Bolar exception in Intellectual Property Law: A Comparative Analysis between India and the US

This article is written by Muskaan Garg, a 2nd Year law student from SLS, Pune.

Introduction

Every patent holder gets a right to hold monopoly over the patented product for a protective period of 20 years, after which the product can be used at large. This protective period ensures an exclusive right to gain profit from their invention. It is only after this period that the product enters the market to be exploited in profit and use. Generally, it takes somewhere between 2-3 years for a new product to attain the marketing approval from required agencies. This duration becomes an extended period of monopoly for the patent holder.

The idea of the bolar provision was to minimize the extended period of monopoly and bring the product in the markets as soon as possible. Hence, the bolar provision is an exception to the general rule of patent infringement. This exception broadly states that any patented invention can be exploited for the purpose of research and development and it will not be considered as patent infringement.

The genesis of this exception was related to the pharmaceutical industry primarily wherein there was higher demand and need of generic, cheaper, easily available medicines over patented medicines. Thereby the exception aimed at encouraging research and competition in order to restrict the patented monopoly to 20 years only and introduce the product in the markets at the earliest.

Emergence and development of the exception

The provision originated in the United States after the case of Roche Products v. Bolar Pharmaceuticals,1984 wherein, the issue was whether the usage of the patented product for clinical purposes is valid or not. The district court held that bolar used the patented product for federally mandated testing which did not amount to patent infringement however, the federal court reversed the order and stated that the experimental rule cannot be so broadly used to allow a violation of the patent laws in disguise of scientific research which has ssubstantial commercial purposes. Later, the Hatch Waxman Act opposed the said decision of the Federal Court and paved the way for the research exception which came to be known as the ‘bolar exception’.

India adopted the provision in 2002 by the way of Section 107A of the patent’s amendment act, 2002. The section states “any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to development and submission of information required under any law for the time being in India, or in countries other than India which regulate manufacture, construction, use, sale or import of any product.”

India follows a more liberal approach towards the exception in terms of export outside India whereas US restricts the use to its territory only. Also, in India it applies to all products whereas in US it applies to only pharma products till date. Until now, there is only one case pertaining to the bolar exception in India which itself is still in progress and has not been finalized.

Bayer Corporation vs. Union of India, is the first case wherein this exception is under discussion. In this case, Bayer restrained Natco from using, making or importing any drug comprising of a specific ingredient, meanwhile Natco applied for compulsory licence against Bayer’s patent with the only condition of not exporting the product beyond Indian territory. Natco violated the condition and exported the product thereby causing patent infringement and receiving a notice for the same. At a later stage, approval was granted for export of a minimum quantity, but Natco further asked for approving larger quantity which was challenged by Bayer. In response, Natco contended that exporting for research purposes is backed by the bolar provision under section 107A. Hence, the issue came down to whether the Section 107A is affected by grant of compulsory license and whether export of the product for research purposes is allowed under the bolar exception.

The Court held that mere absence of the word ‘export’ does not curtail the right of third parties under section 107A. The court emphasized that ‘export’ can come within the ambit of the word ‘selling’ as the same is not restricted to any geographical boundaries. On the second issue, the court stated that grant of compulsory licence cannot deprive of the rights ascertained in section 107A thereby, ruling in favour of Natco. However, this decision is currently stayed by the Delhi High Court.

In Bayer Intellectual Property GMBH v. Alembic Pharmaceuticals Ltd. case, Alembic was found manufacturing and exporting large quantity of the product on which Bayer had a patent. This was opposed by Bayer as a patent infringement and they seeked injunction on the same. Alembic contended that it was not for commercial use but only for research purposes within the ambit of section 107A. The court held that the purpose of the sale is the aspect to be noticed and not the amount of the product exported. If the purpose of sale is experiment or research and is in line with the legal requirements of the exported country then the bolar provision will be applicable and there will be considered to be no infringement of patent.

India has been known for its generic pharmacy and providing access of medical facilities to underdeveloped nations. The decision of the courts up to now have been towards prioritizing public health over private patent rights in order to maintain the spirit of aiding all in times of need. There are no Indian precedents beyond these cases equivalent to a strong foundation. Thereby, it can be safely assumed that India is still at the dormant stage of evolution of the bolar provision and further cases will be important in order to maintain balance between the rights of private patentees and the third-party rights favouring public health and research. In the present scenario of Covid-19, several prominent Indian drug makers including Cipla, Glenmark and Dr. Reddy’s have started conducting research on the drug Remdisivir, taking benefit of the Bolar exemption in patent law but are not yet planning to commercially launch the drug owing to its patent status. The patent on Remdisivir was granted as recently as February 2020 and is valid till the year 2035, this exemption may be of little use if this drug would have proved to be the magic bullet against COVID-19.

Conclusion

Therefore, the positives of the bolar provision are research promotion, easy access and availability to the generic market, encourages competition and quality development, curbs complete and unreasonable monopoly, and ensures the right of generic manufacturers. On the other hand, the negatives are the commercialisation without consent of patentee, exploitation of patent rights, and discouraging inventions. This fails the very purpose of most patent laws.

At present there are two conflicting aspects that require to be looked into; first that right of monopoly over a private patent should be respected even for research purposes and second, that the right of public health, research, and third-party interest should be prioritized over the former. After analysing the emergence of the bolar provision, the author believes that there must be a balance between these conflicting aspects such that there isn’t a breach in the boundary of any rights.

There needs to primarily be promotion of research without encroachment upon the patentee’s rights and without commercialisation of the patented product in any form which is being neglected at the present point. The terms equipped within the legislature are very vague and require redefining of boundaries. Terms like ‘making and selling’ do not define quantities, consent or licence of any sort. This literal gap could cause complete breach of the monopolistic right of the patentee. Instead of manufacturing and selling, more consent-based options like acquiring or lending could be deployed for the purpose of research before the patent ends. In return, some sort of social responsibility could be imposed on the patentee in order to easily provide for reasonable permissions enabling research.

In sum, it needs to be understood that the bolar provision is still a very recent addition to the discussion around patent rights and will need a lot more time to settle in efficiently wherein a balance is attained between reasonable causes and rights of both the sides.