HC allows Indian firm to export drug in which Bayer has patent

New Delhi : In a setback to German pharma major 'Bayer', Delhi High Court has suspended its order restraining an Indian drug company from manufacturing and selling overseas an erectile dysfunction medicine, the patent for which was held by the foreign company.

Justice R K Gauba modified the stay order of December 20, 2016, saying by balancing the interest of Bayer with larger public interest, "equity demands that absolute or unconditional temporary injunction be not granted" as it would halt the manufacturing activity of Ajanta, the Indian firm, thereby causing loss of employment and revenue to the State.

The court, however, clarified that Ajanta Pharma cannot sell or distribute the drug in India till Bayer's civil suit alleging infringement of its patent in the salts, vardenafil and vardenafil hydrochloride, used to make the erectile dysfunction medicine, Valif, is decided.

The patents on the basis of which the suit was filed by Bayer were applied for in 1998. After being granted by the Indian patent office, these have been in force since 2008 for one salt and from 2003 for the other, as per Ajanta's application.

The stay order was modified on Ajanta's plea claiming that Bayer was not "working" its patents in India as it was not making its drug here and said the German company's interests can be protected by way of paying a percentage of profits earned from exports as royalty by the Indian company.

Ajanta also submitted that it will maintain accounts of its sales and profits earned by export of the drug.

Bayer also admitted before the court that it has not used its patents for commercial exploitation in India while Ajanta had launched its drug back in 2009-10 and was exporting it since then to various countries.

"In these circumstances, though the non-user cannot be set up as a defence to the suit for infringement, upon the self-interest of the patentee being balanced against the larger public interest, equity demands that absolute or unconditional temporary injunction be not granted in as much as it would result in the manufacturing activity and the resultant exports of the impugned products of the defendant being ground to a halt resulting possibly in not only loss of employment but revenue to the State as well," the court said.

It also said the modification in the order was subject to Ajanta maintaining proper accounts of its manufacture and exports of its drug and submitting it before the court on a quarterly basis.

With this direction, the court disposed of Ajanta's application and listed the suit for further hearing on February 3.