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Abstract

In 2003, Section 107A of the Patents Act wrote a regulatory review exception into Indian law. Its beholden purpose is to enable patent-protected pharmaceutical products to be brought to Indian markets quicker and in large numbers. Emboldened by a WTO decision brake-testing a similar Canadian statute, Indian pharmaceutical manufacturers have consistently claimed Section 107A benefits from domestic courts. Lately, the economic trail of these benefits has grown to implicate entities abroad. Pushback to this trend from patentees has duly arrived. It has culminated in a stack of Delhi High Court decisions in Bayer v. Union of India. Bayer writes three precepts into Indian law. First, it stipulates that, so long as the purpose of Section 107A is met, courts will not concern themselves with the geographical incidence of the underlying transaction. Second, it prescribes a checklist to assist domestic courts in assessing whether Section 107A is, indeed, satisfied. Finally, it sets out that commercial animus is the bright line dividing permissible transactions from impermissible ones. As this goes to press, less than six years have passed since Bayer. Yet, even in this short time, each of the Bayer precepts has been systemically annihilated by later courts.

As a result, Section 107A law sits nervously: unsure whether to stick with the Bayer ideals or twist in favour of a more chaotic exercise of the TRIPS flexibilities that birthed Section 107A in the first place. In this essay, we narrate how and why this state of affairs has come to be. We side, on balance, with respecting outcomes that predictably interpret Section 107A and its attendant economic considerations. We conclude that, if push comes to shove, Indian courts ought to follow the lead of the WTO Canada decision over two decades ago.

Digital Object Identifier (DOI)

10.55496/VGRX4563

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