license of a patented article), as upheld by a recent judgment of the IPAB. The grant of the compulsory license was based, in part, on the innovator's failure to "work" the patent in India because it imported its products, rather than manufacturing them in India. The United States recognizes that, on appeal, the IPAB modified the Controller-General's reasoning to clarify that "in some cases" the "working" requirement could be met solely by importation. The IPAB, however, rejected the innovator's explanation that economic factors prevented manufacturing in India, stating, "the patentee must show why it could not be locally manufactured. A mere statement to that effect is not sufficient[,] there must be evidence."[1] The IPAB did not clarify the circumstances under which the "working" requirement would be met without manufacturing in India. The decision could inappropriately pressure innovators outside of India – including those in sectors well beyond pharmaceuticals, such as green technology and information and communications technology – to manufacture in India in order to avoid being compelled to license an invention to third parties. The IPAB's decision is currently on appeal to the Bombay High Court.
Although the government has issued only one compulsory license under Section 84, India has made clear that it views compulsory licensing as an important tool of industrial policy for green technologies, with the potential to be applied more regularly across economic sectors. Specifically, India has promoted compulsory licensing in its National Manufacturing Policy as a mechanism available for government entities to effectuate technology transfer in the clean energy sector. India similarly has sought to multilateralize this approach in ongoing negotiations under the UNFCCC. In those negotiations India continues to identify patents as obstacles to the dissemination of climate change technologies, pressing for outcomes that would potentially undermine incentives for innovation, such as existing global standards for patent protection that is a critical part of the response to climate change and other environmental challenges.
The United States also notes with concern the continuing challenges involved with enforcement of patent rights in India, including challenges that patent holders face in securing injunctions against firms that manufacture patented inventions without authorization from the patent holder. Additionally, when approving such manufacture without authorization, Indian state governmental authorities reportedly do not have a mechanism to confirm whether the item to be manufactured is under patent. Recent cases such as Merck v. Glenmark and Cipla v. Roche illustrate this problem and underscore the need for greater regulatory coordination between officials in state and central governments.
Finally, the United States also urges India to provide an effective system for protecting against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products, and to ensure that such a system applies to all pharmaceutical products and not just traditional Indian medicines. It is noteworthy, however, that the Pesticides Management Bill, currently before Parliament, includes provisions for data protection of agricultural chemicals for five years, although that time period begins with the product's first marketing approval anywhere in the world. Meanwhile, data protection for pharmaceuticals remains under consideration by the Ministry of Health and Family Welfare. Without these types of protections in place against the unfair commercial use of clinical test data, companies in India reportedly are able to copy certain
- ↑ Decision of the Intellectual Property Appellate Board, Chennai, March 4, 2013, OA/35/2012/PT/MUM, Paragraph 52
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