Compulsory License for “Not working”

This post was first posted on 8th April, 2011.
 
In a recent development, non-compliance with regard to the requirement of local working of patent, required under patent law, may lead to issue of compulsory licenses to generics for seven top selling drugs. The RTI query sought by SpicyIP (Way to go Spicy IP!) seeking information regarding Form 27 filings by Innovators for the top selling drugs Tarceva (Roche and OSI Pharms), Stutent (Pfizer), Nexavar (Bayer), Sprycel; Dasatinib (BMS), Pegasys (Roche), Viraferonpeg (Schering) and Baraclude;Entecavir (BMS) revealed non-compliance by the Innovators.

Ideally, patent holders are required to furnish a statement regarding the working of the patented invention on commercial scale in India by filing of Form 27 within 3 months of the end of every year to the patent office. Form 27 requires that the patent holder submits the following information:

1.Is the patented invention being worked in India?

·If not worked, reasons for not working and steps being taken for working of the invention.

·If worked, quantum and value (in Rupees), of the patented product that is manufactured in India and that which is imported from other countries.

2. The licenses and sub-licenses granted during the year.
3.Statement on if the public requirement is being met partly / adequately / to the fullest extent at a reasonable price?
 
The RTI query reveals that the Innovators have either failed to file Form 27 or, in cases where the innovators have filed Form 27, the drugs have been imported and not locally manufactured. In other words, the patents for a few of these drugs are not being worked in India.
Section 83 of the patent act while providing the general principles applicable to working of a patented invention, highlights that patents are not granted for the importation of the patented article alone but also to ensure that the inventions are worked in India on a commercial scale to the fullest extent. The section, in a way, necessitates that the invention has to be worked in India and not just imported. The section provides:

“Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely,-

(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay; and
(b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article……….”

In this case, considering that the patented invention is not being worked in India and is completely being imported (as revealed consequential to the filing of RTI), the drugs are liable for compulsory licensing under section 84 of the act. The section provides:
“…..any person interested may make an application to the Controller for grant of Compulsory License on patent on the following grounds, namely:-

(a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or
(b) that the patented invention is not available to the public at a reasonably affordable price, or
(c) that the patented invention is not worked in the territory of India.”

Further, upon the grant of the compulsory license, the patents may also be liable for revocation under section 85 of the act on the ground that the patented invention has not been worked in the territory of India.
However, an application to compulsory license would be considered by the patent office only in cases where the applicant has earlier made efforts to obtain a license from the patentee on reasonable terms and conditions and in case if such efforts have not been successful within a reasonable period.