Bayer Corp. v. Union of India

German company Bayer Corp. (Bayer) (plaintiff) patented a cancer drug called Nexavar. India’s patent office granted a compulsory license to make and sell Nexavar in India to an Indian company called Natco Pharma Ltd. (Natco) after Bayer refused to grant Natco a license voluntarily. Indian law permitted an application for a compulsory license issued by the government if the patent had been granted at least three years prior to the application and the license applicant had made an effort to obtain a voluntary license directly from the patent owner on reasonable terms and conditions. Natco alleged that both conditions were met and asserted that Bayer was not currently meeting demand for the drug in India. Natco presented evidence that nearly 9,000 patients needed the drug but there was only enough supply in India for around 5,200 patients. Natco also alleged that the drug was sold at unaffordable prices in India and that Bayer had not made efforts to manufacture the drug in India. Natco argued that granting a compulsory license would permit Natco to manufacture and sell the drug within India at affordable prices to meet demand. Bayer argued that there was sufficient supply to meet demand. Bayer also argued that the drug was expensive to research and create and therefore expensive to sell but that Bayer had a charity program designed to lower costs. Finally, Bayer asserted that as long as it imported the drug to India, it did not also need to manufacture it there. India’s Intellectual Property Appellate Board upheld the decision to grant Natco a compulsory license, and Bayer appealed to the Bombay High Court.