Using all options: On Covaxin licensing

Context:

• As the second COVID-19 wave continues to ravage the country, it is now clear that universal and swift vaccination is the only way out to mitigate the effects of the pandemic.
• But with only 3% and 10.4% of the total population estimated to have taken the second and a single dose, respectively, the goal of vaccinating a substantial number of people to achieve immunity against SARS-CoV-2 and its variants, remains a tall order for India.
• India has rightly sought (along with South Africa) a temporary waiver of provisions in the TRIPS Agreement (which allows exceptions to the rights of patent owners by grant of compulsory licences) to facilitate universal access to COVID-19 vaccines. But the Centre has done nothing to bring vaccines and medicines under a statutory regime in India to allow for wider availability and a diversity of options.

Relevance:

GS-III: Indian Economy (International Trade, Intellectual Property Rights – IPS), GS-II: Social Justice (Health related issues, Government Interventions and Policies, Issues arising out of the design and implementation of Government Policies)

Mains Questions:

What do you understand by Compulsory License? How can the granting of Compulsory Licenses for vaccines by India help in dealing with the Covid-19 crisis? (15 Marks)

Dimensions of the Article:

1. What is a Patent?
2. Compulsory Licenses under Indian Patent Act, 1970
3. Trade-Related Aspects of the Intellectual Property Rights (TRIPS)
4. Steps which Central Government can take during crisis for Compulsory Licence

What is a Patent?

• A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.
• To get a patent, technical information about the invention must be disclosed to the public in a patent application.
• Patent is provided for the period of 20 years. Exclusive rights are only applicable in the country or region in which a patent has been filed and granted, in accordance with the law of that country or region. Patent rights are usually enforced in a court on the initiative of the right owner.
• In India, Patents are provided by Indian Patent Office. Any appeal against the order or violation goes to Intellectual Property Appellate Board.
• Patent is granted for inventions which are new or involve an inventive step which did not exist before, which has not existed before and has industrial applications.
• When patent is granted on a particular invention, it means that no other person can either produce or sell for commercial purpose those inventions in the market without the approval of the creator of such invention.
• India grants legal protection to various inventions through Indian Patents Act, 1970.

Compulsory Licenses under Indian Patent Act, 1970

• Patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale under Indian Patent Act, 1970.
• However, patents granted do not in any way prohibit Central Government in taking measures to protect public health. Section 84 of Indian Patents Act, 1970 provides for “Compulsory Licencing.”
• Compulsory Licencing is allowed so that
  1. the reasonable requirements of the public with respect to the patented invention have not been satisfied, or
  2. and the patented invention is not available to the public at a reasonably affordable price, or
  3. the patented invention is not worked in the territory of India.
• For patents: when the authorities license companies or individuals other than the patent owner to use the rights of the patent — to make, use, sell or import a product under patent (i.e., a patented product or a product made by a patented process) — without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled.
• The following conditions should be fulfilled by the applicant:
  1. Reasonable requirements of the public with respect to the patented invention have not been satisfied.
  2. Patented invention is not available to the public at a reasonably affordable price.
  3. Patented invention is not used in India.
• Countries would be able to facilitate a free exchange of know-how and technology surrounding the production of vaccines.
• In considering the application field under section for compulsory licensing, the Controller shall take into account:
  1. 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.
  2. the ability of the applicant to work the invention to the public advantage.
  3. the capacity of the applicant to undertake the risk in providing capital and working the invention, if the application were granted.
  4. 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.

Trade-Related Aspects of the Intellectual Property Rights (TRIPS)

• The Trade-Related Aspects of the Intellectual Property Rights (TRIPS) is an international agreement on intellectual property rights.
• It lays down minimum standards for protection and enforcement of intellectual property rights in member countries which are required to promote effective and adequate protection of intellectual property rights with a view to reducing distortions and impediments to international trade.
• The obligations under the TRIPS Agreement relate to provision of minimum standard of protection within the member countries legal systems and practices.
• The Agreement covers most forms of intellectual property including
  1. patents,
  2. copyright,
  3. trademarks,
  4. geographical indications,
  5. industrial designs,
  6. trade secrets, &
  7. exclusionary rights over new plant varieties.
• It came into force in 1995 & is binding on all members of the World Trade Organization (WTO).
• The basic obligation in the area of patents is that, the invention in all branches of technology whether products or processes shall be patentable if they meet the three tests of being new involving an inventive step and being capable of industrial application.

(TRIPS) Agreement allows Compulsory Licensing

• The TRIPS Agreement allows the use of compulsory licences. Compulsory licensing enables a competent government authority to license the use of a patented invention to a third party or government agency without the consent of the patent-holder.
• The TRIPS Agreement sets forth a number of conditions for the granting of compulsory licences. These include:
  1. a case-by-case determination of compulsory licence applications,
  2. the need to demonstrate prior (unsuccessful) negotiations with the patent owner for a voluntary licence and
  3. the payment of adequate remuneration to the patent holder.
• Where compulsory licences are granted to address a national emergency or other circumstances of extreme urgency – certain requirements are waived in order to hasten the process, such as that for the need to have had prior negotiations obtain a voluntary licence from the patent holder.
• Although the Agreement refers to some of the possible grounds (such as emergency and anticompetitive practices) for issuing compulsory licences, it leaves Members full freedom to stipulate other grounds, such as those related to non-working of patents, public health or public interest.
• The Doha Declaration states that each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.
• The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also allows for compulsory licencing of drugs to produce generic version of life saving drugs required to meet public health challenges.
• Thus, CL effectively allows countries to overcome the restriction imposed by patent and make the drugs available at lower price. 
• Under CL, government can allow other countries to make, use, sell or import a product under patent without the permission of the patent owner.       

Steps which Central Government can take during crisis for Compulsory Licence

• In India, the patent regime is governed by the Patents Act, 1970, Section 92 of which envisages the grant of a compulsory license, in circumstances of national emergency and extreme urgency.
• Once a declaration of national emergency is made, and the relevant patents notified, any person interested in manufacturing the drug can make an application to the Controller General of Patents who can then issue a compulsory license.
• The patentee would be paid a reasonable royalty as fixed by the Controller General of Patents.
• Further, under Section 100 of the Patents Act, the Central Government can authorize certain companies to use any patents for the “purpose of the government”.
• Indian companies can begin manufacturing the drugs while negotiating the royalties with the patentees.
• If the Central Government or its authorized company is not able to reach an agreement with the patentee, the High Court has to fix the reasonable royalty that is to be paid to the patentee.
• Another alternative is for the Central Government to acquire the patents under Section 102 from the patentees.
• If the Central Government and the patentee is not able to reach a consensus on the price of the patents, it is up to the High Court to fix the royalty.
• Additionally, under Section 66 of the Patents Act, the Central Government is also entitled to revoke a patent in the public interest.
• The utilization of these flexibilities has also been detailed in the Trade Related Aspects of Intellectual Property Rights Agreement as well.

-Source: The Hindu