Bombay High Court has held that sale even outside India would fall within the sweep of Section 107A of the Patents Act, 1970 providing for no infringement in certain cases, if it is reasonably related to development and submission of information as required under a law in force in India or outside India. The court in this regard observed that the expression ‘selling’ is wide enough to even include cross border sales (exports) and that such safe harbor exception must extend to permit developing overseas sources also. The compulsory licence holder was hence allowed to export Active Pharmaceutical Ingredient (API) Sorafenib for the purposes of conducting development/clinical studies and trials for seeking regulatory approvals in that country. It was noted that inclusion of the act of ‘selling’, through an amendment made effective from year 2002 would have little meaning if patentee’s contention that the exception is only available for the self use, is accepted.
The court while distinguishing similar provisions in the laws of Poland and USA, placed its reliance on the WTO’s DSB panel finding relating to the Canadian provisions. The DSB panel had examined the practice of a chemical manufacturer selling API to a manufacturer of generic formulations and found that the same was permissible within the framework of the Canadian patent law. Placing reliance on the said panel report, the court rejected the contention that the affirmative defense of Section 107A is available only to the manufacturer who uses the patented products for obtaining regulatory approvals for itself. Lastly, noting that use of the expression “reasonably relating to” in Section 107A would mean a reasonable nexus, the court on 5-11-2014 has held that there is reasonable nexus between the sale of the product by the compulsory licence holder to the Chinese company for the purpose of conducting bio-availability, bio-equivalence and stability studies, and submission of information under the law in force in China.