Public health lawfully outlaws the patent rights: a story of March-in rights!

My previous posts on the open-source innovation read with Doha style compulsory licensing and revocation in the public interest were exhaustive on the access to public health, however, there lives something more to explore in this unrestricted realm. That said, what amazes me now while writing this blogpost is more I delve into this topic, the more I find myself onto the surface. Perhaps, the patent law has a lot to discover. Welcome to the Bermuda triangle below, Seun.

In 1997, the first time ever in the history of Bayh Dole Act (hereinafter referred to as ‘Act’) in US, a petition was filed by CellPro before the U.S. Department of Health and Human Services to issue a march-in license under Section 203 of the Act. According to this law, the government can march-in to issue a license to any person, if the Federal Agency finds that– (i) the patent holder does not take or not expected to take any effective action within a reasonable time; (ii) to meet the public health and safety issues, (iii) to meet the requirements for public use (iv) action is necessary to work the invention in US.  Accordingly, the Cellpro requested the government to march-in arguing against the patentee’s unreasonably high royalties and prices of medical care. However, the request was denied.

Did you know?

Since, 1997 till date, the march-in petitions have been requested at various occasions before the US Federal Agency , however, the requests have never been accepted.

Thoughts of one of Nobel laureates, Michael Kremer

In his research published by the Harvard University in 1998, Mr. Kremer proposed a system called as patent buyouts similar to the March-in provision; the government would acquires the patent rights over the inventions which are of great public value at critical times like a pandemic.

Similarly, the Indian patents act, 1970, endorses the march-in rights under sections 99 to 103. Given the present scenario of the Remdesivir patent, if Gilead unexpectedly wishes to exercise the patent rights on his drugs while charging exorbitant prices or unreasonably high royalty, the central government has an option to march-in. Perhaps, the march-in for the public interest would be better than revocation of the patent in the public interest or issuance of compulsory license in case of extreme urgency.

Hence, section 100 makes it clear that the central government and any person authorised in writing by the government can make, use, exercise, import or vend the invention.

One such another alternative is the acquisition of rights under section 102, wherein the government can acquire the patent in order to fulfil the public purpose.

In both the above cases, the patentee has an option to negotiate the royalty with the government, subject to the amount of adequate remuneration, which can even be decided by the High Court.

Garware Wall Ropes Ltd. v. A.I. Chopra and Konkan Railway Corp. Ltd. – 2009 (111) Bom LR 479

The plaintiff filed for injunction against the use of his patented invention by the defendant for the purpose of the central government. The defendant took the defence of Section 100, however, the Bombay high court denied the defence in the absence of any writing contract authorising the defendant to use the patented invention on behalf of the central government.

Accordingly, if the need arises for the patented invention to be made available to the public at a reasonable cost, there are umpteen number of alternatives available with the government under the patent act. Hence, the march-in appears sublime in view of the odds of arguing for revocation of the patent under section 64 or 66, or issuance of the compulsory license under section 92 or 84.

Okay! Does that sound unfavourable to the patentee? Well, let us not forget the conditions on which the patent rights are granted. Turning your attention to section 47(4) of the Patents Act, whereby the grant of the patent is pre-conditioned that the central government can import the medicine or drug “for the purpose merely of its own use or for distribution in any dispensary, hospital or other medical institution maintained by or on behalf of the Government or any other dispensary, hospital or other medical institution which the Central Government may, having regard to the public service that such dispensary, hospital or medical institution renders, specify in this behalf by notification in the Official Gazette.” This section though does not allow the government to make, use or vend the patented invention as allowed under the march-in provisions, however, the import of essential drugs or medicines for distribution is not barred. This would definitely serve a bigger purpose.

For instance, the impugned patent no. 332280, having known as Remdesivir drug of Gilead, is not filed for a patent in Bangladesh. Consequently, section 47 allows the government to import the drug from such countries and the same would not be prejudice to the patentee’s rights in India.

In light of the current scenario, the patentee would rather cooperate with the government to use the march-in provisions as it even involves the “adequate remuneration”, which is absent under section 47.

Did you know?

Section 47 has been invoked in India in the case of Chemtura Corporation v. Union of India and Ors – CS (OS) No. 930 of 2009]. The Delhi High Court allowed the use of the patented invention to the Ministry of Railways, as they qualified to be ‘Government’ under Section 47.

Coming back to the march-in provisions of the US Bayh Dole Act; In 2001, US was hit by one of the deadly infectious disease anthrax, which could only be treated by the drug ciprofloxacin manufactured by Bayer Corporation. The drug price was extremely high priced and the supply was limited. To make the drug available, the government publicly threatened the drug manufacturer by asserting that any request for generic production of this drug will be approved. The announcement was sufficient to informed Bayer about the consequences of not reducing the price. Sooner, Bayer reduced the drug price to half and started stockpiling the tablets to meet the public demands. [click here to access the news report].

Hence, what I would conclude after writing three posts on this topic is that the human rights and access to public health are over and above the patent rights in the hierarchy of rights, exceptions do apply. Accordingly, Gilead would be wise enough not to jumble up his patent rights and to sooner develop a licensing strategy for his Remdesivir drug that is suitable for the Indian situation.

Seun scrolled up the post and said, “Now I understand why you wrote Bermuda triangle because when the public health, public interest or public purpose are at stake, the patent rights stand lost and gone forever”.
Okay! What if… to be continued…

Happy Patenting!!!

About Krishnam Goyal 18 Articles
Krishnam is an LL.M. student at Munich Intellectual Property Law Center (MIPLC), Germany. He is an engineer, advocate and a patent agent in India. He holds around three years of working experience in the field of patent drafting and prosecution in the fields of ICT, electronics, computer-implemented inventions, mechanical engineering and green technology. The area of research that interests him is patenting of AI, SEPs, Green technology and climate change issues

1 Comment

  1. Very vivid analogy of the relationship between public health, interest and patent rights! Maybe the March-in rights would soon play a role in the production of lifesaving coronavirus therapies.

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