In a significant development today, Justice Endlaw of the Delhi High Court held that ‘export’ of a patented invention for experimental purposes is also covered under Section 107A of the Patents Act, 1970 (India’s Bolar exemption) and thus does not amount to patent infringement. It accordingly allowed Natco to export Bayer’s patented drug ‘Sorafenib Tosylate’ (for which it was granted a compulsory license in 2012) to China for the purpose of conducting development/ clinical studies and trials.
What is bolar exemption?
The Bolar exemption originally set out in the Hatch-Waxman Act is an exemption to the patentee’s exclusive rights. The Act essentially overturned the US Federal Circuit’s ruling in Roche Products v Bolar Pharmaceutical (733 F2d 858, Federal Circuit, 1984) against generic drug manufacturer Bolar, which was using Roche’s patented active pharmaceutical ingredient and making generic versions of its drug in order to conduct clinical trials, which were essential to secure regulatory approval from the US Food and Drug Administration. Accordingly, the exemption that enables generic manufacturers to experiment with patented drugs and produce them in limited quantities for research became known as the Bolarexemption. The exemption enables generic drug manufacturers to use an inventor’s pharmaceutical drug before the patent expires, which not only aids in the early launch of generic versions of the drug once the innovator drug’s patent term ends, but also promotes further R&D. In India, the exemption is set out in Section 107A of the Patents Act and is comparatively broader than its US equivalent.

Rejection of Bayer’s Contention

It rejected Bayer’s contention that such export was in violation of the terms of the compulsory license noting that the license condition for making, sale and use of the drug within the territory of India was limited to the purpose of treating HCC and RCC in humans and did not extend to the purpose of obtaining regulatory approvals which is exempted under Section 107A.

Earlier, in 2014, upon Bayer’s application, the court had granted an interim order directing the Customs Authorities to ensure that Natco does not export more than 15gm of ‘Sorafenib Tosylate’ for the purpose of obtaining regulatory approvals. Later, Natco was permitted to export 1 kg of the drug for this purpose.