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India rejects another compulsory licence

Peter Leung

India’s first compulsory licence last year sparked worries that it would be the first of many and accusations that the country was engaging in discriminatory practices against international rights holders. However, rejections of further compulsory licences tell a different story

SpicyIP reports that that the government has rejected a compulsory licence (CL) application for Bristol Myers-Squibb‘s Dasatinib. In ruling earlier this week, the patent controller found that Indian generic BDR Pharmaceutical failed to make a prima facie case for a compulsory licence.

This is the second rejected CL request in the last year. In July, the Department of Industrial Policy and Promotion (DIPP) denied the Ministry of Health’s compulsory licence application for Roche’s Trastuzumab (Herceptin). That request was made under section 92, which allows for the government to file for a licence for cases of national emergency. The CL granted for Bayer’s Nexavar and the rejected Dasatinib application came under section 84, which allows for licence requests from generic manufacturers.

US President Barack Obama and India Prime Minister Manmohan Singh met in September to discuss trade issues

The Nexavar CL sparked concerns that it was just the first of many such licences and claims that India’s IP protection was deteriorating. US officials and industry groups are among the most vocal, accusing India of engaging in protectionist and “anti-IP” policies. Many critics, including USPTO Deputy Director Teresa Stanek Rea, also claim that the compulsory licence grant for Nexavar violates international trade rules.

However, the reality is more complicated. Some 18 months after the Nexavar licence, no other CLs have been granted, though the Indian government has followed through on its promise to pursue more. Defenders of India’s IP regime, such as Dilip Shah of the Indian Pharmaceutical Alliance, stressed that the licence grants take in full compliance with domestic and international laws.

“Bayer could not substantiate their claim that they were making [Nexavar] available [to the target consumers],” he said, and that there was a full judicial process before granting the licence. “The judiciary is independent in India, as opposed to Obama’s order in the Samsung-Apple ITC case,” he argued.

The recent compulsory licence rejections seem to support Shah’s argument; rather than merely rubber stamping requests at the expense of international drug manufacturers, the patent controller and the DIPP is making considerable effort to ensure that requests follow legal requirements. For example, the patent controller rejected BDR’s CL request for Dasatinib because it failed to try to obtain a voluntary licence from Bristol-Myers Squibb as required by the statute.

The continuing review of the Nexavar compulsory licence also demonstrates the importance of rule of law in the process. One of the most heavily criticised aspects of the original ruling was the finding that Bayer had failed to work the patent in India because it did not manufacture domestically, a determination that was sufficient to justify a grant of a compulsory licence but in this case was not relied on. In upholding the CL, the IP Appellate Board diluted the working requirement and held that lack of local manufacturing does not necessarily mean that the patent is not being worked.

Of course, the battle over compulsory licensing is far from over. In fact, though the patent controller has rejected BDR’s request under section 84, the DIPP has yet to decide on the Ministry of Health’s section 92 application. And there is still another outstanding application for another Bristol-Myers Squibb drug, Ixabepilone. Still, as the developments in the last few months show, India’s patent system, rather than being a free-for-all that tramples on the rights of international companies, is its own unique system that despite many flaws is making considerable efforts at coming to legally justified decisions.


Article Comments

Please report in IP seminar. thx

jolene Nov 07, 2013

Yet another "political" victory for big pharma!

Nadeen Nov 07, 2013

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