What is Bolar Exemption?

Jurisdiction – India, USA, Canada

Bolar Exemption is a defence against infringement that allows third parties to use patented inventions (drugs, commonly) to generate data for obtaining regulatory approval from the relevant agency. This is also known as the “research exception.”

The Exemption allows generic drug manufacturers to conduct trials and test manufacturing and delivery capacity before entering the market.[1] They can do so by reverse engineering the patented drug or creating a bio-equivalent of the same. By submitting test data to the regulatory authority before the patent expires, generic drug manufacturers can launch their generic versions immediately after the patent term expires.

Position in India

Section 107A(a) of the Patent Act, 1970 allows third parties to make, construct, use, sell or import a patented invention if this action is reasonably related to development and submission of information for regulatory approval. This provision contains the Bolar Exemption even though it does not expressly mention the same. There is no stipulation about the time period after which the patent can be used under this Exemption.

The Exemption was discussed in Bayer Corporation v. Union of India and Ors. (2014). Bayer patented the drug ‘sorafenib tosylate’ (Nexavar) for kidney and liver cancers. Natco Pharma Ltd. (NPL, respondent 5 in this case) had already obtained a compulsory license for the patented drug and was manufacturing a generic called “sorafenat.” The compulsory license allowed use of the drug only within the territory of India.

NPL wanted to export 1 kg of “sorafenat” to a Chinese pharmaceutical company, HPCL, for conducting clinical trials and R&D so that the data could be submitted for obtaining regulatory approval in China.

The question was whether export was allowed under the Bolar Exemption, since the word “export” was absent from section 107A(a). The Delhi High Court held that for the Exemption to apply there should be a “reasonable nexus” between the use of the patented drug and the submission of information as per the law. Export is allowed under section 107A(a) because the word “selling,” which has been used in the section, is wide enough to include cross-border sales.

Therefore, export is permitted under the Bolar Exemption as long as the export has a reasonable nexus with submitting information for obtaining regulatory approval from the other country.

Position in the US

The issue of Bolar Exemption first came up in the case of Roche Products v. Bolar Pharmaceuticals (1984),[2] wherein the Federal Circuit refused to allow this defence. It held that pre-market testing done by a generic manufacturer to submit data to a regulatory agency was not permissible because it was done for a business purpose i.e. to sell the generic drug after the expiry of the patent term.

Subsequently, this case was overturned by the introduction of 35 U.S.C. § 271(e)(1) which recognizes the Bolar Exemption. This provision states that it is not infringement to make, use, offer for sale, sell or import into the United States a patented invention for use that is reasonably related to submit information required by the law for manufacture, use of sale of drugs.

Apart from drugs, this Exemption also applies to medical devices (Eli Lilly and Co. v. Medtronic [1990]).[3] It can also be used for activities post-approval of the drug by the regulatory agency, if such activities are required by the agency (Momenta Pharm. v. Amphastar Pharm. [2012]Momenta Pharm. v. Amphastar Pharm. [2012]).[4]

Position in Canada

Section 55.2(1) of the Canadian Patent Act is similar to section 107A(a) of the Indian Patent Act. It allows third parties to make, use, construct or sell patented inventions for uses that are reasonably related to submission of information for regulatory approval under the law. This provision was challenged for being violative of the TRIPS Agreement in Canada – Patent Protection of Pharmaceutical Products (2000)[5] for being unlimited in quantity and extent. It was held that the provision was a “limited exception” within the meaning of Article 30[6] of the TRIPS Agreement and was hence consistent with the Agreement. This decision was relied upon by the court in Bayer v. Union of India.

Bolar Exemption is allowed in Canada as long as the patent is used only for regulatory purposes and no commercial use is made.

Featured image from here.



Additional Sources

http://www.wipo.int/wipo_magazine/en/2014/03/article_0004.html

[1] http://www.wipo.int/wipo_magazine/en/2014/03/article_0004.html.

[2] 733 F.2d 858 (1984).

[3] 496 US 661 (1990).

[4] 686 F.3d 1348 (2012).

[5] WT/DS114/R.

[6] Article 30 allows limited exceptions to rights of patentees provided they do not unreasonably conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interest of the patent owner.

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