Natco vs Roche (Doha License): First Day

I’ve been given to understand that Natco’s counsel presented arguments before the patent office today. However, it appears that most of the arguments were centered around the interlocutory application filed by Natco, opposing the move by the patent office to hear Roche/Pfizer. Tomorrow, the patent office will hear arguments in this regard from counsels representing Pfizer/Roche.

It is only after they decide on this interlocutory application (i.e. that parties cannot be heard under section 92A) that the matter will be heard and decided on the merits. Our earlier blog posting on this contained some discussion on whether or not a “hearing” was permissible under section 92A.

While a strict reading of the section does not permit a hearing, the denial of such opportunity could result in a writ petition from Pfizer/Roche alleging that principles of natural justice (audi alteram partem) had been violated. Particularly since the patent office has to decide on appropriate royalty rates. Without there being a pre-determined fixed formula in India (unlike Canada), it may be difficult to counter Pfizer/Roche’s contention that the absence of a hearing/representation (that might have helped establish the “economic value” of patent and the impending CL), seriously prejudices the rights of Pfizer/Roche.

Interestingly the patent office has just released an updated version of their draft manual. We are very happy to note that, consistent with principles of transparency and public participation, they have called for comments. So please do send in your comments by the 25th of March, 2008.

This manual has an entire section on the Doha license. And from this manual, it appears that at the first stage, the patent office has to grant a license, if a “prima facie” case is established by Natco. And that they are to grant a hearing, if they decide against Natco. But such hearing shall only be for Natco and not for Pfizer/Roche. I reproduce sections of this manual below:

“Section 92 A :Compulsory licence for export of patented pharmaceutical product in certain
exceptional circumstances.

18.3.1 The section was introduced by The Patents (Amendment) Ordinance, 2004 which came into force on 1st January 2005, to provide for grant of compulsory licence by the Controller for export of patented pharmaceutical product in certain exceptional circumstances, where compulsory licence has been granted by the country to which the export is intended. This provision was further amended by The Patents (Amendment) Act, 2005, to allow grant of compulsory licence even in cases where the importing country has by notification or otherwise, allowed importation of patented pharmaceutical products from India.

18.3.2 The procedure for obtaining the compulsory licence is laid down in Rules 96 and Rule 97.

18.3.3 This provision is introduced to address the public health concerns of the countries having insufficient or no manufacturing capacity in the pharmaceutical sector to implement the decision of the TRIPS council on Para 6 of the Doha Declaration on TRIPS Agreement and Public Health. This section lays down the conditions that are required to be fulfilled, when the compulsory licences for export purposes will be available. The compulsory licence is
available only for:

(a) The patented pharmaceutical product
(b) Manufacture and export to any country having insufficient or no
manufacturing capacity in the pharmaceutical sector
(c) The product addressing the public health problems in such country.

18.3.4 The explanation under this section technically defines the scope of the pharmaceutical product that comes under the purview of this section. The pharmaceutical product covered under this section is any patented product or product manufacture by a patented process including all such ingredients that are necessary for manufacturing of such products. The diagnostic kits required for the use of the patented product are also covered.

18.3.5 The product on which the applicant has either obtained the compulsory licence from importing country or the importing country has by notification or otherwise, has allowed Importation of patented pharmaceutical products from India.

18.3.6 The application for compulsory licence shall be filed in the office where patent has been granted. This application shall be made on Form 17. The applicant shall give the ground relied on for making the application. He shall also specify the nature of his interest and the terms and conditions of the licence he is willing to accept. This condition is not applicable, where the application is made by the Central Government.

18.3.7 The applicant shall furnish the certified copies of the documents giving details of documentary evidence in support of his interest and the ground on which the application is made. Fee for filing this application Rs. 1500/- for natural person and Rs. 6000/- for other than natural person either alone or jointly with natural person.

18.3.8 The Controller shall ascertain whether a case is made out or not for grant of compulsory licence.

18.4 Where on consideration of the evidence the Controller is satisfied that the prima facie case has been made out he shall proceed to pass an order for grant of compulsory licence with following terms and conditions:

i. Specify the product for which the licence has been granted.
ii. Specify the quantity of product to be exported based on the need of the importing country.
iii. Specify the distinguishing feature of the product and/or packages:-
The distinguishing feature of the product may be colour/shaping of the product or packages provided the Controller shall take into consideration that there is no significant impact on price.
iv. Specify the importing country and the quantity to be supplied to each country.
v. Specify the remuneration to be paid to the patentee: The Controller determines the remuneration taking into account the economic value to the country of the use that has been authorised by the Controller.
vi. The Controller shall direct the licensee to post the information relating to the quantity of the product supplied under licence to each destination with its distinguishing features on the website before the commencement of the shipment.

The Controller then publishes the following information in the official
(i) Patent number
(ii) Name and address of the licensee
(iii) Quantity allowed for manufacture and export
(iv) List of the countries and the quantity to be supplied to each country.
(v) Duration of the licence.

18.5 If the prima facie case is not made out

18.5.1 Where on consideration of the evidence the Controller is satisfied that the prima facie case has not been made out he shall proceed as per the provision of rule 97

18.5.2 The procedure for dealing with the cases where the prima facie case is not made out is given in rule 97(1). According to this rule the Controller is required to notify the applicant that a prima facie case has not been made out and if the applicant so desires he may request the Controller for hearing before the Controller within one month from the date of issue of a notification. If the applicant fails to make such a request within the specified time the Controller shall refuse the application.

18.5.3 Where the applicant make a request to the Controller for hearing, the Controller shall proceed as per the provisions of rule 97(2) and hear the applicant and pass an order for grant of licence or refusal of licence depending on the merits of the case.

18.5.4 This provision provide that the grant of compulsory licence under section 92A (1) and section 92 A(2) has no effect on the compulsory licence granted under other provisions of the Patents Act.

18.5.5 In case of compulsory license for export of patented pharmaceutical products to any country having insufficient or not manufacturing capacity to address public health problem, the application will also have to be made on form 17, and the compulsory license will be granted, immediately under Section 92 A of the Act.”

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

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