COMPULSORY LICENSING UNDER INDIAN PATENTS ACT,1970:
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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