COMPULSORY LICENSING IN INDIA - AN EGALITARIAN PROVISION
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John F. Kennedy famously said that “There are risks and costs to action. But they are far less than the risks of comfortable inaction”. In the context of patents, this adage augurs well with respect to the working of a patented invention.
Objective behind granting a patent for an invention
Section 83 of the Indian Patents Act, 1970 specifically provides that patents are granted to encourage inventions and to ensure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. Moreover, it is clarified that patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article. The protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology. Further, the patent rights are safeguarded to the mutual advantage of producers and users of technological knowledge in a manner conducive to social and economic welfare and for balancing the rights and obligations.
The Section further states that the patents granted do not impede protection of public health and nutrition and should act as instruments to promote public interest especially in sectors of vital importance for socio-economic and technological development of India. Patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
However, it is clarified that the granted patents do not in any way prohibit the Central Government in taking measures to protect public health.
Additionally, section 146 of the Act requires the patentee to furnish such details in the form of working statement to establish an extent to which the patented invention has been commercially worked in India during a financial year. Such a working statement has to be mandatorily submitted before the end of the financial year (the time can be further extended upon suitable request to the Controller upto 30th September).
Compulsory License
A compulsory license (CL) is an authorization granted by the government of a country to a third party other than the patentee to produce a patented product without the consent of the patent owner who has been taking undue advantage of exclusive rights granted by patent. Compulsory licensing tries to eliminate misuse of patent rights by a patent holder in view of public health or anti-competitive practices which would result in restricting trade or hindering technology transfer.
Compulsory Licensing in India
Under the Indian patent regime, Section 84 of the Patents Act, 1970 provides that at any time after the expiration of three years from the date of the grant of a patent, any person interested (including a license holder of the patent as well) may make an application to the Controller for grant of compulsory licence on any of the grounds of:
Objective for granting compulsory licences
Section 89 of the Act particularly provides the rationale behind granting a CL. The primary objective for granting a CL is to enable the patented inventions to be worked on a commercial scale in the territory of India without undue delay and to the fullest extent that is reasonably practicable. Moreover, CLs are granted for ensuring that the interests of any person for the time being working or developing an invention in the territory of India under the protection of a patent are not unfairly prejudiced.
Aspects considered by the Controller for an application for CL
It is mandatory on the part of the Controller to take into account the particulars of –
Provisions for satisfying reasonable requirements of the public
Section 84(7) provides that the reasonable requirements of the public shall be deemed not to have been satisfied on following accounts –
Procedure for granting a compulsory license
Section 87 of the Act determines the procedure that is to be followed for an application for CL. The steps are as follows –
Special provisions relating to compulsory licenses
Section 92 provides that 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.
Further, section 92A 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 CL
Section 94 provides that 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.
Section 85 states that the Central Government or any person interested may after the expiration of two years from the date of the order granting the first CL, apply to the Controller for an order revoking the patent on the ground that the patented invention has not been worked in the territory of India or that reasonable requirements of the public with respect to the patented invention has not been satisfied or that the patented invention is not available to the public at a reasonably affordable price.
Compulsory Licensing can be a great measure controlling the prices of the patented invention, checking anti-competitive measures, satisfying public needs and demands and other provisions. However, the balance between public interest and the rights of the patentee with respect to fostering innovation is crucial to be endeavored upon.