A patent gives exclusive rights
to the patentee to use, sell, manufacture and import the product into the
country where the patent is granted. While a process patent gives the rights to
exclusively use the process and prevents everyone else to use, sell and
manufacture the product that is developed through this process. Any violation
to these rights without the permission from the patentee would cause patent
infringement. However there are certain exceptional Acts where the use of patented
invention without consent of the patentee doesn’t constitute infringement. Section 107 of Indian Patents Act details such
exceptions.
In certain countries including
India, the generic drug makers are allowed to use the patented invention
without the consent of the patentee for development and submission of
information required under law. This provision is called Bolar-like provision or Regulatory
provision. This provision came into
existence from the case of Roche Products v. Bolar Pharmaceuticals. Roche is a
discovery based pharmaceutical whereas Bolar is a genetic drug maker. Roche
holds a patent over the drug Valium. Bolar intended to submit an Abbreviated
New Drug Application (ANDA) to the FDA for a similar drug containing the same
active ingredient as to Valium. Hence Bolar used the patented chemical in its experiments,
before its patent expiry in order to determine if the generic version is bioequivalent
to Valium. Roche responded to this by filing a suit for patent infringement. The
District court of Eastern District of New York declined Roche’s appeal saying
that no infringement had taken place owing to the experimental nature of
Bolar’s work. The Court of Appeal for the Federal Circuit however disagreed
with Bolar’s argument as it intended to sell its generic product in competition
with Roche’s Valium, soon after its patent expiry and stated that the exemption
does not apply to experiments which have commercial objective. Bolar argued
that such violation of exemption would extend the monopoly of Roche over Valium
even after its patent expiry. Thus in 1984, in response to Roche v Bolar
judgement, and in an attempt to promote competition by simplifying
authorisation for generics while maintaining appropriate protection for the
interests of research-based pharmaceutical manufacturers, the US Congress
passed the Drug Price Competition and Patent term Act (known as Hatch-Waxman Act). This law permits
the use of patented products in experiments for the purpose of obtaining FDA
approval and it established the modern system for FDA approval of generic
drugs.
Another instance where an exception
made for infringement is in the case of Parallel
import. A parallel import is said to occur when a product sold by a patent
holder in one country is exported by a buyer to another country with the price for
the same patented product being higher. The purpose of the parallel import is
to check the abuse of patent rights and to control the price of the patented
product. Pharmaceutical companies follow the practice of differential pricing
of drugs according to the purchasing capacity of the prospective consumer in a
target country. As a result, the same drug may be expensive in a developed
country and relatively cheap in developing countries. This principle of
differential pricing forms the basis of parallel trade. It enables countries in
which drugs are expensive to import them from cheaper markets.
On March 23, 1995, a decision
regarding parallel imports was delivered by the Tokyo High Court. BBS
Kraftfahrzeug Technik A.G. ("BBS") of Germany held both German and
Japanese patents for certain aluminum automobile hubcaps. The hubcaps were
legitimately purchased in Germany by a Japanese company which was engaged in
the export of the relevant goods to Japan where an affiliated Japanese company
was engaged in the sale of the goods. These two companies were virtually under
the same management when the goods were imported into Japan for sale at a price
lower than that charged by BBS dealerships in Japan. Subsequently, BBS filed
suit for patent infringement in Tokyo District Court in June of 1994. The
district court found that the two companies had infringed the BBS Japanese
patent. However, on appeal the judgment in favor of BBS was reversed. In
reversing the district court, the High Court held that the patentee's right to
enforce its Japanese patent against the imported goods had been exhausted since
the patentee had legally transferred title to a rightful purchaser of the
patented product.
By enlarge though the patentee
enjoys exclusive rights for his product/process, Indian Patent Act also
contains certain exceptions for the public benefit and prevent the abuse of
patent rights by the patentee.
