Is The Government Attempting To Dilute India’s Compulsory Licensing Regime?
The patent law regime in India is set to undergo a significant change, with the government proposing to reduce the information that patent holders are required to disclose. Experts point out that the if Form 27 is revised in the way the government has proposed, it will dilute India’s compulsory licensing regime.
The grant of a patent implies a statutory monopoly on an invention and throws up the concern that it should not be exploited at the cost of public interest. So, anyone who has a patent licence over an invention is required to submit information related to the working of that patent annually to the patent office. This includes information such as amount of patented product sold in India, total number of units manufactured and imported into the country, and whether the public requirement is being met fully and at a reasonable price.
The purpose behind mandating this disclosure is to ensure that the public requirement is being consistently met with adequate quantity available to them. These disclosures are to be submitted by patent holders in Form-27, which the government has now proposed to amend. The final version of the form, which has been released for public comments, will be notified within six months, as per the government’s statement before the Delhi High Court. This came up when the high court was hearing a 2015 public interest litigation seeking stricter compliance of Form-27.
Form 27 And Compulsory Licensing
Three years after a patent has been granted, the Patent Act allows the grant of a compulsory licence to any person. The person who gets the compulsory licence can then produce the patented product without the owner’s consent, but it needs to be demonstrated that the patent holder had declined the request to voluntarily provide the licence.
A grant of compulsory licence is made only if any of these three conditions are satisfied:
- Reasonable requirement of the public with regard to the patented invention is not being satisfied.
- That the patented invention is not available to the public at a reasonably affordable price.
- That the patented invention is not worked in India.
In determining whether or not the grant of a compulsory licence is required, Form-27 plays an important role, Shamnad Basheer, visiting professor of law at NLS Bangalore pointed out. Basheer had filed the 2015 PIL on Form-27 in the Delhi High Court. He illustrated his point with the first case of compulsory licence in India—Natco Pharma Ltd. vs Bayer.
The question there was whether a compulsory licence should be granted to Natco for production of Hexavar drug which was patented by Bayer. In its judgment, the Delhi High Court found that the quantity of the drug manufactured by Bayer was sufficient for only two percent of the general public and the cost for a month’s supply was around Rs 2,80,000.
This information was revealed by disclosures made by Bayer in Form 27 and the court subsequently came to the conclusion that the patent holder had failed to meet the requirements of the general public and at a reasonable price, and granted the compulsory licence to Natco on the patent. This decision was affirmed by the Supreme Court.
Form 27: Proposed Changes
Among the many changes that the government is seeking to introduce in Form 27, the ones experts are most perturbed by are:
- Detail of licences and sub-licences granted by the patent holder during the year will no longer be required.
- Details of countries from where a product is imported will no longer be required.
- The statement on whether public requirement is being met at a reasonable price will no longer be required.
By eliminating these disclosures, there will be an inevitable dilution of the compulsory licensing regime, as it would become difficult to determine whether conditions—warranting the need for a compulsory licence—such as a “reasonable requirement of the public” are being satisfied, Basheer said in his representation to the government.
The proposed version of the form significantly waters down the requirements of disclosing critical information, senior advocate Anand Grover told BloombergQuint.
Currently, a patent holder is required to inform the authorities about the quantity that’s available in the market for the public. They do so by disclosing the amount which is being manufactured or imported. If the new proposed version of the form comes into effect, it will put the burden of finding this and other critical information on the interested party instead of the patent holder, who anyway has access to this information.Anand Grover, Senior Advocate
The amended form is very pro innovator and pro IP owners, and will make it harder for those who are seeking compulsory licences, Ranjan Negi, partner and head of intellectual property practice at Cyril Amarchand Mangaldas, said. The proposed form attempts to simplify the submission of information on working requirements by a patentee; thus reducing the burden to some extent, he said.
The Delhi High Court is likely to hear the PIL next on Aug. 7.