Compulsory Licensing(IPR)

By-Cyril Jose

WTO defines ''Compusory Licensing as a process wherein government allows someone else to produce the patented product or process without the consent of the patent owner''

Contained in Chapter XVI of the Patents Act 1970, under the sections 82 to 94Conditions vary between each patent syst

Granted After expiration of three years of filing of patentBy the Controller for grant of compulsory license

Conditions for granting of CLReasonable requirements of the public have not been satisfied.Not available to the public at a reasonably affordable price.Not worked in the territory of India.

Considerations for granting of CL

(i) the nature of invention, the time which 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(ii) the ability of the applicant to work the invention to the public  advantage.(iii) the capacity of the applicant to undertake the risk in providing capital and working out the invention, if the application were granted. (iv) as to whether the applicant has made efforts to obtain a licence from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period(six months).

Revocation of Patents

After expiration of two years from the date of the order granting the first compulsory licence, the central government or any person interested may apply to the Controller for an order revoking the patent.

Procedure after filing Compulsory license

Prima Facie case being filed by the Controller

Forwards copies of the application to the patent holder

The same is then published in the official journal

Notice of opposition need to be filed by the patentee within a prescribed period

deemed fit by the Controller

The Controller shall notify the applicant in case of a opposition being filed

Both the applicant and the opponent gets an opportunity to be heard before deciding the case.

Power of Controller to adjourn applications for compulsory license

If the controller is satisfied that the time elapsed since the sealing of the patent has been insufficient to enable the invention to be worked on a commercial scale.

A period of 12 months are usually granted to the patentee to work out the invention in the territory of India.

Within one year the controller has to reveal his stand for the application.

Power of Controller in granting of CL

When an appilcation for compulsory license is made by a patent holder-Order the existing licence to be cancelled, or may, if he thinks fit, instead of making an order for the grant of a licence to the applicant, order the existing licence to be amended

Where two or more patents are held by the same patentee-If the Controller is satisfied that the applicant cannot efficiently or satisfactorily work the licence granted to him under those patents without infringing the other patents he may, by order, direct the grant of a licence in respect of the other patents also to enable the licensee to work the patent or patents in regard to which a licence is granted.

Where the terms and conditions of a licence have been settled by the Controller,The licensee may, at any time after working out the invention on a commercial scale for a period of not less than 12 months, apply to the Controller for the revision of the terms and conditions on the ground that the terms and conditions settled have proved to be more onerous than originally expected and the licensee is unable to work the invention except at a loss, provided that no such application shall be entertained a second time.

Terms and Conditions of Compulsory Licenses The royalty and other remuneration entitled to the patent should be

reasonable

The patented invention is worked to the fullest extent by the applicant with reasonable profit to him

The patented articles should be made available to the public at reasonably affordable prices

The licence granted is a non-exclusive licence

The right of the licensee is non-assignable

The licence is granted with a predominant purpose of supply in the Indian market and that the licensee may also export the patented product ''if need be''

Termination of Compulsory Licence

The operation of compulsory Licence 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

Any order for the grant of a licence under this Chapter shall operate as if it were a deed granting a licence executed by the patentee and all other necessary parties embodying the terms and conditions, if any, settled by the Controller.

Facts- Only 3 Compulsory Licensing has been filed till date in India.

India grants first compulsory licence to Generic manufacturer NATCO for sorafenib tosylate over Bayer AG’s “Nexavar”

According to the Indian Patent Office's decision, the German drug-maker BAYER did not begin importing the drug to India in 2008 and only small quantities were available during the following two years.

"The drug is exorbitantly priced and out of reach of most of the people," the patent authority wrote in its 62-page decision.

In its compulsory license request, Indian generic manufacturer Natco proposed selling sorafenib tosylate at Rs. 8,800 per patient per month - approximately US $175 - resulting in a 97 percent price cut compared to Nexavar.

The Indian Patent Office also said that Natco must pay royalties to Bayer on a quarterly basis at the rate of 6 percent of the net sales of the medicine, in accordance with remuneration guidelines set forth by the United Nations Development Programme.

Reference-

http://ipindia.nic.in/IPActs_Rules/updated_Version/sections/ps84.html

Case studies-

http://www.prepsure.com/news/india-placed-at-the-bottom-in-international-best-practices-usa-chamber-of-commerce/

http://www.firstpost.com/living/world-cancer-day-compulsory-licensing-of-key-drugs-only-way-for-india-to-fight-this-grave-threat-2612574.htmlhttp://www.ictsd.org/bridges-news/bridges/news/india-grants-first-

compulsory-license-to-generic-drug-producer