A Global Ray of Hope: Compulsory Licensing of Patents during COVID-19

According to the World Trade Organization(WTO)1 , compulsory licensing is a grant of license in which the Government of the sovereign allows someone else to produce a patented product or process without taking the consent of the patent-owner, or plans to use the patent-protection invention itself. Provisions pertaining to compulsory licensing between different nations are governed by WTO-agreement known as Trade-Related Aspects of Intellectual Property Rights (TRIPS). Generally, the patent-holder has the exclusive right over its invention and he has a negative ‘right to rem’ which means he has the right to exclude others from using his patented product.

However, the concept of compulsory licensing is contrary to the right of the patent-owner, and such is applicable in extraordinary circumstances.

The pandemic of Covid-19 is one such circumstance in which the concept of compulsory licensing of patents is being heavily debated in many countries and further made applicable in some of them. Different nations who have laws available regarding Compulsory Licensing are trying to interpret their provisions to cover the scope of Covid-19 under the realm of emergency situation whereas countries which do not have laws to govern such licenses are stressing on bringing those specific laws in force.

TRIPS has given this very right to member-states of the WTO to determine the grounds of granting compulsory licenses and the same has been reaffirmed in clause (5)(b)2 of the Doha Declaration which deals with TRIPS agreement and public health. The above-mentioned clause states that “Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.” Moreover, clause (5)(c)3 of the Doha Declaration states that “public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”.  Further, Article 31 of TRIPS4 states that when there is any national emergency or other circumstances of extreme urgency, there is no need to negotiate with the patent-holder and thus, compulsory licenses can be issued by waiving normal requirements.

 

The global wave of compulsory licensing during Covid-19

Extraordinary times require extraordinary measures and therefore compulsory licensing is one such measure that can help the countries that have been battered by the pandemic. In several parts of the world, the gap of supply and demand of Covid-19 essential products such as medicines, personal protection equipment, etc. would potentially widen if the production of these important products would not be allowed to be manufactured by third parties due to protecting the monopoly rights of the patent-holder.

Therefore, in anticipation of the needs of the most vulnerable sect of population and in the larger interest, Governments should supersede the exclusive right of patent-holders and must enable the power of issuing compulsory licenses to all those manufacturers of essential commodities that are required during the times of the pandemic to make these products affordable and available for all.

Previously, some of the countries resorting to the provisions mentioned in Doha declaration clause (5)(c) read with Article 31 of TRIPS and their specific domestic laws have issued compulsory licenses of pharmaceutical patents during the peak of the HIV/AIDS pandemic in 2000-20015

To name some countries; Brazil, Ecuador, Ghana, Indonesia, Malaysia, Mozambique, Thailand, Rwanda, Zambia, and Zimbabwe each issued compulsory licenses for antiretroviral drugs to treat their HIV-infected citizens who could not afford antiretroviral therapy. Fortunately, issuing such a license was a great success as it reduced the cost of treatment and it helped the Government in providing free of cost treatment in many places.

Similarly, Covid-19 was characterized as a pandemic by WHO on the 11th of March, 2020 and therefore, it also fits the criteria to be covered as an emergency situation as defined under clause 5(c) of Doha Declaration. The closing of trade borders has also represented the need for issuing compulsory licenses of essential product patents to meet the demands of importing states.

In light of such aggrieved situations, to tackle the pandemic effectively, a handful of countries have already considered issuing compulsory licenses as a weapon to battle the current biological war. Israel has enforced Section 104 of its Patent Law, 19676 which states that a minister designated by the govt “may permit the exploitation of an invention by Government Departments or by any enterprise or agency of the State, albeit a patent has already been granted for it or applied for, if it appears to the Minister that it’s necessary so to try to within the interests of the defence of the State or the upkeep of essential supplies and services“.

Through the powers of this section, Israel has issued a compulsory license allowing importation of a generic substitute of AbbVie’s patent-protected ‘Kaletra’, an antiretroviral approved for the treatment of HIV, from India.

Similarly, Ecuador and Chile have also taken initial steps to issue compulsory licenses. Chile’s ‘Chamber of Deputies’ has agreed on a resolution granting the use of compulsory licenses for the prevention and treatment of Covid-19 while the Committee of the National Assembly in Ecuador has approved a resolution requiring the Ecuadorian President and Minister of Health to provide free or affordable access to Covid-19 related preventative, diagnostic, and treatment technologies.

Moreover, affluent countries like Germany and Canada have also passed laws on the same lines. Germany through its Prevention and Control of Infectious Diseases in Humans Act and Canada through its COVID-19 Emergency Response Act have suspended patent rights and have issued compulsory licenses. Mostly all the countries are gearing up on the subject of coming out with a law on issuing Compulsory Licenses of patents during the current pandemic.

Position of Compulsory Licensing of Patents in India

In India, the subject-matter of granting compulsory licensing is dealt under Section 84-92 of The Patents Act, 1970.7 There are certain prerequisites that are to be fulfilled before issuing compulsory licensing in India.

The two most important sections under this scope are Section 84 and Section 92 under which the request of issuance of Compulsory License can be made.  Under Section 84, any person interested may make an application to the Controller for grant on Compulsory License on patent after the expiration of three years from the date of the grant of a patent. The application can be made on any of the following grounds-

  • 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

On the other hand, under section 92, the power is with the Central Government to grant Compulsory Licenses in respect of any patent in force if the Central Government is satisfied that there have been a situation of national emergency, or there have been circumstances of extreme urgency, or there have been a case of public non-commercial use.8

Currently, India has not yet faced any difficulties in procuring any essential Covid-19 products and therefore, the applicability of these provisions are not necessary at present, however, as the race of vaccine-hunt is at its toes, India should not hesitate to issue compulsory licenses in order to set a ceiling price for such medicines so that the medicine could not be a matter of luxury and affordable by only a few as such an incident would be in direct violation of the right to health followed by violation of the right to life of a person under Article 21 of the Indian Constitution.

Conclusion

Although, the concept of compulsory licensing is a set-back to the field of inventions and thus, many countries still fear to have a specific law on the matter. However, seeing the larger interest of the society, the applicability of compulsory licensing is a positive step, and therefore, every nation-state should look at all the prosperous ways to enact laws on it.

The healthcare debate of ‘Innovation v. Commercial Gain v. Universal access’ is never-ending and what is required is to find a balanced approach while dealing with it. Proper royalty mechanism should be adopted by every country in such cases where compulsory licensing is a law so that the patent-holder’s right to profit over its invention is not treated unfairly and the holder gets reasonable consideration for the invention.

Compulsory licensing is a ray of hope in these tough times where the whole world has been united in fighting the pandemic and therefore, it is a time to recognize public interest over commercial interest.

 

 

References   [ + ]

Categories:

2283, 14th A Main Road, HAL 2nd Stage
Indiranagar, Bengaluru 560008
+91 80 4124 2111

Email: subathra@akmllp.com