Compulsory licences in offing for generic drug makers

By Kamakhya Srivastava, Lex Orbis IP Practice

The Controller General of Patents is soon going to make public the details of every drug patented in the country. As reported, these details will be extracted from information on the working of the patent that is filed by patent holders and from June it will be put on the website of the Patent office.

Making such information public is thought to be useful to check if patent holders are using the rights granted to them under the Patent Act to meet the country’s demands for medicines. If this is not being met, then a “compulsory licence” permits the manufacture of the patented drug.

It was reported that the Indian Patent Office believes that while around 34,000 patents were in force in India as of March 2010, only about 12 to 13% of were being used.

Kamakhya Srivastava,Lex Orbis IP Practice
Kamakhya Srivastava
Lex Orbis IP Practice

Collecting information

As per the procedure set out under section 146(2) of the Patent Act, 1970, and rule 131(1) of the Patent Rules, every patentee and every licencee (whether exclusive or otherwise) must furnish details of the extent to which the patented invention has been used on a commercial scale in India. These details are to be furnished in a form – form 27 – which is to be filed for every patent.

The form includes information on the quantum and value of the patented product manufactured in India or imported from other countries, a declaration as to whether the requirement of the public has been met partly or adequately or to the fullest extent at a reasonable price and the details of all the licences and sub-licences granted during the year.

Using a patent

The requirement that a patent must be used – or worked as in patent jargon – runs through all patented inventions under the Indian patent law.

However, selecting only drug patents to compile information provided through form 27 seems to pose the question: Is a statement on the commercial use of a patented invention in India relevant only from the viewpoint of compulsory licensing of drugs?

There is no denying that chapter XVI of the Patent Act mandates compulsory licensing for patented inventions and to do this a statement is required. As such, three years after a patent has been granted any person may apply for a compulsory licence on any of the following grounds:

• the reasonable requirements of the public with respect to the patented invention have not been satisfied;

• the patented invention is not available to the public at a reasonable price; or

• the patented invention is not being used in the territory of India.

The information furnished by licencees and patent holders in form 27, which will now be available on the website of the Patent Office for every drug patented in the country, will provide the grounds for substantiating the application for a compulsory licence.

Pharma focus of patents

The amendment of the Patent Act in 2005 turned the spotlight on pharmaceutical patents.

It necessitated the introduction of TRIPS mandated product patents with respect to food, drugs and chemicals.

There were wide ranging debates on several issues with a pharma focus including the framework of compulsory licence in the context of affordability and accessibility of drugs, drug pricing and public health.

This seems to have structured the focus of form 27 towards pharmaceutical patented inventions in seeking information on quantified data on manufacturing of a patented invention in India as well as imported from abroad. It is understood that such information on the working or non-working of a patented pharmaceutical product would help the generic industry to come up with compulsory licence applications.

Compulsory licences

Under the Patent Act, an application for compulsory licencing is tested on criteria such as the nature of the patent and the ability of the applicant to use the patent to public advantage.

In addition, the applicant will need to show that they can provide the investment required for the using the patent and also if there had been any effort to obtain a licence from the patentee on reasonable terms and conditions.

While the Patent Act speaks of when “a public requirement” has not been met, clarity is required on several fronts.

These include what is meant by “commercial scale”, “adequate extent” and also “fullest extent that is reasonably practicable”.

The present structure of form 27 may facilitate testing of the drug patents for compulsory licences in the prevailing circumstances. However, there is a need for a more well thought out form 27 that can be used for every patented invention and not just for pharmaceuticals.

Kamakhya Srivastava heads the Group on Research, Publication & Programmes [GRPP] of Lex Orbis, an intellectual property practice firm at New Delhi.


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