Author: Tarazi Mohammed Sheikh
Keywords: Compulsory Licensing, TRIPS Agreement, Patents Act of Bangladesh, Intellectual Property, Public Health
Introduction
Compulsory licensing (CL) refers to a government's permission for an entity other than the patent holder to produce a patented product or use a patented process, without the consent of the patent owner. While the spotlight often falls on CL in the pharmaceutical sector, its scope extends to patents across various industries. Within the framework of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the concept of CL maintains a delicate balance between enhancing access to existing medical treatments and encouraging the advancement of new therapies.[1] It is one of the controversial issues of the patent law.
Compulsory licencing and the TRIPS Agreement
Article 31 of the agreement outlines provisions for CL and government usage of a patent, stipulating certain conditions that safeguard the rightful interests of the patent holder. Under the terms specified in Article 31, typically, those seeking a compulsory license must have made a reasonable attempt to secure a voluntary license from the patent holder on mutually acceptable commercial terms, which, if unsuccessful, paves the way for CL. In such instances, adequate compensation is still owed to the patent owner. However, during instances of "national emergencies," "other circumstances of extreme urgency," "public non-commercial use," or cases of anti-competitive practices, the pursuit of a voluntary license is not obligatory. The prior voluntary licensing negotiation requirement is further relaxed for the Covid-19 vaccine by the Ministerial Declaration adopted at the World Trade Organisation (WTO).[2] Again, article 31bis of the Agreement introduces greater flexibility to the compulsory licensing framework. The primary aim of Article 31bis is to relax the requirement for domestic supply outlined in Article 31(f). The provision specifically addresses the concerns related to public health emergencies, making it easier for countries to access essential medicines during such critical situations and allows countries without the manufacturing capacity to import needed medicines produced under compulsory licenses from countries that have the capability to produce them.[3]
Compulsory Licensing under The Bangladesh Patents Act 2022
TRIPS offers flexibilities like transition periods, compulsory licenses, government use, and parallel import provisions for implementing members, acknowledging the unique needs of least developed countries (LDCs) like Bangladesh.[4] As an LDC, Bangladesh benefits from a transition period until 2034 to adhere to most TRIPS obligations, with exceptions for certain aspects. After becoming a developing nation, Bangladesh must align its patent law with TRIPS.[5] Thus, in April 2022, Bangladesh enacted the Patents Act, 2022 with the aim of modernizing a century-old patents law and reinforcing intellectual property rights. The original patent and design law, established in 1911,[6] underwent division into separate patent and design laws in 2016. The necessity for the new legislation stemmed from the requirement for updates to align with the evolving economic landscape and the expansion of trade and commerce along with the TRIPS compatibility obligation of Bangladesh.[7]
The Act describes a 'Compulsory license' as a permission given by the right authority to someone or a government-controlled organization, not the patent owner, to use a patented invention in Bangladesh.[8]
Provisions of compulsory licenses are primarily outlined in section 21 of the law. Under section 21, compulsory licenses can be granted under certain circumstances, such as when there's a need for public interest, national security, health, or economic development. They may also come into play if a court determines that a patent holder's or licensee's method of utilizing the invention is anti-competitive, in which case, the government can decide that the invention should be utilized through a CL. Further, if a patentee uses their exclusive rights without authorization or fails to prevent unauthorized use by the licensee, a compulsory license may be issued. Additionally, if a patented invention isn't available in Bangladesh in the required quantity, quality, or at a fair price, a CL can be considered. Moreover, if a new patent application claims a valuable invention that is related to a prior patent and which cannot be used without infringing the previous patent, in that case, the government might grant a CL for the use of such patent.[9]
According to the provisions, applications are assessed individually by the government, ensuring alignment with their intended purpose. Usage must match the granted purpose, and a government-set royalty is paid to the patentee. In cases of anti-competitive use, license modifications are considered.[10] The law also sets a timeframe when a compulsory license might not apply, given reasons like insufficient supply or inactivity. If, due to reasons such as insufficient availability of the patented product or lack of activity in manufacturing it by the patented method, the law grants a period of 4 years from the patent application filing date or 3 years from the patent approval date, whichever is later. During this period, a CL application might be rejected unless valid reasons for inactivity are provided.[11]
Amending license conditions is also possible upon request by the patentee or an interested party. The law also elaborates on patentable inventions, compulsory licenses, and their application process. It mandates that patentable inventions can only be transferred to those directly involved in their development. The process for obtaining a compulsory license would require prior reasonable attempts to secure a voluntary license from the patentee. If rejected within 6 months, an applicant can apply for a CL. However, national emergencies or non-commercial competition scenarios do not require prior voluntarily licensing obligation.[12]
The law further addresses licenses acquired by government entities for preparing pharmaceutical products, that primarily apply to the domestic market and are used to rectify competition concerns in foreign territories due to insufficient production capacity. Regarding semiconductor technology and pharmaceuticals, CL may be granted for non-commercial use or anti-competitive scenarios. If a CL is granted, specific rights come into play, pertaining to utilizing inventions from multiple patents.[13] The law also deals with the revocation of patents if market demands aren't met, and it details conditions for compulsory licenses for pharmaceutical manufacturing.
Section 26 of the law outlines the procedure for appealing administrative decisions, particularly concerning licenses, including compulsory licenses. If dissatisfied with a Registrar's decision on licenses or compensation for compulsory licenses, one can appeal to the government within 2 months of the decision. If the appeal outcome remains unsatisfactory, a further option exists – within 2 months of the appeal decision, a special case can be filed in the relevant court.
Finally, section 36 of the law specifies regulations for compulsory licensing in the health sector. It states that conditions set in a WTO General Council decision from August 30, 2003, will apply in Bangladesh until amendments to the TRIPs Agreement are implemented. This means, Bangladesh as an LDC is exempted from the TRIPS obligations till her graduation to a developing country. This is further reflected in section 5(2) of the Bangladesh Patent Act, 2022 which excludes pharmaceutical products or processes from patent eligibility.[14] This section also addresses remuneration for compulsory licenses related to pharmaceutical products and relevant guiding principles of the WTO. It confirms Bangladesh's commitment to following international guidelines for compulsory licensing, especially in the health sector, and signals a readiness to align policies with potential changes in the TRIPs Agreement.
Recommendations and conclusion
Upon Bangladesh's graduation from LDC status, the significance of compulsory licenses is poised to increase. The government could utilize compulsory licenses to enable either its own production or that of a third party for pharmaceutical products that are excessively priced.[15] It is evident that while Bangladesh's Patents Act encompasses significant provisions to address compulsory licensing, there are several aspects that warrant careful consideration to ensure a well-rounded and effective mechanism. For instance, the criteria for granting compulsory licenses, particularly regarding public health and national emergencies, could be interpreted broadly to avoid potential misuse. Again, the timeframe for when a compulsory license is inapplicable could be misused or unnecessarily prolonged. Therefore, it is pertinent to define clear and specific criteria for issuing compulsory licenses in special circumstances as well as set reasonable and clear timeframes that are aligned with the actual need for addressing public health or economic concerns. Finally, implementing safeguards to prevent misuse of compulsory licensing is significant to ensure that compulsory licenses are effectively utilized to meet the intended objectives of public health and national developments.
Endnote:
[1] Eduardo Urias and Shyama V Ramani, ‘Access to medicines after TRIPS: Is compulsory licensing an effective mechanism to lower drug prices? A review of the existing evidence’ (2020) 3(4) Journal of International Business Policy 367 <http://dx.doi.org/10.1057/s42214-020-00068-4> accessed 28 July 2023
[2] 'Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics' (World Trade Organization, 22 June 2022) <https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN22/31.pdf&Open=True> accessed 25 August 2023
[3] Dianne Nicol and Olasupo Owoeye, ‘Using TRIPS flexibilities to facilitate access to medicines’ (2013) 91(7) Bulletin of the World Health Organization 533 <http://dx.doi.org/10.2471/blt.12.115865> accessed 28 July 2023
[4] Correa CM, ‘Interpreting the Flexibilities under the TRIPS Agreement’ [2021] Access to Medicines and Vaccines <https://doi.org/10.1007/978-3-030-83114-1_1> accessed 25 August 2023
[5] UNCTAD Least Developed Countries Report 2021 - The Least Developed Countries in the Post-COVID World: Learning from 50 Years of Experience (United Nations) <https://www.un.org/ldcportal/content/unctad-least-developed-countries-report-2021-least-developed-countries-post-covid-world>> accessed 25 August 2023
[6] Patents And Designs Act, 1911 <http://bdlaws.minlaw.gov.bd/act-94.html> accessed 25 August 2023