TITLE : ROLE OF COMPULSORY LICENSING

DURING COVID PANDAMIC

ROLE OF COMPULSORY LICENSING DURING

COVID PANDEMIC

ABSTRACT
 A patent is a right given to the property that has been discovered by a person or a company or
an organization. A patent is a type of intellectual property that the owner receives as a legal right
over his products so that the other competitors cannot sell or use or manufacture the same. Patent
is the safeguard for the product that the company produces. Compulsory licensing is the
permission given by the government to produce the patented products during emergency. The
TRIPS agreement sets standards for the protection of each person. It also deals with the
enforcement of intellectual property and also solves disputes between WTO members. The
TRIPS lays down few ways in which they can use compulsory licensing to produce the patented
products. Chapter XVI deals with the patent laws under the Indian Patent Act, 1970. Compulsory
licensing from the international market is more likely to reduce the prices of the drugs which can
improve the access to drugs in the local areas. This paper will focus on how compulsory
licensing has played its role during the covid pandemic and how effectively it has been used
during emergency in other countries and the ways in which it can be implemented in a better
manner.

INTRODUCTION

Compulsory licensing is the approval given to the third party to make or use the product
created by the other. Only after this the third party can use it. The Trade – Related Aspects of
Intellectual Property Rights has provisions that deal with compulsory licensing. Article 31 of the
TRIPS states that compulsory licensing can be given only to stipulated products on agreement
basis. There are few conditions in which compulsory licensing can be granted are: when the use
shall be non – exclusive or when the use shall be authorized predominantly for the supply or on
non - assignable or when paid adequate remunerations. The affordability on medicines for people
in developing and underdeveloped countries was brought only after 1995 when the World Trade
Organization (WTO) and the TRIPS contained stringent protection for pharmaceutical products.
There are international treaties and agreements that cover the protection on intellectual property
laws. Protection of this intellectual property came only after the Paris Convention and it strongly
got its establishment after the World Intellectual Property Organization. 1

Compulsory licensing is a powerful public health tool to mitigate expensive drug prices. The
rewards of patent protection is necessary to support the innovations while compulsory licensing
is an exception that exists for public health emergencies.2

The WTO agreement on TRIPS is a multilateral agreement on Intellectual Property which

plays a key role in facilitating the trade disputes over intellectual property and assuring the WTO
members to achieve the objectives. The agreement is a legal recognition given for the significant
link between the intellectual property and trade. The TRIPS council is responsible for maintain
and monitoring the operations of the TRIPS agreement. Before this agreement there were many
countries where they can easily export the pharmaceutical products to other countries at a very
lower price without the permission of the patent holders/ owners. The main requirement of the
TRIPS was that all nations have to make patents available for the inventions without any
discrimination. The agreement also sets 20 years as a minimum patent protection in all the WTO
member nations. Hence all the WTO countries are required to grant patent protection for
pharmaceutical products. The agreement also includes the use of different instruments which can
improve the access of medicines. Article 31 speaks about the issuance of compulsory license
during national emergencies and other extreme emergency.

STATEMENT OF PROBLEM

1
WIPO, established in 1967
2
Hilary Wong, 2020, the case for compulsory licensing during covid – 19, University of California, Berkeley, School
of Law, USA.
 Compulsory licensing plays a major role in order to protect the patent of the products so that
they cannot be illegally used and has brought many changes. And this licensing must give way
during emergencies so that it can be made available to the people in need. This gives access to
use to pharmaceutical products which can be made easily available. This licensing how it helped
during the covid pandemic in order to get the required medicines will be discussed.

RESEARCH QUESTION

1. How compulsory licensing played its role in the production of covid vaccine?
2. Whether the licensing process is done in a right manner in all the countries?

OBJECTIVES

 To study about the compulsory licensing system and how it helped during the pandemic.
 To know the ways in which compulsory licensing has been implemented in other
countries.
 To suggest better ways to make easy access to the pharmaceutical products.

REVIEW OF LITERATURE

The Doha declaration on the TRIPS has reaffirmed the flexibility of member states for more
easy access of medicines. Generally, the TRIPS Agreement does not protect members from
taking measures to protect public health but this declaration states that it can be implemented in a
better way with the WTO member right to protect the public health. They recognize that the
WTO members face difficulties to use compulsory licensing under the TRIPS Agreement. They
have instructed the council members to find solution for the problem and to report the General
Council. Article 31 had its amendment keeping paragraph 6 as the main frame to enable
compulsory licensing for the production of pharmaceutical products to export the medicines to
countries where the medicine is insufficient. The main reason for compulsory licensing are:

 Abuse of patent rights

 Public interest
 Licensing of related patents
The first compulsory license was passed against the Bayer’s patent on drugs Nexavar on 2012 in
India. This bayer’s patent drug Sorafenib Tosylate was sold under the name of Nexavar which is
a patented drug. The patent drug was used to treat kidney and liver cancer. 3

The 73rd World Health Assembly failed to declare covid vaccine as a global public good. The
WHO on voluntary licensing of covid 19 medicines made it available ready on a non- exclusive
basis. The EOP and the CNIPA have agreed on their request.4

The 6th paragraph of the declaration on TRIPS Agreement waives restrictions imposed in
Article 31 during emergencies. In the absence of voluntary licensing, compulsory licensing will
grant permission for the manufacture of patented products. This circumstances arises when there
is national emergency or extreme urgency and the restrictions would be non- exclusive in nature
and predominantly for domestic use. When on grounds of public health, a member is in need of
the pharmaceutical products then the potential exporting country can use paragraph 6 to send the
product. During that period there will be a waiver in the Article. 5

The Indian Patents Act provides for brief description about compulsory licensing included in
2002 amendment. The amendment provides three grounds in order to get the licensing. The
license can be sought only after the expiry period which is three years from the sealing date of
the patent. A notification can be made to the government incase of national emergencies or
outbreak of epidemic. There is also a provision in which certain patents can made efficient to
work in other patented inventions. Before this amendment the IPA contained a right known as
licenses of right. Under this it would automatically endorse these words and make it available for
compulsory licensing after the period of three years from the date of issue. The patent owner will
give his consent and will also receive remuneration to use his products. Such products exist in
many countries like UK, Germany, etc. Few grounds in which India provides the licensing are as
below:

 At a reasonable requirement of the public.

 When the patented products are not available at an affordable price.

3
Rajeshkumar Axharya and Girishchandra Tanna, 2019, Compulsory Licensing of Patents in India.
4
The European Patent Office 2020, Joint statement of EPO and CNIPA on response to covid 19, News 30 June
5
Weinian Hu, 2020, Compulsory Licensing and Access to Future Covid- 19 Vaccine, CEPS Research Report.
  When the invention is not worked in the territory of India.6

COMPULSORY LICENSING DURING COVID- 19

A compulsory license is a permit granted by the government to produce patented medical

products without prior consent of the patent holder. Compulsory licensing can be issued on the
following grounds:

 To remedy anti- competitive practices or failure of work.

 For public non– commercial use.
 When there is a risk that the product will go out of stock.
 When the public health is at stake.

Over the past two decades compulsory licenses are considered and used in many countries to
access challenges on medicine such as HIV/AIDS, Hepatitis C and Cancer. In 1027 Malaysia
issued a license for sofobuvir to increase the access for treatment of Hepatitis C.

Many countries have excluded pharmaceutical products from patentability in order to make
it affordable for all. India and Brazil are good examples that allowed process patents and not
product patents. On March 2020, Israel issued for compulsory licensing in order to import
generic versions of lopinavir/ ritonavir. The health ministry thought that this drug could treat
covid- 19. Israel did not issue licensing due to its price. It issued compulsory licensing and
turned it as a generic alternative from India because Abbvie was not able to supply enough. Later
AbbVie announced that it will not issue patent at the present situation.

COMPULSORY LICENSING IN OTHER COUNTRIES

The Canada’s Emergency Response Act had its amendment to allow for a speed process of
compulsory licensing on public health. This amendment allowed government to issue license for
necessary innovations. A covid 19 cure may turn out to be an existing drug that is not patented.
Incase compulsory licensing becomes necessary then the countries must take the required steps
to prepare.

6
V. K. Unni, 2015, Compulsory Licensing of Phramaceutical Patents in India: Whether the Natco Decision will meet
the global benchmarks?
 In 2020 the Australian government amended the Patent Act to make changes in rules for
Crown use of patents. In this amendment the Crown use can be invoked when there are
emergencies and new inventions which are not available to the public at a reasonable price.

In 2021 the Brazil government approved a bill which facilitates compulsory licensing in
emergencies. The bill includes applications in the scope of compulsory license and establishes a
procedure for simultaneous licensing group of technologies.

In 2020 the Chile Chamber of Disputes passed resolution to issue compulsory licenses for
any patented medicines, vaccines that respond to the pandemic.

In 2020 the Germany passed a new bill that instructs the government to use patented
medicinal products including narcotics for disinfection.

COMPULSORY LICENSING IN INTERNATIONAL JURISDICTION

The Paris Convention and the TRIPS Agreement allowed most of the countries to follow
compulsory licensing in their legislation. In these countries compulsory licensing can be issued
by a judge or the government. Though USA is not following the compulsory licensing system it
shows some hostility towards granting of compulsory licensing. All the other developed
countries have their own provisions that deals with compulsory licensing in patent statutes. 7

LIMITATIONS OF COMPULOSRY LICENSE

 The compulsory licensing systems in developing countries face pressure from their
trading partners and the pharmaceutical corporations. One good example: Gilead suing
Russia for issuing compulsory license on remdesivir.
 The TRIPS Agreement has some procedural and substantive conditions for compulsory
licensing by the governments.
 Compulsory licensing provides remedy only after patent barriers on medical products
have been established.
 The export and import of medicines is insufficient and does not provide a practical option
to facilitate export.

7
Joseph A. Yosick, 2001, Compulsory Patent Licensing for Better Use of Inventions.
  Compulsory licensed medicines cannot override the non- patent IP barriers. In TRIPS
agreement Article 5 provides compulsory license for patent goods.

NEED FOR TRIPS RELAXATION IN COVID- 19

Many countries have shown their interest in making the best of compulsory licensing which
will help for the welfare of public health. The waiver proposal made by India and South Africa
gives options to choose temporarily and implement, protect the undisclosed information,
industrial design and copyrights related to medicines, vaccines etc. The government should use
TRIPS waiver flexibilities to safeguard the public health.

CONCLUSION

All the countries have the right to determine the issue of compulsory license. The patent
office should be able to issue patent according to the TRIPS Agreement and the Paris Peace
Convention for the protection of Industrial Property. The TRIPS waiver by India and South
Africa allows the countries to unite and provide legal options addressing IP monopolies in the
pandemic. As covid- 19 has spread all over the world, all the governments should stand and work
for its adoption.

A good case study of India provides flexible ways in which the TRIPS Agreement can be
used efficiently by the developing countries. It is still in the developing stage and the entire
world is waiting to see the unique patent system of India facing various challenges relating to
TRIPS Agreement and it’s in the hands of the policy makers to keep it fair and just manner by all
it’s stakeholders which also includes the patent owners and the public.