By: Rajat Nischal
Prominently known as World Intellectual Property Organization [WIPO] elucidates ‘Patent’ as an arranged right specifically for inventions. Lawfully, 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. To get a patent, technical information about the invention must be disclosed to the public in a patent application [1]. An individual who owns/possesses the ownership of the patent is hereinafter referred to as, patent owner/ patentee. Officially, the patent owner shall possess an exclusive and special right on his invention for a limited duration of 20 long years, moreover, the patentee also holds an extraordinary right of eliminating individuals/ groups from using his/her patented product without a formalized permission. Notwithstanding the aforesaid, under specific crucial circumstances and situations, a compulsory license to make use of a patented product may be given to a third party. This impression of “compulsory licensing in India” has been given in Chapter XVI of the Indian Patents Act, 1970 [2].
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OUTLINES OF COMPULSORY LICENSING AS PER PATENTS ACT
Transmogrifying the true concept of compulsory licenses to a very simple and layman’s language would make us understand that these licenses are authorizations provided to a foreign/ alien party by the hon’ble controller general in order to make the usage of a specific patented creation without the approval of the patent owner. The outlines of compulsory licensing are very known at both, international and national levels with the reference cited in TRIPS Agreement for former and Indian Patent Act, 1970[1] for the latter one. Nevertheless, the presence of several preconditions is truly enshrined under sections 84-92 of the Indian Patent Act, 1970 [2] which stands as crucial to be satisfied if a compulsory license is to be issued in favor of a third party.
As enshrined under Section 84 of the Indian Patent Act[3], any individual, notwithstanding to the factum of possession of the license of the concerned patent, can submit a humble appeal to the hon’ble controller general requesting for the permission of compulsory license on expiry of three years if, the following bullets are satisfied;
- In the case where the lawfully protected invention fails to work in India
- In the case where the rational requisites of the public have not been fulfilled
- In the case where the invention is offered at an unfordable price.
Moreover, as enshrined under section 92 of the Indian Patent Act, 1970 [4]a suo moto cognizance may also be issued to the compulsory licenses by the will of the hon’ble controller general if there is either a “national emergency” or “extreme urgency” or in cases of “public non-commercial use”. The hon’ble controller may additionally take into account certain more aspects like of the nature of the patented invention and, The Controller takes into account some more aspects like the nature of the invention, the competence of the applicant to use the creation for public welfare and benefit nevertheless, the absolute discretion to grant the compulsory license falls with the hon’ble controller general. [5]
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ISSUANCE OF COMPULSORY LICENSE
First of its kind of compulsory license by a patent office in India was done on an appreciable date of 9th march of 2012 to Natco Pharma for the generic production of Bayer Corporation’s Nexavar (medication used for treating Kidney and Liver Cancer). Bayer Corporation’s Nexavar sold the medications for an exorbitant and superfluous price costing Rs. 2,80,000 for one month’s dosage. The Natco Pharma was assenting to sell the same dosage at a sum of Rs. 9,000 which is tremendously less than the former price of the medication (as offered by Bayer’s). With a major price drop, people belonging to lower-income groups became eligible to afford the drug created for the welfare of the people. Taking merit of the aforesaid, all the three bullets of section 84 of the Indian Patent Act, 1970 [6] are satisfied and henceforth, the pronouncement was produced for the profit of people.
In several other cases related to the issuance of compulsory licenses in the pharmaceutical industry, the Hon’ble controller general rejected the plea for numerous reasons. The supposed was done due to;
- failing to prove prima facie case
- failure to prove positive public use of the creation
- not applying for a license of patent prior to applying for a compulsory license.[7]
It is a strong belief in the legal facet of patents that getting a creation registered under the law does not absolutely fall out adequate moreover, the judiciary must understand the appearance of the entire case, submissions by the patent holder, and the defense of the same.[8] In few case laws, the Indian courts have relined that the regulations and rules contrary to the anti-competitive practices in the Competition Act, 2002[9] and the obligatory rules of compulsory licensing in the Indian Patent Act, 1970 [10]are not in exclusion of each other; rather, on the flipped side of the coin, they are to be read together. The doubt over the choice of anti-competitive practices may perhaps also be thought out by the Hon’ble controller general. Nevertheless, in case the Competition Commission of India [CCI] treasures that the patent holder’s behaviour is anti-competitive and the said attains an utmost conclusiveness then, the Hon’ble controller will also move further to issue estoppel-the patentee would be estopped from contending to the contrary.[11]
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The rational legal approach in regard to the grant of compulsory license states, the regulations and obligatory rules exists for a sole purpose of people’s wellbeing and the said shall not be used for any other purpose which may directly or indirectly reduce the positive rights of the patentee. A lucid balance of rights/ regulations and, the execution of the same shall justly exist.
CONCLUSION
The laws referring the compulsory licensing should be exercised rationally, cautiously and wisely because it stands straight as an exception to the sober rule of patent. The regulations are not absolute in nature but rather are partially aligned were, neither complete patent protection is provided, nor it is denied wholly. Because of its application in the medical field, the pharmaceutical companies in order to protect their product from compulsory licensing are required to price their patented module in harmony to the financial status of the nation. And owing to the above stated fact, the concept of compulsory licensing as a law has indeed upshifted as an expectational hope for the financially challenged patients. Bearing in mind the financial conditions of India, compulsory licensing as an obligatory regulation is unquestionably a major necessity.
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But then again, the distress faces out when the warm ray of light is flashed towards the contest of the two flanks, the first where it has to obey the international norms of patent protection and the other in which all the arrangements are done in order to safeguard and protect the people of the nation.
[1] Ibid
[2] The Indian Patent Act, 1970, § 84-92, The Gazette of India, pt. II sec. 1 (19th September, 1970).
[3] The Indian Patent Act, 1970, § 84, The Gazette of India, pt. II sec. 1 (19th September, 1970).
[4] The Indian Patent Act, 1970, § 92, The Gazette of India, pt. II sec. 1 (19th September, 1970).
[5] https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm
[6] The Indian Patent Act, 1970, § 84, The Gazette of India, pt. II sec. 1 (19th September, 1970).
[7] http://www.khuranaandkhurana.com/2017/08/03/compulsory-licensing/
[8] Franz Xaver Huemer v. New Yash Engineers, AIR 1997 Delhi 79, 1996 (25) (India).
[9] The Competition Act, 2002, The Gazette of India, pt. II sec. 1 (31st March, 2003).
[10] The Indian Patent Act, 1970, The Gazette of India, pt. II sec. 1 (19th September, 1970).
[11] Koninklijke Philips Electronics N.V. v. Rajesh Bansal and Others, MANU/DE/2436/2018 (India).
[1] https://www.wipo.int/patents/en/
[2] The Indian Patent Act, 1970, The Gazette of India, pt. II sec. 1 (19th September, 1970).
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