IP News 指導老師：李柏靜 學生：黃馨葦 M /3/26

 Citing the high cost of one of the pharmaceutical industry's expensive new cancer drugs, India's patent authority on Monday(3/12) forced Bayer to grant a compulsory license to a local generics manufacturer to ensure patients have access to the potentially lifesaving kidney and liver cancer medicine (Novartis).Bayer (Novartis

 Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.

 The landmark judgment represents the first time the Indian controller general of patents, designs and trademarks has granted a compulsory license to a generics drug maker. But it follows tough decisions in recent years by the office and Indian courts in rejecting patents on expensive cancer medicines, including Novartis. Novartis

 The decision comes as India is negotiating a new trade agreement with the European Union in which intellectual property for pharmaceuticals has been a contentious issue.  Granting the compulsory license reflects Indian authorities' attempt to balance companies' intellectual property rights against the rights of patients to get access to new and expensive medicines that are seeking patents for sale here.

 India's patent law allows authorities to require patent holders to license their products if they are priced beyond the reach of patients and they don't have access to the medicines. Patent holders are entitled to royalties from the licensing.

 In the case of Bayer, Natco can now legally make and sell the low-cost version of Bayer's patented drug, but has to pay a royalty of about 6% of net sales of the drug on a quarterly basis to the German company.  In its decision, noted that Bayer's drug, branded as Nexavar, sells for US$5,698 for a monthly supply.  Natco Pharma Ltd., the generics competitor that brought the case to the patent authority, sought to sell a month's supply of the generic version of Nexavar at US$178. ‧ A Considerable Gap

 "The drug is exorbitantly priced and out of reach of most of the people," the patent authority wrote in its 62-page decision. "The product in question is not a luxury item but a lifesaving drug and it is highly important that a substantial part of the demand be met strictly. In the present case, even 1% of the public doesn't derive benefit of the patented drug."

 In keeping with an international trade agreement India and other countries signed in 1994 as part of the World Trade Organization, the country in 2005 adopted a new patent law recognizing patents on pharmaceutical products, where previously it had only protected manufacturing processes.

 This had allowed Indian companies to become the champion of HIV patients in Africa, where poor people needed access to lifesaving medicines at a cheaper cost. But it was a problem for the multinational drug industry, which relies on the intellectual-property protection of innovation to fund the high cost of research.

 India's new law applied a stricter standard for granting patents—forcing companies to prove new versions of their products were therapeutically more beneficial than earlier versions on which patents had expired.

 A patent must be at least 3 years old before a generics company can apply for a compulsory license.  Still, many Indian companies have been reluctant to push for compulsory licenses where they might jeopardize agreements to manufacture other drugs for wealthy Western drug companies.

 Analysts and patient advocacy groups said:  “This is a rare instance where a general compulsory license has been issued, not bound by government use provisions or those requiring to show ‘extreme urgency’ or ‘emergency,”  The license given to Natco “without encumbrances means a possible opening of opportunities for using compulsory licenses to promote competition.”

 What is the general case?  For compulsory licensing, it’s when the generic copy is produced mainly for the domestic market, not for export.  Is this the same as tearing up the patent?  No. The patent owner still has rights over the patent, including a right to be paid for the authorized copies of the products.

 Does there have to be an emergency?  Not necessarily.  This is a common misunderstanding. The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing. However, the Doha Declaration on TRIPS and Public Health confirms that countries are free to determine the grounds for granting compulsory licenses.Doha Declaration on TRIPS and Public Health

 The TRIPS Agreement does list a number of conditions for issuing compulsory licenses, in Article 31. In particular:  normally the person or company applying for a license has to have tried to negotiate a voluntary license with the patent holder on reasonable commercial terms. Only if that fails can a compulsory license be issued, and  even when a compulsory license has been issued, the patent owner has to receive payment; the TRIPS Agreement says “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization”.  There’s more. Compulsory licensing must meet certain additional requirements: it cannot be given exclusively to licensees (e.g. the patent-holder can continue to produce), and it should be subject to legal review in the country.

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