The First Compulsory Licencing Case in India under the TRIPS Agreement: An Analysis of Bayer Versus Natco Pharma Ltd

Intellectual property rights provides protection to inventions and monopoly rights for a limited period of time to encourage innovation in industry. In many cases, it turned out to be an abuse of the monopoly power by different means. A compulsory licence is a mechanism provided under the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement in order to revoke a patent granted to a patentee in certain circumstances. Across the world, the compulsory licencing (CL) on intellectual property rights (IPRs) is granted on similar grounds like unreasonably exorbitant prices of an essential facility or commodity, or in the country where patent does not work or where substantial public interest is affected by the way an IPR holder exercises his/her right. This article analyses India’s first CL order in favour of Natco Pharma which has garnered a lot of attention all over the world, and CL has been viewed as a remedy to curb the abuse of exclusivity protected by IPR. The case essentially revolves around an anti-cancer drug, Nexavar, which had been patented by Bayer. This article begins by elaborating the concept of CL and its effect on developing countries with a special reference to the TRIPS Agreement. The latter part would deal with the viability of CL order under the Indian framework of IP law and India‘s compliance with TRIPS in the background of the case of Bayer versus Natco Pharma. Finally, the article concludes that CL is a TRIPS-permitted provision that developing countries can use in their favour to protect their health sector, and the present case can be a model for the developing countries.