Compulsory Licensing is perhaps one of the most significant incorporations in The Patents (Amendment) Act, 2005. The concept being a fall-out of the TRIPS Agreement, to which India is signatory, indicates national emergency, extreme urgency, public non-commercial exploitation and anti-competition as a basis for grant of compulsory licenses. However, the Act goes further by providing compulsory licenses to enable manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector in order to address Public Health Problems (S. 92A).

In order to take advantage of S. 92A, it is essential that the country to which the drug has been exported (or for which a compulsory license is being requested) either have granted a compulsory license to the local drug manufacturer or should have authorized such export through notifications. Pharmaceutical products for the purposes of the section include both patented products as well as drugs manufactured by patented processes.

The primary contenders for Compulsory Licenses include life-saving, anti-retroviral and anti-cancer drugs. Natco, is the first and only Indian drug company to have applied for the grant of a compulsory license. Desirous to export anti-cancer drugs Tarceva and Sutent to Nepal as under the “Doha-Style Provision”, they filed an interlocutory petition asserting that the patentees be disallowed to participate in the compulsory license hearing that takes place between the Patent Office and Natco.

S.92A is silent on the count of a hearing to be conducted in the event of an application under the provision. S. 92A envisages the framing of terms for the grant of compulsory licenses, however does not spell the modalities of the same in utmost detail. The Controller in the process of deciding the grant may consider evidence to judge a prima case for making an order under the Section, however exclusion of hearings cannot be interpreted to be imperative.

In this regard, the Patent Office dismissed Natco Pharma’s petition opposing the Patent Office’s move to hear Pfizer before the grant of a compulsory license. The Patent office opined that the arguments of the patentees might prove beneficial in deciding the terms and conditions of compulsory licenses, thereby preventing the abuse of S. 92A.

The Patent Office seems to have made this move, not only to facilitate “fair and equitable” grant of compulsory licenses, but in an attempt to strengthen its standing as a quasi-judicial authority by exercising the principle of “Audi Alteram Partum”.