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What is Compulsory Licensing of Patents in India?

Patents in India are granted


to encourage inventions and to secure that it is worked on a commercial scale. The Indian
Patent Act ensures that a Patentee should not be able to enjoy a monopoly for the
importation of the patented article. The Patent Act provides measures by way of
compulsory licensing (C! to ensure that the patents do not impede the protection of public
health and nutrition and the Patent "ights are not abused by the Patentee. The C
therefore serves to strike balance between two disparate objectives# rewarding patentees
for their invention and making the patented products$ particularly pharmaceutical products$
available to large population in developing and under developed countries at a cheaper and
affordable price. Grant of Compulsory License due to Non-
Working/nafforda!le Prices of Patented "rticle# $%ection &'() %ection &' of
Indian Patent Act pertains to the grant of Compulsory icences. Compulsory icences
are granted in order to( ).Prevent the abuse of patent as a monopoly* +.,ake a way
for commercial e-ploitation of the patented invention by an interested person* and
..Address the public health concern in India. Any person interested or already the
holder of the licence under the patent can make re/uest to the Controller for grant of
Compulsory icence on patent after three years from the 0date of grant1 of that patent$ on
the following grounds( 1.reasonable requirements of public have not been satisfied; or
2.patented invention is not available to the public at affordable price; or 3.patented
invention is not worked in the territory of India. The Controller takes following
aspects into consideration while granting Compulsory icence( ).2ature of the
invention$ i.e comple-ity of the technology* +.Time which has elapsed since the grant
of the patent i.e. despite of the best efforts by the patentee or licensee since the grant of
patent$ it was difficult to work out the invention at commercial scale to its fullest before the
application of the compulsory licence was filed to the Patent 3ffice* ..The measures
already taken by the patentees or any licensee to make full use of the invention*
'.Ability of the applicant to work the invention to the public advantage* 4.Capacity of
the applicant to undertake the risk in providing capital and working the invention$ if
application were granted* 5.Applicant has made full efforts to obtain a licence from the
patentee on reasonable terms and conditions and such efforts have not been successful
within a reasonable period construed as a period not ordinarily e-ceeding a period of 5
months. Grant of Compulsory License for the *+port of Pharmaceutical Products)
Article .)(f! of the T"IP% agreement undermined the need for availability of
medicines to the countries having less or no manufacturing capacity through importation
from other countries. 6T3 adopted a mechanism to resolve this problem by implementing
para 5 of the 7oha 7eclaration on the T"IP% Agreement and Public 8ealth on August .9$
+99.. 3bligation under Art .)(f! of the T"IP% agreement was thus waived off in case of
e-port of pharmaceutical product to the countries having least or no manufacturing capacity
provided the eligible importing members has made a notification to the Council for T"IP%.
The Indian Patent Act was thus amended on :anuary )$ +994 and %ection ;+ (A! was
incorporated for grant of C for e-port of pharmaceutical products in certain e-ceptional
circumstances. The C under the said section can only be granted if the importing
country has also granted C or has$ by notification or otherwise$ allowed importation of the
patented pharmaceutical product from India. This condition is not applicable for least
developing countries (C7! having no patent regime. The C7s is only re/uired to notify the
Council of 6T3 about their willingness to import the pharma product subject to para 5 of
7oha 7eclaration. India,s -irst Compulsory License of Patent) 3n ,arch ;$
+9)+$ India<s first compulsory license (C! was granted by the Patent 3ffice to 2atco
Pharma td. for producing generic version of =ayer Corporation>s patented medicine
2e-avar$ used in the treatment of iver and ?idney cancer. The Controller decided
against =ayer on all the three grounds enlisted in the Patents Act for the grant of C
(reasonable re/uirements of the public not being satisfied* non#availability to the public at a
reasonably affordable price$ and the patented invention not being worked in the territory of
India!. 6hile the multinational giant was selling the drug at I2" +.&9 lakh for a month>s
course$ 2atco promised to make available the same at a price of about . @ (I2" &&99! of
what was charged by =ayer. 2atco was directed to pay 5 percent of the net sales of the drug
as royalty to =ayer. Among other important terms and condition of the non assignable$ non
e-clusive license were directions to 2atco to manufacture the patented drug only at their
own manufacturing facility$ selling the drug only within the Indian Territory and supplying
the patented drug to at least 599 needy and deserving patients per year free of cost.
Aggrieved by the Controller<s decision$ =ayer immediately moved to the Intellectual Property
Appellate =oard (IPA=! alleging that the grant of C was illegal and unsustainable. The
=oard rejected =ayer<s appeal holding that if stay was granted$ it would definitely jeopardiAe
the interest of the public who need the drug at the later stage of the disease. It further held
that the right of access to affordable medicine was as much a matter of right to dignity of
the patients and to grant stay at this juncture would really affect them. The =oard<s
chief Prabha %ridevan in an open court on ,arch '$ +9). dictated the order upholding the
Controller<s decision for grant of compulsory license on =ayer<s patented drug$ %orafenib
Tosylate.
VERSIONS RECORDINGS: The Copyright Amendment of 2012 moved the provisions
with respect to cover versions of sound recordings out of fair dealing provisions under Section
52, into a specific statutory license provision !a"ing version recordings, re#recording of prior
sound recordings, was earlier permitted under the Copyright $aw, %ut codifying it as a statutory
license provision formali&es the said activity in many ways 'urthermore, Section (1C, which
deals with statutory licenses for cover versions clearly spells out specific conditions and
limitations for ma"ing version recordings The Section reads as follows: )(1C Statutory
licence for cover versions *1+ Any person desirous of ma"ing a cover version, %eing a
sound recording in respect of any literary, dramatic or musical wor", where sound recordings of
that wor" have %een made %y or with the licence or consent of the owner of the right in the wor",
may do so su%,ect to the provisions of this section: -rovided that such sound recordings shall %e
in the same medium as the last recording, unless the medium of the last recording is no longer
in current commercial use *2+ The person ma"ing the sound recordings shall give prior
notice of his intention to ma"e the sound recordings in the manner as may %e prescri%ed, and
provide in advance copies of all covers or la%els with which the sound recordings are to %e sold,
and pay in advance, to the owner of rights in each wor" royalties in respect of all copies to %e
made %y him, at the rate fi.ed %y the Copyright /oard in this %ehalf: -rovided that such
sound recordings shall not %e sold or issued in any form of pac"aging or with any cover or la%el
which is li"ely to mislead or confuse the pu%lic as to their identity, and in particular shall not
contain the name or depict in any way any performer of an earlier sound recording of the same
wor" or any cinematograph film in which such sound recording was incorporated and, further,
shall state on the cover that it is a cover version made under this section *(+ The
person ma"ing such sound recordings shall not ma"e any alteration in the literary or musical
wor" which has not %een made previously %y or with the consent of the owner of rights, or which
is not technically necessary for the purpose of ma"ing the sound recordings: -rovided that
such sound recordings shall not %e made until the e.piration of five calendar years after the end
of the year in which the first sound recordings of the wor" was made *0+ 1ne royalty in
respect of such sound recordings shall %e paid for a minimum of fifty thousand copies of each
wor" during each calendar year in which copies of it are made: -rovided that the Copyright
/oard may, %y general order, fi. a lower minimum in respect of wor"s in a particular language or
dialect having regard to the potential circulation of such wor"s *5+ The person ma"ing such
sound recordings shall maintain such registers and %oo"s of account in respect thereof,
including full details of e.isting stoc" as may %e prescri%ed and shall allow the owner of rights or
his duly authorised agent or representative to inspect all records and %oo"s of account relating
to such sound recording: -rovided that if on a complaint %rought %efore the Copyright /oard
to the effect that the owner of rights has not %een paid in full for any sound recordings
purporting to %e made in pursuance of this section, the Copyright /oard is, prima facie, satisfied
that the complaint is genuine, it may pass an order e. parte directing the person ma"ing the
sound recording to cease from ma"ing further copies and, after holding such in2uiry as it
considers necessary, ma"e such further order as it may deem fit, including an order for payment
of royalty 3.planation4'or the purposes of this section )cover version5 means a sound
recording made in accordance with this section5 The first noteworthy change in the
provision is with respect to the medium of version recording The proviso to clause *1+
specifically provides that a conversion can %e made only into the same medium of the original
recording, unless the earlier recording is no longer in commercial use 'or e.ample, if the first
recording was made on a magnetic tape, the cover version must also %e on a magnetic tape
6ou cannot ma"e a digital recording of the cover version The Section states that
payment for the cover versions must %e made to the authors in advance, and for at least fifty
thousand copies in an year The cover version must not mention the original singer or the name
of the film for which the recording was made earlier 'inally, although minuscule, protection for
producers has %een incorporated Cover versions can %e made only after five years of the
first sound recording Also, clause *(+ prohi%its any derivative wor"s li"e remi.es without the
permission of the author, giving them an opportunity to %argain
What is the Database Right?: 7rrespective of copyright protection, a data%ase may
%e protected %y the data%ase right This is intended to protect and reward investment in
the creation and arrangement of data%ases This protection can apply to %oth paper
and electronic data%ases 88 'or copyright protection to apply, the data%ase must
have originality in the selection or arrangement of the contents 'or data%ase
right to apply, there must have %een a su%stantial investment in o%taining, verifying or
presenting its contents 887t is possi%le that a data%ase will satisfy %oth these
re2uirements so that %oth copyright and data%ase right apply There is no
registration for data%ase right # it is an automatic right li"e copyright and commences as
soon as the material that can %e protected e.ists in a recorded form 9owever, the term
of protection under the data%ase right is much shorter than under copyright # it lasts for
15 years from ma"ing %ut, if pu%lished during this time, then the term is 15 years from
pu%lication
WHAT IS A WELL-KNOWN MARK?: A regime for the protection of well#"nown mar"s was first
introduced %y the -aris Convention in Article :bis:*1+ The countries of the ;nion underta"e, e.
officio if their legislation so permits, or at the re2uest of an interested party,to refuse or to cancel
the registration, and to prohi%it the use, of a trademar" which constitutes a reproduction, an
imitation, or a translation, lia%le to create confusion, of a mar" considered %y the competent
authority of the country of registration or use to %e well "nown in that country as %eing already
the mar" of a person entitled to the %enefits of this Convention and used for identical or similar
goods These provisions shall also apply when the essential part of the mar" constitutes a
reproduction of any such well#"nown mar" or an imitation lia%le to create confusion therewith
Su%se2uently, during drafting of the T<7-s Agreement, provisions to accommodate protection of
well#"nown mar"s as envisaged %y Article :bis of the -aris Convention were incorporated as
T<7-s Articles 1:2 and 1:(: 1:2=Article :bis of the -aris Convention *1>:?+ shall apply,
mutatis mutandis, to services 7n determining whether a trademar" is well#"nown, !em%ers shall
ta"e account of the "nowledge of the trademar" in the relevant sector of the pu%lic, including
"nowledge in the !em%er concerned which has %een o%tained as a result of the promotion of
the trademar" 1:(=Article :bis of the -aris Convention *1>:?+ shall apply, mutatis
mutandis, to goods or services which are not similar to those in respect of which a trademar" is
registered, provided that use of that trademar" in relation to those goods or services would
indicate a connection %etween those goods or services and the owner of the registered
trademar" and provided that the interests of the owner of the registered trademar" are li"ely to
%e damaged %y such use The provisions addressing protection of well#"nown mar"s evolved
somewhat from the -aris Convention to the T<7-s Agreement The -aris Convention deals with
well#"nown mar"s in respect of goods alone, and provides protection only against use in
connection with identical or similar goods The T<7-s Agreement mandated that protection %e
e.tended %y !em%er Countries to registered trademar"s against use in connection with goods
and services@ it also covers dissimilar goods and services to the e.tent the disputed third#party
use is found to indicate a connection %etween such dissimilar goods or services and the owner
of the registered mar", which is li"ely to harm the ownerAs interests Bota%ly, %oth conventions
do not define what constitutes a well "nown mar", there%y leaving its definition to the individual
!em%er States 7t is also of significance here that although the e.pression used in the -aris
Convention and the T<7-s Agreement is )well "nown mar",5 different ,urisdictions use different
e.pressions to denote mar"s falling into the category of well#"nown mar"s such as )famous
mar"s,5 )mar"s having a reputation,5 or )notorious mar"s5 ;nder the T! Act, while there is a
definition of )well#"nown mar",5 the e.pressions )well#"nown mar"s5 and )CaD registered mar"
CthatD has a reputation5 are also used PROTECTION OF WELL-KNOWN
MARKS NDER THE OLD INDIAN TRADE MARK STATTE: /efore the enactment of the
T! Act, the statute governing trademar"s in 7ndia was the T!! Act The T! Act came into force
in Septem%er 200( -rior to that date, well#"nown mar"s were protected under Section 0? of the
T!! Act, which provided for defensive registration of well#"nown mar"s as well as passing off
actions Section 0?*1+ of the T!! Act read: 0?*1+=De!e"si#e $egist$ati%" %! &e''-("%&" t$a)e
*a$(s+Ehere a trade mar" consisting of any invented word has %ecome so well#"nown as
respects any goods in relation to which it is registered and has %een used, that the use thereof
in relation to other goods would %e li"ely to %e ta"en as indicating a connection in the course of
trade %etween those goods and a person entitled to use the trade mar" in relation to the first
mentioned goods, then, notwithstanding that the proprietor registered in respect of the first#
mentioned goods does not use or propose to use the trade mar" in relation to those other goods
and notwithstanding anything in Section 0:, the mar" may, on application in the prescri%ed
manner %y such proprietor, %e registered in his name in respect of those other goods as a
defensive trade mar" and while so registered, shall not %e lia%le to %e ta"en off the register in
respect of those goods under the said section The test for eligi%ility for defensive registration of
a well#"nown mar" under Section 0?*1+ was whether the use of the mar" in connection with
goods other than the registered goods or goods in use would li"ely %e perceived as indicating a
connection in the course of trade %etween such goods and the well#"nown mar"As proprietor 7n
other words, li"elihood of deception was the decisive factor in determining whether a well#"nown
mar" was eligi%le for registration under this section 1wners of well#"nown mar"s often availed
themselves of this provision %y registering their mar"s either in all classes or in selected classes
of interest 9owever, even without a defensive registration, 7ndian courts have upheld rights in
several well#"nown mar"s asserted %y trademar" owners through passing#off actions These
court decisions and 7ndiaAs international o%ligations to implement protection of well#"nown
mar"s led to the codification of the well#"nown mar"s provisions under the T! Act /efore
e.amining the T! Act, it is important to review some of the court decisions under the old statute,
the T!! Act, which are considered milestones in the evolution of 7ndian case law on well#
"nown mar"s and paved the way for its codification under the new statute