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Compulsory Licenses and “Statements of Working” in India

Written by Michael Lin
Patent Attorney, Marks & Clerk (Hong Kong)
Posted: August 21, 2013 @ 12:05 pm

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It’s been a busy summer. This brief note provides an update of the quickly-changing Compulsory License and Statement of Working situations in India. In some cases, companies may want to strategically-reconsider their current standard procedures, especially with respect to Statements of Working.

Compulsory License Denied for Trastuzumab

As many following India IP issues are well-aware, in 2012 India issued the 1st compulsory license (CL) to Natco for Bayer’s anti-cancer drug Nexavar. The granting of this CL was further upheld by the Intellectual Property Appellate Board in Spring 2013, leading to great concern and condemnation in the international IP community, especially by those in the Pharma field. Also in Spring 2013, BDR Pharmaceuticals, Ltd. filed the 2nd Indian application for a CL (still pending) for Dasatinib, Bristol Meyers Squibb’s blockbuster anti-cancer drug. Thus it appears to be the beginning of a trend for Indian pharma companies to request CLs, and I believe that this trend will continue and likely increase.

In March 2013, the Indian Ministry of Health has also stepped into the fray, recommending that the Indian Department of Industrial Policy and Promotion (DIPP) also grant a compulsory license to local companies for the manufacturing of Trastuzumab (a.k.a. Roche’s Herclon™ / Genentech’s Herceptin™) for breast cancer treatment. The Ministry primarily supports this because the price of Trastuzumab appears to range from $26,600-41,000 USD per patient in India. Regardless of which end of the range you believe, the typical Indian individual or insurance policy will not be able to pay for such an expensive treatment.

Surprisingly though, in July 2013, the DIPP decided not to issue a CL for Trastuzumab. From the grapevine, it appears that this is likely in response to the ongoing international uproar over the granting of the Nexavar CL to Natco discussed above. It appears that the Indian government was surprised how strongly the International IP community is concerned about the Nexavar CL, and the high (political and business) levels at which this matter has been raised.

After the rejection of the Trastuzumab CL request, the Indian Ministry of Health quickly recommend that the Indian Government “break” the patent instead. The DIPP opposes this as well because the relevant patent is already undergoing post-grant opposition proceedings. This is unlikely to satisfy the Ministry of Health, though, as the opposition process in India is notoriously slow and may not even be concluded before the expiration of the patent.



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Publishing Statements of Working: How will this affect compulsory licenses, licensing and litigation?

A separate but potentially-linked item relates to the “Statements of Working” under the Indian Patent Law, Section 146. This section permits the Indian Patent Controller to, upon request, require patentees/licensees to submit annual “Statements of Working” (a.k.a., Form 27) which are to detail how the Patentee is commercializing that technology in India. According to the law, patentees who fail to file a Form 27 may be fined; however I am not aware of any patentees that have ever, actually been subject to such a fine. Also, in the past, few requests were actually sent out by the Indian Patent Office (IPO). Thus, most foreign and domestic companies have basically ignored this requirement for many years.

Starting in about 2008, the IPO started to send out Form 27 requests. The IPO appeared to start taking such forms seriously, regularly sending out requests every few years. Now, it seems to be an annual request from the IPO.

What forms were received by the IPO in the past were always kept confidential until very recently. Now, for the first time, the IPO has published online the Form 27’s submitted by Patentees for the year 2012. See here. So far, these are the only Form 27’s available online. Accordingly, a significant amount of business and competitive info about commercialization of patents in India is now suddenly, unexpectedly, available – Businesses could likely gain an immense amount commercially-sensitive information from perusing the competition’s Form 27s available online.

However, I am not aware of any specific Indian law, rule or info about how the info in the Statements of Working are to be used by the Indian Government – presumably they could have a large impact when a CL is requested, during licensing, or during litigation. Specifically, it is conceivable that the lack of a recently-filed Form 27 and/or an indication in a Form 27 that the patented technology is not being worked in India may be viewed by the DIPP as weighing in favor of granting a CL.

Accordingly, companies with patents in India will need to decide their strategy for responding to Form 27 requests by the IPO, by taking into account the potential benefits and disadvantages of providing too little or too much information.

 

About the Author

Michael Lin is a partner at Marks&Clerk, Hong Kong and is in charge of M&C’s HK/China Chemical, Bio and Pharma Patent group. His group handles drafting, filing and prosecution of patent applications worldwide and in China and Hong Kong, as well as various International opinion-related work and client counseling. Michael was previously a Patent Senior Counsel at Procter & Gamble Co. in Beijing, where he set up P&G’s Beijing Patent group and handled all Asian Patent matters for P&G’s laundry and cleaning products. He worked for P&G in Beijing, China from 2007-2010, and in Kobe, Japan from 1997-2007. Michael is an Ohio, U.S.A. Attorney and is registered to practice before the USPTO. Michael is a mentor for students and a frequent speaker at law schools, business schools, and industry conferences.

The views expressed in the article above are solely opinion of the author and are not attributable to Marks&Clerk Hong Kong, Marks&Clerk U.K., or Marks&Clerk L.L.P. Furthermore, this article does not constitute a legal opinion in the Peoples Republic of China, Hong Kong S.A.R, or elsewhere. For a legal opinion regarding these matters, please contact your attorney and/or your patent attorney.



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  1. http://spicyip.com/2013/10/breaking-news-india-rejects-compulsory-licensing-application-at-threshold.html

    The tone of this article is very different from the tone of your article. Also, DIPP is NOT the agency to grant a CL but the Indian Patent office is.

    India/ministry was surprised by the reaction is unverifiable to the best of my knowledge. Or is it?

    I am not making categorical statements but the value of your article would be much greater if it took into account these factors