Reasonably Affordable Price

1A compulsory licence on the patent may be granted if the patented invention is not available to the public at a reasonably affordable price. (Patents Act 1970, s 84(1)(b).) Section 84(1)(b) overlaps with s 84(1)(a) as one of the conditions where the reasonable requirement of the public shall be deemed to have been not satisfied includes instances where the demand of the article has not been met on reasonable terms. (Ibid, s 84(7)(a)(ii).) The foregoing discussion on ‘patentable invention’ in para 22.45 will be applicable to the above ground as well.

2In a case involving a licence of right, it was held that if the price was reasonable and demand at that price was being met, it will not be relevant to consider whether the demand would have been greater at a lower price. In determining whether the price is reasonable, the court shall take into account the fact that the patentees and licensees who are engaged in the research and development of drugs may exercise their monopoly during the term of the patent to recoup their research and development expenditure and make a profit. (Research Corpn’s (Carboplatin) Patent (1990) RPC 663, p 695.) An undertaking from the dealers and licensees that the licensees shall not sell articles below a specified price which resulted in the article being sold at a higher price locally than abroad, will not make the price prohibitive or unreasonable in the absence of any evidence to that effect. (See Robin Electric Lamp Co Ltd’s Petition (1915) 32 RPC 202, p 215.)

3In F Hoffmann-La Roche v Cipla (2009) the Division Bench recorded that “Under Section 84 among the grounds on which a person can seek a compulsory licence on a patent is that ’the patented invention is not available to the public at reasonably affordable price. (para 76), and held of erlotinib that “Even if the price per tablet is taken to be Rs. 3,200 as claimed by the Plaintiffs, it is a drug which is expensive. It is clearly beyond the reach of many patients suffering from this dreaded form of cancer. (para 80)

4In In re Exorbitant Pricing of Life Saving Patented Medicines (2026) the Kerala High Court held that section 83 “sub-section (g) also speaks about the requirement/duty to provide patented inventions at reasonably affordable prices to the public.” (para 35) It held that “the required data to decide whether the particular medicines in question are affordable or not, has not been brought on record.” (para 42), and among its findings that “The Government requires to collate the required data and arrive at a decision as to whether a particular medicine is affordable or not and, on that basis, proceed in accordance with Section 100 of the Act, if found necessary.” (p 55–56)