COMPULSORY LICENSING OF PATENTS IN INDIA

WHAT IS A PATENT?

As per World Intellectual Property Organization (WIPO)[1], a patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.

A patent gives an exclusive right to prevent or stop others from commercially exploiting the patented invention. In other words, patent protection means that the invention cannot be commercially made, used, distributed, imported or sold by others without the patent owner's consent. In India, this right is conferred by the government and it is for a period of 20 years from the date of publication.

However this grant of exclusive right to use of a patent is not absolute and under certain conditions and circumstances third parties could be allowed to use a patent by grant of a Compulsory license.

WHAT IS A COMPULSORY LICENSE?[2]

Compulsory licensing is when a government allows a third party to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself.

Article 31 of TRIPS (which pertains to use without authorization of the right holder) lays down the set of conditions that govern the use of compulsory licensing by WTO members, the most important of which are the following:

(a) The entity applying for a compulsory license should have been unable to obtain a voluntary license from the right holder on "reasonable" commercial terms;

(b) If a compulsory license is issued, adequate remuneration must be paid to the patent-holder; and

COMPULSORY LICENSING UNDER INDIAN LAW:

Under the Indian Patent law, Compulsory licenses have been dealt with under the Chapter XVI of the Indian Patent Act, 1970. The act further mentions the prerequisites for the grant of a compulsory license under Section 84-92 of the Indian Patent law.

APPLYING FOR GRANT OF A COMPULSORY LICENSE:

Section 84 of the Indian Patent Act provides that an application to the Controller for the grant of compulsory license may be made by any person interested including the license holder after the expiration of a period of three years from the date of grant of a patent on fulfillment of any of the following conditions:

Reasonable requirements of the public with respect to the patented invention have not been satisfied, or
Patented invention is not available to the public at a reasonably affordable price, or

Patented invention is not worked in the territory of India.

Additional factors taken into account for the grant of Compulsory License:

The ability of the applicant to work the invention to the public advantage;
The capacity of the applicant to undertake the risk in providing capital and working the invention, if the application were granted;

The efforts made by the applicant to obtain a license from the patentee on reasonable terms and conditions.

Nature of the invention and measures taken by the patentee to make full use of the invention.

Thereafter, if the controller is satisfied that the manufacture, use or sale of materials not protected by the patent is prejudiced by reason of conditions imposed by the patentee upon the grant of licenses under the patent, or upon the purchase, hire or use of the patented article or process, he may, order the grant of licenses under the patent to such customers of the applicant as he thinks fit as well as the applicant.

Compulsory licensing Upon Notification by Central Government:

In circumstances of “National emergency” or in circumstances of “Extreme urgency” or in case of “Public non-commercial use” if the Central Government is satisfied that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette.

Thereafter, the Controller shall on application made at any time after the notification by any person interested grant to the applicant a license on such terms and conditions as he thinks fit.

Compulsory License for exporting Patented pharmaceutical products:

Section 92A of Indian Patent Act states that Compulsory license shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory license has been granted by such country or such country has allowed importation of the patented pharmaceutical products from India.

Upon receipt of an application in the prescribed manner the Controller shall grant a compulsory license solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him.

Termination of compulsory license:

On an application made by the patentee or any other person deriving title or interest in the patent, a compulsory license granted under section 84 may be terminated by the controller, if and when the circumstances that gave rise to the grant thereof no longer exist and such circumstances are unlikely to recur. Further, the holder of the compulsory license shall have the right to object to such termination.

Is there a need of Compulsory license for Covid-19 Vaccine in India?

Two coronavirus vaccines, COVAXIN and COVISHIELD have been approved by Central Drug Standards Control Organizations for “emergency use” in India. COVAXIN is an indigenous vaccine, developed by Bharat Biotech in collaboration with the Indian Council of Medical Research (ICRM) – National Institute of Virology (NIV) while COVISHIELD is Serum Institute of India’s version of AZD1222 developed by British Swedish drug maker AstraZeneca.

Compulsory license is a powerful public health tool for overcoming public health emergencies and situation of either expensive pricing and shortage of supply. Presently pricing of both these vaccines have been kept on the lower side and therefore the only concern left is of the production capacity. India has a much bigger role to play helping the world overcome the current pandemic as it has one of the world’s biggest vaccine manufacturing capacities. India has been supplying lakhs of vaccines to many countries around the world. Further it has a population of more than 1.3 billion of its own. Therefore there lies an enormous task ahead of us since vaccines will be required in large numbers.

Although Serum institute has world’s largest vaccine manufacture unit but it is also a part of WHO’s COVAX alliance and therefore it has to balance its supplies to both local and international market. Further India is seeing what is being called as a second wave of Corona virus as positive cases are increasing at daunting rates. What is required here is to quickly vaccinate as many people as possible to keep the number of positive cases and more importantly the death rate as low as possible. Therefore in this time of dire need where time is of the essence government may think of granting Compulsory license for Covid vaccines by making a declaration under section 92 of Indian Patent Act, 1972 of the present situation as “National emergency” or situation of “Extreme urgency” or to facilitate “Public non-commercial use”

At present, India has a sufficient and steady supply of both COVAXIN and COVISHIELD but the current coronavirus pandemic does qualify as a “National emergency” under section 92 of the Indian Patent Act, 1972 and if the need arises, government should be prepared to tackle a situation of shortage of vaccines by preparing a swift mechanism of granting Compulsory licenses to other pharmaceutical companies to ensure availability of sufficient number of vaccines to comply by both its national and international obligations.

[1]https://www.wipo.int/patents/en/#:~:text=A%20patent%20is%20an%20exclusive,public%20in%20a%20patent%20application.

^[2] https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm