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LEGAL FACETS OF PATENT LAW:IN THE LIGHT OF COMPULSORY LICENSING OF PHARMACEUTICAL PATENTS QUA COVID


Introduction

The second wave of COVID-19 has revealed the lack of preparedness and inadequate medical infrastructure in many countries. Rather than treating patients back to health, doctors are forced to plead and scramble for critical drugs, vaccines and medical oxygen. The Covid-19 crisis calls for relaxing stringent global trade rules and particularly important in this regard are rules pertaining to the ownership of intellectual property (IP) to cross-border movement of products involving intellectual property, like vaccines and medicines. The WTO’s rules insist on the protection of IP rights in cross-border trade, which implies that pharmaceutical products like vaccines and drugs can move from one country to another only after ensuring that their developers, i.e., pharmaceutical companies, are commercially compensated for their proprietary knowledge. This certainly explains why the rich and higher-income countries have been much ahead of others in obtaining vaccines and inoculating their citizens. If pharmaceutical patents continue to determine global access to vaccines and drugs, then fighting this global pandemic will remain a distant dream for most undeveloped as well as developing countries. Before delving into the concerned issue, it is important to get familiar with the concept of patents.


Patents are considered one of the oldest forms of intellectual property protection dating way back to the 15th century. A Patent refers to a legal document that grants an exclusive right to the patented invention, which is a product/process that provides a new way of doing something (in general), or furnishes a new technical solution to an existing problem. In order to obtain a patent for an invention, technical information regarding the invention must be revealed to the public in a patent application. Calling attention to the creative and dynamic nature of the inventive process, Justice Buller observed in Boulton and Watt v Bull (1795), which involved Watt's patent for a steam condenser, that patents “were granted for some production from these elements and not for the elements themselves.” While the philosophical or abstract principles could not on their own be patented, their embodiment in a material or practical form could. In these circumstances it was clear that in law it was the artificial or created nature of the final product, its distance from nature, which ensured that an object became an invention rather than a mere discovery.


Effects of the grant of a Patent

A patent incentivizes creativity by providing an innovator with a temporary monopoly over their innovation, and by defending them from the threat posed by imitators who wish to make a cheap replica of the product. The usual effects of the grant of a patent are that the patented invention is prohibited from being exploited during the limited time period, in the nation in which the patent is granted, by persons apart from the owner of the patent, unless ofcourse if the owner agrees to such exploitation by others. Therefore, it can be said that a patent protects an invention, and grants some exclusive rights to the owner of a patent to allow or disallow someone to exploit his/her patented invention within the limited term of patent protection. A patent document, which is supposed to be published to the public at large, stipulates the scope of patent protection and also contains a detailed description of the patented invention. The purpose of a patent is to accelerate technological development by providing the possibility of material reward to an inventor. It also provides an incentive for innovation and encourages inventors and their employees to continue their efforts to develop new technologies. However, patents do not guarantee the commercial success of the patented inventions in the market.


Conditions and Criteria for Patentability

In order to obtain a patent, a patent application must be filed by the applicant at the respective patent office governed by the applicable national law. There are several criteria that will be checked thoroughly by a patent office to determine whether the invention is patentable or not. In accordance with the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement), national patent laws provide three substantive criteria that must be met for an invention to be patentable. They are:

  1. It must be new or novel.

  2. It must involve an inventive step.

  3. It needs to be industrially applicable or useful.

Once a patent application has been filed, there are two general approaches to deal with it. In some countries the examination process only reviews and checks the formality requirements. In other jurisdictions, patent applications are supposed to be substantively examined by a technical expert in order to ensure that it meets the criteria of patentability. Both new innovations and the further development of existing creations may be protected by patents. For example, patents may protect an advancement in science such as the invention of penicillin as well as a new lever on a machine that helps the machine run faster. Patents protect inventions and an invention in turn provides a new way of doing something or gives a new technical solution to a problem. In order to obtain a patent, it is not necessary in patent law that the invention must be represented in a physical embodiment. However, there are inventions that cannot be patented, which includes discoveries, scientific theories, plant or animal varieties, business or commercial methods, and mathematical methods. Furthermore, therapeutic, diagnostic and surgical methods for the treatment of humans or animals (as opposed to medical products) as well as inventions the exploitation of which is against public order or morality are excluded from patentability in many countries.


Scope of Patents

Since patents are territorial rights, so the exclusive rights are only applicable in the country/region where the patent application has been filed and granted, in accordance with the law of that country/region. In short, a patent is an agreement between the inventor and the public. The state provides protection to the patent owner for a limited time period, while obliges the patent holder to publicly disclose his/her invention. Patent protection is generally granted for 20 years from the filing date of the application that is subject to the payment of maintenance fees. Once a patent is expired, revoked, lapsed or invalidated, the invention enters into the public domain which implies that anyone can commercially exploit the invention without infringing the patent in the concerned country. The enforcement of patent rights is quite complex, and it is the patent holder that must identify, monitor and take actions against infringers. It should be clear that in principle, there is no such thing as international patents. Therefore, an inventor must file a separate patent application in each country for which he/she is interested in getting patent protection. In case the patent protection is sought in a number of countries worldwide, an applicant may consider filing an international patent application provided under the PCT (Patent Co-operation Treaty), which makes it possible to get a patent protection for an invention in a large number of countries simultaneously by filing a single "international" patent application. The application can be filed by anyone who is a national or resident of a PCT Contracting State.


Compulsory Licensing: An Exception to Patents

There are certain circumstances where a patented invention can be used by others without any authorization by the patent owner. In certain cases, the use of a patented invention may be authorized to a third party either by the competent court or by a patent office governed by the patent law of the country through a regime called “compulsory licensing”. Compulsory licensing is a process by which government allows someone other than the patent owner to produce a patented product without obtaining the consent of the patent holder or plans to utilise the patent-protected invention itself. It is regarded as of the flexibilities in the arena of patent protection mentioned in the WTO’s agreement on intellectual property— the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement. But compulsory licensing doesn’t imply tearing up the patent as the patent owner still has rights over the patent, including the right to be renumerated for copies of the products made under the compulsory licence.


Article 31 of the TRIPS Agreement enumerates a number of conditions for issuing compulsory licences. In normal circumstances, the person or company applying for a licence should have tried to negotiate a voluntary licence within a reasonable period of time with the patent owner agreed upon reasonable commercial terms benefitting both. Only if that attempt fails, can a compulsory licence be issued against the patent holder. But it must be clear that even when a compulsory licence has been issued, still the patent holder is required to receive payment. According to the TRIPS Agreement, “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization”; but the terms “adequate remuneration” or “economic value” have not been defined in it. In exceptional cases of “national emergencies”, or “public non-commercial use” (or “government use”) or “other circumstances of extreme urgency”, there is no requirement to try first for a voluntary licence. It can be considered as the only instance when the TRIPS Agreement is relaxed and it specifically links emergencies to compulsory licensing. The main purpose is to save time by bypassing the first step of negotiating a voluntary licence. Compulsory licences can normally be granted for all types of products or technologies, provided the conditions in Article 31 are met.


Earlier there was a provision under paragraph (f) of Article 31 that compulsory licences must be granted mainly to supply the domestic market. Now the TRIPS Agreement has been amended in order to provide for an additional type of compulsory licensing, followed by a decision at the 2001 Doha Ministerial Conference when the Ministers realised that the deprived countries which are unable to manufacture pharmaceuticals on their own should be able to obtain affordable copies produced by the means of compulsory licences elsewhere, if required.

The idea behind this is that if such a country needs to produce needed affordable pharmaceuticals, producers around the globe can step up and supply that need, even if a compulsory licence is needed for such production in that country. All WTO members are eligible to export pharmaceutical products under the special mechanism of compulsory licensing. According to the amended TRIPS Agreement, the compulsory licensing mechanism covers pharmaceutical products, including medicines, vaccines and diagnostics, needed to fight an epidemic. The amended rules of TRIPS create the legal pathway, but eventually the countries have to make use of the mechanism. Since it concerns production for export, those countries which are willing to export under the system may be required to amend their laws to ensure that such production is permissible under compulsory licences.


One of the most effective and worthy ways in which global trade rules can contribute in providing access to medicines and vaccines is by enabling compulsory licensing. The World Trade Organisation’s rules allow countries to issue compulsory licences to domestic producers for manufacturing patented drugs and other products under situations of serious public health concern. During normal circumstances, compulsory licences are issued after detailed consultations with the patent, which are lengthy and take time to conclude. But the Covid-19 crisis demands speedy remedies. Hence, Compulsory licences need to be issued fast for enabling the deprived countries to make patented vaccines and critical drugs.


Examples of the Countries that nationally adopted Compulsory Licensing

In the present scenario, when the world is struggling to find a pandemic, many countries have resorted to compulsory licensing as an effective measure to tackle the crisis. Israel issued a compulsory license on March 24, 2020 to import generic versions of a drug 'Ritonavir'. The Israeli Ministry of Health had realized that the antiretroviral drug could be a possible treatment for the patients affected by COVID-19. The tryst is that this was done not because of high price of the drug, but in order to increase the availability of Ritonavir.

Canada also amended its Patent Act in March 2020 in order to allow quick issue of compulsory licenses. The amendment allows Canada to swiftly issue a compulsory license and negotiate a remuneration with the patent holders at a later stage.


Conclusion

When lives are being lost in the blink of an eye, larger and affordable production of drugs and vaccines can help arrest both death rate and infection. It is to be kept in mind that time is a crucial factor here and the more time is squandered, the more lives will be lost. It is high time that global trade rules back off from insisting on patent obligations. Though this doesn’t mean that vaccine and drug development process becomes a philanthropic exercise. However, the current global health crisis and high demand for drugs and vaccines imply that their producers will have enough countries and customers to supply to. The large volumes of production would ensure that they are able to recover the costs on their scientific investments. But what drug developers must avoid is the tendency to make profits by exploiting the helplessness of countries. Profits are indeed reaching the sky for companies like Pfizer, which is among the earliest to make vaccines and sell them to rich countries through advance purchase agreements.


The government of many countries can allow pharma manufacturers to produce the generic versions of patented medicines for the larger public good with the help of compulsory licensing. In simple words, if the patented drug costs thousands of rupees, then its generic version can be prepared at a fraction. Compulsory licensing allows a means to produce affordable drugs and increases its availability and supply. In a worldwide public health emergency where thousands of lives are being lost every minute, critical expensive drugs like Remdesivir, Tocilizumab, Favipiravir etc., which are expensive and scarce, should be licensed to increase production and improve affordability. Such licenses need not necessarily be granted for lengthy periods of time. For the time being, a time limited grant of say 1-2 years should be made. This would boost the production and help the nations stockpile critical drugs and vaccines. A time limited or production quantity limited license would help many countries tide over this crisis and save millions of lives.


References:


Author: Richa Pushpam

B.A.LL.B.(H) 2nd Year

Law School, BHU


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