Here in this article, we discuss case law titled Bayer Corporation vs. Union of India (Delhi High Court), wherein it is been discussed that can there be a sale of Patented Goods by third party for research purposes.

Facts of the Case:

Petitioner Bayer Corporation was granted patent by the India’s Patent office for their drug ‘Sorafenib Tosylate’.

Bayer Corporation filed a suit for injunction against NATCO from making or selling the generic version of their drug. During the pendency of the case, NATCO applied for compulsory license to the Patent office under Section 84 of Patents Act. Patent office granted compulsory license, however, only for making, using and offering to sell only in India.

However, NATCO manufactured the product for export outside India.

Bayer therefore, filed a writ petition seeking a direction to the authorities to seize the consignment for export. Learned Single Judge in its preliminary order directed the authorities to ensure that no consignment should be exported and granted liberty to NATCO to apply for permission to export the drug.

During the pendency of the writ petition, NATCO informed the court that they have applied drug license which was granted to them and they have been permitted to export Sorafenib Tosylate not exceeding 15 gm.

NATCO thereafter applied for permission to export 1 kg of pharmaceutical ingredient for research purposes to which Bayer objected contending that such a transaction would be commercial under Section 107A Patents Act and hence, would be infringement of its patent.

However, Natcos contended that their intention is not exporting the finished product Sorafenat to any party outside India for commercial purpose and further argued that the sole purpose of sale is of drug development.

Single Judge bench rejected Bayer’s contention and dismissed the writ petition. Bayer therefore, filed the appeal against the order of dismissal.

Issue: Whether Section 107A of the Patents Act is an exception to Section 48 of the Patents Act?

Conclusion: Delhi High Court observed that Section 48 of the Patents Act constitutes a negative right to prevent third parties from making, using or selling the patented product. However, research is an exception and the patented product can be carried out if benefit is to be secured and compulsory license have been granted to the third party.

Court further observed that Parliament does not intended to exclude “exports” from the width of the term “Sale” under Section 107A.

It further observed that Section 84, 90 and 92A of the Patents Act deals with compulsory licensing whereas, Section 107A Patents Act is only a provision that allows construction and sale of patented articles only for research purposes and which are subject to certain conditions specified therein.

Court, therefore dismissing the contentions of Bayer, held that once patented invention can be sold for purpose of carrying research, there cannot be any bar narrowing the scope of such sale. Court therefore, dismissed the appeal by Bayer.