It is an interesting case where Bayer Corporation, instead of filing a suit for infringement, filed an inventive writ petition in the Delhi High Court desiring that since the applications of Cipla “SORANIB” allegedly infringed its patent, according to Drugs and Cosmetics act Cipla’s marketing approval application should not even be processed or entertained.

It is for the first time that an attempt is made to link drug approval to patent infringement in India. However, the Delhi High Court, denying the injunction, imposed a substantial cost of Rs. 6.75 Lakh to deter any such future attempts.

Bayer relied on the argument that a combined reading of Section 2 of the Drugs and Cosmetic Act along with Section 48 of the (Indian) Patent Act, 1970 establishes a Patent Linkage Mechanism under which no market approval for a drug can be granted if there a patent subsisting over that drug. It also claimed that CIPLA’s “SORANIB” is a “Spurious Drug” as defined under the Drugs Act, for which market approval cannot be granted.

Section 2 of Drugs and Cosmetics Act states that Application of other laws not barred.—The provisions of this Act shall be in addition to, and not in derogation of, the Dangerous Drugs Act, 1930 (2 of 1930), and any other law for the time being in force. And the section 48 of Indian Patent Act states the

  1. Rights of patentees

Subject to the other provisions contained in this Act and the conditions specified in section 47, a patent granted under this Act shall confer upon the patentee—

(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India:

(b) where the subject matter of the patent is a process the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India:

 It also has an earlier case of same impact where Bayer advanced a rather preposterous legal argument claiming that Cipla’s generic version of Nexavar would qualify as a “spurious” drug under the Drugs and Cosmetics Act; therefore, it ought not to be approved. As the judge rightly noted, this absurd line of reasoning would effectively mean that no generic could be approved, as all of them would amount to “spurious” drugs. We had presented a similar argument earlier.


Lack of clarity in drugs Act may hit generic companies

Ambiguity in the amended Drugs and Cosmetics Act over the definition of the terms ‘adulterated’ and ‘spurious’ drugs could affect Indian generic drug players. The amendment, which came into force on December 2008, could complicate both patent challenges as well as regulation of companies, industry observers said.

The amended law has provided for stricter punishment for companies charged with manufacturing ‘adulterated’ or ‘spurious’ drugs. Under the new law, evidence of both adulteration and manufacture of spurious drugs needs to be established for a person to be convicted.

However, the punishment for this has been increased to 10 years imprisonment from five years now, which could extend to life. The monetary fine has also been increased to Rs 1 lakh from Rs 10,000.

However, lawyers feel there is still some ambiguity in the Act, which needs to be addressed immediately.

What Shamnad Basheer, professor of intellectual property law at the National University of Juridical Sciences (NUJS), Kolkata, have to say is, “Although the increase in penalties for dealing in spurious drugs may be welcome, the fact that the definition of ‘spurious’ remains substantially the same is a grave cause for concern. This definition could be interpreted to even catch within its fold legitimately-authorised generics of good quality and this is problematic.”

Loopholes in the law have been noticed both by intellectual property lawyers and companies alike which was evident in the recent Bayer-Cipla case.

Bayer, in the recent drug patent linkage case, suggested that Cipla’s generic version of Nexavar would qualify as ‘spurious’.

“Given that the government is fighting international efforts such as IMPACT which attempt to define counterfeiting broadly to even catch legitimate generics, the government must, as a first step, clean up its own backyard by redefining ‘spurious’. It must ensure that the term ‘spurious’ as used within the context of drug regulation be simply restricted to substandard drugs.

IP issues should not form part of this definition. And in any case, barring straightforward violations of identical trademarks, the DCGI often does not have the institutional competence to decide complex trademark disputes.

Another point in the law that is of concern is the non-binding power that it gives authorities. The other comments are, “The purpose of the amendment is to curb the spread of adulterated drugs and that is a welcome move.

But the powers given to authorities like the state Food and Drug Administration are non-binding on them and there are concerns that these may be misused.” Not all adulterated drugs, he said, originate from the manufacturer. Some come in at various points in the supply chain and the concerns are that genuine companies may also be pulled up for such occurrences.

“With the lack of clarity on the definition of adulterated and spurious, large companies are more likely to use this as a way to block generic companies from challenging their patents and manufacturing generics. This could harm the generic industry as a whole and if it is not sorted out soon, we will see more lawsuits against Indian companies on such grounds,” said the CEO of a generic company who did not want to be named.

 For the “SORANIB” , The Hon’ble High Court of Delhi finally held that there is no Drug- Patent Linkage mechanism in India as both the Acts have different objectives and the authority to determine patent standards, is within the exclusive domain of the Controller of Patents. Moreover, the patent linkage will have undesirable effect on the India’s Policy of Public Health. It further held that the market approval of a drug does not amount to infringement of patent. Therefore, the patent infringement cannot be presumed, it has to be established in a court of law. Such adjudication is beyond the jurisdiction of Drug Authorities.

On the issue of “SORANIB” being a spurious drug, the court held that CIPLA’s “SORANIB” cannot come under the category of spurious goods as there is no element of passing off like deception or imitation present in CIPLA’s drug”.


Keywords: The Drugs and Cosmetics Act, The Indian Patent Act, Spurious drug, Cipla, Bayer.