COMPULSORY LICENSING & COVID-19 VACCINE : AN INSIGHTFUL CONVERSATION WITH IP ADV ADITI VERMA THAKUR

Interview by- Rokkam Gayatri Kumari

Adv. Aditi Verma Thakur is an intellectual property lawyer and advisor. She has been helping clients ranging from multinational corporations, SMEs to start-ups from across the industry sectors on their diverse IP and related requirements for more than 13 years. Currently, she is a senior partner with Ediplis Counsels, a leading firm focusing on IP and related legal areas. Earlier, she was a partner at IndusLaw and spearheaded its IP practice. She has completed her masters from National Law University, Jodhpur and her bachelors from Devi Ahilya Vishwavidyalaya, Indore.

VAIDHA Law Journal is elated to receive this opportunity to interview her on understanding Compulsory licensing, its impact on patentee's rights, and the efficient production of the COVID-19 vaccines.

She can always be contacted at:-

LinkedIn- https://www.linkedin.com/in/aditiverma/

Firms Official Website- https://www.ediplis.com/

1. Could you please explain to our readers what a compulsory licensing system is and how it originated?

A compulsory licensing system is provided under patent law. It essentially means a government can issue a compulsory license for a patent without the right holder's authorization, but only if some criteria for the compulsory license are met and subject to specific terms and conditions.

The compulsory license system has emanated from the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), a multilateral treaty that India and several other countries have signed. The treaty sets out minimum standards of IP protection, enforcement, trade-related aspects, etc., that each signatory country should provide to its citizens. The compulsory license system is one of the flexibility available under the treaty. A country may opt to include these flexibilities under their patent laws depending upon their social and economic ecosystem.

2. How and when an application for compulsory licensing can be made in India?

Under the Indian law, an application for a grant of compulsory license can be made with the Patent Controller in the regular course after three years from the date of grant of the patent for an invention. A few reasons, among other things, based on which such an application for the grant of compulsory license could be made are; reasonable public requirements for the patented invention not met or non-availability of the patented invention at a reasonably affordable price.

After deliberating the subject of compulsory license with the interested parties during the proceeding, if the Controller is satisfied that the application for compulsory license shows sufficient cause, the requested license may be granted on the patented invention to the applicant on the conditions that the Controller considers suitable.

In exceptional circumstances, like in case of national emergency or for public non-commercial use of patented technology, the central government can issue a declaration (in the form of official notification in the Official Gazette) to grant a compulsory license for the patented invention. While granting such a compulsory license, the Patent Controller should fix the terms and conditions (including the prices towards the patented product) so that the patentee derives a reasonable commercial advantage as per market standards.

3. As we know, in the first phase of COVID-19, Israel has issued a permit for compulsory licensing; what consequences (good and bad) did it lead to?

Israel's compulsory licensing provisions are slightly different from India's. The patent law of Israel allows a state minister to grant a compulsory license for a patented invention or a subject under the patent application in the interest of national emergencies or to ensure essential supplies or to maintain critical services.

These provisions were invoked by an Israeli minister last year (2020) for the patented product Kaletra (original therapeutic use is for the treatment of HIV conditions) of AbbVie (US-based pharmaceutical company), and the generics of Kaletra were allowed to be imported in Israel.

The generics were eventually sourced from an Indian generic manufacturer. The invoking of the compulsory license system by the Israeli minister led AbbVie to decide not to enforce their patent rights over Kaletra globally, and because of this, Indian generic drug makers will surely benefit.

4. What do you feel about this implementation of the compulsory licensing system?

From the perspective of the right holder AbbVie, the Israeli minister's approach appears to be a bit rushed. As per the news reports, no dialogue was held with AbbVie about the grant of a compulsory license for Kaletra. Also, based on reports, the terms and conditions of the compulsory license, including the payment terms, were in a way arbitrarily set, and there was no deliberation on the market value of the license generally.

I feel a compulsory license system should be a balancing act by which a patentee's financial interests also ultimately need to be considered. However, more than this, I feel that the Israeli case would undoubtedly have a cascading effect on other countries' considerations for the grant of compulsory licensing for COVID-19 related treatments and prevention technologies if the right holders cannot meet demands.

5. What is the USA’s take on the granting of Compulsory licensing? How does its patent law work?

As mentioned above, the countries that have signed the TRIPS Agreement can choose to incorporate the level of standards and flexibilities in their country's patent laws depending upon their country's social and economic ecosystem.

The US does not have any compulsory license system. However, the US patent law has a few provisions that allow the US government's use of an invention in certain cases by compensating the patentee suitably.

From the US law’s perspective, the debate is more regarding the IP waivers over COVID-19 vaccines, testing diagnostics and therapeutic compounds proposed by India and South Africa jointly at the WTO last year, which the Biden administration has supported recently. It is essential to highlight that the Trump administration was against such blanket IP waivers. However, recently, the Biden administration has supported having limited IP waivers over COVID-19 vaccines.

As of now, there is no concreteness to the stand of the US around IP waivers. But if a decision is taken and the US decides to support the IP waiver for COVID-19 vaccines, the WTO, which follows a consensus-based decision-making process, will still need to confirm the same from other members before effecting the IP waivers for COVID-19 vaccines. That will undoubtedly take time for implementation at the larger global level.

Besides this, I would also like to add that a few US vaccine makers like US-based Moderna had supported patent waivers over their COVID-19 vaccines related patents. Moderna stated in October 2020 about not enforcing its COVID-19 related patents against those making COVID-19 vaccines during the pandemic. It had also added that it would eliminate IP hurdles on vaccine development during the pandemic.

Moderna was willing to license its COVID-19 vaccines-related IPs (not limited to include patented technologies) to those who are interested. Immediately after the Biden Administration supported IP waivers over vaccines in May this year, another critical feedback came from Moderna. It has now stated that countries across the globe will continue buying their vaccines for years, with or without patent waivers, but if a decision is made for IP waivers, its competitors will face significant hurdles for scaling up their manufacturing of the vaccines.

6. Being an IP Expert, please share with us your insights on the enforcement of the compulsory licensing approach in India; what would you suggest?

As of now, the compulsory license approach might not currently work in India. There is no information or report that I am aware of about any Covid-19 related innovation having the status of a granted patent in the country. Even when the Indian patent system allows for expedited processes for examinations of patent applications and patents have been granted in less than a year.

I would also like to highlight that compulsory licensing or any IP waiver in the current scenario is not by itself going to accelerate the production of vaccines, medicines, and diagnostic tools overnight. This is also a view of patent owners like Moderna, as highlighted before. A patented product may be a tiny bit of a significant technology and know-how set. However, much information in the more extensive set may be protected as trade secrets and confidential information.

In order to have an overall utilization of the technology and innovative know-how, voluntary licensing is the most suitable model and more impactful. What is needed more is active tech transfers and licenses, public-private partnerships, ramping up infrastructure, and raw material supplies to increase the productions and meet demands. This will automatically regulate the process of distribution and supplies.