Patent

Patent has been defined by the World Intellectual Property organization as `` an exclusive right granted for an invention, which is a product or a process that provides, in general , a new way of doing something, or offers a new technical solution to a problem”. WIPO has specified that when a patent application is given it should provide all the details about the technical functionality of the invention to the public. The person who has the exclusive right over the invention can enjoy it for 20 years and can ensure that others are excluded from the use of it enjoy monopoly over the invention and earn profit. Despite this , there are situations where compulsory license is given to the third party to make use of the invention Chapter XIV of the Indian Patent Act, 1970 explains the concept of compulsory licensing.

What is compulsory licensing under the Indian Patent Act, 1970?

Compulsory licensing can be explained as the authorization given by the  controller general to the third party to make the use or sell of the invention which has been patented without the interference or permission of the real owner. This concept has been considered by the Indian patent Act as well as TRIPS (trade related aspects of intellectual property rights) agreement on both national and international level.  After a period of 3 year prom the date of the patent is sealed, applicate for compulsory license can be made on the fulfillment of the conditions which are laid down in section 84 of the Indian Patent Act-

·   Reasonable requirements of the public with respect to the patented invention have not been satisfied, or

·   Patented invention is not available to the public at a reasonably affordable price or

·   Patented invention is not worked in the territory of India.

Also, section 92 of the Act states that the controller of patents can issue compulsory license suo moto in case the central government issues a notification stating the invention is  required for national emergency or extreme  urgency or for public non- commercial use.

Factors such as public advantage added by the applicant with the use of the invention, risk that can be taken by the applicant for working the invention and providing capital, the efforts that are shown by the applicant are also considered while granting the compulsory license to the applicant. Also, the nature of the patent and the efforts made by the patentee to make full usage of the invention plays an important role to satisfy the controller for granting license to the third party. The right given to the third party under the compulsory license does not take away the right of the patent holder to receive monetary benefit for the invention used. 

As mentioned above the concept of compulsory licensing is also a part of TRIPS therefore Article 31 states set of rules that governs the use of compulsory licensing by WTO members- 

·   The entity applying for a compulsory license should have been unable to obtain a voluntary license from the right holder on reasonable commercial use.

·   If a compulsory license is issued, adequate remuneration must be paid to the patent holder and;

·   A compulsory license must be granted mainly to supply the domestic market.

Termination of compulsory licensing-

If any application is made the person who has interest in the patent or the patentee who is the owner of the invention for termination of such license proving that the circumstances that gave rise to granting of such compulsory license does not exist anymore or is unlikely to appear again. In such conditions the termination is possible by the controller if he thinks fit. The holder of such a license has the right to object to the termination made.

 On 9th March 2012, India’s first compulsory license was granted by the patent officer to Natco Pharma for the generic production of a life saving medicine Nexavar of Bayer Corporation which was used for treating liver and kidney cancer. This drug was sold by bayer at a very high price of 280000 and Natco offered to sell only 90000 for a month's dosage so that it can be used by people belonging to different status. As this offer fulfilled all the conditions laid down in Section 84 of the Act, the compulsory license was granted for the benefit of the public.

Conclusion-

Compulsory License is an exception to the general rules of that patent and therefore it is very important that the concept of compulsory license should be used prudently. Talking about the present scenario if the companies producing the vaccines for disaster like covid starts charging high prices for the dosage the government has to issue compulsory license for the vaccine to make sure that it is available to the general public.  Compulsory licensing is hoped for many patents which are financially challenging to many countries. This concept neither grants full rights nor denies the right. Therefore, it is necessary that the business entities should ensure that they approach the price in such a way that it suits the economic status of the country and at the same time they can enjoy the monopoly and save it from compulsory licensing.