Section 92 of the Patents Act provides a summary/accelerated mechanism under which Compulsory Licences (CL) may be issued by the Controller of patents pursuant to a notification by the Central/Union Government. Here’s the provision:
Section 92. Special provision for compulsory licences on notifications by Central Government
(1) If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have effect, that is to say—
(i) the Controller shall, on application made at any time after the notification by any person interested, grant to the applicant a licence under the patent on such terms and conditions as he thinks fit;
(ii) in settling the terms and conditions of a licence granted under this section, the Controller shall endeavour to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.
(2) The provisions of sections 83, 87, 88, 89 and 90 shall apply in relation to the grant of licences under this section as they apply in relation to the grant of licences under sec. 84.
(3) Notwithstanding anything contained in sub-section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub-section (1) that it is necessary in—
(i) a circumstance of national emergency; or
(ii) a circumstance of extreme urgency; or
(iii) a case of public non-commercial use,
which may arise or is required, as the case may be, including public health crises, relating to Acquired Immuno Deficiency Syndrome, human immune deficiency virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 in relation to that application for grant of licence under this section:
PROVIDED that the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of section 87.
Based on a reading of the provision, it is clear that the provision is to be invoked in extra-ordinary circumstances involving “national emergency” or “extreme urgency” or “public non-commercial use”. The mechanism under this provision is set in motion by and when the Central Government notifies in the Official Gazette that such extra-ordinary circumstances have necessitated the grant of compulsory licences in relation to patents which help to address the exigency.
However, Section 92(2) still requires a person interested to apply to the Controller for grant of a compulsory licence. That said, the primary differences between CL under Sections 84 and 92 are as follows:
1. Under Section 84, an application for a CL may be made only after expiration of 3 years from the date of grant of the patent, whereas under Section 92 the Central Government may notify for issuance of a CL anytime after the sealing of the patent.
2. The grounds for grant of a CL under Section 84 are different from the exigencies dealt with by Section 92.
3. Under Section 92(3), the procedure for opposition by the patentee and hearing prescribed in Section 87 may be given a go by if the Controller is satisfied that the situation demands it.
The question that could arise is what is the distinction between “national emergency and extreme urgency”? National emergency clearly refers to a nation-wide crisis or at least a public crisis, whereas “extreme urgency” could refer to an individual crisis where the condition is extremely rare and restricted to an individual or a few individuals, both of which requiring immediate action.
The point that emerges is that a sense of immediacy appears necessary for Section 92 to be invoked by the Central Government citing national emergency or extreme urgency. Consequently, if a health condition is rare but is not immediately fatal or there is no outbreak of an epidemic (in other words there is no “national emergency” or “extreme urgency”), but the drug is exorbitantly priced or is not adequately available, Section 92 may not be the appropriate remedy. One would think Section 84 may be the apt provision for such a situation if the primary grievance is with respect to the pricing of the drug or its availability.
The third ground for grant of a CL under Section 92 is a case of “public non-commercial use”. This provision, on the face of it, does not have other restrictions which help us understand the nature of the situation when Section 92 may be invoked for public non-commercial use of patented inventions. In the absence of such indicators, the provision is capable of capricious use. To avoid this, it may be necessary to apply the spirit of the first two grounds under Section 92 to public non-commercial use. Simply put, the situation must be serious enough to warrant the grant of a CL for non-commercial use of a patented invention at a public scale.
If such a cautious approach is not adopted, Section 92 could become the option of first resort rendering Section 84 secondary, more so since Section 92 envisages waiver of the opposition and hearing procedure prescribed in Section 87.
I look forward to comments and corrections from readers.
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