[Guest post] Revocations, special compulsory licenses, patent strategies & COVID-19: A note on Indian Patent Law

Covid-19 has without a doubt initiated a new IP saga. What is the impact of IP on the Covid-19 crisis? And how well do relevant exceptions in the patent system, such as compulsory licenses really work in such extraordinary circumstances?

IPKat friends Dr. Victor Vaibhav Tandon and Dr. Akanksha Wadehra Tandon, give us a very interesting perspective, that of Indian Patent Law.

Here is what Victor and Akanksha say: 

Indian patent law has several mechanisms to deal with potential abuse of the patent system as well as to ensure affordable access to medicines and public health facilities. Among these are the provisions against evergreening and second indications (section 3(d) of the Patents Act) as well as the provisions relating to revocation (section 64) and compulsory licensing (section 84). However, two hitherto under-explored provisions of the Indian Patents Act have the potential to gain particular relevance in the present time, where the world fights against the Covid-19 pandemic. These are the provisions relating to compulsory licensing upon a notification by the central government (section 92) and the provision for revocation on ground of prejudice to the public (section 66). Both these provisions come into play only after the patent has been granted. These can be significant for access to diagnostic kits, vaccines and drugs undergoing trials (like Remdesivir), which are covered by existing patents. These clauses will not be relevant for any vaccine or drug that is still in the stage of development and for which patent applications are pending.

Photo credit: Getty

The first provision, for compulsory license on a notification by the Indian government (section 92) is influenced heavily by the Doha Declaration (https://www.who.int/medicines/areas/policy/tripshealth.pdf ). This provision is very different from the general compulsory licensing mechanism (section 84) in India wherein a potential applicant has to wait for at least three years before applying for a compulsory license and is additionally required to first attempt to negotiate a voluntary license with the patentee (this requirement of negotiations in section 84 can also be waived under, inter-alia, national emergency or extreme urgency). Under section 92, however, all that is required is that the Indian government should bring a notification in the official gazette, any time after sealing of the patent, declaring that compulsory licenses should be granted thereon. This can be done by the central government under the following circumstances, (1) National emergency, (2) Other circumstances of extreme urgency and (3) Public non-commercial use. Once such a notification is there, any person interested (which is a competitor or a generic manufacturer) can apply to the Controller of Patents and the Controller will have to grant the compulsory license. The usual grounds of grant required to be proven by the applicant under section 84 are not applicable under section 92. The Controller can even waive off the procedure of hearing the patentee in such cases of national emergency, extreme urgency or public non-commercial use. This extreme measure requires that the Controller shall inform the patentee of such non-application of hearing procedure, as soon as practicable. The Act also says that such exceptional circumstances can include “public health crisis” relating to AIDS, TB, malaria or other epidemics. Therefore, a pandemic like Covid-19 directly creates a situation where in the Indian government can exercise its power under section 92.

The second provision allows the Indian government to revoke a patent if the same is “generally prejudicial to the public” (section 66). Here, the central government will have to hear the patentee before declaring the patent as revoked. It can, perhaps, be argued that any patent that reduces access to medicines during a pandemic is prejudicial to the public. This provision is different from the usual revocation provision (section 64) because it brings in elements of public interest and of what qualifies as prejudicial to the public. Therefore, this section is not dependant on the inherent strength or weakness of the patent itself. For a usual revocation, inter-alia, lack of novelty, inventive step, and industrial applicability is required to be proven. But this is not the case with revocation under section 66. However, it should be noted that section 66 is a more stringent provision because it gives the power to revoke. On the other hand, section 92 allows the patent to live and also allows some benefits to the patentee (by way of royalties) and the compulsory licensees. Interestingly, it is reported that Indian government has been approached to revoke the patent on Remdesivir under section 66 (https://spicyip.com/2020/04/govt-urged-to-revoke-patent-for-gileads-potential-anti-covid19-drug-remdesivir.html ).
 
 It will be prudent if patents do not come in the way of cures and affordable access to such cures for Covid-19. The patent system has enough flexibility to allow for access to all during such emergency situations. For example, if there is any potential vaccine, drug or diagnostic kit(s) covered by one or more patents, and if the existence of such patents comes in the way of providing affordable access to the public then the Indian government has any of the aforesaid two options available to it. Access to the public can be hindered in several ways and each time public access is hindered, public interest suffers. In such a scenario, in the absence of adequate, affordable and meaningful access to medicines or other products, there is a violation of right to health and, consequently, of right to life itself. For example, existence of patents can lead to prohibitive costs for medicines or even excessive royalty rates under a license, both of which can effectively thwart access. Also, existence of patents has the potential to harm both follow-on research/innovation as well as collaborative research efforts. In any such scenario, the government could step in and revoke the patent itself under section 66 by holding that the existence of patent(s) is prejudicial to the public.

Alternatively, the Indian government has the option to issue a gazette notification holding the Covid-19 pandemic as a national emergency or situation of extreme urgency for the purposes of patent law under section 92. Such a notification can then enable the grant of compulsory licenses for the patents covered in the notification. A notification under section 92 has several advantages, as noted above. The most important advantage being that, unlike a revocation, the exercise of this alternative does not result in the demise of the patent. Also, this provision is time efficient and a license can be granted even after the immediate grant of a patent, unlike in the case of a normal compulsory license. This efficiency is also because, under section 92, a prospective compulsory licensee is not required to negotiate a voluntary license with the patentee(s).

However, more importantly, the existence of such mechanisms in any patent law will probably alert patentees and could act as an inducement for them to (1) offer adequate supplies at affordable rates, (2) ensure that supplies are met through their own efforts as well as the efforts of their licensees, (3) enter into licensing contract on reasonable terms and (4) show, as an effective public relations exercise, that in dire times, they care more about people than the excessive profits. Such measures can enable them to probably avoid the fate of seeing their patents revoked or being the subject of special compulsory licenses. It should be noted here that social and economic welfare as well as the protection of public health are important goals that are recognized by TRIPS as well (see Article 7 and Article 8 https://www.wto.org/english/docs_e/legal_e/27-trips.pdf ). Finally, it will be interesting to see how the government and the stakeholders react to such crisis and how they use the flexibilities under the patent system or how they react to the deterrent effect of such flexibilities, in India and elsewhere.