Recently a division bench of Delhi High Court, upheld a single Judge decision and ruled that Section 107A of the Patent Act, 1970, permits exports from India of a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India or in any other country, that regulates the manufacture, construction, use, sale or import of any product.
Emergence of Bolar Exemption
Fundamental purpose of granting patents in pharmaceutical invention is not only to encourage research and development but also to make the pharmaceutical products, medicines easily available in the market, thereby protecting health and nutrition. Hence, keeping in mind the public health issues and problems, the bolar exemption was introduced.
It is an exemption for the purpose of research through which third parties or generic companies can use the patent for the purposes of clinical tests or for approval of drug authorities or any other regulatory approval, before the expiration period of the patent. However the third parties or generic companies cannot launch their products until the expiration of the patent term.
1As per Article 33 of TRIPS, patentee has the right to exploit his patent for a period of 20 years, but the article does not in any manner specify that the market exclusivity is to be extended for a period of say two years during which the generic drug companies will have to obtain the drug authorities approval. Hence, rights provided by Section 107A helps the third parties to obtain the permission from regulatory bodies before the expiration of the patent term.
Bolar Exemption in India
India, until 2005, only permitted process patents in pharmaceuticals; further being a developing country, TRIPS gave a transitional period of 10 years to India to introduce provisions relating to grant of product patent.2 Thus this period helped India to develop a flourishing pharmaceutical industry. In the midst of it, India introduced the bolar exemption through the Patents Amendment Act, 2002, with the insertion of section 107A- 107A states certain acts not which are not considered as infringement. For the purposes of this Act there is no infringement for,
(a) any act of making, constructing,[using, selling or importing] a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, [use, sale or import] of any product3.
Case laws in India
India has not seen much litigation with respect to Bolar provision and the first case wherein judiciary interpreted this provision was Bayer v. UOI wherein the following issues were discussed:
- Whether export of the product for submission of information in any other country other than India is allowed?
- Whether the rights ensured under S.107A are affected due to the grant of compulsory license or whether can they be read jointly?
Single Judge's decision
The judge on the first issue emphasized that export can come within the ambit of the word "selling" used in Section 107A as the word selling is not restricted to any geographical boundaries. Further, it mentioned that the rights given to the generic manufacturers i.e. third parties under S.107 A are covered by fundamental right, Article 19 (1)(g)4 of the Indian Constitution, thus such a right cannot be curtailed by mere absence of the word "export". On the second issue, the court highlighted that the grant of compulsory license cannot deprive the party from the rights provided in S.107A. Hence, the decision was rendered in favor of Natco.
Division Bench's decision
The Division bench upheld the decision of the single Judge and held that the export of a patented invention is allowed under Section 107A and it further mentioned that since exports are not regulated properly, it could be misused to export beyond what is 'reasonably related' to the purpose of development and submission of information for obtaining regulatory approval. Hence, safeguards need to be put in place to prevent such misuse and each case would have to be determined on its individual facts5.
The decision affirmed by the Delhi High Court has expanded the reach of the bolar exemption by giving a liberal interpretation to the word "sale". However, there is a lot which India has to explore in this provision be it in its scope and parties to be covered under this provision or type of goods to be covered coupled with enforcement mechanism etc. Therefore, Indian judiciary while interpreting and developing this provision should not compromise with the rights of both parties i.e. of patentees and of the generic manufacturers or third parties.
2 V.K. Ahuja, Intellectual property Rights in India (2nd ed. Lexis nexis 2015) 577.
3 The Patents Act 1970, s. 107A (a).
4 The Constitution of India 1950, Article 19 (1) (g).
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