Saturday, 7 January 2017


 Compulsory  Licenses are  government authorizations which allow a third party to make, use, or sell a patented product without the consent of the patent owner.
 Provisions regarding compulsory licensing are provided for under both the Indian Patent Act, 1970, as well as the TRIPS (Trade Related aspects of Intellectual Property Rights) Agreement in the international level. Compulsory licenses are granted for a variety of reasons such as prevention of abuse of the patent to form a monopoly, addressing public health concerns, etc. Compulsory licensing has for long been a subject of controversy, and despite the existence of statutory provisions, compulsory licenses have not been issued liberally.
In India, compulsory licenses are dealt with under Chapter XVI of the Indian Patent Act, 1970. The conditions which need to be fulfilled in order for a compulsory license to be granted are laid down under Sections 84 and 92 of the Act.
As per Section 84, any person who is interested or already the holder of the license under the patent can make a request to the Controller for grant of Compulsory License on patent after three years from the date of grant of that patent, on the existence of the following conditions:
·        The reasonable requirements of the public with respect to the patented invention have not been satisfied
·        The patented invention is not available to the public at a reasonably affordable price
·        The patented invention is not worked in the territory of India.
The Controller, while granting compulsory license, is required to take into account factors such as the nature of the invention, measures already taken by the patentees or any licencee to make full use of the invention, ability of the applicant to work the invention to the public advantage, time elapsed since the grant of the patent, and so on.
According to Section 92 of the Act, compulsory licences can also be issued suo motu by the Controller of Patents pursuant to a notification issued by the Central Government if there is either a “national emergency” or “extreme urgency” or in cases of “public non-commercial use”. The mechanism under this provision is set in motion by the Central Government when it notifies in the Official Gazette that extra-ordinary circumstances have dictated the grant of compulsory licences in relation to patents which help to address the exigency. However, Section 92(2) still requires a person interested to apply to the Controller for grant of a compulsory licence.


Instances of Compulsory Licensing in India thus Far

India’s first and only compulsory licence till date was granted by the Patent Office on March 9, 2012, to Natco Pharma, an Indian company, for the generic production of Bayer Corporation’s Nexavar, a drug used for the treatment of Liver and Kidney cancer. The three grounds mentioned under Section 84 of the Indian Patent Act were all met, i.e. Bayer’s drug left the reasonable requirements of the public were unsatisfied, it was not available to the public at a reasonably affordable price, and the patented invention was not being worked in the territory of India. While Bayer offered the drug at the cost of Rs. 2.8 lakh for a month’s therapy, Natco Pharma had offered to sell the medicine at merely a fraction of that cost (Rs. 8,800).  The decision of this case indicated that as opposed to maintaining an extremely strict patent protection regime, the interest of public at large would be given more importance by the government. However, the decision also invited harsh criticisms from the large group of multinational companies, who felt that the issue of compulsory licences ought to be exercised in an even more stringent manner.

More recently, Mumbai-based BDR Pharmaceuticals has been seeking the grant of compulsory licence for the generic production of US drug maker Bristol-Myers Squibb’s anticancer drug Dasatinib, sold under the brand name Sprycel. The Patent Office rejected BDR’s application on the grounds that the company did not make enough efforts to obtain a voluntary licence for the drug. While this rejection was lauded by the international community and the multinational companies in particular, it seems that the issue of a compulsory licence for the drug may very well be on the cards, as citing the emergency of a public health crisis under Section 92 of the Patent Act, the Health Ministry has reportedly sought a waiver of patent rights for Dasatinib. Through a letter to the Department of Industrial Policy and Promotion (DIPP), the Health Ministry has allegedly stated that the cost of producing the drug will be met through government schemes, and that around half-a-dozen schemes will be initiated to fund the cost of making the drugs available to patients for public non-commercial use.

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