Compulsory Licensing law under TRIPS

Regime
- Yashraj
Bardhan*
Introduction

The Intellectual Property Rights has emerged as one of the

most important kind of property endowed with adequate
protection under the law of the national as well as international
legal systems. Given the significance of innovations, discoveries,
and creativity in human life and the civilization, IPRs deserve as
the most revered and sacred rights to be jealously protected.1

The importance attached to the IPRs is also reflected in the

Agreement concluded by International community in the name of
Trade Related Intellectual Property Rights (TRIPS) which was
separately entered amongst Member nations of WTO and the
developed, developing and the least developed countries were
given different time - frames to make necessary amendments in
their national legal system for IPRs protection to come at par with
the TRIPS Agreement.2

Yet important aspect which has always drawn attention is

that it must be for the welfare and development of human being
and the civilization and not otherwise. No right is absolute and so
are the Patent3/IPR rights. It has to be borne in mind that such
rights are safeguarded and encouraged for the betterment of the
human life and society. Therefore, the provisions such as
compulsory licensing4 find place in the legal system relating to IPR
law which is one of the tools to mitigate the exclusive rights
conferred upon patent holder in case of pharmaceutical industry.
TRIPS does not use the word compulsory licensing, instead it
refers to it as ‘Other Use without Authorization of the Right Holder’
under Article 31 Article 75 and 86 also describe, in principle, about
compulsory licensing conditions. TRIPS led to controversy
regarding use of compulsory licensing for public health and to
serve socio – economic purpose as original TRIPS in spite of these
provisions, left many ambiguities as to when and how WTO
members may circumvent IPRs to gain access to essential drugs or
1
*B.A. LL.B (Hons.), NLIU, Bhopal; Consultant Law, Infrastructure Development
Authority, Bihar, Patna. (E-mail-yashrajbardhan@sify.com;
yashrajbardhan.india@gmail.com ). [Views expressed are personal]
1
whether holders of IPRs could prevent subsequent import or
export of their product once they have placed it in the market.

Use of compulsory licensing is of utmost importance for

pharmaceutical products as medicines are not available to the
poorer section in various countries due to patent protection
enjoyed by MNCs. This is especially true in case of anti - AIDS
drugs.7 The premise of such provisions has been the need to bring
a certain degree of equity in the system by making products,
particularly, pharmaceuticals accessible and affordable to large
population in developing countries.8

The objective of this paper is to analyze the concerns for

cheap medicines and the amendment in the Indian Patent law to
make the same compliant with the TRIPS provisions. There has
been strong belief that due to the amendments in our National
Law of patents, drug prices would inflate as now the product
patent system has been introduced which would empower the
patent holder of a particular drug/medicine to monopolize the
Paris Convention for the protection of industrial property, 1883 was the first
convention for the protection of Intellectual Property. This Convention and
Berne Convention for the protection of Literary and Artistic Works, 1886 are the
earliest and they focus primarily on preventing nations from enacting
discriminatory Intellectual Property laws.
2
The law of patents has also become an important discipline of international
trade and commerce due to great advancement in science and technology,
revolutionary changes in information technology and the introduction / re
introduction of product patent. (See www.legalserviceindia.com/article/1414-
Patents-&-Its -Effects-In-India.html )
3
Patenting is one of the rights under IPRs. Grant of patent rights confers an
exclusive right upon the patent holder to make, use, sell and distribute the
patented product or the process. He can exclude all others from using that
invention in the particular jurisdiction in which he has got the patent. Patent
rights are a property and the patentee becomes the owner of it.
4
CL is an authorization given by a national authority to a person, without or
against the consent of the title holder, for the exploitation of a subject matter
protected under patent.
5
Article 7 states that protection of intellectual property should be for the
purpose of promoting innovation in the manner conducive to social and
economic welfare, and to balance of rights and obligations.
6
Article 8 states that IPRs may be suspended for the purpose of public health
and socio-economic need.
7
Janodia, M. D.; Rao, J.V.; Udupa. N.; “Compulsory Licensing: To what Extent it
is practicable?”, Current Science, Vol. 91, No. 8, 998. The Article was accessed
from INTERNET from www.ias.ac.in/currsci/oct252006/998.pdf as accessed in
August, 2009
8
Harshita Mathur, “Compulsory Licensing under Section 92A: Issues and
Concerns”, Journal of Intellectual Property Rights, Vol. 13, September 2008, 464
2
market and to dictate the price. Therefore, an attempt has been
made in this paper to examine the possibilities under the current
legal regime of patents/IPRs with special reference to the TRIPS
Agreement for the use of Compulsory Licensing provisions to
safeguard public health.

Historical Background

The Intellectual Property protection regime had been in

practice in different countries in varying levels of protection. There
appeared a need to harmonize this old law to facilitate
international trade and the free flow of technology. This was
necessary in order to obtain sufficient protection in other countries
of the world in view of the disparity in laws.

This was realized for the first time in the year 1873 when
many countries refused to display their inventions in an exhibition
called for this purpose held in Vienna. It followed deliberation,
conference and finally Paris Convention for protection of Industrial
Property, 1883 came into existence. Thereafter, Berne Convention
for the protection of Literary and Artistic Works, 1886 and Rome
Convention for Artists and Performers Rights, 1961 came into
existence to protect IPRs at International Level.

Later on, one International Organization namely World

Intellectual Property Organization (WIPO) also came into existence
in Stockholm in the year 1967 when last revision of Paris
Convention took place. This Organization has the responsibility to
administer and promote IPR on an international level.9 However,

9
T.V.Malvika, INTELLECTUAL PROPERTY RIGHTS, Magazine, as accessed on
12/09/2009 on INTERNET site-
http://www.tutorial.web4all.in/archives/fsug~bangalre/2006-Aril/000754.html
and also available on
www.thehindu.com/thehindu/mag/2006/04/09/index.htm
3
Uruguay Round of Negotiations culminating into World Trade
Organization came out with Agreement on Trade Relate
Intellectual Property Rights as TRIPS in the year 1994 which
worked to merge Intellectual Property Rights with International
Trade.10

The concept of compulsory licensing is not new and its

history dates back to the Statute of Monopolies in 1623 in England
where it was evolved as means to work locally a patented product.
It was also included in the Patent Act of 1883 in England which
provided for the grant of the patent in case where it was not being
used in public interest.11

India's laws on IPRs, specially the Patents, date back to 1856

which was again re-enacted in 1859 in line with British Law as
amended in 1852. Subsequently, several changes took place in
this field and finally the Indian Patents and Designs Act 1911 was
enacted. After independence, it was realized that Enactment of
1911 was not in the interest of Indian inventors, an amended and
new Act namely Indian Patents Act, 1970 was enacted12 wherein
also Compulsory licensing provision was added.13 This post
independence law on patents was the first comprehensive patent
rights regime in our country.

Indian Patents Act, 1970 and Compulsory Licensing

Provisions

In Indian Patents Act, 1970, after three consecutive

amendments, there has been lots of changes in the provisions
relating to compulsory licensing. Sections 82 to 94 under Chapter
XVI provide for working of patents, compulsory licenses and
revocation. General principles applicable to patented inventions
10
D. H Kim.; Research Guide on TRIPS and Compulsory Licensing: Access to
Innovative Pharmaceuticals for Least Developed Countries, as accessed from
INTERNET site:- www.nyulawglobal.org/globalex/TRIPS_Compulsory_
Licensing.htm in July, 2009
11
W.R.Cornish, Intellectual Property: Patents, Copyrights, Trademarks and Allied
Rights, p. 291, 4th Edn., Sweet & Maxwell, London, (1999)
12
The 1970 Act was enacted upon the recommendations of Tek Chand Patent
Enquiry Committee (1948-1950) and the Ayangar Committee (959). The
Patents Act, 1970 abolished the product patent for food, pharmaceuticals and
chemicals and restricted the same only to process patent. Provision of ‘license
of rights’ let the inventions being freely used in public interest.
13
Supra Note 9
4
have been detailed under Section 8314. Section 84 dealing with
Compulsory Licensing states that anyone may be granted
compulsory license under the established process to exploit a
patent if "a patent is not worked in India for three years after its
grant...” on fulfillment of three conditions as: “'reasonable
requirements of the public' are not satisfied" , "the patented
invention is not available to the public at a 'reasonably affordable
price'...." and “the patented invention is not worked in the territory
of India”. To determine reasonable requirements of public, it
provides as,
a) The development or establishment of trade and
industry is being prejudiced in India ;
b) The demand is not being met to an adequate extent or
on a reasonable terms from manufacture in India;
c) The establishment or development of commercial
activities in India is prejudiced;
d) A market for the export of the patented article
manufactured in India is not being supplied or
developed

Apart from the above, there are other similar situations for
grant of compulsory licensing. The Controller shall have to take
into account the nature of invention; the time elapsed since the
sealing of the patent, the ability of the applicant to work the
invention to the public advantage, capacity of the applicant,
applicant’s efforts. Section 88 lays down the powers of Controller
in granting CLs and Section 89 states the general purposes for
such grant as follows:-
i. That patented inventions are worked on a
commercial scale in the territory of India without undue
delay and to the fullest extent that is reasonably
practicable;
ii. That the interests of any person for the time
being working or developing an invention in the territory

14
This section lays emphasis on (i) encouragement of invention, not monopoly
of patentee, (ii) Protection and enforcement of patent rights for dissemination
of knowledge conducive to social and economic welfare and to balance of
rights and obligations, (iii) to promote public interest and to prevent ways and
means impeding public health and nutrition, (iv) benefits of patented
invention should reach to public at reasonably affordable prices.
5
 of India under the protection of a patent are not unfairly
prejudiced.

Section 90 lays down the terms and conditions for such

grant regarding payment of royalty, remuneration to the patent
holder, fullest utilization of patent with reasonable profits,
patented articles are available to public at reasonable price, non-
exclusive and non-assignable nature of license, predominant
purpose of supply in Indian market etc. Now Section 92A allows
exportation of patented products under compulsory licensing. In
case, the Central Government feels that the purpose behind grant
of CL has been achieved, it may terminate the same under Section
94.

The 1970 Act had been passed under Indira Gandhi

government to permit greater access of medicines at lower rates
to the poor in the country. This objective was achieve also as the
permissibility of process patent only allowed Indian companies to
flourish by producing generic version of medicines and making
them available at lower costs. However, in pursuance of
obligations under international organization such as WTO and
TRIPS Agreement, India had to bring the amendments in its law
which was done phase wise.15

Recent Developments
After the coming into existence of the World Trade
Organization and 1994 Agreement on Trade Related Aspects of
Property Rights, all the signatories are obliged to grant product
patents to pharmaceuticals products and also to incorporate other
provisions of international Agreement in national law. Accordingly,
the Indian Parliament brought three amendments to the Patent
Act, 1970.
The Patent (1st Amendment) Act, 1999 provided for Exclusive
Marketing Rights with retrospective effect since 1st January, 1995.
The Patents (2nd Amendment) Act 2002 brought some wider
changes as follows:-

15
Andrade C., Shah N., Chandra S, “The new patent regime: Implications for
patients in India, Indian J. Psychiatry”, 2007; 49: 56 - 9
6
 i. Definition of invention now read as a new product or
process involving an inventive step and capable of
industrial application;
ii. Microorganisms were made applicable;
iii. Term of patent was extended to 20 years from the
date of application;
iv. ‘Licenses of Rights’ provision were deleted;
v. Reversal of burden of proof under Section 104A was
inserted;
vi. Research exemptions were incorporated under Section
107A;
vii. Sub-section (g)16 of Section 3 was deleted widening
the scope of patentability of testing methods or
processes.

The Patents (3rd Amendment) Act, 2005 ushered India to the

product patent regime as required by TRIPS which led to much
rancor amongst academicians, pharmaceutical industry and social
activists. This Amendment has many new provisions that will
shape the country's pharmaceutical industry in a new frame. The
amended Act's key provisions to strengthen the regime in
accordance with the TRIPS and the Doha Round of year 2001 and
it retained the Compulsory Licensing provisions under Sections 84
to 94, Chapter XVI.

India's compulsory licensing provision gets more importance

in view of the increase in drug price and their unaffordability in
poorer and developing countries. As a result of new system being
introduced by the TRIPS Agreement, there has been increase in
the price of medicines affecting people at large which have been
evidenced in the United Nations’ Programs.17

16
“a method or process of testing applicable during the process of manufacture
for rendering the machine, apparatus, or other equipment more efficient or for
the improvement or restoration of the existing machine, apparatus or other
equipment or for improvement or control of manufacture”
17
Brook K. Baker, “Arthritic Flexibilities For Accessing Medicines: Analysis of
WTO Action Regarding Paragraph 6 of the Doha Declaration on the TRIPS
Agreement and Public Health in Indiana International & Competitive Law
Review”, 14 Ind. Int’l & Comp. L. Rev. 613, page 2, 2004
7
 The retention of the Compulsory Licensing provisions has
been subject of much criticism and appraisal from the
developed/industrialized and developing/least developed countries
respectively. However, the developing and the least developed
countries have hailed such provisions as it would be in direction of
protecting the interest and concerns of the poor’s health and
making life saving and other crucial drugs available to the masses
at a reasonable and affordable price.

Under such circumstances, the question arises as to the

permissibility of the provision for compulsory licensing under the
TRIPS Agreement and the Doha Declaration which would be
analyzed subsequently.

TRIPS Agreement and Compulsory Licensing

TRIPS Agreement indicates that IPRs need to be balanced
against other important interests, such as public health.18 Article
31 of the TRIPS Agreement19 provides for the compulsory licensing
18
Martin, G.; Sorenson, C.; Faunce, T.; “Balancing Intellectual Monopoly
Privileges and the need for essential medicines; Globalization and Health”,
20073:4 as available on website :-
www.globalizationandhealth.com/content/3/1/4
19
Article 31:- Other Use without Authorization of the Right Holder

Where the law of a Member allows for other use of the subject matter of a
patent without the authorization of the right holder, including use by the
government or third parties authorized by the government, the following
provisions shall be respected:

(a) Authorization of such use shall be considered on its individual merits;

(b) such use may only be permitted if, prior to such use, the proposed user
has made efforts to obtain authorization from the right holder on reasonable
commercial terms and conditions and that such efforts have not been
successful within a reasonable period of time. This requirement may be
waived by a Member in the case of national emergency or other
circumstances of extreme urgency or in cases of public non-commercial use.
In situations of national emergency or other circumstances of extreme
urgency, the right holder shall, nevertheless, be notified as soon as
reasonably practicable. In the case of public non-commercial use, where the
government or contractor, without making a patent search, knows or has
demonstrable grounds to know that a valid patent is or will be used by or for
the government, the right holder shall be informed promptly; (c) the scope
and duration of such use shall be limited to the purpose for which it was
authorized, and in the case of semi-conductor technology shall only be for
public non-commercial use or to remedy a practice determined after judicial
or administrative process to be anti-competitive; (d) such use shall be non-
exclusive; (e) such use shall be non-assignable, except with that part of the
enterprise or goodwill which enjoys such use; (f) any such use shall be
authorized predominantly for the supply of the domestic market of the
8
indirectly, not using the term expressly. “Other use” as referred
in this Article refers to use other than that allowed under
Article 30.20 There are grounds set forth under this Article which
justify the grant of compulsory licensing rights for the exploitation
of the patented rights.21

The important grounds22 for granting CLs are as follows:-

i. Emergency and extreme urgency;

Member authorizing such use; (g) Authorization for such use shall be liable,
subject to adequate protection of the legitimate interests of the persons so
authorized, to be terminated if and when the circumstances which led to it
cease to exist and are unlikely to recur. The competent authority shall have
the authority to review, upon motivated request, the continued existence of
these circumstances; (h) the right holder shall be paid adequate
remuneration in the circumstances of each case, taking into account the
economic value of the authorization; (i) the legal validity of any decision
relating to the authorization of such use shall be subject to judicial review or
other independent review by a distinct higher authority in that Member;
(j) any decision relating to the remuneration provided in respect of such use
shall be subject to judicial review or other independent review by a distinct
higher authority in that Member; (k) Members are not obliged to apply the
conditions set forth in subparagraphs (b) and (f) where such use is permitted
to remedy a practice determined after judicial or administrative process to be
anti-competitive. The need to correct anti-competitive practices may be taken
into account in determining the amount of remuneration in such cases.
Competent authorities shall have the authority to refuse termination of
authorization if and when the conditions which led to such authorization are
likely to recur; (l) where such use is authorized to permit the exploitation of a
patent (“the second patent”) which cannot be exploited without infringing
another patent (“the first patent”),

the following additional conditions shall apply: (i) the invention claimed in
the second patent shall involve an important technical advance of
considerable economic significance in relation to the invention claimed in the
first patent; (ii) the owner of the first patent shall be entitled to a cross-
license on reasonable terms to use the invention claimed in the second
patent; and (iii) the use authorized in respect of the first patent shall be non-
assignable except with the assignment of the second patent.

20
Article 30 reads as:- Exceptions to Rights Conferred

Members may provide limited exceptions to the exclusive rights conferred by

a patent, provided that such exceptions do not unreasonably conflict with a
normal exploitation of the patent and do not unreasonably prejudice the
legitimate interests of the patent owner, taking account of the legitimate
interests of third parties.

21
Carton M. Correa, et al, (Eds.), Intellectual Property and International Trade-
The TRIPS Agreement, p. 210, Kluwer Law International, London, 1998
9
 ii. Anti-competitive practices;
iii. Public non commercial use;
iv. Dependent patents

TRIPS does not limit the Members’ right to establish

compulsory licenses on grounds other than explicitly mentioned
therein, for instance, in order to protect the environment or for
reasons of “public interest”. The Agreement gives that much
flexibility to the Member countries and the only case in which the
Agreement does restrict the freedom to determine the grounds for
compulsory licenses relates to “semi-conductor technology” which
can only be subject to compulsory license for non-commercial use
and to remedy anti competitive practices.

In cases of emergency and extreme urgency, prior request

to the patentee for grant of license on reasonable terms is not
necessary. However, the patent holder has to be informed as soon
as reasonably possible. Article 31(g) provides for revocation of the
compulsory license as soon as the purpose for which it was issued
has been fulfilled. This is a discouraging clause to applicants of
compulsory license as they will not be sure as when their license
can be revoked and in many cases their investment and labor
might go in waste.

A glance of TRIPS Agreement and harmonious reading

depicts that it incorporates conditions etc. under which a patented
product may be used to protect public health by means of ‘other
uses’ exception, that is to say by way of compulsory licensing.

The underlying objective of the patent rights is to contribute

to the promotion of the technological innovation and to the
transfer and dissemination of technology, to the mutual advantage
of producers and users of technological knowledge and in a
manner conducive to social and economic welfare, and to balance
of rights and obligations. Therefore, the IPRs are subject to higher
social values and a balance needs to be created. Article 8 of the
Agreement states:-

22
Grant of patent is subject to certain conditions also apart from these
grounds. The applications are considered on case by case basis upon
fulfillment of prior request, determination of scope and duration, non-
exclusive and non- assignable nature, remuneration, review and revisions etc.
10
 1. Members may, in formulating or amending their national
laws and regulations, adopt measures necessary to protect
the public interest in sectors of vital importance to their
socio- economic and technological development, provided
that such measures are consistent with the provisions of
this Agreement.
2. Appropriate measures, provided that they are consistent
with the provisions of this Agreement, may be needed to
prevent the abuse of intellectual property rights by right
holders or resort to practices which unreasonably restrain
trade or adversely affect the international transfer of
technology.

The grant of compulsory licensing can be justified on the

basis of this Article itself. It allows for appropriate measures to be
taken to prevent abuse of IPRs. Secondly, it also allows the
measures to be taken, which are necessary to protect public
health and nutrition. On the ground of clause 1 of Article 8, grant
of compulsory licensing can be justified in cases of pharmaceutical
industry and other areas related to health and nutrition. This
Article read with Preamble23 can be of great significance to the
developing countries where the technological development is slow
23
The Preamble reads as :- Members,

Desiring to reduce distortions and impediments to international trade, and

taking into account the need to promote effective and adequate protection of
intellectual property rights, and to ensure that measures and procedures to
enforce intellectual property rights do not themselves become barriers to
legitimate trade;

Recognizing, to this end, the need for new rules and disciplines concerning:

(a) the applicability of the basic principles of GATT 1994 and of relevant
international intellectual property agreements or conventions;

(b) the provision of adequate standards and principles concerning the

availability, scope and use of trade-related intellectual property rights;

(c) the provision of effective and appropriate means for the enforcement of
trade-related intellectual property rights, taking into account differences in
national legal systems;

(d) the provision of effective and expeditious procedures for the multilateral
prevention and settlement of disputes between governments; and

(e) transitional arrangements aiming at the fullest participation in the results

of the negotiations;
11
and use of the patented invention is necessary for protecting
public health, environment or any other public interest.

Despite these overtures of TRIPS, confusion / suspicion

surrounded for its impact on availability of essential drugs and
their pricing which were addressed at Doha.

Doha Declaration and Compulsory Licensing

The Doha Declaration 2001 was the result of the

uncertainties prevailing amongst the developing and least
developed countries regarding applicability of TRIPS provisions
and their impact on pharmaceutical industry.24 It was feared that
product patent would affect access to medicines. Challenge of the
decision legitimizing the production of generic versions of ARV (a
medicine for AIDS) through compulsory licenses as a means to
address the problem of access by multinational pharmaceutical
companies in the country’s courts of the South African
governments; was an aggravating factor leading to uncertainties
regarding how TRIPS flexibilities would be interpreted. This action

Recognizing the need for a multilateral framework of principles, rules and

disciplines dealing with international trade in counterfeit goods;

Recognizing that intellectual property rights are private rights;

Recognizing the underlying public policy objectives of national systems for

the protection of intellectual property, including developmental and
technological objectives;

Recognizing also the special needs of the least-developed country Members

in respect of maximum flexibility in the domestic implementation of laws and
regulations in order to enable them to create a sound and viable technological
base;

Emphasizing the importance of reducing tensions by reaching strengthened

commitments to resolve disputes on trade-related intellectual property issues
through multilateral procedures;

Desiring to establish a mutually supportive relationship between the WTO

and the World Intellectual Property Organization (referred to in this Agreement
as “WIPO”) as well as other relevant international organizations;
Hereby agree as follows

Articles……………

24
Supra Note 18
12
of MNCs drew widespread criticism from both NGOs and
governments of developing countries, who alleged that TRIPS was
being used by the pharmaceutical industry to enhance profits at
the cost of human lives.25

The controversy ultimately led to the withdrawal of the case

and catalyzed a much-needed discussion on public health and
intellectual property rights at the WTO’s Doha round of discussions
in 2001, which culminated in a landmark declaration on public
health known as the Doha Declaration on Public Health.26

The developing countries were not utilizing the flexibility of

the TRIPS Agreement as they had been unsure of how these TRIPS
flexibilities would be interpreted, and how far their right to use
them would be respected.27

Protection of public health is one of the most important

concerns and against the aforesaid background, the African group,
later joined by India and Brazil, requested for a special session of
WTO which was accepted and was held at Doha on 14th November,
2001, at the WTO Ministerial meeting in Doha. This Meeting

25
Carlos Correa, “Implications of Doha Declaration on the TRIPS Agreement and
Public Health” as quoted by Vishwas H Devaiah , TRIPS and Public Health
accessed from the INTERNET on 02/02/2008 on the address :-
http://www.sarai.net/research/knowledge-culture/critical-public-legal-
resources/tripsandpublichealth.pdf
26
Doha Declaration was adopted on 14th November 2001. Paragraphs 5 and 6 of
the Declaration become more important. Paragraph 5 (b) states that each
member has the right to grant compulsory licenses and the freedom to
determine the grounds upon which such licenses are granted. Further clause (c)
of Paragraph 5 states that each member has the right to determine what
constitutes a national emergency or other circumstances of extreme urgency, it
being understood that public health crisis, including those relating to HIV/AIDS,
tuberculosis, malaria and other epidemics, can represent a national emergency
or other circumstances of extreme urgency.
Paragraph 6 states and declares that WTO members with insufficient or no
manufacturing capacities in the pharmaceutical sector could face difficulties in
making effective use of compulsory licensing under the TRIPS Agreement and
therefore, Council for TRIPS was instructed to find an expeditious solution to this
problem and to resort to the General Council before the end of 2002. The
decision came on 30th August, 2003 which allowed any member country to
export pharmaceutical products made under CL within the terms set out in the
decision. (See www.wto.org/nglish/news_e/nes07_e/trips_wp_7dec07_e.htm and
also www. wto.org/English/tratop_e/implem_para6_e.htm)
27
“TRIPS and Pharmaceutical Patents”, FACT SHEET, September 2006 available
on website at www.tripsfactsheet_pharma_2006_e accessed on 06/12/2008
13
clarified international trade rules cannot undermine the legitimate
right of countries to protect public health.28

The need for such an endeavor was felt in view of the

increasing disparity amongst nations in availability of life saving
medicines. Despite medical advancement and increasing life
expectancy, the disparity in health status amongst people
worldwide is increasing. This is because of the reason that the
drugs, which are available in the market are beyond reach of the
poor.

The Doha Declaration on the TRIPS Agreement and Public

Health recognized that developing countries with insufficient, or
no manufacturing capacity in the pharmaceutical sector could face
difficulties in making effective use of compulsory licensing under
the TRIPS Agreement.

The Declaration29 has addressed these concerns30 and

developing countries’ point of view has been conceded.

The objective of Doha Declaration on the TRIPS Agreement

and Public Health was to clarify the official stand on certain
provisions of TRIPS relating to public health. It recognizes the
concerns of developing countries and LDCs on the issue. The
Declaration clarifies that ‘public health crisis’ can represent ‘a
national emergency or other circumstances of extreme urgency’,
and that an ‘emergency’ may be either a short-term problem, or a
long-lasting situation.31

28
“Public Health Safeguards in the TRIPS Agreement”, 19 as accessed on 8 th
October, 2009 and available on website:-
www.whoindia.org/LinkFiles/Trade_Agreement_sections2_public_health_safegua
rds.pdf
29
The WTO has taken action by setting up a system for the implementation of
Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health
after a decision on August 30, 2003 to facilitate access to medicines in
developing countries. WTO members have incorporated the waiver of 2003 on
6th December 2005 into a permanent amendment on TRIPS. The permanent
amendment shall allow any member country to export pharmaceutical products
made under compulsory license. This shall make it easier for poorer countries to
obtain cheaper generic versions of patented medicines. This amendment has to
be ratified by 2/3 members for which the time has been extended to 31st
December 2009.
[See N. Lalitha, “Doha Declaration and Public Health Issues”; Journal of
Intellectual Property Rights, Vol. 13, September 2008, 401(406)]
30
Supra Note 27.
31
Supra Note 25
14
 The Doha Declaration recognizes the implicit imprints of
Article 732 and 8 of the TRIPS Agreement that consideration of
public good could be an overriding factor while offering IPR
protection to medicines for specified diseases and epidemics,
particularly for Developing and Least Developing countries and it
does not come under the purview of WTO or the Dispute
Settlement Body. It has to be kept in mind that Article 5 of the
Agreement provides that any interpretation of the provisions of
the Agreement has to be in compliance to the aims and objectives
of the Agreement.

The Declaration, in fact, is the reiteration of the fundamental

tenets already built in the 1994 Agreement on TRIPS and it
endorsed more emphatically the following points:-33
(a) Need for TRIPS to address the public health problems
affecting the Developing Countries and the Least Developing
Countries especially for HIV/AIDS, Tuberculosis, Malaria and
other epidemics.
(b) Recognition of the importance of intellectual property rights
protection for innovation of new medicines while at the
same time recognizing the unaffordable high prices of
patented drugs.
(c) The rights of members to interpret and implement through
appropriate measures protection of public health and
promotion of access to medicines subject to respecting
Articles 3 and 4 of the TRIPS Agreement, referring to Most
Favored Nation treatment to national and non- nationals.
(d) The rights of members under Para 5 of the Declaration to
determine the grounds for Compulsory Licenses define
national emergencies and implement exhaustion rights.
(e) Methodology to assist countries with no technological
capabilities to implement compulsory licensing to be
addressed by General Council by the end of year 2002.

32
Article 7 read as :- Objectives :- The protection and enforcement of
intellectual property rights should contribute to the promotion of technological
innovation and to the transfer and dissemination of technology, to the mutual
advantage of producers and users of technological knowledge and in a manner
conducive to social and economic welfare, and to a balance of rights and
obligations.
33
Ramnath Subbu, “TRIPS and Public Health: the Doha Declaration,”,
Business/Science, The Hindu, Thursday, November 29, 2001
15
 (f) Provisions for technology transfer to Least Developed
Countries under Article 66.2 to continue and the LDCs not
obliged to implement Articles 5 and 7 of Part II of the
Agreement till January 2016.

The Doha Declaration recognizes the fact which was implicit

under Article 7 and 8 of TRIPS, that consideration of public good
which includes public health could be the overriding factor while
offering IPR protection for medicines for specified diseases and
epidemics, particularly for developing and developed countries.
The term ‘epidemic’ has not been defined and it gives a room for
interpretation to the developing countries and it does not come
under the purview of WTO or the Dispute Settlement Body.
However, the beneficial mechanism for transfer of technology for
making life saving medicines to developing countries and least
developed countries is yet to be considered.

The Declaration confirms that its members can decide their

own grounds for application of the flexibilities. CLs can be granted
on large number of grounds related to public health concerns, and
countries have the freedom to define these.34

Conclusion

Compulsory Licensing provisions have now become explicit

after the Doha Declaration and Decision on Implementation of
Paragraph 6 of Doha. CL has been agreed by the international
community to be acceptable under TRIPS regime extending
utmost importance to public health concerns. Such an approach
of the international community has provided access to patented
life saving medicines in the Developing and Least Developed
Countries.

The Amendments brought to Indian Law of Patents in

compliance of TRIPS too has taken into account the public health
concerns by retaining CL provisions. The new amended Act allows
export of drugs manufactured under CL to the poorer countries to
meet their health problems as per the Doha Declaration on TRIPS.

34
Supra Note 28.
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 There are certain lacunas too in the current regime of CL in
India such as non awarding CL for first three years of patent,
permissibility only for the drugs registered in the country etc
which should be resolved for achieving the objective of CL in a
better manner. Even though, it may be stated that the new law
will generate awareness and encourage companies to invest in
research and inventions.

Lastly, it appears necessary to state that CL should not

override the other important aspect that a
company/firm/individual incurs lots of expenditure, time and
energy for an invention and he has to be provided adequate
incentive too. Therefore, the National Governments must properly
look into the remuneration/royalty being paid to the patent holder
in case of grant of CL and it should issue license in case of need
and urgency. It must not be a normal feature, else, it shall have
dissuasive effect for the innovators and in long term, the public
interest of protecting public health shall be adversely affected. A
balance must be maintained between both the interests.

Simultaneously, the Competition law also has to be taken

into account while dealing with rights of patent holder and he
must not be allowed to exploit his monopoly and dominant
position.35 The CL acts as a balancing factor in restraining patent
holders to turn monopolists and to harm public in general.

The CL may provide a temporary succor to the concerns of

national health in emergency or in case of no access to drugs due
to high prices, the long term solution can be found only by building
capacity within the country to manufacture essential drugs. It shall
need proper mechanism to ensure technology transfer and the
Developing as well as Least Developed countries need to focus in
this area.36 Apart from the efforts of technology transfer, the
countries with no or insufficient manufacturing capacity should
attempt and become innovative.

35
“Competition law and Intellectual Property Laws” as accessed on 27/11/2009
and available on Website:- www.legalserviceindia.com/article/1307-
Competition-Law-and-Intellectual-Property-Laws.html
36
N.S Gopalkrishnan, “TRIPS Agreement and Public Health: An Overview of
International Issues”; Journal of Intellectual Property Rights, Vol. 13,
September 2008, 395 (398)
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