compulsory licensing

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COMPULSORY LICENSING

JENI VARGHESEPATENT DEPARTMENT



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

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COMPULSORY LICENSING

• Compulsory licenses are licenses that are granted by a government to an individual or company seeking to use patents, copyrighted works or other types of intellectual property, to do so without seeking the owner's consent.

• Compulsory licenses-involuntary contracts between a willing buyer and an unwilling seller imposed or enforced by the state.

• The individual or company granted compulsory license have to pay the owner a set fee for the license.

• Objective of granting compulsory license is to prevent the abuse of monopoly granted.

• Nations currently have the right to issue compulsory licenses on patents and copyrights.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

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Compulsory licenses under International Law

Paris Convention for the Protection of Industrial Property :

•The purpose of the Paris Convention was to establish a system for inventors to protect their inventions internationally.

•Article 5

•The Paris Convention for the Protection of Industrial Property states "each contracting state shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work."

Berne Convention for the Protection of Literary and Artistic Works-Article 11bis(2) and Article 13(1) provide the legal basis for compulsory licensing at international level.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Compulsory licenses under International Law

TRIPS - Trade related aspects of intellectual property

•The World Trade Organization provisions on intellectual property.

•Contains rules on patents, copyrights and trademarks.

•Compulsory licenses and a number of restrictions on the use of compulsory licenses-Article 31 of TRIPS.

India is a party to above international agreements for the protection of intellectual property that have provisions regulating compulsory licensing.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Compulsory Licenses and Patents

• The grant of a patent gives its owner (patentee) a limited period of exclusivity where the patentee can prevent others from practicing the patented invention.

• This limited period of exclusivity affords the patentee control over the invention’s price and, in turn, gives the patentee a mechanism by which he/she can regain research and development costs.

• This right to exclusivity is enforced in most countries by the judicial system, with the unauthorized manufacture, use, sale, offer to sale, or import of a patented technology deemed to be infringement.

• The government has the power to revoke or limit a previously granted exclusive patent right.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


• Compulsory licensees take away the patentee’s exclusive control over the patented technology.

• Specific terms vary from country to country,

• Three basic situations:

(1) where a dependent patent is being blocked: Where a patented invention (‘dependent patent’) cannot be worked without exploiting an earlier patented invention (‘original patent’), the owner of the dependent patent generally must obtain a license over the original patented invention.

(2) the patent is not being worked, or

(3) the invention relates to food or medicine.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


INDIA: • The objective of Patent Grant in India is to ensure that the

inventions are worked in India on a commercial scale and to the fullest extent without any undue delay.

• Any interested person after expiry of three years from grant of patent, may make an application to the Controller for grant of compulsory license on the grounds that:

(a) the reasonable requirements of the public with respect to the patented invention have not been satisfied, or(b) the patented invention is not available to the public at a reasonable price, or

(c) the patented invention is not worked in territory of India. [Section 84(1) of Patent Act, 1970]

• The controller may grant compulsory license if the above conditions are satisfied upon such terms as he may deem fit.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


• While granting the compulsory license the Controller shall take into account - the nature of invention, time elapsed, ability of applicant to work the invention, applicant’s efforts for obtaining a license on reasonable terms. [Section 84 (6)]

• Above not applicable in certain cases-

(i) national emergency, or

(ii) extreme urgency, or

(iii) public non-commercial use, or

(iv) on establishment of a ground of anti competitive practices adopted by the patentee.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


• Terms and conditions of Compulsory License [Section 90 (1)]

(i) royalty and other remuneration, if any, reserved to the patentee, or other person beneficially entitled to the patent.

(ii) Patented invention should be worked to the fullest extent by the person to whom the license is granted.

(iii) Patented article should be made available to the public at reasonably affordable prices.

(iv) License granted is a non-exclusive license.

(v) The right of licensee is non-assignable.

(vi) License is for the balance term of the patent unless a shorter term is consistent with public interest.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Compulsory Licenses and PatentsCASE LAW- NATCO Vs. BAYER

• The Controller General of India passed an order of compulsory license against Bayer’s patent on drug Nexavar on March 09, 2012, which is India’s first compulsory license post TRIPS era.

• NEXAVAR- anti-cancer drug, chemically known as Sorafenib tosylate (Patent-holder Bayer Corporation)

• Hyderabad-based Natco had filed an application for issue of compulsory license to manufacture the low-cost version of Nexavar.

• The compulsory license was granted in accordance with the grounds described under section 84 of the Indian Patent Act.

• The license is valid till expiry of the patent in 2021.

• The compulsory license enables Natco to sell the drug at a price not exceeding Rs 8,880 for a pack of 120 tablets (one month's therapy) as against Rs 2,84,428 being the cost of Nexavar sold by Bayer.

• The order also makes it obligatory for Natco to supply the drug free of cost to at least 600 needy patients per year.

• Natco will have to pay 6% royalty on sales to Bayer for the drug on a quarterly basis.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Compulsory Licenses and Copyright

• Copyright law provides for compulsory licenses of copyrighted works for specific uses in many countries.

• Remuneration or royalties received for a copyrighted work under compulsory license are specified by the law of each country.

• Berne Convention for the Protection of Literary and Artistic Works.

- Berne Convention is an international agreement governing copyright .

- provide for the minimum requirements to be set when compulsory licenses are applied.

-Article 11bis(2) and Article 13(1).



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


INDIA-compulsory licensing can be invoked under certain circumstances

with respect to both published works and unpublished works.

THE COPYRIGHT ACT, 1957

COMPULSORY LICENSE FOR WORK WITHHELD FROM PUBLICDuring the term of copyright in any work which has been published or

performed in public, a complaint is made to the Copyright Board that the

owner of the copyright in the work

(a) has refused to republish or allow the republication of the work or has refused to allow the performance in public of the work, and by reason of such refusal the work is withheld from public; or

(b) has refused to allow communication to the public by broadcast of such work or in the case of a sound recording the work recorded in such sound recording,

the Copyright Board if satisfied, direct the Registrar of Copyrights to grant the

such person or persons a license to republish the work, perform the work in public or

communicate the work to the public, as the case may be, subject to payment to

the owner of copyright such compensation and subject to such other terms and

conditions as the copyright board may determine. [Section 31(1)]



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com


COMPULSORY LICENSE IN UNPUBLISHED OR PUBLISHED WORKS

• In the case of any unpublished work or any work published or communicated to the public and the work is withheld from the public in India, the author is dead or unknown or cannot be traced, or the owner of the copyright in such work cannot be found, any person may apply to the Copyright Board for a license to publish or communicate to the public such work or a translation thereof in any language. [Section 31A (1)]

• Where license is granted, the Registrar of Copyright may direct the applicant to deposit the amount of the royalty determined by the copyright board in the public account of India or in any other specified by the copyright board, so as to enable the owner of the copyright or his heirs, executors or the legal representatives to claim such royalty at any time. [Section 31A (5)]



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

CONCLUSION

Though compulsory licenses work as a deterrent against misuse

of Intellectual (IP) rights by IP holders, it would diminish the

purpose of the IP system. Compulsory licenses will reduce

inventors’ incentive to develop new technologies and it will in a

way encourage inventors to keep inventions secret. This would

defeat the main purposes of the patent system-to promote

innovation and to encourage disclosure of inventions. The

possibility of a compulsory license would reduce the value of the

patent; therefore, inventors would be less likely to invest money

to develop a new invention because the return on investment

would be smaller.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

THANK YOU

compulsory licensing

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