Compulsory Licensing To Pharmaceutical Patents In India - A Study
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Category: Intellectual Property
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COMPULSORY LICENSING TO PHARMACEUTICAL
PATENTS IN INDIA: A STUDY Shatarup Banerjee, School of Law, Christ (Deemed to be University), Bangalore
ABSTRACT
Tangible property has played a major role in human civilization. Various thoughts and stories have been proposed concerning property, such as Marxism and Capitalism. But in our modern world, intangible property, also called intellectual property, like patents, copyrights, trademarks, etc. , has started playing an equally important role. Intellectual Property Rights are a set of rights exclusively given to creators of new inventions, literary works, logos etc. Intellectual Property Rights are governed by a global agreement called the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, based on which states that are signatories to this agreement pass statutes to give effect to this agreement. One such IP is patents, which are certain rights that are granted on new inventions. The pharmaceutical industry is a major user of patent rights.
These patent rights can be removed by a process called compulsory licensing. The research paper examines the framework of compulsory licensing under the TRIPS Agreement and the application of compulsory licensing in India, particularly concerning pharmaceutical patents. Compulsory licensing allows governments to authorize the use of patented inventions without the patent holder's consent in specific situations, such as public health emergencies. The paper analyzes the provisions under TRIPS, which consist of Articles 31 and 31bis and legal provisions within India's Patent Act, especially Section 84, which states the conditions granting compulsory licensing. Through a detailed exploration of landmark cases, such as Bayer vs.
Natco, the paper discusses the system of compulsory licensing regime that is followed in India and how it is different from the vision of compulsory licensing that was envisaged in TRIPS, along with the challenges and criticisms of the system. This paper suggests that compulsory licensing should be used along with other methods, such as patent pooling and voluntary licensing by the government for the promotion of public health and safety and to make drugs more affordable for the people of India. Keywords: Compulsory Licensing, Intellectual Property Rights, The Patent Act 1970, TRIPS
1. Introduction
Property has played a vital role throughout the history of the world. Over the centuries, all around the globe, certain privileges over property were recognized and codified into law, which became part of property laws. However, rights over property were limited to tangible aspects such as buildings, lands, apartments, etc. Eventually, there was a requirement to give rights to the owner of ideas that would protect the inventor, author, artist, etc. Otherwise, they risk losing control over their intellectual creations and facing unauthorized use, reproduction, or exploitation. This undermines the incentives for innovation and can lead to significant economic losses.
In the 19th and 20th centuries, international agreements like the Paris Convention for the Protection of Industrial Property1 and the Berne Convention for the Protection of Literary and Artistic Works2 laid preliminary groundwork for a global Intellectual Property Rights (IPR) system. In recent decades, the rise of the digital age has posed new challenges and opportunities for IPR laws. With the advent of the internet, it has become very easy to access digital content that can be copied and distributed. Hence there was a need for robust legal protections and enforcement mechanisms at a state and an international level. New forms of intellectual property, such as software, databases, digital artworks etc have emerged due to which there was an urgent requirement for the laws to keep up with the rapidly changing landscape.
One of the significant developments in the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a comprehensive international legal agreement that sets down minimum standards for various forms of intellectual property (IP) regulation as applied to nationals of other WTO Members. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994 and is administered by the World Trade Organization (WTO). It includes intellectual property rights over copyrights, trademarks, geographical indications, industrial designs, patents, integrated circuit layouts, and trade secrets3. The agreement is designed to strike a balance between the interests of IP owners and users, ensuring that the rights of creators are protected while allowing for the fair use of intellectual property.
India signed this treaty and amended its existing laws to comply with the 1 Paris Convention for the Protection of Industrial Property March. 20, 1883, as revised at Stockholm July 14, 1967, 21 U. S. T. 1583, 828 U. N. T. S. 305.
2 Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as revised at Paris July 24, 1971, 1161 U.N.T.S. 3.
3 TRIPS Agreement, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex
1C, 1869 U. N. T. S. 299 TRIPS agreements. The pharmaceutical industry is one of the sectors that frequently use and interact with IPR law. The pharmaceutical industry uses The Patent Act of 1970 in India regularly to patent their new drugs for diseases after which they sell them. This patenting is done so that for a temporary period of time, they get the exclusive power to manufacture that drug and sell those drugs. This is done to promote pharmaceutical innovation in the industry and compensate for the cost of research and development for the development of that drug. In certain cases, certain important drugs are patented, due to which the average person in a country cannot access them or cannot be manufactured during an epidemic of diseases in that particular country.
During such circumstances, patented drugs act as a hindrance to public policy, and hence, during such circumstances, the patent on that drug needs to be removed temporarily or permanently for public policy. Such a provision where a patented product, including pharmaceutical drugs, by government-granted authorization to use a patented product or process without the consent of the patent owner. Such a provision of compulsory licensing is mentioned in the TRIPS in Article 314 and section 84 of The Patent Act 19705 in India. In order for granting of compulsory licensing certain criteria must be met and be proved to the controller of patents. In India only once compulsory licensing has been approved by the controller of patents and subsequently the high courts.
In this research paper we are going to be looking at and studying compulsory licensing conditions and regimes in the industry of pharmaceutical patents in India.
2. Literature Review
A. Rahul Chaudhry “Compulsory licensing of patents in India” Pharmaceutical Patent Analyst The research paper provides a detailed review of the compulsory licensing regime in India, particularly focusing on pharmaceutical patents. It covers the background and provisions of the Patents Act, 1970, examining how these provisions align with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement. The paper discusses the procedural aspects of granting compulsory licenses, offering a review of key cases such as the issuance of India's first compulsory license for Bayer's anticancer drug, Nexavar, and the subsequent applications
4 TRIPS Agreement Article. 31, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade
Organization, Annex 1C, 1869 U.N.T.S. 299
5 The Patents Act, 1970 Section 84
for drugs like Dasatinib and Saxagliptin. Through these cases, the paper tries to explore the difficult balance between the innovation of drugs and public welfare and access to such patented drugs which in a lot of cases have a high price tag. the paper, using the cases and the statute, tries to understand the jurisprudence and the various criteria that are used to grant compulsory licenses in India. B. Dr. Payal Thaorey and Anushree Mukte “Compulsory Licensing of Pharmaceutical Patents in India: Issues and Challenges” IPR Journal of Maharashtra National Law University, Nagpur This research paper provides an in-depth analysis of compulsory licensing for pharmaceutical patents in India, exploring its legal, practical, and ethical dimensions.
The authors begin by explaining the concept of patents and pharmaceutical patents, emphasizing the tension between patent holder’s rights and public health needs. They then delve into the legal framework for compulsory licensing in India, discussing relevant provisions of the Indian Patent Act 1970 and international agreements like the TRIPS Agreement. The paper then examines the implementation of compulsory licensing in India and using the landmark case of Natco Pharma vs. Bayer Corporation which was the first and only instance where a compulsory license was granted by the controller of patents and subsequently by the Bombay High Court for a pharmaceutical drug in India. The paper analyzes the grounds on which the license was granted in the case in order to understand the circumstances on which compulsory licensing would be granted in India.
A significant portion of the paper is dedicated to exploring the challenges and issues surrounding compulsory licensing. The paper concludes that compulsory licensing has been underutilized in India and attributes this underutilization to factors such as international pressure from developed countries and inadequate compensation for patent holders. Finally, the authors propose several recommendations to improve the compulsory licensing system in India. These include clarifying legal provisions, establishing a more balanced approach to determining royalties, encouraging technology transfer as part of licensing agreements, and exploring alternative mechanisms like patent pooling and voluntary programs by pharmaceutical companies. C.
Siraprapha Khim Rungpry “Compulsory licensing issues and trends in Asia” Pharmaceutical Patent Analyst This research paper discusses the stance of compulsory licensing in Asia. The paper opens by stating that compulsory licensing is controversial in the field of patent and patenting rights. It states that the purpose of compulsory licensing in the TRIPS Agreement is to deal with health and national emergencies. The paper also discusses the Doha Declaration that expounded the TRIPS Agreement. The paper goes on to discuss the HIV/AIDS health emergency in the Asian Continent and how compulsory licensing was used to deal with it in Malaysia, Taiwan, Indonesia, etc. Then, it goes on to explain the new usage of compulsory licensing that was used by India and Thailand for public welfare and granting access to patented medicines.
The paper shows concern that this new usage of compulsory licensing by countries like India to give access to costly patented drugs to its population might go against the spirit of patenting and against the provisions of the WTO and TRIPS Agreement.
3. Statement of Problem
This research examines and studies the compulsory licensing system according to the TRIPS Agreement along with the Doha Declaration and the current compulsory licensing regime in India according to the Patent Act 1970, along with the various judicial decisions that are given by various courts and bodies to find out the jurisprudential stance of compulsory licensing in India. Along with that, we will also be looking at the challenges that are present in the compulsory licensing system and some potential suggestions for improving the compulsory licensing regime in India.
4. Methodology
This research paper employs doctrinal research and a qualitative approach, which is best suited for our topic. I have extensively examined primary sources like statutes. Additionally, I have drawn on secondary sources such as books, journals, and articles to analyse and study the compulsory licensing regime in India.
5. Research Objectives
1. To identify the compulsory licensing regime that is mentioned in the TRIPS Agreement
2. To identify the statutory compulsory licensing regime in India and the conditions for granting
the compulsory licensing
3. To identify the major judicial decisions in India regarding compulsory
4. To identify challenges to the compulsory licensing regime in India
6. Research Questions
1. What is the compulsory licensing regime that is mentioned in the TRIPS Agreement?
2. What is India's statutory compulsory licensing regime, and what are the conditions for
granting compulsory licensing?
3. What are the major judicial decisions in India regarding compulsory licensing?
4. What are the challenges to the compulsory licensing regime in India?
7. Data Collection
7A. Compulsory Licensing Regime in TRIPS Agreement The TRIPS Agreement, or the Agreement on Trade-Related Aspects of Intellectual Property Rights, is a comprehensive international treaty that establishes minimum standards for the regulation of intellectual property (IP) rights across all World Trade Organization (WTO) members. It was negotiated during the Uruguay Round of General Agreement on Tariffs and Trade (GATT) negotiations, which took place from 1986 to 1994 and became effective on January 1, 1995. TRIPS was introduced to create a uniform global framework for IP protection, covering areas like copyrights, patents, trademarks, geographical indications, industrial designs, and trade secrets6. One of the important provisions in the TRIPS agreement is mentioned in Article 31 of the TRIPS Agreement with the title “Other Use Without Authorization of the Right Holder”7.
This article essentially talks about compulsory licensing in Indian law in Section 84 of The Patent Act of India. Article 31 of the TRIPS Agreement outlines the conditions under which a WTO member country can permit "other use" of a patented invention without the consent of the patent holder, including by the government or authorized third parties. Such use must be
6 Supra Note 3
7 Supra Note 4
justified on individual merits, and efforts must be made to obtain authorization from the patent holder on reasonable commercial terms. However, in cases of national emergency, public noncommercial use, or extreme urgency, this requirement may be waived, with the right holder being notified. The scope and duration of such use must be limited to its purpose, and it must be non-exclusive and non-assignable, except in cases involving the entire business or goodwill. The use must predominantly supply the domestic market, and authorization should end when the circumstances necessitating it no longer exist. Adequate remuneration is required for the right holder, and both the authorization and the remuneration decisions are subject to judicial or independent review.
Special rules apply when the use is intended to address anti-competitive practices or to enable the exploitation of a "second patent" that relies on a "first patent. " In the latter case, the second patent must represent a significant technical advancement, and crosslicensing between the patent holders may be required. The nature of Article 31 of TRIPS was expounded in the Doha Declaration of 20018, which essentially reaffirmed the rights to use compulsory licensing following TRIPS provisions, and each WTO member has the right to determine what a health emergency is and the special circumstances during which the country can use compulsory licensing. The Declaration allowed the least-developed countries to delay implementing patent protection for pharmaceuticals until 2016, recognizing their challenges in providing affordable healthcare9. 7B.
Compulsory Licensing Regime in India The Indian Patent Act of 1970 is the primary piece of legislation that governs the patenting system in India. It was enacted to promote innovation and the protection of intellectual property while balancing public interest. The Act provides a legal framework and the conditions that need to be fulfilled for the granting of patents for inventions covering fields of pharmaceuticals, biotechnology, engineering etc. Initially, the Act allowed for the granting of patents for a period of 14 years but was later amended to extend the duration to 20 years to align with international standards, particularly the TRIPS Agreement10. The Act defines the criteria for granting of patents, which are novelty, inventive step, and industrial applicability. However, under certain
8 Declaration on the TRIPS Agreement and Public Health, WTO Doc. WT/MIN(01)/DEC/2 (Nov. 20, 2001)
9 Id
10 The Patents (Amendment) Act, 2002, No. 38, Acts of Parliament, 2002 (India)
circumstances, the government take away the exclusive right to sell, manufacture and distribute the patented products. This is called compulsory licensing. Compulsory licensing is defined in section 84 of The Patent Act11, which states that after 3 years of a grant of a license, any person can apply to the Controller for the grant of a compulsory license. Then the government allows that person to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself. It is subject to the following conditions, which are stated in section 8412 on which compulsory licensing may be granted, which are;
1) If reasonable requirements of the public concerning the patented invention have not been
satisfied
2) The patented invention is not available to the public at a reasonably affordable price
3) The patented invention has not worked in the territory of India. The person who wants to get
a compulsory license needs to fill out form 17. Then, the controller will call the person who wants the license and the patent holder to hear both sides of their arguments. According to section 84(6)13, During its decision, the Controller will take into account;
1) The nature of the invention, the time that has elapsed since the sealing of the patent and the
measures already taken by the patentee or any licensee to make full use of the invention
2) The ability of the applicant to work the invention to the public advantage
3) The capacity of the applicant to undertake the risk in providing capital and working the
invention if the application were granted
4) Whether the applicant has made efforts to obtain a license from the patentee on reasonable
terms and conditions and such efforts have not been successful within a reasonable period.
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12 Supra Note 5
13 The Patents Act, 1970, § 84(6)
Section 8814 grants the controller the compulsory license if he is satisfied that they meet the requirements. The controller can also grant compulsory licenses if there is a national emergency or a state of urgency by notification from the central government. Once the compulsory license is given, it can also be terminated under section 9415 of the Patent Act and Rule 102 under Patent Rules 2003 upon application of termination of the compulsory licensing if the controller is satisfied that the conditions of giving the compulsory license are not being satisfied. Under Section 8516The controller also has the power to revoke the compulsory license if he sees that reason or the condition of giving the license is not being fulfilled. 7C.
Judicial Decisions on Compulsory Licensing in India For a more complete understanding of the compulsory licensing regime in India, it is essential to understand the judicial angle of compulsory licensing in the Indian Patents Act of 1970; it is essential to look at the case laws that the Indian courts and the controller of patents in India have decided. There has been only one instance where a compulsory license has been granted in India, and there are very few cases of compulsory licensing. Hence, we can conclude that getting a compulsory license in India is very difficult, and the government wants as few compulsory licenses to be granted in India. Still, let us look at the major cases of compulsory licensing in India. The case of Bayer Corporation Vs. Union of India and Others17 is considered a landmark case in India for compulsory licensing.
In this case, the Bayer Corporation had a trademark over an active pharmaceutical compound called Sorafenib, which was sold under the brand name Nexavar around the world and is used in the treatment of liver and kidney cancer. The Bayer Corporation had the trademark of Sorafenib in India and sold it in India for Rs 2,80,438. A generic manufacturing company named Natco Pharma Limited who wanted sell the drug Sorafenib. Hence, they initially asked for a voluntary license from Bayer, but they declined it. Hence, after 3 years of passing the granting of license, Natco Pharma filed for a grant of compulsory license to the controller of patents under section 84 (1) of the Indian Patent Act,
1970. The Controller found that Natco Pharma was deserving of a compulsory license as Bayer
had failed to meet the requirements of S. 84 of the Patents Act, 1970. The Controller drafted
14 The Patents Act, 1970, § 88
15 The Patents Act, 1970, § 94
16 The Patents Act, 1970, § 85
17 Bayer Corporation v. Union of India & Ors, AIR 2014 Bom 178
the terms and conditions of the compulsory license and awarded a 6% royalty from profits to Bayer. Bayer appealed the Controller’s decision before the Indian Intellectual Property Appellate Board (IPAB) who also agreed with the controller's decision and allowed for compulsory licensing but increased the loyalties to 7%. The Bayer Corporation, the Bombay High Court alleged this decision The Bombay High Court looked at the provisions of Section 84 and whether they satisfied or not. The court held that Natco Pharma did fulfill the condition of applying for granting for compulsory licensing after 3 years of granting of the license, and Natco Pharma even tried applying for a voluntary license from the Bayer Corporation.
The court also held that the public's reasonable requirements of the drug was not being met by the Bayer Corporation because there is not enough supply of the available medicine even after Cipla (another pharma company) making infringed drugs of Sorafenib. The court also held that the drug was not available at a reasonable price to the general public (Rs 2,80,438) whereas Natco Pharma could sell the drug at a price of Rs 27,960. The court also held that Section 83 emphasizes that patents should not enable monopoly solely through importation and suggests efforts should be made to manufacture in India. The court agreed with the Tribunal's stance that whether a patent is "worked" in India could vary case-by-case, and the patent holder must justify why manufacturing in India was not feasible.
Due to the above reasons, the court held that the compulsory license to Natco Pharma is justified in India. This was the only case in India where a compulsory license was granted hence making it an important case. In the case of Lee Pharma v AstraZeneca18, a company named Lee Pharma wanted compulsory licensing under section 84 of the Indian Patents Act, 1970 for a drug ‘Saxagliptin’, which was patented in the name of AstraZeneca and was used for type two diabetes. The controller ultimately didn’t grant the compulsory license to Lee Pharma. They held that Lee Pharma, through any statistics, has failed to prove that the reasonable requirements of the public are not being satisfied by AstraZeneca.
The controller held that the average price of Saxagliptin class of drugs prices ranges between Rs 42 to 58, and Saxagliptin is sold on average between Rs 41 and 49; hence, the price is affordable in India and can be brought by the general public. The controller held that Lee Pharma has failed to prove that there is a shortage or low supply of the
18 Lee Pharma Ltd. v. AstraZeneca AB C.L.A. No. 1 of 2015
drug and the costs are also unreasonable in India and as established in the case Bayer Corporation Vs. Union of India and Others manufacturing the drug in India itself is not necessary to show that the patent is not working in India hence, Lee Pharma failed to prove that the patent is not working in India. In the case of BDR Pharmaceuticals v. Bristol-Myers Squibb19, a company named BDR Pharmaceuticals applied for compulsory patent under section 84 of the Indian Patent Act for the drug DASATINIB, used to treat Chronic Myeloid Leukemia (CML), and this drug is sold under the brand name SPRYCEL by Bristol Myers Squibb who held the patent of the drug in India. This matter went to the controller of patents, who ultimately rejected compulsory licensing to BDR Pharmaceuticals.
BDR Pharma argued that the patented drug DASATINIB was not available to the public at a reasonably affordable price and that the reasonable requirements of the public were not being met. They proposed offering the drug at a significantly lower price than Bristol Myers Squibb. The controller ultimately concluded in its judgment that BDR Pharmaceuticals failed to make a prima facie case for the grant of compulsory license. The Controller stated that BDR Pharmaceuticals had made no attempt to procure a voluntary license from Bristol Myers Squibb. It was further held that BDR Pharmaceuticals had not acquired the ability to work the invention to public advantage. Thus, the above reasons for compulsory license was denied by the controller of patents to BDR Pharmaceuticals.
8. data analysis and Recommendations
8A. Analysis of the compulsory Licensing regime of the TRIPS Agreement From Article 31 of the TRIPS Agreement, we can say that compulsory licensing was primarily included for public health emergencies or special national emergencies. During such times, in order to supply patented medicines, a government may use compulsory licensing to deal with such an emergency. The same stance was also reiterated in the Doha Declaration of 2001. One such health imagery for which compulsory licensing was used was the HIV/AIDS health emergency in Asia. Malaysia was the first Asian country to issue compulsory licensing for pharmaceutical products. On 29 September 2004, the Malaysian government issued a 2-year government use compulsory licensing to import from India three HIV/AIDS medicines, which
19 M/s. BDR Pharmaceuticals International Pvt. Ltd v. Bristol Myers Squibb C.L.A. No. 1 of 2013
are didanosine/ddI (patented by BMS), zidovudine (patented by GSK) and a combination of lamivudine and zidovidine (patented by GSK). In Thailand, the government issued compulsory licensing targeting two HIV/AIDS drugs, efavirenz (Merck) and a com- the combination of lopinavir and ritonavir (Abbott's Kaletra). Similarly, in Indonesia, they also issued compulsory licensing for dealing with HIV and AIDS20.
Later though an amendment in 2017 Article 31bis was introduced which allowed for countries with sufficient manufacturing capacity to export medicines produced under a compulsory license to countries that lack the ability to manufacture their own but with the condition that the importing country must notify the WTO, and certain safeguards are in place to prevent diversion of the medicines to other markets21 The provisions show that the primary purpose of compulsory licensing in Article 31 of TRIPS is to deal with public health and national health emergencies. However, it can be seen that even during public emergencies, when developing countries want compulsory licensing, they face pressure from powerful pharmaceutical lobbies and sometimes from developed countries, who argue that such practices could harm the global innovation ecosystem.
such countries have faced diplomatic pressures and threats of trade sanctions when exercising their rights under TRIPS. TRIPS do not focus on a more primary problem faced by the developing and least developed countries, which is access to patented medicines, some of which are sold at high prices and inaccessible to the people living in such countries. Later, countries like Thailand and India took a more expansive interpretation and usage of compulsory licensing, where compulsory licensing was used to give access to patented medicines at a more affordable rate. 8B. Analysis of the compulsory Licensing regime in India The approach taken by Indian law in the case of compulsory licensing is similar yet different from the TRIPS Agreement.
Section 92 of the Indian Patent Act of 1970 allows the controller of patents to grant compulsory licenses if there is a national emergency or a state of urgency by notification from the central government22. Some provisions allow for the selling of patented pharmaceuticals by use of compulsory licensing to other countries by a notification of the central government according to section 92A of the act23. These provisions line up the 20 Siraprapha Khim Rungpry, Compulsory licensing issues and trends in Asia, Pharm. Pat. Analyst (2013) 2(6), 681-683
21 TRIPS Agreement Article. 31bis, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade
Organization, Annex 1C, 1869 U.N.T.S. 299
22 Indian Patent Act, 1970, No. 39 Acts of Parliament 1970 (India), s. 92
23 Indian Patent Act, 1970, No. 39 Acts of Parliament 1970 (India), s. 92A
objectives
and provisions of the TRIPS agreement. The key difference between TRIPS and the Indian Patent Act is that there is an emphasis on public policy and the application of the patented drug in the Indian scenario. We can see this in Section 84 of the Patent Act, which looks at a patent's reasonable requirements of the public, the affordability of the patented drugs and whether that patented drug works in the territory of India24. This statute makes the patented drug to be examined more holistically. This holistic approach can be seen in the case of Bayer Corporation Vs. Union of India and Others25, which was the first and only time compulsory licensing was granted.
From the judgment of the Bombay High Court that the conditions for the grant of a compulsory patent in section 84 (reasonable requirements of the public, the affordability of the patented drugs and whether that patented drug works in the territory of India play a very important role and for the condition of a patent working in India) and it is not necessary for the patent holder to always have a manufacturing plant in India, but rather, there should be enough supply of the patented drugs available in India. In the cases of Lee Pharma v AstraZeneca26 and BDR Pharmaceuticals v. Bristol-Myers Squibb27 there was an attempt by the petitioner to obtain compulsory licensing for drugs but was denied by the controller of patents because it did not satisfy the conditions in Section 84 of the Act fully.
From these cases, we can see the applicant must fulfil all or at least most of the conditions that are laid down in Section 84 of the act to have a prima face case to convince the controller to grant compulsory licensing. The controller wants the applicant holder to first try to get a voluntary license from the patent holder then try to make a prima face case to the controller for the grant of a compulsory license. Hence, we can see that public policy plays an important role in granting compulsory licensing and compulsory licensing is given very carefully and on the basis of merits that is mentioned in Section 84 of the act by the controller of patents. 8C. Challenges of the Compulsory Licensing There are various challenges to compulsory licensing in India.
The pharmaceutical company often views compulsory licensing as the government denying their exclusive rights, which can lead to tensions between the government and pharmaceutical companies. This can lead to
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27 Supra Note 16
pharmaceutical companies not innovating and bringing out drugs for diseases because they may feel that if they make a major breakthrough, then the government can easily use compulsory licensing to get the patented drug. Another problem with compulsory licensing is that developing countries, including India, which require compulsory licensing the most, face pressure from developed nations and the big pharmaceutical giants to maintain strong IP protection and not to use compulsory licensing, which can influence the frequency and ease with which compulsory licenses are granted.
In India, the biggest problem with the compulsory licensing system is that the success rate of compulsory licensing in India has been low, often due to stringent requirements that applicants must satisfy to justify the need for such a license, which goes against the mandate welfare of the people and access to drugs at an affordable rate. In India, only once since the 2005 amendments to the Patent Act 1970 a compulsory license for a drug has been granted, even though a vast majority of the population of India cannot afford many of the patented drugs for serious diseases like various cancers. Hence, due to international pressures from both developed and big pharmaceutical companies, the usage of compulsory licensing, a major tool available to the government for public welfare, is severely underutilized in India.
9. Conclusion
and Recommendations We can conclude that while compulsory licensing is a vital tool for balancing intellectual property rights with public health needs, its statutory implementation in India through The Patent Act of 1970 is one of the most flexible implementations of the compulsory licensing system. Still, it has been limited due to international pressures from developed countries and big pharmaceutical companies and the reluctance of the government and the controller of patents to use compulsory licensing or to grant compulsory licensing. The Bayer vs. Natco case, which is the only case where compulsory licensing was granted in India for a pharmaceutical drug, shows us that compulsory licensing can be used to advance public interest and public health by making essential medicines more affordable and increasing access to such medicines.
The difficult conditions that are imposed for obtaining such compulsory licenses greatly reduce the supply of important drugs, which leaves many people around the globe, especially in developing and least-developed countries, without access to important drugs that are used in life-saving treatments. There is a need for legal and policy reforms to enhance the efficiency and effectiveness of the compulsory licensing process and the system. It is essential to strike a balance between encouraging innovation, especially in the case of the pharmaceutical field, and ensuring the promotion of public health, access to drug and affordability of drugs to the country's citizens. Even though India takes a very holistic approach to compulsory licensing, there are still problems that plague the system, and hence, it is essential to take steps to make the system better.
The following are the suggestions for making the current compulsory licensing system in India better-
1. The current legal framework could be further clarified to further ensure the smooth
functioning of the procedure through which licenses are granted. Additionally, such clarifications should be made while taking into account the contemporary public health needs
2. The government of India should revisit the affordability criteria and public need
assessments to keep up with the changing costs and access to healthcare in India.
3. The time required to apply for compulsory licensing can be reduced from 3 to 2 years.
4. The Government of India could explore alternative mechanisms like patent pooling or
voluntary licensing programs instead of using compulsory licenses, which would maintain the integrity of the patenting process and also provide access to essential drugs to the public.
5. International pressures from pharmaceutical lobbies and developed countries should be
countered through better and cooperative multilateral negotiations to safeguard the health interests of developing nations and least-developed nations.