Indian drug makers can export patented meds for approval: Delhi High Court

NEW DELHI: The Delhi High Court has allowed Indian companies Alembic and Natco Pharmaceuticals to export — for research and regulatory purposes— generic versions of two life-saving medicines developed by Germany's Bayer.

The Wednesday ruling is another victory for Indian makers of generic drugs embroiled in court battles with drug inventors.

Bayer had approached court in 2016 to stop Alembic from exporting its generic version of Xarelto ( Rivaroxaban), used to prevent and treat dangerous blood clots. The company also sued the government in 2014 to stop Natco’s export of Sorafenat, a generic copy of Bayer's drug Nexavar (Sorafenib), used to treat liver and kidney cancers.

The government had granted Natco a licence to make the generic version of Nexavar in 2012 before its patent expired — a decision upheld by the Supreme Court in 2014 when Bayer appealed the move.

Bayer contended that Alembic infringed its patent on the blood thinner by exporting and dealing in the drug Rivaroxaban. Bayer also claimed Alembic had exported 90 kg of the drug worth Rs 3 crore and that shipments of such a quantity were not as per the law. Alembic argued that exporting its version of the drug was well within Indian laws.


In Natco's case, Bayer said licence for Sorafenat had been granted for sale of the drug within India. Natco sought permission from court to send samples of active ingredients abroad for experimentation and generation of clinical trial data for submission to authorities.

Both companies said their exports were purely for research and regulatory purposes. Additionally, Natco said it never exported the finished drug outside India for commercial purposes.

"I've held their exports to be permissible," said Justice Rajiv Sahai Endlaw. Alembic and Natco are required to give an undertaking they will not export drugs for purposes other than those in Section 107A of the Indian Patents Act, 1970.

Under this provision, companies can make, use, sell and import a patented invention solely for purposes reasonably related to the development and submission of information required under any law in force in India or elsewhere.

Endlaw said to uphold what Bayer contends would be contrary to the natural, literal or textual interpretation of Section 107A . EThas seen a copy of the judgment.

There is nothing in the language of Section 107A to suggest that the patented drugs can’t be transported out of India, according to the judgment. The order rejected Bayer's argument that quantities of the drugs exported by Natco and Alembic exceeded that required for clinical development and regulatory approvals.

"All exports by a non-patentee of a patented invention are deemed to be for the said purpose and only if proved to be otherwise, can make the exporter liable for consequences thereof in an appropriate legal proceeding," it added.

The judgement suggested that conditions to sell within the Indian territory as part of Natco’s licence for Sorafenat would not restrict it from obtaining regulatory approvals as a non-patentee under India's or another country's laws.

"The court has reiterated that growth of the pharma industry cannot be stunted in such a manner by stopping exports for research and regulatory purposes which is a recognised exception under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)," Pratibha M Singh, counsel for Alembic, told ET.

According to Rajeshwari H, counsel for Natco, the judgement interprets the scope of Section 107A for the first time, including the fact that exports are allowed under this section. "...This judgement clarifies for the first time that as long as the material is exported bona-fidely for regulatory submissions, it cannot constitute infringement (of a patent)," she told ET.

Bayer did not immediately respond to ET's queries on the ruling.