Even as the bill seeking amendment to Patent Act, 1970 is awaiting parliamentary consent, the government is learnt to be seriously considering introduction of a special provision called "Licence of Rights" (LR) in the Rules hereunder, with a view to enabling the domestic industry to use the TRIPS-compatible provision for compulsory licensing of patented drugs.

The Parliamentary Standing Committee on Patents has recommended the introduction of LRs in the patent rules, a senior official with the department of industrial policy & promotion (DIPP) told pharmabiz.com. The DIPP has sought the concurrence of the department of commerce to frame the rules.

As the TRIPS permits the World Trade Organisation member countries to adopt "any kind of provision for compulsory licensing", LRs which would exclude the risks of administrative and judicial actions, would help the Indian industry to really use the compulsory licensing clause, the official said. It would also give the Indian industry a higher level of protection against the patent-holder blocking the compulsory licensing bids by invoking complex legalities.

Some countries like the United Kingdom have already armed themselves with the introduction of LRs in patent-related legislations. Sources added that the United Nations' report on "Role of Patent Systems and Transfer of Technologies" had stated that the developing countries could avoid the costly delays in patenting and use of permitted provisions like compulsory licensing by incorporating necessary risk-mitigating clauses in their patent laws. The introduction of LRs would be a move in that direction.

The perennial handicaps of the industries in the developing countries namely, lack of technical know-how and inability to expediently address legal complications and speed up the formalities regarding patent applications would be solved by the lessons to rights. It was principally because of these reasons that the Indian industry so far has not been using the extant provision for compulsory licensing.

While compulsory licensing in any form is permitted in TRIPS, a move is on in the United States by which the patented drugs could be marketed by other companies by payment of royalties to the patent-holder. This and the introduction of compulsory licensing clause fortified with lessons to rights would stand the generic drug units in good stead to cope with the product patent regime, officials said.