IPR-Licensing of Related Patents

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A patent is a privilege given to the owner to prevent him from making, using, selling, or offering for sale his invention without his permission. As a result, all parties can only use the creator's patented invention on mutually agreed-upon terms, giving rise to the principle of licencing. Licensing is a legal tool that allows patent rights to be transferred to anyone who wants to work on the invention before the patent expires. The patent owner authorises the person (licensee) to use the patent rights under agreed-upon terms. General Principles of Working Of Patented Inventions is based on section 83 of the Indian constitution. The section provides for the exercise of powers for working of Patents and Compulsory Licences. Patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and without delay. They are not granted merely to enable Patentees to enjoy a monopoly for the importation of the patented article, it says. The protection and enforcement of Patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, according to the section. The Patentee or a person deriving title or interest on Patentee does not resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.A Compulsory Licence is a licence granted by the Government to a third party to use the Patented invention. It is designed to restrict the rights of the Patentee to stop abuse/misuse of the rights by the property holder. It was granted to prevent the negative effect of such action on the interests of the public. The Government can grant it in certain circumstances to prevent misuse/abuse of rights granted to Patentee for safeguarding interests of public. Abuse or misuse of rights by Patents is a common phenomenon in all the countries in the world. The question of abuse only arises when Patentee fails to take reasonable steps to commercialize the invention, and does not make it available at affordable cost. The other situation is a national emergency, the court said. The decision should balance interests of

Patentee and the general public.

Trade Related Aspects of Intellectual Property Rights (Trips)The World Trade Organization's Doha Conference in 2001 announced the importance of prioritising public health over intellectual property rights. It was agreed at that conference that countries have the right to protect public health and provide affordable medicines, and that member countries should determine the terms and conditions for issuing compulsory licences on their own.The principle of Compulsory Licensing is in use in India. It refers to a licence issued to a party to produce, sell, or use a product or method that has been granted a patent without the owner's permission. Sections 84 and 92 of the Indian Patent Act 1970 address the requirements for compulsory licencing, stating that:

Compulsory license will be granted on the following grounds (Section 84):

  • That the reasonable requirements of the public with respect to the patented invention have not been satisfied or,
  • That the patented invention is not available to the public at a reasonably affordable price or,
  • That the patented invention is not worked in the territory of India.

Section 92 of the Patent Act of 1970

addresses other reasons for granting a compulsory licence. There are special provisions for mandatory licences based on Central Government notifications.

The government issues compulsory licences for the following reasons:

  • For exports, if the product is used for exporting to another country then government can grant licenses but this is only in exceptional circumstances.
  • If there is national emergency, where the product is needed on an urgent basis like in war or in health crisis
Advantages of granting compulsory license:

· A compulsory licence is essential for supplying affordable goods to the public, such as medicines and medications. It means that such an invention is used for the public good rather than being reserved for the patentee, thus benefiting underdeveloped and developing countries.

· Compulsory licences have provisions for simultaneously rewarding the patent owner, so that the patent continues to serve as an opportunity alongside the product being used by the public.

· In situations where the patentee lacks the financial resources to carry out the development of the invention, the same may be given to the licensee to carry out the production.

Natco Pharma Ltd. is the first company to file for compulsory licensing for producing generic version of Bayer's Corporation's patented medicine Nexavar. This drug was used in the treatment of kidney and liver cancer. The patent office in 2012 granted the compulsory license to Natco Pharma for the same drug for the reason that the public did not have access to this drug at affordable price and the patented invention was not worked in India and the patented invention was not worked in India. They stated that all the 3 conditions of sec 84 were fulfilled that,

  • The reasonable requirements of the public were not fulfilled
  • That it was not available at an affordable price
  • Patented invention was not worked around in India.
As a result, Natco applied for a compulsory licence for

Bayer's patented drug Nexavar under Section 84 of the Patent Act. The Bayer Corporation offered Nexavar for $ 6299 for a month's supply. Natco Pharma proposed selling the same medication under the brand name Sorafenib Tosylate for $196. It was suggested that it will favour India's entire population, which numbers in the millions.The government ruled in favour of public health and granted Natco Pharma a mandatory licence. Lee Pharma, a Hyderabad-based Indian pharmaceutical firm, filed an application for compulsory licence (date 29.06.2015) for the patent covering AstraZeneca's diabetes treatment medication

Saxagliptin. Lee Pharma claimed the following grounds:
  • the patentee has failed to meet the reasonable requirements of the public,
  • the patented invention is not available to the public at a reasonably affordable price, and
  • the patented invention is not worked in India.

However, the Controller General dismissed all three of Lee Pharma's grounds, and the Compulsory licence application was denied on the grounds that Lee Pharma failed to explain what the appropriate public demand was for Saxagliptin. The Controller General also reported that Lee Pharma failed to reveal the exact number of patients who were prescribed the patented drug and how many of them were unable to access it due to its non-availability, making

it difficult to determine whether manufacturing in India was needed.
  1. www.icsi.edu/media/webmodules/CRCPP_IPRL&P_2018_DEC_30.pdf(www.mondaq.com/india/patent/767148/patent-licensing