US investors still concerned over compulsory licensing in India

The acrimony between India and the US over the issue of intellectual property rights (IPR) and patents, as well as compulsory licensing in the pharmaceuticals sector, is far from over.

“Section 3(d) (of Indian Patents Act) and compulsory licensing continue to remain significant concerns for the American investors,” said Patrick Kilbride, Executive Director (International IP) of US Chamber of Commerce’s Global Intellectual Property Centre (GIPC). “India still lacks an innovation-driven model, despite having a National IPR Policy in place.”

In an interview to BusinessLine, he said even though the government had rolled out the National Intellectual Property Rights Policy last year, IP-intensive American firms continue to face severe challenges in the Indian market concerning Section 3(d) of the Indian Patents Act.

Section 3(d) of the Patents Act prevents ever-greening of patents unless it differs significantly in properties with regard to efficacy. The GIPC, in its annual IPR report, had ranked India in the bottom three for having a weak IPR and patents regime.

India was placed on the ‘Priority Watch List’ in the US Trade Representative’s (USTR) Special 301 Review, for irregularities in the application of Section 3(d) and usage of compulsory licensing.

However, according to the Indian Pharmaceutical Alliance (IPA), the benefits of extended monopoly from secondary patents are often limited in the US under Section 3(d).

“We acknowledge that the US has serious concerns on Section 3(d) of the Patents Act, which denies patents to inventions that are new forms of known substances, unless there is an increase in efficacy. However, we respectfully submit that the denial of such litigation benefits in India ought not to be considered a denial of adequate and effective patent protection for US companies,” said DG Shah, Secretary General, IPA, in his submission to the USTR for 2017 Special 301 Review. On compulsory licensing, Kilbride said even though there has been just one case so far where the instrument was used, there are apprehensions that it can be put to use again, and other developing countries can follow India.

“There is no guarantee that the CL provisions will not be used again. There is no mention of such a thing in the National IPR Policy. We need that assurance from the government,” he said.

According to the IPA, the application for a compulsory licence was made principally because the reasonable requirements of the public for the drug were allegedly not met at a reasonably affordable price.

US pharmaceutical firms have been up against arms with India ever since the India Patent Office allowed compulsory licensing of Bayer’s anti-caner drug Nexavar in 2012, allowing the production of its generic version.

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