Page 194 - DMGT401Business Environment

Unit 8: Legal Environment

Provision of compulsory license can be implemented after payment of adequate Notes
remuneration to the patent holder. Article 31(h) of the TRIPS Agreement that provides the
guideposts in this regard states that, "the right holder shall be paid adequate remuneration…
taking into account the economic value of the authorisation."

Consideration for determining remuneration for use of a patent: In determining the reasonableness
of licensing terms for the use of a patent under subsection (c), the secretary of Health and
Human Services or the Federal Trade Commission (as the case may be) shall consider:
(a) the risks and cost associated with the invention claimed in the patent and the
commercial development of products that use the invention,
(b) the efficacy and innovative nature and importance to the public health of the
invention or products using the invention,

(c) the degree to which the invention benefited from publicly funded research,
(d) the need for adequate incentives for the creations and commercialisation of new
inventions,
(e) the interest of the public as patients and payers for health care services and
(f) the public health benefits of expanded access to the invention.
Source: House of Representatives, Affordable prescription Drugs and Medical Inventions
Act; (HR 1708): To amend Title 35, United States Code to provide for Compulsory Licensing
of certain patented inventions relating to health, 107th congress, 1st session, May 3, 2001.
Compensation for Use of Patent: In exercising the right under subsection (a) to authorize
other use of the subject of a patent, the right holder shall be paid reasonable remuneration
for the use of the patent, in determining the reasonableness of remuneration for the use of
a patent, the secretary of Health an Human services may consider:

(a) Evidence of the risks and costs associated with the invention claimed in the patent
and the commercial development of products that use the invention;

(b) Evidence of the efficacy and innovative nature and importance to the public health
of the invention or products using the invention;
(c) The degree to which the invention benefited from publicly-funded research;

(d) The need for adequate incentives for the creation and commercialisation of new
inventions;

(e) The interest of the public as patients and payers for health care services;
(f) The public health benefits of expanded access to the invention;
(g) The benefits of making the invention available to working families and retired
persons;
(h) The need to correct anti competitive practices; or other public interest considerations.
(Source: House of Representatives, Public Health Emergency Medicines (HR 3235): To
amend title 35, United States Code, to provide for compulsory licensing of certain patented
inventions relating to health care emergencies, 107th congress, November 6, 2001.)

5. Pre-versus Post-grant Opposition: Before the introduction of the new ordinance, India
followed a system of Pre-Grant Opposition. The erstwhile section section 25 of the Patent
Act provided for initiation of proceedings for opposition the grant of a patent which could

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