Compulsory licensing - Talk by Gaurav Mishra at event organized by Department of science and technology, Rajasthan

Copyright BananaIP Counsels 2020 - All Rights Reserved
Compulsory Licensing
By
Gaurav Mishra
gaurav@bananaip.com
www.bananaip.com

Rights of a Patentee?
 Section 48
 Exclusive right to
◦ Make
◦ Use
◦ Sell
◦ Offer for sale
◦ Import
 What does it apply to?
◦ Products
◦ Processes

License
 What?
◦ Permission to do, use, or own something.
 Types of Patent License
◦ Exclusive License
◦ Non-exclusive License
◦ Compulsory License – Exclusive? OR Non-
exclusive?

Compulsory Licenses (s. 84)
 Who can apply and when?
◦ Acc. to S. 84(1)
 Any person interested may apply for issue of CL to the Controller
including license holder [s. 84(2)]
 After expiration of three years from date of grant of patent
 Rule 96; Form 17
 Any costs?

Compulsory Licenses (s. 84)
 Grounds of applying for CL
◦ Reasonable requirements of public have not
been satisfied
◦ Patent invention is not available to public at
reasonably affordable price
◦ Invention is not worked in the territory of India

Reasonable requirements
 Section 84(7) : Reasonable requirements of
public not deemed satisfied if:
◦ Due to refusal by patentee to grant license: [s. 84(7)(a)]
 an existing trade or industry OR development & establishment of any
new trade or industry India OR the trade / industry of any person
trading or manufacturing in India is prejudiced;
OR
 Demand for patent article has not been met to adequate extent or on
reasonable terms;
OR

 A market for export is not being supplied or developed;
OR
 Establishment or development of commercial activities is in
India is prejudiced;
 If due to conditions imposed by Patentee in a license
OR if by purchase, hire and use of patented article or
process: [s. 84(7)(b)]
◦ Manufacture , use or sale of materials not protected by patent
is prejudiced

 If Patentee imposes any of the following conditions in
his license: [s. 84(7)(c)]
1. to provide exclusive grant back
2. prevent any challenge to validity of patent
3. Coercive package licensing
 If patented invention is not worked in territory of India
on a commercial scale to an adequate extent or
worked to fullest extent that is reasonably practicable:
[s. 84(7)(d)]
 If working of patent on commercial scale in India is
prevented or hindered by importation of patented
article from abroad [s. 84(7)(e)]

Considerations by Controller
 u/s. 84(6), the controller takes the following into
consideration before issue of CL
1. Nature of invention;
 Time elapsed since sealing of the patent;
 Measures already taken by the patentee to make full use of the
invention;
2. Ability of applicant to work the invention to public advantage;
3. Capacity of applicant to undertake risk in providing capital and
working the invention
4. Whether applicant has made efforts to obtain a license from the
patentee on reasonable terms and conditions without success
 Clause is NOT applicable in case of national emergency, cases of
extreme urgency, public non commercial use or establishment of
ground of anti competitive practice adopted by patentee

Adjournment of applications for CL
 u/s. 86 – Controller can adjourn the application for
issue of CL if he believes that:
◦ Time since grant of patent is insufficient to work the invention
◦ If patentee proves that he could not work the invention due to
any rule or regulation of the state or central government
 Application can be adjourned for a maximum of 12
months

Terms & Conditions of CL (s. 90)
 Controller must try to ensure that:
◦ Royalty or remuneration to patentee is reasonable
◦ Licensee is able to work the invention to the fullest
with reasonable profits to him
◦ Invention is available to public at reasonably
affordable prices
◦ License is non exclusive
◦ Rights are non-assignable
◦ License is for as short a term as possible keeping
in mind the public interest
◦ Predominantly supply should be in Indian market
◦ Licensee can export is necessary
◦ Does not authorize licensee to import

Case studies
 Bayer versus Natco.
◦ India’s first and only compulsory license granted till date
 Case summary:
◦ On 9th March 2012, the Controller ruled against German pharmaceutical giant Bayer Corp.
◦ Patented drug “Sorafenib tosylate” (Nexavar) used in treatment of advanced stages of kidney and liver
cancer.
◦ Drug launched in 2006, received license to import and market the drug in India on 1st August 2007.
◦ Bayer did not import the drug at all in 2008 and only started importing it in small quantities in 2009 and 2010
◦ Seeing that Bayer was not making the drug accessible to more people, Natco applied for a compulsory
license under Section 84 of the Patents Act
◦ Cost difference: Nexavar costed 2.80 lakh for 120 tablets; Natco’s drug costed 8800 INR for 120 tablets
◦ Decision upheld by Bombay High Court

Other CL cases
 Emcure Pharmaceuticals v. Roche
◦ Second instance but withdrawn
◦ Roche’s Drug “Trastuzumab” commonly known as Herceptin
◦ Department of Industrial Policy and Promotion (DIPP) denied the Ministry of Health in proceeding
with this application, which had made a request under section 92 of the Patents Act, which allows
for the government to file for a license in cases of national emergency
 BDR Pharma v. Bristol Myers Squibb (BMS)
◦ Second CL application
◦ BDR Pharma filed for a Compulsory License in March 2013, for Bristol Myers anti-cancer drug
“Dastanib”.
◦ Rejected by Controller as BDR Pharma could not make out a prima facie case for the grant of a
compulsory license – failed to make efforts to obtain a voluntary license from the patentee on
reasonable terms and conditions.

Other CL cases
 Lee Pharma v. Astrazeneca
◦ Third CL application
◦ Lee Pharma filed Compulsory Licensing Application on 29th June 2015 for patented
drug “Saxagliptin”
◦ Saxagliptin granted originally to Bristol Myers Squibb (BMS) - used in the treatment
of Diabetes.
◦ Patent assigned by BMS to AstraZeneca
◦ Lee pharma alleged that Astrazeneca had been importing the drug at less than a
rupee but charged as much as Rs 45 for each tablet.
◦ Controller rejected application on grounds that prima facie case could not be made
out

Images by iXimus from Pixabay
HellooooooHi
CL for drug against Coronavirus

The case of Remdesivir
 Gilead holds three patents in India for remdesivir
drug originally used to treat Ebola
 In May 2020, two health advocacy groups asked
government to revoke patent on remedesivir
 Gilead signed non-exclusive licensing agreements
with five generic drugmakers based in India and
Pakistan, allowing them to make and sell
remdesivir for 127 countries.

Questions?

Thank You
Presentation also available on:
https://www.bananaip.com/ip-news-center/

Compulsory licensing - Talk by Gaurav Mishra at event organized by Department of science and technology, Rajasthan

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Compulsory licensing - Talk by Gaurav Mishra at event organized by Department of science and technology, Rajasthan