Guest Post

Chasing the Covid Vaccine: The Compulsory Licensing Chimera (Part 2)

Dr. Pushpendra Rai*

As per Greek mythology, Chimera is a fire-breathing monster with a lion’s head, goat’s body and serpent’s tail. Legend has it that in ancient Greece, an old king named Minos had kidnapped Athena, the beautiful wife of a courageous soldier called Apollo, and dragged her to his palace. Apollo was all set to storm the palace and rescue Athena but was told that the compound was guarded by a monster called Chimera, and so he should go to Mount Olympus and take the advice of God Zeus. Zeus gave him a silver sword and asked him to aim for the monster’s heart. Apollo landed up at the palace in Crete, went racing through the tunnel, located the monster and flung the sword into the air piercing the Chimera’s heart. The monster perished, Apollo ran inside and rescued his wife.

However, we use the other meaning of the term Chimera over here – an illusion, or an unrealizable dream.

At least in the immediate term.

Several journalists, public commentators, experts, academics and political leaders have been repeatedly asking the government to issue compulsory licenses on Covid vaccines. Quite a few commentators on TV debates do the same. Even the former prime minister Manmohan Singh wrote to the PM suggesting, inter alia, that the government invoke the compulsory licensing provisions so that a number of companies are able to produce the vaccines under a license. He added that this was done in the case of medicines to deal with the HIV/AIDS disease and that Israel had already invoked the compulsory licensing provisions.  

All noble, thoughtful and well-intentioned proposals, like the one for the global IP-waiver.

However, in the present circumstances talking about issue of compulsory licenses on Covid vaccines (preventive vaccines only and not curative medicines) is premature, irrelevant and inapposite. It’s like telling the government to make available all the rooms at the Roosevelt, Waldorf-Astoria and Mandarin hotels in Connaught Place for flood victims around Delhi. A valid and humane demand, just that none of these hotels exist in Connaught Place today!

In order to explore the issue further, let’s take a step back and understand what is a compulsory license on a patent.

A patent is an exclusive right granted to the original inventor, authorizing him to make, use, sell and distribute the subject of invention. However, rarely does it happen that the original inventor commercializes his own creation as inventions are extremely complicated and require a significant amount of resources to manufacture and market widely.

Inventors prefer to license or assign the invention instead of undertaking the costs of producing it. They also find the arrangement attractive as they do not have to incur any risks on making, developing or marketing the invention. More so, infringement costs related to contesting patent rights and re-claiming the patent also lie with the licensee. In return, the patentee provides all technological know-how, processes, designs and methods involved with the invention. The license so granted is called a voluntary license and that is how inventors and innovators function around the world. All arrangements entered into voluntarily.

For instance, Charles Goodyear invented the process for vulcanized rubber in 1839, received a patent in 1844 but never manufactured or sold rubber products – selling his rights to other individuals and firms to license, manufacture, sell or use the process for vulcanizing rubber. IBM had 9,130 patents assigned to it in 2020, topping the list of companies with assigned patents.  

However, at times when a patentee is not ‘working’ the patent in a particular jurisdiction, another entity can approach the government with the request to compulsorily direct the patentee to issue a non-voluntary license on grounds of abuse of the license or its non-working.

This is normally done only after the passage of three years, since the grant of the patent, and on generally satisfying the authority that the patentee had not made the product available to the market within a specific period of time; in reasonable quantities; and at a reasonably affordable price. On being satisfied about the above, the authority can issue a non-exclusive, non-assignable license to the applicant and also set the amount of royalties to be paid to the patentee. An important element is that the applicant should have made efforts to obtain a license from the patentee on reasonable terms.

Compulsory Licences have been permitted in international agreements right from the time of the Paris Convention for the Protection of Industrial Property (1883); reiterated in the TRIPS Agreement (1994); and re-emphasized and liberalized through the Para Six Amendment of TRIPS (2003), enabling the export of products under a compulsory license to countries with inadequate manufacturing facilities.

So yes, a compulsory license is permitted in international agreements and no state can be prevented from issuing it. At the same time, it’s an exceptional weapon, very rarely used, as frequent recourse can stifle innovative practices.  

The Indian Patents Act 1911 has always contained provisions relating to compulsory licensing. In line with what is stated above, the Compulsory License is issued when the Controller, is “satisfied that the reasonable requirements of the public, with respect to the patented invention, have not been satisfied or that the patented invention is not worked in the territory of India or that the patented invention is not available to the public at a reasonably affordable price”.

But the provision has been invoked only once in India’s 110-year-old patent history, when a compulsory license was issued to an Indian company Natco Pharma in 2012, on a cancer drug, Nexavar (patent held by Bayer Corporation), which was marketed globally in 2006; a good six years before the compulsory license was granted in India.  

And no, no compulsory license was issued in India on HIV/AIDS medicines. Neither has Israel issued any compulsory license on the Covid vaccine. They have fully vaccinated 56 percent of their population with the Pfizer vaccine, purchased under commercial arrangements

So how does it work in India in the case of the Covid vaccine?

The question is ab initio void as none of the foreign manufacturers of Covid vaccines have taken patents in India. Therefore, if the patents do not exist, how do the authorities issue a compulsory license to any applicant?

The Sputnik V vaccine has received three patents in Russia. According to reports, 148 patents have been granted in the United States with Covid-19 disclosures. Pfizer, Moderna and Novovax would be among those companies. It’s possible that some of these companies would have filed applications under the Patent Cooperation Treaty (PCT) route, which would have designated India as one of the countries.

However, as a PCT application merely seeks to obtain an international search report and a preliminary examination report on the patentability of the invention; and there is no such thing as a global patent, protection would be extended to India, only when the company specifically comes to the country and files an application for a patent, which would then be examined by the national authorities, and decisions taken on grant of the patent.

Even in the most optimistic of scenarios, from the standpoint of the applicant, the earliest a patent can issue would be in the next two to three years in India. Therefore, the question of a compulsory license on any Covid vaccine will not arise till then.

Let’s go a step further.

We take the extreme scenario assuming that a patent would be available for these companies in India soon, thereby opening up the prospect for the issue of compulsory licenses. Ordinarily, an application for a compulsory license can be made only after the lapse of three years from the grant of the patent. But emergency measures are available in the Patents Act to waive this time period, in times like the current pandemic, for instance.

Continuing with this scenario, a foreign drug company comes to India tomorrow and applies for a patent for a Covid vaccine. The patent office fast tracks the application and gives the patent in 18 months. The government exercises its emergency powers and orders the issue of a compulsory license to an Indian pharmaceutical company, authorising it to manufacture the vaccine. All in record time.

What happens next?

As the grant of a compulsory license triggers an adversarial relationship between the patentee and the licensee, the latter would not get any assistance while setting up its facilities, absorbing technologies and unraveling know-how and processes, thereby delaying the rollout of the product by a few years.

In the case of the 148 patents referred to above, the details of production have been set out in various sources but not in sufficient detail yet, for commercial production. “The complexities of production of the Pfizer vaccine are illustrated in graphics in a New York Times article (April 28, 2021), wherein the DNA is prepared in Chesterfield, MO and shipped to Andover, MA for mRNA production; then the mRNA shipped back to Chesterfield or Kalamazoo, MI for packaging into the vaccine nanoparticles; and then sent back to Andover for testing before release.  While some of this complexity may be company-specific, it also represents the different technological requirements for preparing an effective vaccine.”[1]

To be on the safe side, in the case of a drug produced in India, under a compulsory license, the drugs controller may insist on going through the various phases of clinical trials, before according marketing approvals.  This again would add a few more years to the entire process of manufacturing the vaccine in India.

And what about the capability of our own pharma units to take on this challenge?

One of the leading companies, Cipla, was considered the Robin Hood of AIDS drugs about two decades back. It was known for manufacturing generic equivalents of well-known patent drugs and selling them in poor countries of Africa and other aid groups at prices well below those sought by the original manufacturers.

However, this time around things are different as we are talking about drugs which have barely been in the market for a year and the international patent scene has changed totally. The Managing Director of Cipla said that he was not sure that an IP waiver at this stage was something that could solve the immediate problem. He agreed that high-level skills were involved in the manufacture  of mRNA vaccines like the ones developed by Pfizer and Moderna, adding, “I do believe that manufacturing of these drugs is complicated, I do believe that there exists considerable know-how and it’s not just about IP, but it’s really about that technology and the experience that companies have had in formulating their technology.”[2]

Furthermore, in future if we are expecting our companies to enter into licensing arrangements with these major drug manufacturers, and set up manufacturing facilities in India, we would not like to start on the wrong foot by talking about compulsory licensing, even before they have decided to seek patent protection in India or transferred technologies to our companies to start production. The Covid virus is fast mutating and it’s possible that we may be requiring more advanced vaccines to defeat it. In which case, would India like to have a contentious relationship with countries and companies working on the frontiers of technology?

A compulsory license is a Brahmastra[3]and like all responsible nations, we have to use it with due care and deep consideration. This is not a one-off battle; it’s a long drawn out war against an unseen enemy, for which we would need a wide array of weapons.  

So what do we do?




[3] Supernatural weapon used in the Mahabharata

*Dr. Pushpendra Rai is a former IAS officer, with 25 years of experience in the field of Intellectual Property. For almost two decades, he worked with the World Intellectual Property Organization (WIPO), Geneva, a UN specialized agency, handling a diverse set of assignments. He advises countries/institutions on IP strategies; carries out assignments for WIPO; and lectures nationally and globally to academia, chambers of commerce, policymakers, judges, students, legislators, and diplomats. He is an Independent Director with the SBI. Dr. Rai has a master’s degree in Economics from Lucknow; another master’s from Harvard University; and a Ph.D. from IIT, Delhi.


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