This article is authored by Akash Krishnan, a law student from ICFAI Law School, Hyderabad. It discusses in detail the patent laws in India, the different kinds of patents, the impact of Covid-19 on the patent laws, and the issue of a global IPR waiver for essential medicines in times of pandemics like Covid-19.

Introduction

A patent is one of the forms of intellectual property in industrial property. It refers to the grant or award of privilege, propriety or authority given by the Sovereign or the Government of the country to one or more individuals. A patent is not granted for an idea or principle as such, but for some article or the process of making a product or article by applying the idea. The concept of patent and the criteria of patentability has remained the same for centuries.

A patent is an exclusive right granted to a person who has invented a new and useful product or has made an improvement/addition to an existing product or article or a new process of making a product. It consists of an exclusive right to manufacture the new product invented or manufacture a product according to the invented process for a period of 20 years from the date of filing the application. After the expiry of this term, it falls into the public domain and anybody can make use of the invention. Grant of a patent is territorial in nature. A patent granted in one country cannot be enforced in another country unless the concerned invention is also patented in that country.

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Patent laws in the medical industry

India has been a frontrunner when it comes to battling Covid-19 by vaccinating the citizens of the country. Indian vaccine manufacturers had a huge role to play in the production and distribution of vaccines on a large scale to meet domestic and international demand. In light of the same several provisions of the Patents Act are attracted to the use of inventions related to Covid-19. Let us now discuss these provisions in detail.

Compulsory licenses

Under Section 84 of the Patents Act, 1970, the controller is empowered to grant compulsory licenses by fixing the terms and conditions of the license after the expiry of three years from the grant of the patent to any person other than the patentee, to work the patent on the following grounds –

  1. If the patentee fails to satisfy the reasonable requirements of the public with respect to the patented invention.
  2. If the patented invention is not available to the public at a reasonably affordable price.
  3. If the patented invention is not worked in the territory of India.

The significance of this provision is that public interest is being given utmost importance. If any manufacturer is aiming to exploit the market by charging high prices or does not make it available for production in India, then any interested party can make an application for the grant of compulsory license and manufacture the product in accordance with the terms and conditions applied by the Controller while granting the license.

Special provision for compulsory licenses on notifications by the Central Government

Under Section 92 of the Patents Act, if the Central Government is of the opinion that there exists a national emergency or in circumstances of extreme urgency or in case of public non-commercial use, a compulsory license should be granted, it may issue a notification to that effect. Such a notification can be issued at any time after the grant of the patent.

Once such a notification has been issued, any interested person can make an application for the grant of compulsory license to the controller. The controller while granting the license has to ensure that the product that is being manufactured under the compulsory license is being sold to the public at the lowest possible price.

Further, in case of public health crises or epidemics like Covid-19, Section 92(3) explicitly states that the procedure that is followed for application and grant of compulsory license can be avoided and application can be processed expeditiously.  

The significance of this provision is that there is no waiting period as provided under Section 84 for the grant of compulsory license. Thus, in situations like Covid-19, a compulsory license can be granted with immediate effect for the benefit of the citizens of the country.

Power of the Central Government to use/acquire inventions for the purposes of the Government

Under Section 100 of the Patents Act, the Central Government is empowered to utilise any invention for the purposes of the Government at any time from the grant of patent. It is pertinent to note that this provision also allows the Government to use any invention for which a patent has not been granted but only an application for grant of a patent has been filed.

Under Section 102, similar powers have been granted to the Central Government for the use of the patented inventions. What is peculiar about this provision is that it not only allows the Government to use the patent but also acquire it from the patent holder by making appropriate payments.

By applying the powers under this provision, the Central Government can use or acquire any invention for the purpose of vaccinating people and protecting them from Covid-19. Any medicinal or pharmaceutical product can be acquired and used by the Government to facilitate the immunisation of the general public.

It is pertinent to note that as of now, the Government has not used any of the powers granted under these provisions for increasing the production or distribution of vaccines in India. Instead, the Government has entered into advance purchase agreements with domestic vaccine manufacturers to ensure timely procurement and distribution of vaccines.  

India’s quest for a global IPR waiver amidst Covid-19

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1994 protects patents for any invention in any field of technology that satisfies the primary test of novelty, inventiveness and usefulness. However, there is also room for flexibility. Power has been given to the World Trade Organisation (WTO) members to exclude certain inventions from this protective net on the grounds of maintaining public order, protection of human/plant/animal life and protection of the environment. In the case of pharmaceutical inventions, nations have time and again resorted to compulsory licensing. The TRIPS Agreement allows the issue of compulsory licenses, subject to certain pre-conditions including that of voluntary negotiations with the patent owner. But these pre-conditions are not applicable in cases of national emergency or circumstances of extreme emergency or in cases of public non-commercial use.

India’s proposal for IP waiver

It was in October 2020 that the Government of India and South Africa approached the World Trade Organisation (WTO) with a proposal seeking a waiver from the provisions of the TRIPS. This waiver was sought with the sole intent of ensuring equitable distribution of the vaccine across the world. It is an open fact that neither a manufacturer individually nor in the form of limited groups can satisfy the global demand for vaccines, especially at a time when the demand for vaccines has already surpassed the supply capacity. Moreover, the high-income countries have wasted no time to secure their considerable share of vaccines thereby leaving the low-income countries at high risk.

The waiver is sought from the application and enforcement of Intellectual Property Rights for all technologies necessary for the prevention, containment and treatment of Covid-19. This proposition was supported by 62 WTO member states and over 100 low-income countries. It also met opposition from certain high-income countries like the UK, Australia etc. However, it was only in May 2021, that the proposition found its biggest supporter in the form of the USA, which announced its support to the waiver and willingness to participate in the text-based negotiations at the WTO. Post this announcement from the USA, the initial proposition was amended by India and South Africa on May 25th 2021 and a revised draft was submitted wherein a waiver was sought for a period of 3 years, subject to annual review, intellectual property rights on all relevant health products and technologies, including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19.

Counter declaration filed by the European Union

With the revised draft set in motion and the world debating on its prospects, the European Union (EU) released a Draft Declaration on June 4th 2021. This, however, did not favour the TRIPS waiver but focused on the use of voluntary licenses for expanding the manufacture and supply of vaccines. It also emphasised on minimising export restrictions for smoother cross-border supplies of vaccines and sharing of expertise between member nations. However, it has been a restatement of the provisions under the TRIPS. It states that in case of national emergency, circumstances of extreme emergency etc, compulsory licenses can be issued by a member nation without conducting negotiations with the patent right holder. This provision has already been laid down under Article 31(b) of the TRIPS Agreement. 

The idea of proportionate compensation to the patent right holder by the holder of compulsory license advocated under the Draft Declaration finds its roots in the provision of adequate remuneration laid down under Article 31(h) of the TRIPS Agreement. Also, the provision for import & export of pharmaceutical products by a member nation to other member nations which lack manufacturing capacity and issue of compulsory license in pursuance to it by issuing a notification to the TRIPS Council specifying the name and quantity of products, import eligibility, etc. as laid down under the Draft Declaration is only the reiteration of Article 31bis of the Trips Agreement which provides for issue of a similar notification for import & export of patented pharmaceutical products.

Issues in the EU Draft Declaration

The academic debate is centred around whether knowledge and technology sharing, including sharing of potential trade secrets, will help successfully combat the virus on a larger scale or not. While the initial proponents have focused on boosting the manufacturing capacity of low-income countries, increasing affordability and protection of human lives, the EU Draft Declaration has maintained the stance of IP protection and has failed to provide measures for maximising supply at affordable costs. It is also pertinent to note that, almost all the vaccines have been developed by pharmaceutical companies in the European Union individually or in collaboration with other pharmaceutical companies. Thus, the view taken by the EU Draft Declaration could be cast as a protective net over the Intellectual Property of European Pharmaceutical companies. Since the WTO could have to consider both the proposals now, which would take significantly longer, it can be mooted that the EU Draft Declaration might be an attempt to delay the text-based negotiations on the proposition submitted by the Indian and South African Governments.

The present situation of the global IP waiver

The recent meeting of the WTO General Council held from 27th-28th July 2021 ended on the note that the member nations are in disagreement over the fact that the pro-waiver stance is the best possible option for tackling the issue of shortage and affordability of vaccines and other pharmaceutical products required to combat the virus. The General Council was to continue informal discussions with the member nations over the matter and prepare a Ministerial Declaration which was to be put forward for consideration in the WTO 12th Ministerial Conference later this year in December 2021.  

Conclusion

The Indian patent laws have empowered the Central Government to acquire and use any invention. This wide range of power ensures that the general public can receive proper medical facilities on time and at appropriate prices. The concept of compulsory licensing has a drawback when it comes to the waiting period of three years but the same has been overcome by the enactment of Section 92 of the Patents Act. Thus, when it comes to the impact of Covid-19 on the essential medicine laws under the Patents Act, the Indian Patent laws are self-sufficient and protect the interests of the general public.

When it comes to India’s role on a global platform, the argument for a global IP waiver in times of pandemics is an important argument that has been raised by India. Even though Indian laws may be self-sufficient, it may not be the case for all countries and thus it is necessary that companies and nations place the interests of the general public before their individual interests of obtaining patents and royalties arising from the use of such patents.

References

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