Big relief for Big Pharma: Indian Patent Office rejects application for compulsory license

Aditya Gupta

By a detailed order passed last week, the Indian Patent Office rejected an application for compulsory license filed by a generic drug manufacturer BDR Pharmaceuticals International Pvt. Ltd. (“BDR”) seeking a license of Bristol Myers Squibb’s (“BMS”) Indian patent for an anti-cancer drug. The Indian Patent Office found that BDR had not made out a prima facie case for grant of a compulsory license since it had not made efforts to obtain a voluntary license from BMS on reasonable terms and conditions.

Though the Indian Patent Office did not go into the merits of BDR’s application and rejected it on preliminary grounds, this victory will help restore pharmaceutical companies’ faith in the Indian patent system.

BMS is the assignee of Indian Patent No. 203937 entitled “A compound 2-amino-thiazole-5-carboxamide” which covers the active ingredient of the anti-cancer drug DASATANIB. Sold by BMS under the brand name SPRYCEL®, DASATANIB is used as a second line of treatment for Chronic Myeloid Leukemia.

In February 2012, BDR approached BMS seeking a voluntary license for manufacturing DASATANIB. BMS responded to BDR’s offer by raising certain queries regarding, amongst other things, BDR’s capacity supply a high volume of the API, quality assurance systems followed by BDR, and its compliance with regulatory standards and GMP. BDR treated this reply as “clearly indicative” of BMS’s rejection of offer for voluntary license and did not further correspond with BMS regarding the offer.

Thereafter in March 2013, BDR approached the Indian Patent Office seeking a compulsory license for BMS’s patent (unfortunately, the grounds based on which BDR sought the license are unclear since a copy of the application has not been uploaded on the website of the Indian Patent Office).

The decision of the Indian Patent Office revolves around a provision of the Indian patent statute which mandates that before making an application for a compulsory license, a party must first try to obtain a voluntary license from the patentee on reasonable terms and conditions. These efforts must continue for a reasonable period (which the law clarifies to be ordinarily six months).

The Indian Patent Office found that BDR, by failing to respond to BMS’s queries, had not made efforts to obtain a voluntary license. It held that BMS was entitled to raise queries regarding BDR’s credentials and capability to manufacture the product before negotiating the terms of a voluntary license. The Office noted that there was a “deliberate intent” on BDR’s part to refrain from negotiating with the patentee and held that this procedural irregularity was fatal and thus rejected the application.

BDR now has the option challenging this order through an appeal process. In the alternative, it could again approach BMS for a voluntary license. It can also opt not to pursue the licensing route any further. Only time will tell which of these options BDR will exercise; but for now BMS can celebrate in what surely is a strategic victory.

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