Author: C Thiruvikram
Edited by: Shadrack Chai
INTRODUCTION:
Both the concepts of compulsory licensing and patent rights have their differences and usages. Yet there is lately a large worldwide struggle/tussle between patent rights and compulsory licensing. A patent right is nothing but the ownership of any medicine that is invented and the compulsory license of the person to whom the right to manufacture and sell is given by the patentee to another person who could be beneficial by distribution along with the inventor or the actual owner of the patented product. In this following article, you will find the true concept of patent rights and compulsory licensing and its prerequisites how to granted a patent right and grant of compulsory license in compulsory licensing.
Keywords: IPR, patent rights, compulsory licensing, pharmaceutical industries, medical patents, product patents.
SUB-HEADINGS
Meaning, Definition & Explanation:
PATENT RIGHTS:
These are the rights that are granted to the patent holder, i.e., the pharmaceutical company, where they could prevent the production and selling of this patented product for over the limit of 20 years. It allows the patent holder to recoup investments in their research and development, and it encourages innovation by providing them a temporary monopoly.
COMPULSORY LICENSING:
It is a provision that the government uses which grants the third party to sell the patented product without the prior consent of the patent holder for the particular patented product. These are typically invoked when there are public health emergencies/ national crises/ when the patented product does not meet its required demand for the particular drug. But to grant compulsory licensing there a required royalties that need to be paid by the license holder to the patent holder. By this, it aims to balance the patent rights with the public interests and ensure access to essential medicines while incentivizing innovation.
Essentials Elements / Pre-requisites of compulsory licensing:
There are a few prerequisites which are essential for compulsory licensing, which are as follows:
Patent protection: The drug or invention must be patented in the country where compulsory licensing is sought.
Public interest: Compulsory licensing is usually invoked to address a public health need, such as:
Epidemics (e.g., HIV/AIDS, COVID-19)
Pandemics
National health crises
Unmet medical needs
Access to essential medicines
Insufficient supply or access: The patent holder must be unable or unwilling to meet the demand for the drug, leading to:
Shortages
High prices
Limited availability
Attempts to negotiate: The government or applicant must demonstrate efforts to obtain a voluntary license from the patent holder, which were unsuccessful.
National emergency or extreme urgency: Compulsory licensing may be granted during national emergencies or situations of extreme urgency, such as a public health crisis.
Non-commercial use: Compulsory licensing is often limited to non-commercial use, such as for public health programs or government procurement.
WTO compliance: Countries must comply with World Trade Organization (WTO) rules, specifically the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Domestic legislation: The country must have domestic legislation in place to enable compulsory licensing, such as laws allowing for government use or third-party licenses.
Case Laws / Judicial Development of the Concept:
BAYER CORPORATION V UNION OF INDIA[1]:-
Facts:-
In Bayer Corporation vs Union of India (2014), Bayer challenged the Indian Intellectual Property Appellate Board’s decision to grant a compulsory license for its cancer drug Nexavar (Sorafenib Tosylate) to Natco Pharma. Bayer, a U.S.-based company, held a patent for the drug but priced it at ₹2,80,000 per month, making it unaffordable for many patients. Natco sought a voluntary license to sell the drug at ₹8,800 per month but was denied, leading to its application for a compulsory license under Section 84 of the Indian Patent Act.
Issues Raised:-
Efforts for Voluntary License: Whether Natco made sufficient efforts to obtain a voluntary license from Bayer before applying for a compulsory license.
Reasonable Requirement of Public: Whether Bayer’s supply of the drug met the reasonable requirements of the public.
Affordability: Whether the patented drug was available to the public at a reasonably affordable price.
Working of the Patent: Whether the patented drug was being worked in India, including through importation.
Adjournment of Application: Whether the Controller should have adjourned Natco’s application to allow Bayer more time to meet market needs.
Judgment:
The Indian Supreme Court upheld the compulsory license, concluding that Natco had made adequate efforts to obtain a voluntary license. It found that Bayer had not satisfied the public’s reasonable requirements, as the price was prohibitively high. The Court ruled that the drug was not available at a reasonably affordable price and that Bayer’s importation did not constitute sufficient working of the patent in India. The Tribunal’s decision to grant the compulsory license was affirmed, emphasizing public interest and access to essential medicines. The petition was dismissed, reinforcing the balance between patent rights and public health.
NOVARTIS AG v. UNION OF INDIA[2]:-
Facts:-
In Novartis AG v. Union of India (2013), Novartis challenged the Indian patent office’s denial of a patent for its cancer drug, Glivec (Imatinib Mesylate). The patent application was rejected because the drug did not meet the criteria of novelty and non-obviousness under Section 3(d) of the Indian Patent Act, which aims to prevent the evergreening of patents by requiring that new forms of known substances demonstrate enhanced efficacy.
Issues Raised:-
Patentability Criteria: Whether the interpretation of Section 3(d) of the Indian Patent Act was appropriate in rejecting Novartis’s application.
Public Health vs. Patent Rights: The balance between protecting public health and the rights of pharmaceutical companies to patent new drugs.
Impact on Access to Medicines: Concerns regarding how the denial of the patent could affect access to affordable medicines in India.
Judgment:-
The Supreme Court of India upheld the patent office’s decision, affirming that Glivec did not exhibit significant therapeutic efficacy over existing treatments. The Court emphasized the importance of public health and access to medicines, stating that the patent system should not be used to extend monopolies on drugs that do not provide substantial benefits. The judgment underscored India’s commitment to ensuring affordable healthcare while maintaining a robust patent framework.
MERCK KGAA V INTERVET INTERNATIONAL BV[3]:-
Facts:-
In Merck KGaA v. Intervet International BV (2010), Merck KGaA, a German pharmaceutical company, filed a patent infringement lawsuit against Intervet International, a Dutch company, over a veterinary vaccine for poultry. Merck claimed that Intervet’s vaccine infringed its patent related to a specific method of producing the vaccine.
Issues Raised:-
Patent Infringement: Whether Intervet’s vaccine production method infringed Merck’s patent.
Validity of the Patent: The validity of Merck’s patent, particularly concerning its novelty and non-obviousness.
Scope of Patent Protection: The interpretation of the patent claims and whether Intervet’s actions fell within the scope of Merck’s patent rights.
Judgment:-
The court ruled in favour of Merck, finding that Intervet’s vaccine did indeed infringe on Merck’s patent. The judgment reaffirmed the validity of Merck’s patent, emphasizing that the patented method provided a significant advancement in the production of veterinary vaccines. The decision highlighted the importance of patent protection in encouraging innovation within the pharmaceutical industry.
CANADA PATENT PROTECTION ON PHARMACEUTICAL PRODUCTS:-
Overview:-
Canada’s patent protection for pharmaceutical products is governed by the Patent Act, which provides a framework for granting patents on new inventions, including drugs. The key aspects include the criteria for patentability, the duration of protection, and regulatory considerations.
Key Aspects:-
Patentability Criteria:
Novelty: The invention must be new and not previously disclosed.
Non-Obviousness: The invention must not be obvious to someone skilled in the field.
Utility: The invention must have a specific, substantial, and credible utility.
Duration of Patent Protection:
Patents in Canada typically last for 20 years from the filing date, subject to the payment of maintenance fees. This period allows pharmaceutical companies to recoup their research and development investments.
Regulatory Framework:
The Patented Medicines (Notice of Compliance) Regulations allow for a streamlined approval process for generic drugs after the patent expires.
The Canadian Intellectual Property Office (CIPO) administers patent applications and grants.
Compulsory Licensing:
Under certain conditions, the Canadian government can issue compulsory licenses to allow others to produce a patented product without the patent holder’s consent, particularly in situations of public health need.
Data Protection:
Canada provides data protection for new pharmaceutical products, ensuring that the data submitted for regulatory approval is not used by competitors for a specified period.
Conclusion:-
Canada’s patent protection framework aims to balance the interests of pharmaceutical innovators with public health needs, ensuring access to medicines while incentivizing research and development in the pharmaceutical industry.
BRAZIL’S MEASURES AFFECTING THE PATENT PROTECTION:-
Brazil’s patent protection framework is primarily governed by the Industrial Property Law (Law No. 9,279/1996), which outlines the legal mechanisms for granting patents, including specific provisions that impact pharmaceutical products. This framework is designed to balance the interests of innovation and public health, reflecting Brazil’s commitment to ensuring access to medicines while encouraging research and development.
Patentability Criteria:-
Under Brazilian law, to qualify for patent protection, an invention must meet three fundamental criteria: novelty, inventive step, and industrial applicability.
Novelty: The invention must be new, meaning it has not been disclosed to the public before the filing date.
Inventive Step: The invention must not be obvious to someone skilled in the relevant field, which means it should involve a significant advancement over existing knowledge.
Industrial Applicability: The invention must be capable of being used in some kind of industry, ensuring that it has practical utility.
These criteria are essential for maintaining a high standard of patent quality in Brazil, promoting genuine innovation rather than mere incremental changes.
Duration of Patent Protection:-
Patents in Brazil are granted for a maximum duration of 20 years from the filing date, contingent upon the payment of annual maintenance fees. This period allows patent holders to recoup their investments in research and development. However, the lengthy examination process at the Brazilian Patent Office (INPI) can lead to delays in the granting of patents, sometimes extending the effective protection period.
Compulsory Licensing:-
One of the most significant aspects of Brazil’s patent system is its provisions for compulsory licensing. Under specific conditions, the Brazilian government can issue compulsory licenses to allow third parties to produce a patented product without the patent holder’s consent. This is particularly applicable in cases of public health emergencies or when the patented product is not being supplied adequately to the market. For instance, Brazil has used compulsory licensing to make HIV/AIDS medications more accessible, demonstrating its commitment to public health over strict patent enforcement.
Patent Examination Process:-
Brazil employs a substantive examination process for patent applications, which can prolong the time it takes for patents to be granted. The INPI evaluates applications for compliance with patentability criteria, and the backlog of pending applications has been a challenge. Efforts have been made to streamline this process, but delays remain a concern for both applicants and the pharmaceutical industry.
Data Exclusivity:-
Brazil provides a period of data exclusivity for new pharmaceutical products, typically lasting five years. This exclusivity prevents regulatory authorities from using the clinical data submitted by the original manufacturer for marketing approval of generic versions during this period. This measure is aimed at protecting the investment made by pharmaceutical companies in developing new drugs.
Public Health Considerations:-
The Brazilian government has consistently emphasized public health in its patent policies. This approach has led to tensions between the government and pharmaceutical companies, particularly regarding access to essential medicines. Brazil’s willingness to utilize compulsory licensing and other measures to ensure access to affordable drugs reflects its prioritization of public health needs over strict adherence to patent rights.
Conclusion:-
Brazil’s measures affecting patent protection illustrate a complex interplay between safeguarding intellectual property rights and addressing public health imperatives. While the framework encourages innovation, it also ensures that essential medicines remain accessible to the population. This balance is critical in shaping Brazil’s pharmaceutical landscape and has significant implications for global health and patent policy discussions.
CONCLUSION & COMMENTS:-
The tussle between patent rights and compulsory licensing in the pharmaceutical industry is a complex and multifaceted issue, reflecting a delicate balance between innovation, access, private interests, and public health. This conclusion summarizes the key aspects of this debate.
Patent rights are essential for encouraging innovation in the pharmaceutical industry, as they provide a temporary monopoly for patent holders to recoup investments in research and development. However, excessive patent protection can lead to high drug prices, limited access, and public health concerns.
Compulsory licensing, on the other hand, allows governments to grant permission for third-party manufacturers to produce patented drugs without the patent holder’s consent, usually during public health emergencies or when the patent holder is not meeting demand. This mechanism ensures access to essential medicines, promotes competition, and addresses shortages or high prices.
The tension between patent rights and compulsory licensing arises from the need to balance these competing interests. Patent holders argue that compulsory licensing undermines their rights, discourages innovation, and sets a dangerous precedent. In contrast, public health advocates contend that compulsory licensing is necessary to address unmet medical needs, promote access, and protect human life.
To resolve this tussle, governments, patent holders, and generic manufacturers must engage in constructive dialogue and find mutually beneficial solutions. This may involve:
Voluntary licensing agreements: Patent holders can voluntarily license their patents to generic manufacturers, ensuring access while maintaining some control.
Tiered pricing: Patent holders can adopt tiered pricing strategies, offering discounted prices in low-income countries or for public health programs.
Patent pooling: Patent holders can pool their patents, allowing generic manufacturers to access multiple patents and promote competition.
Research and development incentives: Governments can offer incentives for research and development, such as tax credits or grants, to encourage innovation while ensuring access.
Transparency and accountability: Patent holders and governments must ensure transparency in patent applications, licensing agreements, and drug pricing, promoting accountability and trust.
In conclusion, the tussle between patent rights and compulsory licensing in the pharmaceutical industry requires a nuanced and context-specific approach. By balancing innovation, access, private interests, and public health, stakeholders can promote a sustainable and equitable solution that benefits both patients and patent holders.
- REFERENCES
Books / Commentaries / Journals Referred
Patent Law- P Narayanan.
Patent law cases and materials- A synthesis on India.
Intellectual Property Law- Dr.Avtar Singh.
Supreme Court on Intellectual Property- EBC Law Journal.
Online Articles / Sources Referred
Indiankanoon.com
Legal services.in
Ipleaders.com
Livelaw. in
Scconline. in
Casemine. in
Cases Referred
Bayer Corporation v Union of India.
Norvatis ag v union of India.
Merck kgaa v intervet international.
Statutes Referred
Patents Act, 1970.
World Trade Organization.
Canada Convention.
Brazil Convention.
[1] (2016) 5 SCC 473.
[2] (2013) 6 SCC 1.
[3] [2010] EWHC 1973 (Pat).
