Mar 4, 2018 | Indian Patents Act 1970
In this case, Medical Technologies (hereinafter referred to as MT) filed a suit for passing off against Neon Laboratories (hereinafter referred to as NL), for the use of the Trade Mark “ROFOL”, which they pleaded is deceptively similar and identical to their trademark “PROFOL”. Brief facts of the case are as follows:
- MT herein had pleaded that they are engaged in business and manufacture of pharmaceutical products and medical preparation, and have acquired high reputation and goodwill in the market. That their predecessor-in-title, introduced a molecule preparation and generic drug ‘propofol’ for which the product permission was obtained from Commissioner of Food and Drugs Control Administration on 02.05.1998. That their predecessor also coined the trademark “PROFOL” in April 1998 and since then the said mark has been used for the product. In 2000 after amalgamating with the predecessor, MT became owner of the mark “PROFOL” and subsequently filed for trademark registration.
- On coming to knowledge that NL introduced in the market similar product with the mark “ROFOL”, the present suit was filed by MT claiming that the mark “ROFOL” is deceptively similar and identical to their mark “PROFOL” and that the NL has been passing off its products as that of MT. The Trial Court restrained NL from using the “ROFOL” on the basis of its similarity to MT’s mark “PROFOL”, which was affirmed by the High Court on an appeal. And an appeal was preferred by NL against the decision of High Court.
Arguments
By Appellants i.e., NL
- That they had obtained registration of the trademark “ROFOL” in class 5 of fourth schedule Trade Mark Rules on 14th September 2001 relating back to date of application viz. 19th October 1992.
- That the date of application is relevant to present dispute as MT was not present in the market in the year 1992.
By Respondents i.e., MT
The primary contention of MT was that they were honest concurrent user of the mark “PROFOL” and that the mark had been in use since 1998 by their predecessor-in-title which was passed upon them in the year 2000 whereupon they filed for registration of the said mark. That they have acquired high reputation and goodwill and that the mark used by NL was deceptively similar and identical to that of MT’s and hence injunction was sought by them to restrain NL from passing off their product as that of MT’s.
Issues
The core issue before Hon’ble Supreme Court was that whether the prior registration will obliterate the goodwill and reputation earned by the parties? Would a deeming provision i.e., relating registration retrospectively prevail on prior user?
Judgement
The Hon’ble Supreme Court observed that to claim exclusivity trademark should not be descriptive and should normally be partake of new creation, but in pharmaceutical industry it is common for a product to be named after the molecule or salt from which it is constituted which form a favourable determinant in passing-off action.
Further, Hon’ble Supreme Court elucidated upon the rule of “first-user” and observed that this rule is seminal part of the Trade Marks Act. The court reiterated Section 34 of the Trade Marks Act, 1999 and observed that:
“This Section palpably holds that a proprietor of a trade mark does not have the right to prevent the use by another party of an identical or similar mark where that user commenced prior to the user or date of registration of the proprietor. This “first user” rule is a seminal part of the Act. While the case of the Plaintiff-Respondents is furthered by the fact that their user commenced prior to that of the Defendant-Appellant, the entirety of the Section needs to be taken into consideration, in that it gives rights to a subsequent user when its user is prior to the user of the proprietor and prior to the date of registration of the proprietor, whichever is earlier. In the facts of the case at hand, the Defendant-Appellant filed for registration in 1992, six years prior to the commencement of user by the Plaintiff-Respondents. The Defendant-Appellant was, thus, not prevented from restraining the Plaintiff-Respondents’ use of the similar mark PROFOL, but the intention of the Section, which is to protect the prior user from the proprietor who is not exercising the user of its mark prima facie appears to be in favour of the Plaintiff- Respondents.”
And thus, it was held by court that reluctance on part of NL to use the mark and to restrain MT from using similar mark could be interpreted as an indication of abandonment of the mark. And, that the MT had been using the mark well before any attempted use by NL. The Court affirmed with the observation of lower courts and subsequently injunction was grated in favour of MT.
By: Dhruv Dangayach, Ramaiah College of Law
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Feb 19, 2018 | Indian Patents Act 1970, Patent
The most significant aspect of a patent specification is unquestionably the patent claim. A patent claim concisely defines what the invention claims and what is to be protected. In other words, patent claims specify the scope of the invention. Every patent application must have carefully phrased claims, as claims are very important in litigation. Notably, a claim is typically phrased as a codified statement of technical facts indicating the extent of the invention claimed to be protected. A patent claim specifies the novel characteristics in the patent application that the inventor wishes to protect.
Anatomy of a Patent Claim
A patent claim comprises three essential parts: the preamble, transitional phrases, and the body of the claim.
- Preamble: This section specifies the type of invention for which the patent is being applied, such as a method, process, apparatus etc. The preamble should always be consistent with the title of the invention. For example, if the applicant wishes to patent a method/assembly/system, the preamble will begin like, “A method for…”
- Transitional Phrases: The transitional phrases indicates whether the claim is restricted to the elements stated or whether it may apply to products or processes that have other elements. In other words, they are typically the statements that convey the idea that the claim is either limited to the items specified or encompasses more procedures with additional attributes. Some examples of transitional phrase are, comprising of, wherein, consisting of etc.
- Body: This section of the claim includes all constraints and aspects of the claim and illustrates their relationship.
Preamble Transitional Phrase Body of the Claim
A bed sheet tensioning device comprising [a resilient strap with releasable fasteners at each end thereof, each of the releasable fasteners being adapted to fasten the strap to the cloth material of a bed sheet by gripping the cloth material without any part of the fasteners being included on the cloth material]
Different types of patent claims
- Types of claims based on drafting
- Independent Claims: Due to their ability to precisely define the distinguishing quality, they are also referred to as “primary claims.”. Independent claims are “stand-alone” claims that do not refer to any other claim. Independent claim includes a preamble and all the details required to describe the invention. The first claim, generally stands alone, establishes the level of protection that the invention is claiming. To prevent possible infringers from evading the independent claim in any way, independent claims are often more expansive than dependent claims.
- Dependent claims: These claims are so called because they relate back to a prior independent or dependent claim, thereby limiting the applicability of the earlier claims. The scope of dependent claims is generally less than that of the claim upon which they are based such as independent claim. It occasionally might include well-known characteristics, even minor details and optional innovative elements of the invention.
- Types of claims based on invention field
- Jepson claims: The preamble of a Jepson claim describes a prior art statement, which is followed by claims that represent an improvement over the prior art. In an overview, it elaborates on the point of the invention’s uniqueness in comparison to previous art in a specific domain. Jepson claims are the most common in US patent law.
- Markush claims: A Markush claim is a type of claim that is used to prevent the creation of new claims. A Markush claim allows a patent drafter to select a specific element of the invention from a group of features that all share some common characteristics.
- Swiss-type claim: This type of claim is used when a previously unknown compound or substance is to be patented for a new medicinal use. In other words, this is a resurrected claim format intended to include the first, second, or subsequent medical utilisation of a well-known composition or substance.
- Types of claims based on invention
- Product claim: A product or apparatus claim addresses an invention’s structure or functionality. A product claim, for example, can define the components of a new device, the structure of an electrical device, or the functional components of an equipment.
- Process claim: A process or method claim describes how you do something, such as perform a task, develop a product, or process the data. For example, the manner you process specific materials to form a product, encode and decode data within a particular context, or perform image recognition using an imaging system are all examples of processes which may be described with a process claim. Software and corporate approaches also fall into the process claim category.
- Types of Claims based on structure
- Composition claims: These claims are frequently made when an innovation relates to the elemental composition of any component or material.
- Mean-plus-function claims: These claims make no reference to the precise design of the invention. Further, the mean plus function claims provides instructions on how to carry out the desired function. In a mean-plus-function claim, the element in the claim can be expressed in terms of the steps necessary to carry out a function. Additionally, the scope of these claims is broad enough to encompass all the components or structures described in the application.
Patent claims are perhaps the most significant aspect of any patent application. As a matter of fact, when drafting a patent claim, the patent drafter should always consider taking extra care and attention. The more precisely the patent claim is documented, the easier it is to defend the invention against potential infringers. The technical aspects of the invention should be stated as thoroughly as possible in the claims. Drafting a patent is a challenging task, and failure to do so properly can arise in a delay in grant, or even rejection. To avoid such disruptions, one should seek the advice/assistance of patent experts to attain a thorough understanding of preparing claims that provide better protection.
By: Dr. Paridhi Malhotra
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Jan 19, 2018 | General
A limited liability partnership (LLP) is a partnership company in which the partners have limited liabilities, and each partner is not responsible or liable for another partner’s misconduct or negligence.
Steps to register a LLP in India are as below:
Step 1: Getting Digital Signature Certificate (DSC)
The first step towards registering LLP is to acquire the digital signatures of all the designated partners of the LLP since the LLP’s documents are filed online. Digital signatures can be obtained from certified government agencies, such as National Informatics Centre, IDRBT Certifying Authority, E-MUDHRA, CDAC and NSDL. The cost of acquiring a DSC depends upon the certifying agency that the applicant has applied for.
Step 2: Reserving the Name of LLP
To register a LLP, the applicant needs to get a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be processed at the Central Registration Centre. However, before citing or quoting the name, it is always advisable to check from the Ministry of Corporate Affairs (MCA) portal for a free name. This will provide a list of companies with the same or similar names to a proposed LLP. Once the name has been chosen, the registrar will approve the name that is not very similar to any existing LLP. The LLP-RUN will need to be submitted along with a fee that will then proceed for the approval of the registrar.
Step 3: Incorporation of LLP
Form for incorporation of Limited Liability Partnership (FiLLiP) is required to be filled and submitted with the registrar for incorporation of LLP. Prescribed fees have to be paid as per Annexure ‘A’. Application for allotment shall be permitted to be made by 2 individuals only.
Step 4: File Limited Liability Partnership Agreement
This agreement governs the mutual rights and duties amongst the partners. The agreement can be filed in form 3 online on MCA Portal. From the date of incorporation, Form 3 for LLP agreement has to be filed within 30 days. LLP Agreement has to be printed on Stamp Paper, wherein every state has their different stamp paper.
It takes approximately 15 days to get DSC and Form 3, subject to availability of all the documents.
Documents Required for LLP Registration
The documents required to register your LLP are roughly the same as required for most business set-ups. However, there are two sets of documents that will need to be submitted for the LLP registration i.e. documents required of partners and the LLP documents.
Documents of Partners
All partners in the LLP will be required to submit the following documents:
- Identity proofs and PAN cards of all partners.
- Address Proofs of partners that includes Voter ID, passport or driving license.
- A passport size photograph against a white background.
- Passports of NRIs and foreign nationals who wish to become partners in an LLP.
Documents to be submitted
Documents related to the LLP entity that need to be compulsorily submitted are:
- A proof of the registered office of address needs to be submitted at the time of registration or within a time span of 30 days of the incorporation of the LLP. In case, the registered office is a rented facility, an NOC from the landlord is necessary. Additionally, at least one proof of residence will need to submit such as utility bills that are no older than 2 months.
- A Digital Signature Certificate (DSC)
Cost of LLP registration
Find below the cost involved in the registration process:
DSC – Around Rs. 1500-2000 for 2 partners
Name Reservation – Rs. 200
Incorporation – Depends on capital contribution
Contribution up to Rs. 1 lakh – Rs. 500 & Contribution between Rs. 1 and 5 lakh – Rs. 2000
LLP Agreement -Depends on capital contribution.
Contribution up to Rs 1 lakh – Rs 50 for filing Form 3 and stamp duty based on the state where LLP is formed
Limited Liability Partnerships in India
Limited Liability Partnerships in India are based on the Limited Liability Partnership Act of 2008. The Limited Liabilities Partnership Act 2008 was officially published on the 9th of January, 2009 in the official Gazette of India and has been effective since 31st March, 2009. The rules constitutive of this act were later published on the 1st of April, 2009 and amended in 2017. The official incorporation of the LLP happened on the 2nd of April, 2009. An LLP is attractive for many new entrepreneurs since the cost of forming an LLP is little; there is no minimum capital contribution and very few compliance regulations as compared to other kinds of business enterprises. Like many entrepreneurs seeking to become part of an LLP or set it up, you can avail of a range of business loans that will help you in starting a new business or for business expansion purposes.
The total time for registering an LLP is approximately 15 days. The minimum members should be 2 whereas there is no upper limit of members in LLP.
http://www.mca.gov.in/MinistryV2/llpformsdownload.html
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Oct 7, 2017 | General
Forest resources alone will not be able to meet the growing demand for wood and wood-based panel materials. Rice Husk Particle Board, made from readily available rice husk, can effectively replace the demand for panel materials. Additionally, these boards allow for the reuse of waste materials and can be made at a minimal cost. The Indian Plywood Industries Research & Training Institute (IPIR&TI), Bangalore, India, has developed a unique method for manufacturing boards from rice husk using suitable binding agents. This method is unique in terms of value addition and completes utilization of the husk without strict chemical composition requirements. In 1985, IPIRTI’s RHPB technology was transferred to the National Research Corporation (NRDC) of New Delhi, India, a Government of India enterprise, for further development and commercialization. In 1987, NRDC licensed the technology to M/S Padmavathy Panel Boards Pvt. Ltd (PPBL), Bangalore, Karnataka, and cooperated with PPBL to solve the difficulty of moving technology from the lab to the factory.
Rice Husk Board is the first product of its kind to be produced in India as a viable alternative to wood-based panel boards. NRDC has been assigned IPIR’s patented technology for commercial exploitation. In 1988, the technology was licensed to a Bangalore entrepreneur who planned to build a commercial plant. The NRDC has provided the firm with an interest-free developmental loan through its ‘Technology Development Programme’ to fulfill the project’s costs. The NRDC has also provided engineering assistance to the project. The Corporation and the entrepreneur worked together to supervise the project. In a world record time of 18 months, the unit was put into production. The company is currently in regular production and has produced several goods to fulfill a variety of needs. As a substitute for wood-based panel boards, the product is well-received on the market.
GENERAL CHARACTERISTICS: When compared to wood particle boards and other similar panel materials, the upgraded rice husk particle boards have the following distinguishing advantages:
- Resistance to Termites
- Resistance to Decay
- Resistance to fire
- Resistance to Rodents
Rice husk boards are available in a variety of densities, thicknesses, kinds, and grades to meet a variety of needs. The manufacturing method, which is based on cutting-edge technology, provides total quality. Wall Paneling, Doors, Windows, Furniture, Table Tops, False Ceilings, Roofing Panels, Insulation, Partitions, Stage Setting, Industrial and Domestic Floorings, and so on are only a few examples of product applications.
IPIR & TI, Bengaluru, has refined and improved the technology for producing rice husk particle board using modified resin binding technology to achieve multilayers. The RHBP panels are strong enough to meet the requirements of the applicable specifications and standards. RHPB has improved over the years, as shown in the table below:
RHPB Technology was founded in 1985.
(RHPB Technology Post 2010)
- Rice husk particle board with many layers
- Face and core particles are separated, resulting in a clean surface finish.
- The physical and mechanical qualities meet the requirements of IS3087-1985: Medium Density Particle Board Type Specification. 2 three-layered flat pressed boards
- The board is resistant to termites, rot, and fire.
Rice-growing countries around the world have enormous challenges in disposing of rice husk trash, which poses a major environmental concern if burned. Rice Husk Particle Board manufacturing method developed at the Indian Plywood Industries Research Institute in Bangalore has emerged as one of the finest answers to this problem because it helps to maintain eco-balance and conserve the eco-system. In India, as well as many other rice-growing countries, patents have been submitted.
This board has shown to be a viable alternative to wood in a variety of applications. Furthermore, these boards can be created to be decorative. Several Indian companies have been granted licenses, and a turnkey facility has been established in Malaysia. The company has also created floor tiles (made of rice husk), fire-resistant doors, and other products with a granite-like finish. Furthermore, during the Gujarat earthquake, the technology’s licensee assisted in the construction of a huge number of low-cost houses.
Rice husk is the most readily available of all agricultural wastes. It is a by-product of the country’s most major agro-based sector, paddy milling. Rice husk is produced in the country in quantities of 2 million tonnes per year. For the past two decades, researchers have been trying to figure out how to use rice husk to make useful products. However, due to its high silica concentration, the traditional particle board manufacturing method failed.
For the past three decades, researchers have been trying to figure out how to use rice husk to make useful products. However, few successful approaches have been developed because of their peculiar chemical composition.
Using modified phenol cardanol formaldehyde resins, IPIRTI has perfected a process for producing multilayered particleboard. The panels’ strength qualities meet the applicable specifications’ requirements. The boards have a strong termite resistance and are fire-resistant.
The proposed method has a large environmental impact because it uses rice husk to avoid deforestation in one way.
IPIR&TI, Bengaluru, will supply all technical know-how, as well as training and process demonstrations on a pilot plant size. Please contact NRDC if your company is interested in commercializing the product in India or other countries.
Conclusion
Rice Husk Particle Board’s research and development is an example of radical product development innovation. In everyday applications, it takes the place of well-known and widely used wood and wood-based particle board. It took a long time to do the research
To avoid depletion of forest resources and environmental deterioration, the Ministry of Science and Technology recognized the necessity to find alternative materials (identification of new products). It was determined that a specialized research institute capable of conducting research projects could be found. The necessary” funds were made available to conduct research. NRDC, which had extensive experience in the subject, was given the duty of technology transfer. The transfer of technology has been smooth and the project has been a success thanks to the provision of necessary funds and the promoter’s commitment.
Author: Pratik Maitra, Symbiosis Law School, Hyderabad
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Apr 20, 2017 | Indian Patents Act 1970
A patent is one of the most important forms of Intellectual Property Rights (IPR) and can be defined as a set of exclusive rights granted by the Government or a sovereign state to an inventor or assignee for a limited period in exchange for detailed public disclosure of an invention. Patents are granted to the inventions that are novel, inventive and industrially useful. Additionally, the subject matter shall not fall under category of “Inventions not patentable” and the patent specifications shall fulfil the statutory requirements that describe contents of the specifications and manner, in which a patent application is to be submitted. In order to get a patent, the inventor or applicant has to describe the invention in a prescribed format and submit to respective patent office, and upon thorough due diligence and scrutiny, the patent is granted, provided it fulfils statutory requirements. Once the patent is granted, patent holder or patentee gets right to exclude everyone else from making, using, selling, offering for sale and even importing the product or process that uses patented invention.
Now, when the patent is granted, though, patent holder gets a set of rights to prevent other from using the patented invention, grant of patent comes with a set of duties and obligations. After getting a patent, it becomes duty of the patent holder to work the invention, himself or by means of granting a license to third party (ies) because the sole purpose of having a system of patents is to ensure that the inventions are worked in India on a commercial scale and to the fullest extent without any undue delay and patented product is available to the public. In fact, Section 146 of the Indian Patents Act 1970 requires every patentee to disclose every year, the extent to which he/she has commercially “worked” his/her patent. Additionally, having set of rights in the form of patents should also ensure that patentee is not abusing the rights, especially in case of pharmaceutical patents, where the subject matter claimed a patent, may pertain to a lifesaving drug, it becomes critical to ensure that drug is available at affordable price and sufficient quantity to cater market needs.
The history of compulsory license goes back to the time when Africa was in the grip of HIV/AIDS epidemic and the patents for Anti-Retroviral (ARV) drug combination were in hands of few leading pharmaceutical companies such as Glaxo, Merck and SmithKline etc. ARV is one of the most effective drug combinations to not only suppress the HIV virus and but also stop the progression of HIV disease. As these companies had patents on the drugs, they also had right to prevent all other companies from making, selling, offering for same and importing the drug in the territory of Africa. This kind of exclusivity extended by the patent sometimes results in complete monopoly and abuse of patent rights by the patentee. In this case, these multinational companies were exclusively marketing the drugs at exorbitant prices of $10,000 per patient per year, which was unaffordable for majority of patients.
In the meantime, looking at the opportunity to cater needs of patients, Cipla, an Indian Pharma company offered to manufacture and sell a generic version of the drug at about 3 % of the price. The African Government started to procure the drugs from Cipla mainly because of low price and quality, for which it was sued by drug multinationals for violating their patent rights. One important point to be noted here is that Africa is a country with little or no drug manufacturing capacity and therefore, it had to solely depend upon importing the drug from outside. However, the multinationals in this case were forced to withdraw the suit due to an outrage by the international community.
This incident became an issue in international forums like WHO, UN, UNCAD and WTO Ministerial conference at Doha, Qatar on 14th November 2001. In the fourth Ministerial conference at Doha, the issue of pharmaceutical patent and public interest was taken up and a declaration was made on “TRIPS Agreement and Public Health”. Its purpose was to respond to the concerns that have been expressed that the TRIPS Agreement might make some drugs difficult to obtain for patients in poor countries.
Doha Declaration constituted a milestone in the TRIPS Agreement for two reasons because:
- It ensures balance between public health and patent rights, and
- Sets forth a clear preventive standard
According to Section 83 (General principles applicable to working of patented inventions) of Indian Patents Act 1970, there has been emphasis on “Working of the patents” which means that the patented invention shall be commercialized in order to meet reasonable requirements of the public and patented products are available at reasonable price to the public. Patents are granted to the inventors for the purpose of encouraging inventions as well as to enhance industrial development and, therefore, should be worked in its fullest extent within the territory of India. The patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article, but the invention shall be worked commercially to meet demands of the public. The patents granted shall not delay protection of public health and nutrition and should act as instrument to promote public interest, especially in sectors of vital importance for socio-economic and technological development of India. The patent rights should not be abused by the patentee and the patentee shall not resort to practices, which unreasonably restrain trade or adversely affect the international transfer of technology. The patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
if the patentee is not commercializing the invention and because of that, the reasonable requirements of the public are not met or the patented product is not available to public at reasonable price, the compulsory license is available as a remedy against abuse of patent right. The provisions for compulsory licenses are made to prevent the abuse of patent as a monopoly and to make the way for commercial exploitation of the patented invention by an interested person. Compulsory licensing is granted by the Government to produce the patented product or process without the consent of the patent owner. With respect to the pharmaceutical industry, the compulsory license attempts to strike a balance between promoting access to existing drugs and promoting research and development into new drugs.
If the invention is not commercialized for 3 years or in case of national emergency or urgency, the compulsory license may be granted to the person who requests the controller for the same. After thorough assessment of entire situation such as necessity and demand of commercializing the invention, capacity of the applicant to manufacture the patented product or process, the Controller may grant compulsory license. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) also sets out specific provisions that shall be followed if a compulsory license is issued. All significant patent systems comply with the requirements of TRIPs.
Section 84, 92 and 92A are the three main provisions that talk about compulsory license. According to section 84 (Compulsory License) of Indian Patents Act 1970, if patentee doesn’t commercialize the invention for 3 years, any person interested can request the Controller to grant him a compulsory license in order to manufacture and commercialize the patented invention so that reasonable requirements of the public are met and the product is available to the public at reasonable cost. The application for compulsory license under Section-84 can be filed only after expiry of 3 years from the date of grant of the patent.
According to Section 92 (Special provision for compulsory licenses on notifications by Central Government), if the Central Government is satisfied that it is necessary that compulsory licenses should be granted at any time after the sealing of patent to work the invention, it may make a declaration to that effect, by notification in the Official Gazette. The compulsory license under this section is granted under following circumstances:
- National emergency; or
- In circumstances of extreme urgency; or
- In case of public non-commercial use.
The Controller shall grant to the applicant a license under such circumstances on the terms and conditions as he thinks fit. He shall settle the terms and conditions of a license and try to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights. The public health crises may be related to Acquired Immuno Deficiency Syndrome (AIDS), Human Immuno Deficiency Virus (HIV), tuberculosis, malaria or other epidemics.
Section-92A (Compulsory license for export of patented pharmaceutical products in certain exceptional circumstances) was introduced by The Patents (Amendment) Ordinance, 2004 which came into force on 1st January 2005, to provide for grant of compulsory license by the Controller for export of patented pharmaceutical product in certain exceptional circumstances, where compulsory license has been granted by the country to which the export is intended. This provision is introduced to address the public health concerns of the countries having insufficient or no manufacturing capacity in the pharmaceutical sector to implement the decision of the TRIPS council on Para 6 of the Doha Declaration on TRIPS Agreement and Public Health. This section lays down the conditions that are required to be fulfilled, when the compulsory licenses for export purposes will be available. The compulsory license is available only for:
(a) The patented pharmaceutical product;
(b) Manufacture and export to any country having insufficient or no manufacturing capacity in the pharmaceutical sector and
(c) The product addressing the public health problems in such country.
Compulsory license is available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems. Such country shall permit importation of the patented pharmaceutical products from India by notification or otherwise. On receipt of an application in the prescribed manner, the Controller shall grant a compulsory license solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him.
The term ‘pharmaceutical products’ used in this section means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.
Compulsory license once granted under certain circumstances such as national emergency or extreme urgency expires when the circumstances under which it was granted do not exist anymore. While considering an application for termination of compulsory license, the Controller shall take into account that the interest of the person who had been granted the license is not unduly prejudiced.
March 2012 , Indian Patent Office granted its first compulsory license to a domestic generic drug-maker, Natco for anti-cancer drug called Nexavar. German pharmaceutical company Bayer AG had monopoly over an anti-cancer drug, and it authorized the production of a low-cost version for the Indian market. Under Section 84 (1) of the Indian Patent Act 1970, any person may request a compulsory license if, after three years from the date of the grant of a patent, the needs of the public to be covered by the invention have not been satisfied; the invention is not available to the public at an affordable price; or the patented invention is not “worked in,” or manufactured in the country, to the fullest extent possible.
Bayer acquired an importing license for the drug Nexavar (sorafenib tosylate) in 2007 but, according to the Indian Patent Office‘s decision, the Bayer did not begin importing the drug to India in 2008 and only small quantities were available during the following two years. Bayer “took no adequate or reasonable steps to start the working of the invention in the territory of India on a commercial scale and to an adequate extent,” the decision notes. The drug was found to be exorbitantly priced and out of reach of most of the people. ” the patent authority wrote in its 62-page decision. “The product in question is not a luxury item but a lifesaving drug and it is highly important that a substantial part of the demand be met strictly. In the present case, even 1 percent of the public doesn’t derive benefit of the patented drug.[1]”
In its compulsory license request, Indian generic manufacturer Natco proposed selling sorafenib tosylate at Rs. 8,800 per patient per month, approximately US $175, resulting in a 97 percent price cut compared to Nexavar. The Indian Patent Office also said that Natco must pay royalties to Bayer on a quarterly basis at the rate of 6 percent of the net sales of the medicine.
Compulsory license is a kind of permission or license granted by controller of patents with respect to the working of the invention. This is one of the effective remedies to keep drug price under control and ensure that the drug is available to public at affordable price in the territory of India and balance between patent rights and public health is maintained well.
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