1 April 2013Jurisdiction reportsAbhishek Malhotra

Key recent cases

Bayer v Natco Pharma

As per a widely reported decision, the Controller General of Patents, in March 2012, granted a compulsory licence—the first of its kind under the Patents Act, 1970, in respect of a pharmaceutical product—in favour of Natco Pharma, a Hyderabad-based generics company, for Bayer Corporation’s leading cancer drug, Nexavar (sorafenib). Bayer appealed against the decision before the Intellectual Property Appellate Board (IPAB). The IPAB, in an order of March 5, 2013, upheld the compulsory licence.

The IPAB noted that Bayer sold the drug at an “excessive” price ($5,200 a month) and was able to meet the requirements of only 2 percent of the patient population. Therefore, two of the grounds under Section 84 had been made out by the applicant, namely: (i) that the reasonable requirements of the public with respect to the patented invention have not been satisfied; and (ii) that the patented invention is not available to the public at a reasonably affordable price.

With respect to the third ground (“that the patented invention is not worked in the territory of India”) IPAB disagreed with the Controller General who had held that “working” under Section 84 cannot include mere imports. The IPAB held that “working” is a flexible term and can also include imports in some instances. The interpretation depends on the circumstances such as the technology at issue and whether the invention could feasibly be manufactured in India.

“THE COURT FELT THAT THE MORE PROXIMATE THE TIME OF THE OFFENDING ‘USE’ BY THE NEWS CHANNELS, THE MORE WEIGHT WOULD BE GIVEN TO THE USE BEING ‘UNFAIR’.”

In the present case, there was no discussion on whether patentee did, or did not, furnish any credible reasons for not manufacturing in India. It was, however, held that Bayer’s patient assistance programme did not necessarily mean that it worked the patent adequately. Additonally, it was also held that non-licensed sale of the drug or generic equivalent would not be taken into consideration to determine whether the patent has been worked.

While upholding the grant of the compulsory licence, the IPAB increased the rate at which the licence fee was granted from 6 percent to 7 percent in view of the finding that Natco was selling its drug at a margin of 30 percent.

Over to the High Court.

NDTV v ICC

In a case dealing with the issue of fair use in relation to broadcasting sporting events, the International Cricket Council (ICC) sparred with broadcaster NDTV’s news channels before the Delhi High Court, in a matter that went to the court’s Division Bench.

The court observed that the language of the provision has to be construed strictly, since fair dealing is an exception to copyright infringement. Since the news channels sought to argue that their activity was protected fair dealing because they were reporting a current event, it was important to identify whether the event was actually a current event.

The court laid down a two-pronged test for determining what constitutes reporting. First, the coverage would have to be “result-oriented”, and second, it matters whether it is primarily an analysis or review of a sporting event. The court held that if the offending coverage does not amount to reporting, an injunction must follow.

The court relied on the decision of the Delhi High Court in ESPN Star Sports v Global Broadcast News on the point of fair dealing exemption. The court felt that the more proximate the time of the offending “use” by the news channels, the more weight would be given to the use being “unfair”. Another factor which needs to taken into account is whether the offending programme competes with the exploitation of the copyright by the copyright owner.

The court devised two options for the news channels: either (a) opt to put on the air an advertisement specifically targeted during special programmes created around the sporting event/broadcast, and not use the footage; or (b) use the footage without advertisements. With respect to a cap on the amount of footage used and its repetition, the court decided that each case would have to be viewed on its facts depending upon the number of matches played per day at different venues.

An expectation was voiced that for future events, the TV channels would use the footage strictly in accordance with these principles or they would have to purchase the footage legally from ICC or the authorised broadcaster.

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