Compulsory Licensing to mitigate

Corona pandemic:
An urgent need to enforce Compulsory licensing and
suspension of IP rights.

GROUP 1
Astha Chandodwala B001
Mrunal Sinkar B007
Shubham Jain B020
Saagarika Khandelwal B025
 About
Table this
of Contents
template

01 05
Compulsory Licensing CL: The Indian Legal
Framework (Section 92)

CL: The Indian Legal

06
The COVID19 Case
02 Framework (Section 84)

Landmark Judgment: NATCO Hurdles to implement CL

03 vs BAYER 07
Conclusion &

04 CL: For and Against

08 Recommendations

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 Compulsory Licensing
Chapter XVI of the Indian Patents Act, 1970

A compulsory license, in the simplest of terms, is a license issued by the government to an applicant so as

to allow it to manufacture, sell and/ or distribute a patented product without the permission of
the patentee.

In most cases, compulsory licensing involves the production of a generic copy of the patented good
primarily for domestic use and not for exportation and its most basic purpose is to ensure equitable access
to essential goods.

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 CompulsoryYou
Licensing:
can alsoThe
splitIndian
your content
Legal Framework

There are certain pre-requisite conditions, given under sections 84-92, for issuing a CL.

As per Section 84, any person, regardless of whether he is the holder of the license of that Patent, can make a
request to the Controller for grant of compulsory license on expiry of three years, when any of the following
conditions is fulfilled –

• the reasonable requirements of the public with respect to the patented invention have not been satisfied

• the patented invention is not available to the public at a reasonably affordable price

• the patented invention is not worked in the territory of India.

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 Landmark Judgment: NATCO vs BAYER

March, 2012
Indian Patent Office granted compulsory license
to NATCO for generic version of Nexavar-
Bayer’s Anti-cancer drug.

Claims by NATCO
1. Drug not available at affordable price
Price:
NATCO: ₹ 8,800 for a months treatment
BAYER: ₹ 2,80,000 for a months treatment
2. Not working in India
3. Bayer importing drug despite of having Mfg. site in India.

All the 3 conditions of Section 84 were fulfilled and the decision was taken for the benefit of
general public.
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 Section 92 (1), The Patents Act 1970

Compulsory licenses can also be issued suo motu by the Controller

of Patents pursuant to a notification issued by the Central
Government if there is either a “national emergency” or “extreme
urgency” or in cases of “public non-commercial use”.
The said section enables the Government of India to notify to the
public of such extreme circumstances, whereupon, any person
interested can apply for a compulsory license and the Controller in
such case may grant to the applicant a license over the patent on
such terms and conditions as he thinks fit.

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 Compulsory licensing: Pros & Cons

◉ PROS ◉ CONS

The royalty paid to the innovative

The patented drug is easily made company may be lesser than the expense
available to the public. incurred in the research and development
of the drug.

Deterrent to innovation as the monopoly

The patented drug will be available to the
of the patentee over the patent is
public at cheaper price.
suspended.

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COVID-19 and the Shortage of Drugs:
A Case for Compulsory Licensing
• Massive toll on healthcare
• Supreme Court of India to declare the second wave
as a national emergency
• The non-availability of vital medicines and vaccines
exacerbated the situation

Remdesivir

Tocilizumab

Favipiravir

Patent protected
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 Significant Statistics
COVID19 Vaccination in India
11.8 Crore people The standard set by World Health
received atleast 1st dose Organization
of vaccine to reach herd immunity

1/10th of the Country needs

135 Crore 160 to 170 Crore
population doses of vaccine

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 Significant Statistics
COVID19 vaccination in India
Average vaccination rate in India Current Vaccine Production

40 Lakh 50 Lakh doses 600 Lakh

doses doses
a day of Covaxin/ of Covishield/
month month
Ideal rate

70 Lakh - 1 Crore
a day
i.e. 330 Crore
>
dozes a month (+10% wastage)
650 Lakh
dozes a month

>
“extremely urgent“
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 “
On 20th April 2021, the Supreme Court of India declared the crisis triggered
by the second wave of the Coronavirus as "national emergency“. The
Supreme Court also asked the Central government to consider invoking
powers vested under Section 92, of the Indian Patent Act, to hoist the
availability of COVID -19 related drugs.

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• The inclusion of compulsory licensing in the Indian patent regime clearly states that when such a
pandemic situation arises and the government has to decide whether to preserve the rights of the
patentee or give priority to public life, the government has to prioritize public life over the rights
of the patentee.

• Compulsory licenses would not snatch the rightful due of the Big Pharma. Big Pharma would get
a “reasonable advantage” in the form of license fee for its patent rights. . However, it would prevent
Big Pharma from making bumper profits in a public health emergency.

• The inclusion of such provision in the Patent act is not to exploit the patent rights of a patentee, but
to safeguard the public interest and life, as the sole aim of the issuance of compulsory licensee is to
address the public health problems.

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• Even the Doha declaration (Paragraphs 4 – 6) on TRIPS agreement and Public health affirmed the
flexibility of TRIPS member states in circumventing patent rights for easy access of the medicines or
drugs to the public, by invoking compulsory license.

• Further, compulsory license invoked under such circumstances is provided with a “sunset clause” i.e. only
for certain periods to say -till the national urgency or extreme urgency ceases to occur.

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 Hurdles to implement Compulsory Licensing for COVID19
You can also split your content
drugs/vaccines.

1. Unfortunately, on a closer reading of Section 84, an essential condition precedent to granting compulsory
licenses emerges: compulsory licenses can only be granted after three years have elapsed from the date of
grant of a patent to the concerned parent company.   

This statutory hurdle can only be surpassed if the government amends the said provision and eliminates this
condition.

2. Issuing compulsory licenses would only be feasible if the government has a generic producer ready to
manufacture sufficient quantities of generics. Such a producer must be technologically equipped to quickly
make cost-efficient alternatives.

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 Hurdles to implement Compulsory Licensing for COVID19
drugs/vaccines.

3. Another setback of compulsory licensing is protection of Trade secrets. As per Article 39 of the TRIPS
agreements, members are required to protect trade secrets "against unfair commercial use." Even if compulsory
licenses were to be issued, trade secrets would still have to be protected. Which is why compulsory licensing may
not be effective in the case of vaccines since data related to reverse engineer those vaccines are protected
under trade secrets.

4. Majority Indian Pharma companies in India are mostly drug makers. The technology transfer and building
infrastructure, for example, BSL-3 laboratories to culture live viruses for vaccine production is risky and time
consuming.

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 In twoConclusion
or three columns

◉ The genuine test is to follow the principles of Intellectual Property security and simultaneously balance the
interest of general wellbeing.

◉ The utilization of the arrangements of obligatory permitting should be utilized sensibly.

◉ The giving of the Compulsory permit should not be made successive to the point that it risks the exploration
and interest of the patent holder.

◉ Whether it is a compulsory license or a voluntary alternative, neither should be provided to a company

unless it can produce medicines of the requisite quality.

◉ Compulsory license is a good step but is not the only step. The government should bring together the
stakeholders and device a strategy to address the hindrances to the production of vaccines by third party
entities without drastically affecting the interests of the patentee.

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Thank You
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 References

◉ https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_31_1_patent-act-1970-11march2015.pdf

◉ https://www.mondaq.com/india/patent/1085400/compulsory-licensing--a-panacea-for-controlling-covid-19

◉ https://www.theleaflet.in/covid-19-and-the-shortage-of-drugs-a-case-for-compulsory-licensing/

◉ https://www.lexology.com/library/detail.aspx?g=253ff273-55fb-46cf-9331-04d632ac055e

◉ https://blog.ipleaders.in/implications-of-grant-of-compulsory-licensing-of-patent-in-india/

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