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Choosing People Over Diplomacy: A Clear Case for Compulsory Licensing

By: Prabhav Pachory & Sidhant Hans * |

One death is a tragedy, a million deaths a statistic. The same has proved to be true in the world affected by covid-19. Covid-19 has wreaked havoc in India and thousands have died in consequence but only those who lost their kith and kin truly know the value of essential drugs such as Remdesivir etc. There are various medicines such as Remdesivir, Tocilizumab, etc which are considered as a panacea for Covid-19, but there is a huge shortage in supply of such medicines, which makes this a perfect case in which the centre can give teeth to section 92 of the patents act and enforce the provision of a compulsory licence under the Act. Section 92 authorises a third party to make, use or sell a particular product or use a particular process which has been patented, without the prior permission of the patent owner. This may improve consumer access to medicines sold by pharmaceutical companies by imposing price controls on them.

During the hearing of the sou moto case in which the Supreme Court has taken cognizance of the issues arising out of the COVID-19 pandemic, it orally remarked and asked the centre to furnish reasons why the compulsory licence should not be issued. However, the centre told the Supreme Court that it is not in favour of exercising powers under the patents act such as compulsory licensing over covid-19 vaccines and medicines at this stage citing that Centre is engaged in diplomatic level talks with other Nations for procurement of vaccine and medicines.

As the number of Covid-19 cases surged in April, many people went from pillar to post in the search of covid-19 related drugs such as Remdesivir etc. Taking advantage of this situation some sellers demanded exorbitant prices for the medicines. This was not only illegal but also inhumane. WhatsApp messages were flooded with the request for covid-19 related drugs. Public health emergency was manifest. At present,, there are very few manufacturers of covid-19 drugs, which makes the cost of the drugs to be very expensive and makes it a perfect case in which a compulsory licence must be issued and prices be capped so that the drugs can also reach the marginalized.

Compulsory licensing under the Indian Patents Act find its mention at two places viz. Section 84 and 92. Section 84 of the Patents Act, 1970 talks about the case where any interested person may make an application to the controller seeking the grant of a compulsory licence for a three-year-old patent on the given grounds such as public requirement, affordable pricing etc. Further, the applicant is required to satisfy the Controller that any of the mentioned grounds exist in order to secure the grant of compulsory licence. However, the same is not the case with Section 92.

Section 92 of the Patents Act, 1970 is a special provision for compulsory licensing. It takes into account those situations which, in the opinion of Central Govt., require urgent measures so as to meet the requirements of the public at large. Once a notification under Section 92 is made by the Central government, the Controller shall on an application made at any time after the notification by any person interested, grant to the applicant a licence under the patent Act on such terms and conditions as he thinks fit. This act of granting compulsory licence by the Controller is a mandatory one unlike that in Section 84 which is a discretionary exercise of his power. The Controller may reject the application for compulsory licensing under Section 84 but cannot do so in the case of Section 92.

Section 92 empowers Controller in circumstance of national emergency, which may arise during an epidemic, to dispense with certain compliance obligations like publishing the application for compulsory licensing in the official journal and supplying the copies of the said application to the Patentee. Whereas, the Controller is bound to comply with these procedural obligations while dealing with an application under Section 84. It is worth mentioning here that an Indian generic drug manufacturer Natco Pharma Limited has filed an application before the Controller of Patents seeking a compulsory license to produce the drug 'Baricitinib' which is used for the treatment of COVID-19. The first-ever case of compulsory licencing in India is the Nexavar case [Bayer Corpn. v. Union of India, SLP (C) No. 30145 of 2014, decided on 12-12-2014 (SC)], wherein the controller general of patents granted a compulsory licence to Natco Pharma to manufacture and sell Bayer Corp.’s patented drug sorafenib tosylate (Nexavar) used to treat patients suffering from liver and kidney cancer. Bayer’s challenge against the order of Controller was rightly dismissed by the Bombay High Court observing that “entire basis of grant of the compulsory licence is based on the objective that patented article is made available to the society in adequate numbers and at a reasonable price. These are matters of public interest. The law of patent is a compromise between the interest of the inventor and the public. Public interest is and should always be fundamental in deciding a lis between the parties while granting a compulsory licence for medicines/drugs”.

The lives of the people must always be prioritised over any diplomatic relations. The Legislature had carefully contemplated the requirement of patented goods for certain circumstances for which powers were given to the Central Govt. under the Patents Act. The objective of inserting Section 92 seems to be quite obvious, which is to empower the Central Govt. with ample room to deal with situations involving exigencies. The exercise of this special power by the Central Govt. will cater to the present situation and will act as a balance between the demand and supply gap.


* Prabhav Pachory is an advocate practicing at Delhi High Court.

Sidhant Hans is an advocate practicing at Punjab and Haryana High court.



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