Compulsory licensing is a process in which government grants license to someone else to produce a patented product or process without the consent of the owner of the patent or decides to use the patent-protected invention itself. It is one of the flexibilities provided in TRIPS Agreement through which the other interested person can produce the patented product without the consent of the owner of the patent.

There are certain prerequisites as provided under section 84-92, which need to be fulfilled for grant of compulsory license in favour of someone.

As per Section 84(1), any interested person, after three years from the grant of patent can make a request to the controller for grant of compulsory license when any of the following condition is fulfilled:

  1. The requirements of the public related to patented invention has not been satisfied.
  2. The patented invention is not available at reasonable price to the public
  3. The patented invention has not worked in India.

In addition to the above-mentioned grounds the compulsory license can also be issued suo moto by the Controller of the Patents pursuant to a notification issued by the Central government if there exist some national emergency or extreme urgency or public non-commercial use. Section 92 authorizes government to notify of any extreme condition and the Controller in such extreme condition may grant to the applicant a license over the patent on such terms and conditions as he thinks fit. However, the patentee has the right to be heard in compulsory license application process.

Cases pertaining to Compulsory License

Indian Patent Office granted its first compulsory license on March 9, 2012 to Natco Pharma for production of the generic version of Bayer’s Nexavar, an anti-cancer agent used in the treatment of liver and kidney cancer. In Natco vs Bayer it was established that only 2% of the cancer patient population had easy access to the drug and that the drug was being sold at very high price of 2.8 lakh INR for a month’s treatment. Further, a ground was raised that Nexavar was being imported within the territory of India, the Indian Patent office issued compulsory license to Natco Pharma which assured that the tablets would be sold at the price of Rs. 8,800/- for per month’s treatment. Also, it was held that 6% of the net sales of the drug would be paid to Bayer by Natco Pharma as royalty.

In the case of BDR Pharmaceuticals International Pvt. Ltd. Vs M/s Bristol Myers Squibb Company, the application filed by local drug maker BDR Pharmaceuticals International Pvt. Ltd. to issue a compulsory license to make a patented blood cancer drug dasatinib was rejected by Indian Patent office. The Controller rejected the compulsory license application made by BDR stating that BDR has failed to prove the conditions of compulsory licensing so as to make an order under section 87 of the Act. Controller also stated that BDR Pharmaceuticals did not attempted to procure the license voluntarily from the patent and the applicant did not have the ability to work the invention for public advantage.

Considering the cases on compulsory licensing in India, it is clear that the provision of compulsory license cannot be misemployed to diminish the rights of the patent holders and that the basic jurisprudence governing the concept of compulsory licensing lies in balancing the rights of the patent holder as well as making the invention available at an affordable price to third parties in case of need.

Role of IPR/Patent attorney in case of compulsory license

In case where client wants to apply for compulsory license the IPR/patent attorney will assist the client on the best course of action for getting it and in case where the client is the owner of the patented invention the IPR/patent attorney will direct the client on how to protect his invention from compulsory license. In case someone applies for the grant of compulsory license for the patented invention of the client the IPR/patent attorney will represent the client in front of the controller.

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