Chapter 13
Compulsory Licensing
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Working of
patents - General principles a.
Patents
are granted to encourage inventions and to secure that the inventions are
worked in India on a commercial scale and to the fullest extent that is
reasonably practicable without undue delay. b.
Patents
are not granted merely to enable patentees to enjoy a monopoly for the
importation of the patented article. c.
The
protection and enforcement of Patent rights contribute to the promotion of
technological innovation and to the transfer and dissemination of technology,
to the mutual advantage of producers and users of technological knowledge and
in a manner conducive to social and economic welfare, and to a balance of
rights and obligations. d.
Patents
granted do not impede 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. e.
Patents
granted do not in any way prohibit Central Government in taking measures to
protect public health. f.
The
Patent right shall not be abused by the patentee or person deriving title or
interest on Patent from the patentee, and the patentee or a person deriving
title or interest on Patent from the patentee does not resort to practices
which unreasonably restrain trade or adversely affect the international
transfer of technology. g.
Patents
are granted to make the benefit of the patented invention available at
reasonably affordable prices to the public. h.
Patented
inventions are worked on a commercial scale in the territory of India without
undue delay and to the fullest extent that is reasonably practicable; i.
The
interests of any person for the time being working or developing an invention
in the territory of India under the protection of a patent are not unfairly
prejudiced. |
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Compulsory License An application for grant of a compulsory license may be made under the
following provisions: a. Section 84. b. Section 91. c. Section 92. d. Section 92A. |
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Compulsory License under Section 84 a.
Any person interested may make an
application to the Controller for grant of Compulsory License for a patent
after the expiry of three years from the “date of grant” of the patent on the
following grounds:
i.
that the reasonable requirements of
public with respect to the patented invention have not been satisfied, or
ii.
that the patented invention is not
available to the public at reasonably affordable price, or
iii.
that
the patented invention is not worked in the territory of India. Such an
application may also be made by the licensee. b. No
person shall be stopped from alleging the grounds i-iii
above by reason of any admission made by him in the licence
or otherwise or by reason of his having accepted such a licence. c. In
considering such an application, the Controller shall take into account-
i.
the nature of the invention, the time
which has elapsed since the sealing of the patent and the measures already
taken by the patentee or any licensee to make full use of the invention;
ii.
the ability of the applicant to work
the invention to the public advantage;
iii.
the capacity of the applicant to
undertake the risk in providing capital and working the invention, if the
application were granted;
iv.
as to whether the applicant has made
efforts to obtain a licence from the patentee on
reasonable terms and conditions and such efforts have not been successful
within a reasonable period as the Controller may deem fit. Reasonable period
shall be construed as a period not ordinarily exceeding a period of six
months. However, these circumstances shall not be applicable in case of
national emergency or other circumstances of extreme urgency or in case of
public non-commercial use or on establishment of a ground of anti-competitive
practices adopted by the patentee. |
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Reasonable
requirements of the public The reasonable requirements of the
public shall be deemed not to have been satisfied—
I.
if, by reason of the refusal of the
patentee to grant a licence or licences
on reasonable terms,—
i.
an existing trade or industry or the
development thereof or the establishment of any new trade or industry in
India or the trade or industry in India or the trade or industry of any
person or class of persons trading or manufacturing in India is prejudiced;
or
ii.
the demand for the patented article
has not been met to an adequate extent or on reasonable terms; or
iii.
a market for export of the patented
article manufactured in India is not being supplied or developed; or
iv.
the establishment or development of
commercial activities in India is prejudiced; or
II.
if, by reason of conditions imposed
by the patentee upon the grant of licences under
the patent or upon the purchase, hire or use of the patented article or
process, the manufacture, use or sale of materials not protected by the
patent, or the establishment or development of any trade or industry in
India, is prejudiced; or
III.
if the patentee imposes a condition
upon the grant of licences under the patent to
provide exclusive grant back, prevention to challenges to the validity of
patent or coercive package licensing; or
IV.
if the patented invention is not
being worked in the territory of India on a commercial scale to an adequate
extent or is not being so worked to the fullest extent that is reasonably
practicable; or
V.
if the working of the patented
invention in the territory of India on a commercial scale is being prevented
or hindered by the importation from abroad of the patented article by—
i.
the patentee or persons claiming
under him; or
ii.
persons directly or indirectly
purchasing from him; or
iii.
other
persons against whom the patentee is not taking or has not taken proceedings for infringement. |
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Contents
of application Such an application shall contain a
statement setting out the nature of the applicant's interest, the facts upon
which the application is based and the terms and conditions of the licence the applicant is willing to accept. |
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Procedure a. Where
the Controller is satisfied, upon consideration of an application for
compulsory licence, that a prima facie case has been made out, he shall direct the applicant
to serve copies of the application upon the patentee and any other person
appearing from the register to be interested in the patent in respect of
which the application is made, and shall publish the application in the
official journal. b. The
patentee or any other person desiring to oppose the application may, within
two months from the date of publication of the application or within such
further time as the Controller may on application (made either before or
after the expiration of the prescribed time) allow, give to the Controller
notice of opposition. c. The
notice of opposition shall include grounds on which the application is
opposed and the terms and conditions of the licence,
if any, the opponent is prepared to grant to the applicant and shall be
accompanied by evidence in support of the opposition. d. The
opponent shall serve a copy of his notice of opposition and evidence on the
applicant and notify the Controller when such service has been effected. e. No
further statement or evidence shall be delivered by either party except with
the leave of or on requisition by the Controller. f. The
Controller shall forthwith fix a date and time for the hearing of the case
and shall give the parties not less than ten days notice of such hearing. g. The
procedure specified in sub-rules (2) to (5) of rule 62, shall, so far as may
be, apply to the procedure for hearing under this rule as they apply to the
hearing in opposition proceedings. h. If,
upon consideration of the evidence, the Controller is satisfied that a prima
facie case has not been made out, he shall notify the applicant accordingly,
and unless the applicant requests to be heard in the matter, the Controller
shall refuse the application. The applicant shall make such a request within
one month from the date of such notification. i.
If the applicant requests for a
hearing within the time allowed, the Controller shall, after giving the
applicant an opportunity of being heard, determine whether the application
may be proceeded with or whether it shall be refused and issue a speaking
order on the matter as expeditiously as possible. |
Section 86, 87, 88, 89, 90. |
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Terms
and conditions In settling the terms and conditions
of a licence, the Controller endeavours
to secure - a. that
the royalty and other remuneration, if any, reserved to the patentee or other
person beneficially entitled to the patent, is reasonable, having regard to
the nature of the invention, the expenditure incurred by the patentee in
making the invention or in developing it and obtaining a patent and keeping
it in force and other relevant factors; b. that
the patented invention is worked to the fullest extent by the person to whom
the licence is granted and with reasonable profit
to him; c. that
the patented articles are made available to the public at reasonably
affordable prices; d. that
the licence granted is a non-exclusive licence; e. that
the right of the licensee is non-assignable; f. that
the licence is for the balance term of the patent
unless a shorter term is consistent with public interest; g. that
the licence is granted with a predominant purpose
of supply in the Indian market and that the licensee may also export the
patented product, if need be in accordance with the provisions of sub-clause (iii) of clause (a) of
sub-section (7) of section 84; h. that
in the case of semi-conductor technology, the licence
granted is to work the invention for public non-commercial use; i.
that in case the licence
is granted to remedy a practice determined after judicial or administrative
process to be anti-competitive, the licensee shall be permitted to export the
patented product, if need be. The terms and
conditions of a licence settled by the Controller,
may be revised upon Application by the licensee after he has worked the
invention on a commercial scale for at least twelve months, on the ground
that the terms and conditions settled have proved to be more onerous than
originally expected and that in consequence thereof the licensee is unable to
work the invention except at a loss. However, no such application shall be
entertained a second time. |
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Application by licencee a. Where
the Controller is satisfied on an application for compulsory license that the
manufacture, use or sale of materials not protected by the patent is
prejudiced by reason of conditions imposed by the patentee upon the grant of licences under the patent, or upon the purchase, hire or
use of the patented article or process, he may, subject to the provisions of
Section 84, order the grant of licences under the
patent to such customers of the applicant as he thinks fit as well as to the
applicant. b. Where
an application for compulsory license is made by a person being the holder of
a licence under the patent, the Controller may, if
he makes an order for the grant of a licence to the
applicant, order the existing licence to be
cancelled, or may, if the thinks fit, instead of making an order for the
grant of a licence to the applicant, order the
existing licence to be amended. |
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Compulsory
license in case of two or more patents held by the same patentee Where two or more patents are held by
the same patentee and an applicant for a compulsory licence
establishes that the reasonable requirements of the public have not been
satisfied with respect to some only of the said patents, then, if the
Controller is satisfied that the applicant cannot efficiently or
satisfactorily work the licence granted to him
under those patents without infringing the other patents held by the patentee
and if those patents involve important technical advancement or considerable
economic significance in relation to the other patents, he may, by order,
direct the grant of a licence in respect of the
other patents also to enable the licensee to work the patent or patents in
regard to which a licence is granted under section
84. |
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License for
related patents a. At
any time after the grant of a patent, any person who has the right to work
any other patented invention, either as patentee or as licensee thereof,
exclusive or otherwise, may apply to the Controller for the grant of a licence of the first mentioned patent on the ground that
he is prevented or hindered without such licence
from working the other invention efficiently or to the best advantage
possible. b. No
order under such an application shall be made unless the Controller is
satisfied –
c. Controller,
if satisfied, that the grounds alleged have been established by the
applicant, he may make an order on such terms as he thinks fit granting a licence under the first mentioned patent and a similar
order under the other patent if so requested by the proprietor of the first
mentioned patent or his licensee. However, such a licence
granted by the Controller shall be non-assignable except with the assignment
of the respective patents. d. The
procedure as mentioned in Sections 87, 88, 89 and 90 shall apply to licences a licence granted
under this provision. |
Section 87, 88, 89, 90, 91 |
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Compulsory
licence on notification by Central Government a.
If
the Central Government is satisfied, in respect of any patent in force in circumstances
of national emergency or in circumstances of extreme urgency or in case of
public non-commercial use, that it is necessary that compulsory licenses
should be granted at any time after the sealing thereof to work the
invention, it may make a declaration to that effect, by notification in the
Official Gazette, and thereupon the following provisions shall have effect,
that is to say -
I.
a
circumstance of national emergency; or
II.
a
circumstance of extreme urgency; or
III.
a case
of public non-commercial use, which may arise or is required, as the case may be, including public
health crisis relating to Acquired Immuno
Deficiency Syndrome, Human Immune Deficiency Virus, Tuberculosis, Malaria or
other epidemics, the procedure as mentioned in Section 87 shall not apply.
However, the Controller shall, as soon as may be practicable, inform the
patentee of the patent relating to the application for such non-application
of Section 87. |
Section
83, 87, 88, 89, 90, 92 |
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Compulsory licence
for export of patented pharmaceutical products in certain exceptional
circumstances a. Compulsory
licence shall be available for manufacture and
export of patented pharmaceutical product to any country having insufficient
or no manufacturing capacity in the pharmaceutical sector for the concerned
product to address public health problems, provided compulsory licence has been granted by such country or such country
has, by notification or otherwise, allowed importation of the patented
pharmaceutical products from India. b. The
Controller shall, on receipt of an application in the prescribed manner,
grant a compulsory licence 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. c. The
provisions of (a) and (b) shall be without prejudice to the extent to which
pharmaceutical products produced under a compulsory licence
can be exported under any other provision of this Act. d. 'Pharmaceutical
products' 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. |
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Termination
of Compulsory License a. Patentee
or any other person deriving title or interest in the patent, may make an
application for termination of compulsory licence
granted under Section 84 on the ground that the circumstances that gave rise
to the grant thereof no longer exist and such circumstances are unlikely to
recur. b. The
holder of the compulsory licence shall have the
right to object to such termination. c. While
considering such an application, the Controller shall take into account that
the interest of the person, who had previously been granted the licence, is not unduly prejudiced. |
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