Use for Regulatory Approval Defence in Patent Infringement Lawsuits

- (Bolar Exemption)

Anytime a person produces something new that hasn't existed in society before,
whether it's a machine, a new kind of medicine or technology, etc., it can be referred to as an
innovation, and the individual who makes the creation is known as the inventor. It is
important to acknowledge and give credit to inventors. Therefore, the Indian Patents Act,
1970, which grants legal acknowledgment of inventions and protects them from being
infringed, was created to protect inventions in India from any form of infringement. A novel
product or procedure that involves an inventive step and can be used in industry is referred to
be an innovation, under Section 2(j) of the Indian Patents Act, 1970. A patent, in general,
refers to a title or legal authorization that allows the inventor to utilise a product for selling or
distributing within the time frame set by the authorities. According to this statute, the
registered patent holder has the right to prevent anybody else from using his innovation as a
means of public monopolisation. There are several exceptions to this general rule, though,
which allow a third party to sell, use, or alter patented inventions without infringing on the
rights of the patent holder. The Indian Patents Act, 1970 refers to this exception as the "Bolar
Exemption." India is regarded as the global centre for medicine. It is the world's leading
manufacturer and exporter of pharmaceuticals. It is a signatory to the TRIPS Agreement,
which gives states the authority to enforce appropriate patent exemptions while taking the
patent holder's interests into account (Article 30). As a result, a defence under the Indian
Patents Act of 1970 was added in Section 107-A of the Patents Amendment Act of 2002. In
India, this is referred to as the "Bolar exemption," and it allows anybody to use or sell a
freshly developed drug or any other invention for the purpose of further study or development
without fear of legal repercussions.

Bolar Exemption – What it means?

The Patents Act of 1970 in India governs all licencing procedures, grants the patent
holder exclusive rights, permits enhancements, provides remedies for infringements, and
specifies the rights of the patent holder, among other things. This law was put into place to
encourage societally beneficial inventions. In accordance with Section 48 of the Act, the
inventor of pharmaceuticals and related items has a 20-year window of time during which to
sell, utilise, or monopolise their creations. Therefore, the bolar exception is in effect during
this time, allowing the third party to utilise the patented goods for research or other
modifications.

Section 107-A of the Indian Patents Act, 1970 lays down:

(a) any act of making, constructing, [using, selling or importing] a patented invention solely
for uses reasonably related to the development and submission of information required under
any law for the time being in force, in India, or a country other than India, that regulates the
manufacture, construction, [use, sale or import] of any product.

This means that if any other person who is not the owner of the patented product uses it for
research and development, then it will not be termed as an infringement of patent rights.

(b) importation of patented products by any person from a person [who is duly authorized
under the law to produce and sell or distribute the product], shall not be considered as an
infringement of patent rights.

If a medicinal drug is essential to society, it may be used for additional research and
testing without the patent holder's permission up until the end of the time allotted for the
patent under this legislation. As a result, this clause helps pharmaceutical companies perform
trials before the patent expires. According to Section 48 of the Indian Patent Act, 1970, the
patent holder has the sole right to sell, use, distribute, or monopolise the patented product on
the market for the term of the patent. He also has the right to transfer his rights to any third
party with his consent. The owner of a patent cannot transfer his rights without a third party's
consent, and only limited terms and restrictions can be imposed on the third party, among
other limitations of the patent rights. A patent right may be contested in court. To monopoly
the patented goods, a mandatory licence is needed. The Indian Patents (Amendment) Act,
2005 controls how much it costs consumers to utilise patented goods.

Merch Sharp & Dohme Corp & Anr v. Sanjeev Gupta & Ors, a case in which the question of
whether selling or producing a patented product for export amounts to infringement, was
brought before the Delhi High Court on November 18, 2019. The Delhi court heard the
matter and noted that Section 48 of the Indian Patents Act, 1970 safeguards the rights of the
patent owners by prohibiting the use of the patent by a third party for any purpose, including
for sale or use, without the patent holder's consent. The court determined that Section 48
protects patents from being manufactured for export as a result.
Now the question arises, whether the export of patented products for research would come
under the purview of bolar exemption?

In the cases of Bayer Corporation v. Union of India & Ors. and Bayer Intellectual Property
GMBH & Anr v. Alembic Pharmaceutical Ltd., (2019), the Delhi High Court addressed this
issue and found that Section 107-A "is in line with the TRIPS agreement, International
guidelines, and Article 47, 21 of the Indian Constitution upholds export as a valid part of the
bolar exemption." Therefore, exporting for research and clinical trials is covered by Section
107-A as the bolar exemption, and the patentee's rights will not be affected.

Accordingly, it is abundantly obvious from the ruling that under Section 107-A of the Indian
Patents Act of 1970, the patented drug or items may be transferred overseas for study or a
trial.

A Comparison of the Bolar Exemption

The laws of the European Union are where the idea of bolar exemption first emerged.
The bolar exemption concept is more limited in the U.K. than it is in India since prior to the
passage of the U.K. Patent Act, there were no exemptions for research involving patented
goods. However, thanks to an amendment introduced in 2011, the U.K. has recently granted
an exception for R&D, allowing individuals to utilise patented goods. However, the law has
divided products into categories (a) and (b). Additionally, there are currently no exemptions
granted for some products. There are no such categories in India; all products are free from
the bolar tax. Products are given bolar exemption in considerably more nations than the UK,
such as Germany and France.

Conclusion

In India, the Bolar exemption is granted more latitude. The copyrighted goods may be
exported abroad without the patent holder's permission for additional improvements,
advances, or clinical trials under Section 107-A of the Indian Patents Act, 1970. This implies
that top-notch research and experimentation can be conducted using the newly developed
medications by generic manufacturers. Despite the fact that the product is legally protected,
the maker may sell, use, and distribute it to the broader public if necessary. Although it is
claimed that the bolar exemption is for the benefit of society, the rights of the patent holder
must not be infringed upon or removed. Make sure that no one is able to manufacture
copyrighted goods under the Bolar Exemption for their own profit or money-making venture.
The main goal is for individuals to have access to patented inventions or medical treatments
at the lowest possible cost. To relieve patients' financial burden, the Medical Association of
India must inform the licenced physicians to suggest generic medications. Accordingly, the
bolar exemption is what the Indian Patents Act, 1970 refers to as a good defence against
patent infringement.