In the year 2020, World Health Organization (WHO) declared a global pandemic due to the rise of the viral infection caused by SARS-COVID19 which was first detected in the end of the year 2019. Due to this pandemic pharmaceutical companies began developing new formulas and technologies to create medicines and vaccines for the cure of COVID-19. But this led to a hint of competition between the companies and countries and to promote fair competition one needs to protect their formulas and technology. Such companies use patent rights to protect their formulas, technology, and any other project they are working on which provide exclusive rights to patent holder to use and produce the patented product.
With rise of pandemic, patent rights seem to be opposing the idea of public welfare as not just one country but the whole world is suffering and exclusive rights over a product might limit its distribution. This is where compulsory licensing comes into play. This paper aims at finding answers to questions that concerns compulsory licensing, its limitations, scope, and significance. This paper also aims at discussing the necessity of waiving off the patent rights for COVID-19 vaccine and how it will affect developing countries with their healthcare facilities.
What is Compulsory Licensing?
A patent provides exclusive rights to the owner of the patent to use, manufacture, export, sell a product, idea, formula, or a technology. Patent owners then can recover the price incurred in production once the patented product is successful. But there is an exception to this sole right over patent which is termed as compulsory licensing.
Compulsory licensing is a process where government allows people to produce, use, sell, export, the patented product without permission of the patent owner. This process is included in WTO’s agreement governing intellectual property rights (Hereafter IPR)– TRIPS (Trade related aspects of Intellectual Property Rights) Agreement. Compulsory licensing provides flexibility in the laws of IPR for the benefits of society.
There is a huge misconception that compulsory licensing might limit the rights of patent owner. Process of compulsory licensing does not take away rights of patent owner and that involves the right to receive fair compensation for the copies of products made under compulsory license. the TRIPS Agreement itself says “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization” Although the definitions of adequate remuneration and economic value are still unclear.
The TRIPS Agreement provides a number of requisites for issuing compulsory licences, in its Article 31, It states that; the person or company applying for a licence has to have tried, within a reasonable period of time, to negotiate a voluntary licence with the patent holder on reasonable commercial terms. Only if that fails can a compulsory licence be issued.Doha Declaration on TRIPS and Public Health settles that countries can further define their own conditions to grant compulsory licenses and define national emergency.
Compulsory Licencing in India
In India the process of Compulsory licensing is governed under the Chapter XVI of the Indian Patents Act 1970 along with Patents Rules, 2003 and the TRIPS Agreement. Grounds for granting compulsory licences in India are provided under Section 84(1) of Indian Patents Act, 1970 which states that an application for Compulsory licences can be made to the controller, any time after elapse of 3 years from the date of grant of patent by anyone who is interested on the grounds that;
- the reasonable requirements of the public with respect to the patented invention have not been satisfied; or
- the patented invention is not available to the public at a reasonably affordable price; or
- the patented invention has not been operational in the territory of India.
If the above-mentioned conditions are satisfied, anyone interested can file an application for compulsory licensing.
Furthermore, Section 92 of the Indian Patents Act 1970, allows controller of the patents to issue compulsory licence Suo moto but only after a notification by the central government and only in case of national emergencies or extreme urgency or in cases of public non-commercial use.
According to Section 84 (6), A controller while granting compulsory license looks at various factors like:
- Nature of the product
- Duration of elapse from the date of grant of patent.
- Measures taken by the patent holder for making complete use of the product
- Public advantage of the invention
- Capacity of applicant with respect to risk of providing capital and working on the invention
- Efforts made by the applicant to obtain license from patent holder which failed within a reasonable period of time not exceeding 6 months.
But national emergency, extreme urgency, public non-commercial use, stand as an exception to the above-mentioned factors.
India’s first compulsory licence was granted in the year 2012 to a Hyderabad based pharmaceutical company Natco Pharma Ltd for production of generic version of a patented medicine Nexavar by Bayer Corporation which is used as a cure for kidney and liver cancer. When Bayer corporation moved the decision of the controller to Intellectual Property Appellate Board (IPAB) it rejected the application stating 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.”
Compulsory Licencing in times of Global Pandemic
World Health Organisation in the early 2020 declared COVID-19 as a global pandemic. With rise in number of COVID-19 cases and deaths it became a matter of extreme urgency to develop a medicine or vaccine for its cure. According to the world trade rules it is mandatory to issue a patent for cross-border trades of vaccines and medicines for protection of Intellectual Property. If the same continues, it would be difficult for all the countries, especially developing countries to fight this pandemic. To solve this issue, in October 2020, India and South Africa filed a petition with the WTO for waiving off patent right and grant of compulsory licence for the benefit of public in support of ending this pandemic because it will promote scale up of production which will lead to better reach of vaccine. But this proposal was then opposed by several developed countries like USA.
Supreme Court in its Suo Moto case regarding shortage of remdesivir a medicine for COVID-19 on April 2021, dealt with a question whether or not to invoke Section 92 and Section 100 of the Patents Act for production of generic version of remdesivir. A three judge bench comprising Justices DY Chandrachud, L Nageswara Rao and S Ravindra Bhat stated that “since Covid-19 was a public health emergency, the situation was apt for invoking such emergency powers to increase the affordability and accessibility of the medicines and vaccines.” Further in July 2021, report titled ‘Review of Intellectual Property Rights Regime in India’ suggested that compulsory licence should be granted for all COVID-19 related drugs to amplify the production of vaccination considering it is a national health emergency.
In the light of global pandemic, it has become a necessity to make COVID-19 vaccines and medicines available to every section of not just country but the whole world keeping in mind the intensity of the disease and how rapidly it is mutating and spreading leading to death of millions. Patent rights are making it difficult for other pharma companies to produce and export vaccine thus, compulsory licencing is needed to amplify the manufacturing and production of vaccine, so as to break the chain. Waiver of these rights will not only lead to amplified production but also help in production of generic version so it becomes affordable and accessible to all sections of the society and not just the higher or more privileged sectors. To sum it up, Compulsory licensing of COVID-19 vaccine might bring us one step closer to reach the end of this battle of global pandemic.
 WTO | intellectual property (TRIPS) – TRIPS and public health: Compulsory licensing of pharmaceuticals and TRIPS, , https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm (last visited Sep 8, 2021).
 INDIAN PATENTS ACT, 1970, .
 Compulsory Licensing, , S.S Rana & Co (2020), https://ssrana.in/ip-laws/patents/compulsory-licensing-patents-in-india/ (last visited Sep 8, 2021).
 Centre rules out issuing compulsory licensing under Patents Act to increase production of Covid drugs, , http://www.pharmabiz.com/NewsDetails.aspx?aid=138374&sid=1 (last visited Sep 8, 2021).
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