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COVID-19 Vaccines: Are Patent Rights Still Ethical? A case for compulsory licensing


  • A case for compulsory licensing


Many consider patent rights to be ethical rights as they advance innovation and incentivise production of knowledge. The need to balance patent rights with access to information and availability of essentials is the most popular discourse in today’s time. Generally, these are related to the field of biotechnology and become a heated political issue. Arguments against granting of patents contend that there are inventions and discoveries like genetic engineering, which are so beneficial to the humankind that they should be available to all. This has given rise to the concerns regarding the ethical implementation of patenting practice in the discipline of biotechnology. This paper will discuss one of the flexibilities granted in the patenting laws in the form of compulsory licenses with respect to the production of COVID-19 vaccines in India.


It was on January 16th 2021 that first dose of COVID vaccine was administered in India to a sanitation worker from AIIMS, Delhi. It marked the beginning of the first phase of vaccination in the country. Target population was that of the healthcare workers, sanitation workers, front line workers, those who are of 50 years and above and people below 50 years of age with co-morbidities. It was called the largest vaccine drive in the world planning to cover around 300 million priority groups. However, as the further phrases of this drive unravelled, there was a panic situation in the country about vaccine shortages. The government’s poor planning for the second wave and the vaccination programme was to be blamed for this anxiety amongst people. In January itself the Prime Minister began Vaccine Maitri (vaccine friendship), a “humanitarian” initiative wherein as of 19th May 2021, India has donated 663.698 Lakhs of vaccine doses to foreign countries. [1] Was it really humanitarian is a hotly debated issue as millions of Indians are craving for vaccines while their homeland is the largest producer of vaccines in the world. Another issue is that they failed to use the vast manufacturing capacity of the Serum Institute of India (SII), the producer of the vaccine sold under the trade name “Covishield”. The government missed the SII’s offer to sell 10 crore doses at a discounted rate way back in December 2020. [2] With the SII CEO Adar Poonawalla fleeing the country on getting unprecedented threats for not being able to fulfil the vaccine demands of the country, scholars and policy makers have been thinking of what other alternatives could help meet these domestic demands. As Professor Girdhar Babu, the head of Public Health Foundation of India, has expressed to the media that if India wants to make the smallest of a difference in its fatality rate, it needs to start administering approximately 7 to 10 million vaccines per day, for which it will require five times more of the current production. [3] India is in a dire need of vaccines amidst the second wave, fearing an already predicted third wave of coronavirus and one of the major policies that could succour India and the globe is the policy of compulsory licensing.


What is Compulsory Licensing?

Beginning with the basics, according to WIPO, 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”. [4] This means that a person who has invented a “new” product or a process can have the right to restrict anyone else from making use of their product or process for a period of 20 years. However, there are certain flexibilities granted by the WTO’s TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement. One of these flexibilities is the granting of compulsory licenses according to the Article 31 of the TRIPS Agreement, titled “Other Use without Authorization of the Right Holder”. [5] Compulsory Licenses are granted by the government to someone else apart from the patentee to produce their patented product or use their process without their consent. [6] Article 31 of the TRIPS discusses the provisions that need to be met before granting the compulsory license, one of which is that there must be previous unsuccessful attempts at acquiring voluntary licenses. Moreover, this does not imply that the patentee has lost all rights over their product or process completely. They can still get a compensation for the profits made through the use of the compulsory license.


In India, the parallel provisions for this are Section 84 to 92 of the Indian Patent Act of 1970. Section 84 lays down the conditions of which any person can make a request for a compulsory license to the Controller. Further, Section 92 gives the power to the Controller to Suo moto issue compulsory licenses if there is a government notified national “emergency” or “urgency” for “public non-commercial use”. The first such case of granting compulsory license was in the case of the lifesaving drugs used to treat kidney and liver cancers. Since, the patentee company Bayer Corporation sold the medicine Nexavar at extortionate prices, the license was awarded to Nacto Pharma which brought down the price significantly. [7] All the other conditions given in the Act were met. In relation to that, it must be noted that these provisions are not exclusive of those against anti-competitive practices. In fact, the Controller in India has the power to issue a compulsory license if he finds the conduct of a patentee to be anti-competitive as done in the case of Koninklijke Philips Electronics N.V. vs. Rajesh Bansal and Ors. [8] These provisions have been read in conjunction in other jurisdictions as well; for example, in 2007 the Brazilian government decided to issue a compulsory license in favour of Abbott Laboratories for the production of Kaletra, a patented drug used for AIDS, after the patentee company, Efavirenz refused to lower its price. [9]

Why Should Compulsory Licenses be Granted for the Production COVID-19 Vaccines?

Prior to the signing of the TRIPS agreement, India was one of the countries which only granted patents on the process of creating a product. This enabled other entities to use the method of reverse-engineering and recreate some generic pharmaceutical products and keep the market affordable. With the advent of TRIPS in India, patents started to be issued for both the process as well as products which came as a hurdle in the pharma industry of India and the public good.

To overcome such obstacles, this flexibility of compulsory licensing is a lucrative option to go for. Although, there are a number of compliances for it to apply. This needs to be done at a domestic as well as international level. For instance, Covishield is an intellectual property of the Oxford University, the license for which was granted to AstraZeneca, a British company. It was further sub-licensed by them to the Serum Institute of India. Taking a precedent from there, this can be done internationally with the help of negotiations by the government with companies such as Moderna who have willingly agreed to waive their patent rights during the period of pandemic. [10] The WHO itself had launched an initiative in May 2020 to have a voluntary pool of companies giving away their patent rights, sharing knowledge and technology for a worldwide production of drugs used to fight the pandemic. [11] The root of all these benevolent efforts is to give patent relaxation for the good of humanity and one such way of doing the same is to grant compulsory license to the entities who are willing to produce vaccines at affordable prices. In fact, countries like Chile [12] and Israel [13] have already approved the resolutions to issue compulsory licenses for any COVID-19 related drugs in their markets. At home, while discussing the suo moto action on COVID-19 issues in the Supreme Court, Justice Ravindra Bhat and the Solicitor General Tushar Mehta asked the centre to enable section 92 of the Patents Act, giving examples of how India was one of the first countries to do so in the Nacto case. [14]


At the domestic level, the only Indian made COVID-19 vaccine is the one sold under the trade name “Covaxin”. Since Covaxin is made by Bharat Biotech with the support of the Indian Council of Medical Research (ICMR) and National Institute of Virology, Pune, it should be easy for the government to grant an open license to anyone who can produce the vaccines. Nonetheless, at this hour considering the crisis that India is facing, large and significant humanitarian steps are required to tackle the situation. A time-bound compulsory license can be issued by the government in favour of other entities which have the producing capacity but lack the technology, knowledge or the rights to manufacture these vaccines. Since manufacturing capacity of Bharat Biotech cannot meet the demand of the entire nation, the license should be issued for a period of say, two years for other companies to make generic versions of the Covaxin. This in no way implies that Bharat Biotech will have absolutely no rights and benefits for their product. They can still have a certain percentage of profits as their license fee. The goodwill and the brand name will still be theirs to use. They can resume their exclusive rights over the product after the expiry of the time period for which the license was granted. This means that after the license gets outdated, the company will be able to restrict other companies from making these drugs and be able to claim its monopoly in the market.


Similar suggestions have been highlighted in a Public Interest Litigation (PIL) in front of the Kerala High Court by Advocate Gopalkumar G.K where he pleads that the court must make a declaration saying that it is perfectly valid to grant compulsory licenses for the production of COVID Vaccines and that the court must direct the respondents (Union of India and others) to issue compulsory licenses to pharmaceutical companies to manufacture Covaxin. [15] The petitioner presented a case for the granting compulsory license arguing that all the conditions for the same are met and that the current situation totally calls for a humanitarian action like this. Even though the government has given the license to produce Covaix to a public sector enterprise, Haffkine Bio Pharmaceutical Corporation Limited, it will take at least a year to start producing the vaccine due to its small capacity. [16] This is a step too small to improve the vaccine supply as there are other, more capable entities with larger manufacturing capacities and infrastructure to actually help in this situation. Surprisingly, the union government has taken a stand against the compulsory licensing of the vaccines, putting them outside the purview of “essential drugs”, stating that it will be “counter-productive” at this stage. In an affidavit filed in the court on 9th of May, 2021, it said that “any discussion or mention” of this issue will bring “serious, severe and unintended” consequences for India. [17]


Interestingly, the stance taken by India on the international forum is contradictory to its domestic stand. In October 2020, the Indian and the South African governments put forth a proposal to waive off the intellectual property protections to make medicines, vaccines and testing available to all. [18] This proposal has gotten the support of more than 120 countries including the US. Putting this into action requires a global consensus on the matter but EU is still posing a big hurdle in its way.


Compliances to Grant Compulsory Licenses

This section will discuss the legal compliances for compulsory licenses to be issued globally and locally. These compliances are more or less the same with technical differences to it. Doha Declaration to the TRIPS Agreement tried to facilitate poorer and developing countries to have a better access to public healthcare. Section 30 of the TRIPS mentions the exceptions to the exclusive rights granted by the patents and section 31 lists out the conditions for the same. Sub-paragraph (b) of section 31 lists out three requirements for the same; (1) national emergency, (2) extreme urgency and (3) for public non-commercial use. The current situation of India during the second wave of coronavirus disease does qualify for an extreme emergency considering the 7-day average of 3,039 deaths as of May 16th. [19] There’s a major shortage of hospital beds, essential medicines and oxygen supply and a long-term solution for this situation is the supply of vaccine. In case, the vaccines are imported through a compulsory license, it must be to meet domestic demands (as per the sub-paragraph f) and would be provided either free of cost or at affordable prices on a no-profit basis. Moreover, paragraph 5, sub-paragraph (c) of the Doha Declaration gives the power to a state to determine what amounts to a national emergency or situations of extreme urgency. [20] Sub-paragraph (c) says that the duration of such a license should be limited to the cause for which the license is being granted. This means that the licenses must be granted for a period of a year or two or as and when the demand and supply are synchronized.


Domestically, issuing compulsory licenses would invoke Chapter XVI of the Indian Patent Act of 1970. Under section 84 of the act, the subclause (1) lays out three conditions on which compulsory licenses are granted. Firstly, that the “reasonable requirements” of the public are not satisfied by the patented product, second, product is not affordable for people and third that the product is not worked in India. Another section of significance is the section 92 of the act which allows the central government to make a declaration of a national emergency or extreme urgency to make way for the Controller to grant a compulsory license, ensuring that the products are available at the lowest prices possible. This, up to a huge extent overlaps with the international provisions for compulsory licensing. Licenses must be granted after the terms and conditions given in section 90 are complied with. The provision that holds the most significance in the current pandemic is section 90(3) which says that if the central government feels the need to import patented products from other countries in larger public interest. This is subject to the condition that proper remuneration and royalty fee is paid for the same. This provision is the key for India to try and negotiate with as many foreign vaccine manufacturers as possible in order for them to grant their licenses to Indian manufacturers.

In the current trying times, India is in a dire need of vaccines at a larger rate. The current production capacity does not seem to make for the rising demands for the vaccines. As aforementioned, this is one of the most important and vital solution for Indian manufactures to be able to make an effort towards meeting the demands for the vaccines which must be taken into consideration. The most apt questions to raise in this time of crisis is that are patent protections still ethical?


References



[1] I. MEA, "COVID-19 UPDATES," 2021. [Online]. Available: https://www.mea.gov.in/vaccine-supply.htm.[2] F. Express, "Covid-19: Why India is facing vaccine shortage," 10 May 2021.[3] V. V. Rao, "The case for compulsory licensing of Covid vaccine," National Herald, 1 May 2021.[4] WIPO, "Patents," [Online]. Available: https://www.wipo.int/patents/en/. [Accessed 14 May 2021].[5] WTO, "TRIPS AGREEMENT, Article 31," [Online]. Available: https://www.wto.org/english/res_e/publications_e/ai17_e/trips_art31_oth.pdf.[6] WTO, "Compulsory licensing of pharmaceuticals and TRIPS," [Online]. Available: https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm. [Accessed 14 May 2021].[7] Bayer Corporation v. Natco Pharma Ltd., 2013.[8] 12 July 2018.[9] E. a. S. K. Bond, "Compulsory licensing, price controls, and access to patented foreign products," ournal of Development Economics, vol. 109, pp. 217-228, 2014. [10] N. Koukakis, "Countries worldwide look to acquire the intellectual property rights of Covid-19 vaccine makers," CNBC, 22 January 2021.[11] WHO, "Solidarity Call to Action," [Online]. Available: https://www.who.int/initiatives/covid-19-technology-access-pool/solidarity-call-to-action. [Accessed 15 May 2021].[12] L. G. Abinader, "Chilean Chamber of Deputies approves resolution for compulsory licenses for patents relating to the coronavirus virus," KEI Online, 17 March 2020 .[13] J. S. Steeven Scheer, "Israel approves generic HIV drug to treat COVID-19 despite doubts," Reuters, 19 March 2020.[14] In Re Distribution of Essential Supplies and Services During Pandemic.[15] L. S. Thomas, "High Time Govt Opens Doors To Enable Capable Vaccine Manufacturers To Produce Vaccines': PIL In Kerala High Court Seeks Compulsory Licensing Of Covid Vaccines," Live Law, 11 May 2021.[16] F. Malik, "Centre allows Haffkine to start Covaxin production," Hindustan Times , 16 April 2021.[17] K. Rajagopal, "Coronavirus | Experts point to ‘contradiction’ in India’s push for IPR waiver on vaccines," The Hindu, 13 May 2021.[18] J. C. Mathew, "No consensus on India-South Africa's WTO proposal to waive off patent rights for COVID-19 innovation," Business Today, 18 October 2020.[19] T. N. Y. Times, "India Coronavirus Map and Case Count," 2021. [Online]. Available: https://www.nytimes.com/interactive/2020/world/asia/india-coronavirus-cases.html. [Accessed 16 May 2021].[20] WTO, "DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH," 14 November 2001. [21] V. V. Rao, "The case for compulsory licensing of Covid vaccine," National Herald, 1 May 2021. [22] WIPO, "Patents," [Online]. Available: https://www.wipo.int/patents/en/. [Accessed 17 May 2021].[23] "Compulsory licensing of pharmaceuticals and TRIPS," [Online]. Available: https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm.[24] N. Shukla, "India: Compulsory Licensing In India," Mondaq, 2019.[25] I. MEA, "COVID-19 Updates- Vaccine Supply," 2021.[26] F. Express, "COVID-19: Why is India Facing a Vaccine Shortage," 2021.[27] 12 July 2018.



~ By Diya Dave, Law Student


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