origiin newsletter april 2012

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Origiin Newsletter April 2012, Volume 2, Issue 12

www.origiin.comVisit our blog: http://origiinipae.blogspot.com

Copyright 2011, Origiin IP Solutions LLP. All rights reserved

April 2012 Volume 2 Issue 12

IN THIS ISSUE

What is Compulsory License? ..1

Latest News...2

Patentalk.3

Interesting patent of the month.4

EDITORS

Santhoshi BasuthkarMolika Gupta

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Sir Isaac Newton

Special issue on Compulsory license

What is a Compulsory License?

By Santhoshi Basuthkar ([email protected])

In developing countries like India, where AIDS is

spreading widely, access to lifesaving medicines is a

dire need. The Indian Pharmaceutical industry is

mainly involved in producing generic drugs and there

are very few R&D centers in the country that invent

new drugs. Thus we mainly depend upon importing

those valuable medicines from the developed nations.

Several multinational pharmaceuticals use this opportunity to hike up the prices of

their drugs when it is being sold to the markets of the developing nations. This

prevents the easy access of medicines to the needy patients. Compulsory licensing

is one such tool to prevent such dominance of monopoly exhibited by the

multinational industries. A compulsory license (CL) to a patented product is granted

when the government allows someone to produce the patented product without the

consent of the patent owner. It is an involuntary act between a willing buyer and an

unwilling seller, enforced by the state.

Patents are granted to encourage the inventors to disclose their inventions and

also to grant them monopolistic right to exploit the invention. The objective of

patent grant in india is to ensure that the inventions are worked in India on a

commercial scale and to the fullest extent without any undue delay. If the patentee

is not commercializing the invention and as a result, the reasonable requirements

of the public are not met or the patented product is not available to public at

reasonable price, the compulsory license is available as a remedy against abuse of

patent right.

Many patent law systems provide for the granting of compulsory licenses in varioussituations. The Paris Convention of 1883 provides that each contracting state may

I can calculate the motion ofheavenly bodies, but not the

madness of people.


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take legislative measures for the grant of compulsory licenses. The Article 5A (2) of the Paris Convention reads:

"Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory

licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent,

for example, failure to work."

Compulsory licensing is one of the flexibilities on patent protection included in the TRIPS (Trade Related Aspects of

Intellectual Property Rights) agreement. Article 31 of TRIPS lists a number of conditions for issuing a CL. India

joined the TRIPS agreement in 2005 thereby providing stronger provisions for CL. Today, many countries such as

Canada, France, UK, USA, Australia, Zimbabwe, Ghana, Brazil, Equador, Malaysia, and Thailand have provisions

for granting CL. Section 84 of Indian Patents (Amended) Act, 1970 states the provisions for granting CL. It mainly

deals with three major conditions for granting a CL: a) Reasonable requirements of the public with respect to the

patented invention have not been satisfied, b) The patented invention is not available to the public at a reasonably

affordable price and c) The patented invention is not worked in the territory of India.

The first Compulsory License in India was granted recently on 9th

Mar 2012, to Natco Pharma for the manufacture

of its patented anti-cancerous drug, Nexaver. Natco would sell the drug at 97% lesser rate of its original cost. The

grant of the first CL in India has been welcomed with mixed reviews. Undoubtedly, the CL would ease the suffering

of the needy patients by getting cheaper access to valuable medicines. However, the pharma giants had to swallow

a bitter pill. It takes around 2 billion dollars to innovate a single drug and launch it in the market, grant of such

compulsory licenses would shake their product pipeline as the ROI (Return of Investment) for such expensive

drugs would not be met. Experts say that such events will also reduce the innovations happening in the pharma

sector. Nevertheless, the main notion of inventing new drugs is to meet the needs of the patients, hence it would

be wise for pharmaceutical companies to come up with new price slabs while launching their product to respective

countries.

LATEST NEWS

Indias first Compulsory License Agreement Granted

On 9th

March 2012, India saw its first grant of Compulsory License, under the

Indian Patents Act 1970, to manufacture and sell the drug, Nexavar (Sorafenib

tablets). The drug is prescribed for the treatment of Liver and Kidney cancer

and the primary inventor (patentee) of the drug being Bayer Pharmaceuticals. The native cost of the drug in India is

around Rs. 2,80,428 per Month and Rs. 33,65,136 per year. Due to the heavy costs of the drug and incurring high

number of patients, the Indian generic drug company, Natco Pharma (applicant) applied for the grant of compulsory

license to manufacture the drug, to the Controller of Patents, Mumbai.

The Controller General investigated the case based on U/S 84(1)[a, b and c], as follows:

a) The reasonable reqirements of the public with respect to the patented invention has

not been satisfied: There are approximately 20,000 liver cancer patients and 8900 kidney

cancer patients in India, while the sales report submitted by the patentee showed that it

only imported tablets that met the need of just 2% of the cancer patients in the country.


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Despite the fact that the drug has been in Indian market for 4 yrs, the Patentee has not made the drug available in

sufficient quantities. b) The patented invention is not available to the public at reasonably affordable price: The

average income of an Indian family estimated to be Rs. 60,455/annum, where the price of the drug i.e Rs. 2,80,000

is far fetched for a common man. The exhorbidant price of the drug is thus restaining a common man from using it.

c) The patented invention is not worked in India: Nexaver was launched in India in 03-03-2008, but even after 4 yrs

of its launch, the patentee did not make any arrangements to manufacture the drug locally. Based on these

grounds, Compulsory License was granted to Natco Pharma to manufacture and sell the drug at the price ofRs.8800/- month in India.

This decision given by the Controller General was highly welcomed by the generic companies in India. It also

serves as a warning for several multinational pharma companies that hike the prices of the drug and prevent from

reaching the needy patients in the country, the patent office would end the monopoly of such patents in order to

provide access to medicines.

Yahoo sues Facebook for infringing 10 patents

Yahoo Inc sued Facebook Inc over 10 patents that include methods and

systems for advertising on the Web, opening the first major legal battle among

big technology companies in social media. The lawsuit, filed in a San Jose,

California federal court on Monday, marks a major escalation of patent

litigation that has already swept up the smartphone and tablet sectors and

high-tech stalwarts such as Apple Inc, Microsoft Corp and Motorola Mobility

Holdings Inc.

Infringement of patent happens when any third party makes, uses, sells, offers for sale or imports the patented

product in a given territory without consent of the patentee. In the lawsuit, Yahoo says Facebook was considered

"one of the worst performing sites for advertising" prior to adapting Yahoo's ideas.

However, in response to being sued by Yahoo for patent infringement last month, Facebook filed counter-claims

against Yahoo for infringing 10 of its own patents. Facebook also denied the original claims against it from Yahoo,

seeks damages for Yahoos infringement, and requests a trial by jury.

PATENTALK: Mr Anil Kulkarni

This section is an initiative by Origiin to introduce innovations from various inventors and valuable opinions on

protection, exploitation, of Intellectual property by Intellectual Property experts to provide inspiration to the readers

and also make our readers aware about the emerging technologies, products and innovations. This section also

aims at bringing out the importance of patent protection and the way such innovations are making difference in

evolution of scientific progress in the country.

In this issue, we are introducing Mr Anil Kulkarni, Principal Technical Officer in National Chemical Laboratory,

Pune and Registered Patent Agent. Below is his expert opinion on compulsory license, which was recently granted

to Natco Pharma for the first time in Indian history.
http://techcrunch.com/2012/03/13/yahoos-patent-suit-against-facebook-is-a-crock-of-shit-and-it-pulled-same-move-on-pre-ipo-google/http://techcrunch.com/2012/03/13/yahoos-patent-suit-against-facebook-is-a-crock-of-shit-and-it-pulled-same-move-on-pre-ipo-google/


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Designation and company name: Principal Technical Officer, Division of NCL

Innovations; National Chemical Laboratory.

Area of expertise: Worked as IPR Coordinator in NCL since 1991 till 2007

Here is an excerpt of his interview byOrigiin

Origiin: Please let our viewers know what compulsory license is and when was it

first introduced in Indian law?

Mr. Kulkarni: I am restricting my answers to the Patents only. Monopoly rights are granted to the patentee under

patents system. These are exclusive rights to prevent third parties not having his consent from the act of making,

using, offering for sale or selling and importing the product and in respect of a patent for process, preventing using

the process or making using, offering for sale or selling and importing the product directly obtained in India. The

patentee is likely to abuse these rights by importation, refusing the grant of license, imposing restrictive conditions

or unreasonable terms for the license. This hits the very basis of grant of monopoly rights wherein the patented

inventions are expected to be worked in India within 3 years of their grant. Therefore provisions are made in almost

all countries including India for issuing compulsory licenses by the authority to see that the patented inventions are

commercialized indigenously the benefits are available to general public. The consent to work the inventions is

given by the authority rather than the patentee under certain special circumstances and the order of the Controller

operates as a deemed contract between the patentee and the licensee.

The Indian patent system is based on the laws passed by UK since 1856. In UK, the compulsory license system

was recognized in 1850s. International community accepted this in 1883 through Paris Convention. A century ago,

in 1911, the Patents and Designs Act was made applicable to India which was based on the 1908 Act of UK. While

the provisions for restricting the abuse of monopoly granted by patents is as old as the laws, the composite Act of

1911 definitely had a provision of compulsory license under sections 22 and 23

Origiin: When a company has invested huge amount of money in R&D, it is logical for Government to grant

such license? Isnt it discouraging for the companies?

Mr. Kulkarni: The provisions of compulsory license are present in laws relating to inventions in each and every

country. As said earlier the provisions are for preventing misuse of monopoly rights granted to the individual and

also to strike the balance of interest between the individual monopoly and the social needs. The provisions of

compulsory licenses, licenses of rights and deemed licenses of right present in the Patents Act 1970 before 2002

amendment came under severe criticism in international deliberations. After we joined Paris Convention it wasincumbent upon us to amend the provisions of our Patents Act to make it TRIPS compliant and hence amendments

were made in the Patent Act wherein the provisions relating to Compulsory License were completely overhauled.

These changes brought out marked transformation of character of these provisions whereby from generality the

provisions were given the nature of case-to case basis.

The provisions as they stand today are to remedy special circumstances only. The logic of the Government in

amending the generalized provisions is vindicated by the very fact that after the amendment we had the first case

of grant of compulsory license only after almost 10 years and also from the enforcement of the Patents Act 1970.

Getting a compulsory license is not an easy task. Stringent conditions are required to be fulfilled, Controller is

mandated to take into consideration several factors as mentioned in sec. 81(1) (6). Therefore it appears to be


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perfectly logical for making provisions despite companies making huge investments and other relevant arguments

of the companies. From the grounds of the compulsory licenses in our Patent Act one can safely conclude that

these grounds do not affect the interests of the companies in normal circumstances. These licenses are to remedy

certain unusual circumstance such as reasonable requirements of the public in India are not being met, in case of

national emergency and extreme urgency and helping a needy country in case of shortage of pharmaceutical

products. Therefore I feel that it is not and should not be considered by corporate as a discouraging factor.

Origiin: What is usually the term of compulsory license and who can get it?

Mr. Kulkarni: There is no specific term defined under the Act for a compulsory license. Section 90 of The Patents

Act provides for terms and conditions of Compulsory licenses. Sub-section (vi) of section 90(1) of the Act provides

that the controller shall endeavor to secure that the license is for the balance term of the patent unless a shorter

term is consistent with the public interest. Thus discretion is given to controller to decide the term of the license.

The term of the compulsory license granted by the Controller could also be affected if the patentee successfully

secures the order of termination of the license from the Controller under section 94. The first license granted by the

Controller to NATCO is also for the remaining term of the patent.

The application for the compulsory license can be made by any person interested. The definition of the term

person interested in subsection (t) of sec. 2(1) is inclusive one to include a person engaged in or in promoting

research in the same field as that to which the invention relates.

Origiin: In recent case of compulsory license in Natco v/s Bayer, howmuch difference is there in cost of

drug after and before license?

Mr. Kulkarni: In the instant case the drug in question Sorafenib tosylate sold under the brand name of

NEXAVAR is used for the treatment of advanced stage of kidney and liver cancer. It is not a lifesaving drug but alife extending drug. The life of a person affected by kidney cancer can be extended by 4-5 years while that of liver

may be extended to 6-8 months. The drug has to be taken by the patient throughout his lifetime and cost of therapy

is Rs. 2,80,428 per month and Rs. 35,65,136 per year. In the said application for compulsory license, NATCO have

claimed that they can provide the said drug for Rs. 74 per tablet or Rs. 8,800 per month per patient. (Pack of 120

tablets required for a months treatment.)

Origiin: Can grant of compulsory license be opposed?

Mr. Kulkarni: Yes, the application for the compulsory license can be opposed by the patentee or other person.

Sec. 87 of the Patents Act describes procedure for the dealing with the applications for compulsory license u/s 84.

On prima facie satisfaction that the case for compulsory license is made out, the Controller shall direct the applicant

to serve the copies of the application to the patentee and others have interest in the patent. (As appearing in the

register of patents) and also cause the application to be published in the official journal. Within two months of this

publication the patentee of other person can send a notice of opposition to Controller. If any such notice is received

by the Controller, it is mandatory for him to give opportunity to the patentee to defend the application for license

against his patent.

Origiin: Are there chances of misuse of such license?


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Mr. Kulkarni: The provisions relating to compulsory license have been considerably amended to make it TRIPS

compliant in 2002. The licenses of right and deemed licenses as prevailing under the Act prior to 2002 have been

done away with. The mere fact that Controller has decided the first case of compulsory license in last 10 years or

so to say from the inception of the Patents Act 1970, show how seldom the provisions of compulsory license are

used in India. The new provisions provide safeguards against the misuse of Compulsory licenses. The Controller is

also empowered to set conditions for the compulsory licenses to safeguard the interest of the patentee also. If the

present decided case is any indication, the decision of the Controller is very sound and reasonable striking balancebetween the individual monopoly interest on one hand and the social needs at the other. Therefore I genuinely feel

that there is little chance of misuse of such license. Further any aggrieved party always has recourse to appeal to

courts and tribunals to remedy any injustice caused. Hence I feel there is little scope for any misuse of such

licenses.

To post your story, write [email protected] PATENT OF THE MONTH

HAPTIC COMMUNICATION

United States Patent Application number : 20120062371

Inventors: Radivojevic Zoran, Andrew Piers, Saunamaki Jarkko,

Jokinen Tapani

Assigee: Nokia Corporation (Espoo, FI)

Filing date: Sept 13, 2011

Published date: 15th March, 2012

Abstract: In accordance with an example embodiment of the present

invention, an apparatus comprises: a material attachable to skin, the

material capable of detecting a magnetic field and transferring a

perceivable stimulus to the skin, wherein the perceivable stimulus

relates to the magnetic field.

More info: Nokia has recently filed a patent for an idea that would

prevent users from missing a call. The patent involves using a

ferromagnetic material which would be sprayed or stamped onto a

users skin before being linked up with a mobile device. The material is

capable of detecting a magnetic field and emitting a vibration. The tattoo

once applied will be able to prompt the user in the form of a vibration,

when the phones battery is running low, an email notification or even a

calendar alert. One can also customize the vibration pulse to different

kinds of notifications. The procedure for applying the vibrating tattoo is

identical to the usual one, but only the ink is special.
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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