conditions imposed by DLF
in the contracts that the company had signed with
apartment allottees.36
In the Natco v Bayer decision, Bayer's inability to
make Nexavar available to nearly 98 per cent of the
Indian public 7 was held by the Controller to amount
to a failure to satisfy the reasonable requirements
of the public. In the absence of the requirements
of the 'exceptional circumstances' test in India and
given the consumer welfare focus of the CCI, it is
not inconceivable that the CCI would adopt a similar
approach and find that the exercise of IP rights in such
a scenario limits the production of goods in violation of
section 4(2) (b) (i) of the Competition Act. Further, the
Controller had observed that a patentee can contribute
towards the transfer and dissemination of technology
by either manufacturing the product in India itself or
by granting a licence to a third party to manufacture
the product in India, and that Bayer had failed to do
so. 8 The CCI could potentially construe such failure
by a dominant pharmaceutical company to limit or
restrict the technical or scientific development of goods
or services in India to the prejudice of consumers, an
abuse in contravention of section 4(2) (b) (ii) of the
Competition Act.
The decision in Natco v Bayer also states that 'the
patentee (Bayer) thus took no adequate or reasonable
steps to start the working of the invention in the
territory of India on a commercial scale and to an
adequate extent'." The CCI may also be sympathetic
to arguments based on failure to 'work a patent',
given that exclusivity is reserved and that competing
enterprises are not granted the opportunity to access
the patented product and compete with the dominant
enterprise. The CCI could potentially adjudge such
failure to work a patent as amounting to a denial of
market access, an abuse listed under section 4(2) (c)
of the Competition Act.
In the authors' view, such an approach would
indeed be highly controversial, albeit not impossible,
given the social and economic constraints faced by
developing countries such as India. Moreover, the
compulsory licence would be issued, not in order to
enable competitors to provide 'a new product on a
neighbouring market', but to enable companies to
provide the same product at a fair price in order to
satisfy demand.
However, it is strongly recommended that even if the
CCI were to proceed on this basis, compulsory licences
be issued with great caution. It is critical that the royalty
COMPETITION LAW INTERNATIONAL August 2012
 THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA

determined is based on FRAND (fair, reasonable and
non-discriminatory) terms and that the duration of the
licence is limited and constantly reviewed, so as to only
remedy inadequate supply. The CCI must also exercise
caution to avoid falling into the trap of becoming a
price regulator, a concept that competition authorities
around the world find disconcerting.
The better approach would be for the CCI to refer
any case dealing with compulsory licensing to the
relevant IP authority in India. In fact, section 21A
of the Competition Act explicitly provides the CCI
with the power to make a reference to a concerned
statutory authority, where the CCI is faced with a
decision whose implementation is entrusted to such
other statutory authority. Relevant IP authorities in
India would have the requisite expertise to grant such
licence and determine equitable terms thereof. This
would also remove the problem of the CCI becoming
a price regulator. In this regard, it is important to
remember that competition law is not a panacea. There
are other modes of redress available to parties seeking
a compulsory licence and, perhaps, adequate remedies
lie elsewhere.
Finally, a decision by the CCI to issue a compulsory
licence could have other implications. Such decisions
may cause IP-reliant firms to either abandon operations
in India or refrain from entering the Indian market
altogether. A parochial approach to IP rights might
also diminish the attractiveness of the Indian market
to foreign direct investors, as weak protection of IP
rights and the threat of compulsory licensing tends
to lower the expected returns of foreign investments.
It is therefore recommended that the CCI grant a
compulsory licence only where the concerned IP
authority fails to do so or where there are over-arching
contraventions of competition law, and alternative
remedies are not sufficient. Given that the test
for establishing a refusal-to-license abuse and the
corresponding grant of a compulsory licence remedy is
itself subject to strict scrutiny in jurisdictions overseas, it
is recommended that the CCI be especially circumspect
in the exercise of such authority.
The Natco v Bayer decision sets the precedent
for making expensive patented drugs available for
compulsory licensing under the Patents Act. However,
questions remain as to whether competitors of
dominant undertakings holding patent rights may use
section 4 of the Competition Act to enable them to
compete on the same market as the IP owner.
The CCI may be tempted to intervene when a patent
monopoly fails to address social and developmental
concerns and where public demand for a life-saving
drug has not been met. Though competition law is
a tool used for the attainment of economic freedom
and prosperity in developed economies of the EU
and the US, in a nation such as India, competition
law may be motivated by other considerations,
including access to healthcare. Pharmaceutical
countries may find great risk in operating in India
if competition intervention is used to remedy social
inequity rather than to ensure a competitive market
place. It is, therefore, recommended that compulsory
licensing as a remedy to anti-competitive conduct
should only be used where the dominance of the
defendant is unquestionable, no other equitable
remedy is available and where the interests in favour
of a licensee are so strong, they trump any harm that
could be caused to the innovation incentives of IP
right holders.

Conclusion
At a time where global pharmaceutical mergers are
subject to intense scrutiny by the Indian Government
and the marketing policies of the pharmaceutical
industry are being debated by the Indian bureaucracy,
the grant of India's first compulsory licence in this
sector has certainly raised eyebrows. The Natco v Bayer
decision has already resulted in an adverse perception
of the Indian pharmaceutical industry and may
adversely impact foreign investment in this sector.

COMPETITION LAW INTERNATIONAL August 2012

THE CURIOUS CASE OF COMPULSORY LICENSING IN INDIA
Notes 18
* The views expressed by the authors are not to be attributed to 19
the firm or to any of the firm's clients. Any opinions expressed
are solely the personal views of the authors and the information
contained herein is from public sources only.
I Natco PharmaLimited v Bayer Corporation,Compulsory Licence
Application No 1/2011.
2 See generally, Micheal A Carrier, [2009], Innovationfor the 21st
Century: Harnessingthe Power of IntellectualProperty and Antitrust law, 20
New York OUP;J Newberg and T Willard, [1997], 'Antitrust and
Intellectual Property: From Separate Spheres to Unified Fields', 66 21
Antitrust LJ 167.
3 Joined cases 56/24 and 58/64, Consten & Grundig v Commission, 22
[1966] ECR 299, at p 346. 23
4 All conversions from INR to USD in this document have been 24
calculated at the rate US$1 = 52.6084 INR, the exchange rate as on
08 May 2012.
5 Section 84(1), Patents Act, 1970.
6 Note the conditions listed under section 84(1) of the Patents Act 25
are alternative and not cumulative. 26
7 If Bayer's data on the number of patients eligible for treatment 27
by Nexavar (8,842 per year) were accepted, given the number of
boxes sold and the duration of treatment required, the Controller 28
observed that only a little over 200 patients (or two per cent) had
received the drug; Natco v Bayer, see note 1 above, at p 22. 29
8 Section 83, Patents Act, 1970.
9 Cipla is currently defending a patent infringement claim filed by
Bayer, in relation to Nexavar, in the Delhi High Court.
10 For a list of national statutory provisions under IP laws that
provide for the grant of a compulsory licence, see: Survey on
Compulsory Licenses granted by WIPO Member States to Address 30
Anti-competitive uses of IntellectualProperty Rights, CDIP/4/4 Rev/
STUDY/INF/5.
11 Case T-69/89, Radio TelefisEireann v Commission, 1991 ECR II-485.
12 Cases C-241 & 242/91P, Radio TelefisEireann v Commission, 1995
ECR 1-743. 31
13 Ibid, at paragraphs 52-56.
14 Case 418/01, IMS Health GmbH & Co OHG v NDS Health GmbH &
Co KG, [2004] ECR 1-5039. The ECJ found that refusal to license
intellectual property 'may be regarded as abusive only where
the undertaking which requested the license does not intend to 32
limit itself essentially to duplicating the goods or services already
offered on the secondary market by the owner of the intellectual 33
property right, but intends to produce new goods to services not
offered by the owner of the right and for which there is potential
consumer demand', at paragraph 49. 34
15 Case T-201/04, Microsoft Corp v Commission, 2007 ECR II-03601. 35
16 Ibid, at paragraph 656. 36
17 RWhish and D Bailey, [2012], Competition Law, Oxford 37
University Press, at p 801. See generally: J Vickers, [2008], 'A 38
Tale of Two EC Cases: IBM and Microsoft', (2008) 4 Competition 39
Policy International3; I Forrester, [2005], Regulating Intellectual
Propertyvia Competition? Or Regulating Competition via Intellectual
Property?Competition and IntellectualProperty: Ten Years on, the
Debate still Flourishes. [Online] Available at: www.eui.eu/RSCAS/
Research/Competition/2005/200510-CompForrester.pdf
<accessed 21 May 2012>.
See note 14 above, at paragraph 49.
Indeed, in IMS Health,the ECJ observed that in the balancing of
the interest in protection of the intellectual property right and the
economic freedom of its owner against the interest in protection
of free competition, the latter can prevail only where refusal to
grant a licence prevents the development of the secondary market
to the detriment of consumers' at paragraph 46 [emphasis added];
also, note 14 above, at paragraph 49.
Also known as the Colgate doctrine, as held in United States v Colgate
& Co, 250 US 300, 307 (1919).
Verizon CommunicationsInc v Law Offices of Curtis V Trinko, 540 US
398 (2004).
Pacific Bell v linkLine Communications, 03 E.3d 876 (Fed Cir 2009).
See note 21 above, at p 408.
R Coco, [2008], 'Antitrust Liability for Refusal to License
Intellectual Property: A Comparative Analysis and the
International Setting', 12 Marquette IntellectualProperty Law Review
1(2008) at p 6.
Image Tech Servs vEastman Kodak, 125 E3d 1195 (9th Cir 1997).
CSUv Xerox Corp, 203 F.3d 1322 (Fed Cir 2000).
Antitrust Issues in Intellectual Property Licensing Transactions [20121,
ABA Section of Antitrust Law at p 32.
E Fox, [2003], 'WeProtect Competition, You Protect Competitors',
26(2) World Competition 149.
See generally: J Stiglitz, [2002], 'Globalization and its Discontents,
W.W. Norton & Company; Jenny F. [2002], Globalization,
Competition and Trade Policy: Convergence, Divergence and
Co-operation' in Chapter 16, C Ajones and M Matsushita (Eds),
Competition Policy in the Global Trading System: Perspectivesfrom the EU,
Japan and the USA [2002], Kluwer Law international.
D Rajagopal, [2012], Cipla shocks rivals by slashingcancer drugprices
up to 75%, [Online] Available:
http: //articles.economictimes.indiatimes.com /2012-05-04/
news/31573060_1-cancer-drug-iressa-sorafenib <accessed on
8 May 2012>.
S Chatterjee, [2012], On cue, Roche to cut cancer drugprices, [Online]
Available:
www.dnaindia.com/money/report_on-eue-roche-to-cut-cancer-
drug-prices_1666622
<accessed on 8 May 2012>.
Sections 4(2) (a) (ii), 4(2) (b) (i), 4(2) (b) (ii), and 4(2) (c) of the
Competition Act, respectively.
Case 13/2009, MCX Stock Exchange Ltd & Or v National Stock Exchange of
India Ltd & Ors. Please note, the authors have advised, and contisue to
advise, The National Stock Exchange in relation to this case.
Ibid, at paragraph 10.73.
Case No 19/2010, Belaire Owner'sAssociation v DLF Limited and HUDA.
Ibid, at paragraphs 12.103-12.111.
See note 1 above, at p 22.
See note 1 above, at p 53.
See note 1 above, at p 53.
COMPETITION LAW INTERNATIONAL August 2012