Introduction

Bolar Provision: An Exemption to Patent Exclusivity, A patent is a title or legal recognition granted to an inventor to utilize a product for the purpose of selling or distributing it for the time period designated by the authorities. Under this statute, a registered patent holder can prevent his innovation from being monopolized in the public domain by anyone other than himself. There are certain exceptions to this general rule, such as when a third party sells, uses, or modifies patented innovations without infringing on the patent holder's rights. Under the Indian Patents Act, 1970, this exception is known as the 'Bolar Exemption.'

India is renowned as the world's medical centre. It is the world's leading manufacturer and exporter of pharmaceuticals. It is a signatory to the TRIPS Agreement, which allows states to establish reasonable patent exemptions that take into account the patent holder's interests (Article 30). As a result, under the Indian Patents Act, 1970, Section 107-A of the Patents Amendment Act, 2002 was enacted as a defence. In India, this is known as the Bolar exemption, and it allows any third party to utilize or sell a freshly produced drug or product for further development or study without risk of legal repercussions.

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The Bolar exemption: Background and Significance

One of the most essential notions in the Patents Act is the bolar provision. It was first presented by the United States in the Hatch Waxman Act, 1984, which states: It will not be a demonstration of encroachment to make, use, offer to sell, or sell inside the United States or import into the United States a protected creation exclusively for purposes sensibly related to the improvement and accommodation of data under a Federal law that directs the assembling, use, or clearance of medications or veterinary organic items.

In essence, Patentees have an exclusive right to their mental brilliance (innovation), i.e. a monopoly for a set period of time. However, they are extending their monopoly rights by prohibiting generics/third parties from entering the market immediately after the patent expires, because marketing authorization takes at least two years, giving the patentees a de facto monopoly of two years. As a result, the seeds of bolar exemption or research exemption were sown in order to curtail such actions and protect the rights of generic manufacturers. After the Roche v. Bolar case 733 F.2d 858 (Fed. Cir. 1984), the United States created the bolar exemption in the Hatch Waxman Act. As a result, numerous countries have adopted it; India did so in 2002, and India's research exemption is similar to Canada's Bolar exemption.

As a result, it was welcomed by a number of countries; India acquired the equivalent in 2002, and India's exploration exclusion is similar to the Bolar exemption in Canada. A primary purpose for granting licences is to encourage innovative activity and the production of new advancements. To this end, inventors are provided incentives such as market selectiveness, which lasts for 20 years in India. However, when it comes to granting pharmaceutical licences, the government must consider a broader perspective, such as stimulating new work and making pharmaceutical products and medicines more effectively affordable and accessible on the market, so assuring overall health and nutrition.

Keeping in mind the general medical difficulties and issues, the Bolar exception was presented, which aided in checking the patentees' oppressive business strategy and market selectiveness. This arrangement looked to mostly benefit nonexclusive medicine producers. The arrangement was the necessity of great importance, as continuously millions in creating nations pass on from infections that may immediately be addressed by medicine treatments, and all the more financially be dealt with by Generic drugs.

Indian Patents Act, 1970

India's Bolar Exemption is found in Section 107A of the Indian Patent Act, 1970. The main goal of Section 107A is to define what types of demonstrations are not deemed invasion. One of the most significant elements for the establishment of nonexclusive assembling businesses in India is the enormous desire in a cost-effective pharmaceutical. Bolar Provision is a defence mechanism against patent infringement. When a creation is finished, it is either used or sold to a third party for the aim of furthering inventive work. As a result, this arrangement is expected to be extremely significant in light of the fact that traditional drug makers, who attempt to maintain their business in the market not long after the expiration of the trailblazer organization's licences, will benefit from the Bolar arrangement because they will have the necessary time and opportunity to conduct research on the item while the patent is still valid. The bolar exemption provided in India is more extensive and liberal than the bolar exception provided in the United States. In India, it does not limit the use, trade, import, manufacture, and development of patents for data storage to India alone, but rather to any other country apart from India, unlike the US Safe Harbor rule, which limits the equivalent to the United States as it is.

The concept of Patent linkage and Bolar exemption cases in India

Bayer Corporation vs Union of India (2014)

There was no formal provision relating to patent linking in India until recently. The Delhi High Court answered this question in a case involving Bayer and Cipla as the opposing parties. Bayer filed a writ petition in the Delhi High Court to stop Cipla from manufacturing, selling, and distributing their version of the kidney cancer medicine Sorafenib tosylate. Bayer claimed that the drug was a clone of its patented drug, and that Cipla's attempt to produce Sorafenib would render the drug a forgery (as defined by Section 17B of the Drugs and Cosmetics Act1940).Bayer sought that the Drugs and Cosmetics Act's relevant clauses be read alongside the Patents Act's relevant provisions. The granting of a drug licence to Cipla, according to Bayer, would be in violation of Section 48 of the Patents Act, 1970. Cipla argued that the Bolar exemption allows experimentation with any patented drug to generate data that can be submitted to the Drug Control Authority under Section 107A(a) of the act. Cipla further argued that the Patents Act cannot be interpreted in connection with the Drugs and Cosmetics Act [1940] because it lacks a clause requiring the drug controller to deny a licence to an application if the product is patented. The court finally decided that the Drugs and Cosmetics Act [1940] and the Patents Act [1970] are two separate acts, and that the drug controller is not required to consider patents when granting licences. The writ petition was dismissed by the court, which was later appealed to the division bench. The division bench agreed, concluding that the Drugs and Cosmetics Act [1940] and the Patents Act [1970] are different and distinct, and that any attempt to combine them cannot be supported.

Bayer Corporation v Union of India (2019)

The Bolar exemption was recently revisited in India, culminating in a major decision by the Delhi High Court in Bayer Corporation v Union of India (2019), which established an apparently open and flexible interpretation of the Bolar exemption. Surprisingly, Sorafenib was one among the medications in discussion once again. This decision was based on Bayer's appeals of the single judge's decision in the writ petitions filed by Bayer against Natco and Alembic Chemicals to prohibit the respondents from making, selling, distributing, advertising, exporting, or offering for sale any product that infringed Bayer's patents for the drugs Sorafenib and Rivaroxaban, respectively. Through the Indian Patent Office, Natco had already obtained a compulsory licence from Bayer for Sorafenib, Natco requested permission from Bayer to export 1 kilogram (kg) of the active pharmaceutical ingredient Sorafenib to China in order to conduct a clinic trial and undertake regulatory research on the drug's development. Bayer denied the application and filed a writ petition, claiming that granting Natco such permission would be in violation of Section 107A because the transaction involves a commercial activity and thus infringes on Bayer's rights. The court dismissed Bayer's argument, ruling that Section 107(A) covers any sale of a patented invention that is required for the development and submission of information under any law regulating the manufacture or sale of any product in a nation other than India. The sale of 1kg of Sorafenat to the Chinese business was found to be reasonably connected to research that the company was obligated to conduct in order to secure regulatory licences, and thus fall within the exception under Section 107A.In both cases, the Delhi High Court's division bench issued a same ruling on the legal interpretation of Section 107(A) of the Patent Law.

Bayer stated that the provision in question is an exception and is subject to Section 48 of the Patent Law, which grants the patentee rights. The court, however, disagreed with this approach, noting that the Bolar exception in the Indian statute is a separate provision with a distinct history. Because the Patents Act is territorial in character and covers the entire country, Bayer asserted that the term "selling" employed in the provision does not encompass exports. The statute, it was argued, only applies to acts that take place within India. Natco argued that Section 107A, when read in conjunction with Section 48, does not prohibit export provided the individual in question meets the qualifications set forth in Section 107 (a). The export of the active pharmaceutical ingredient for purposes properly related to the submission of information, according to Natco, is legal. The court reasoned that once it is determined that patented inventions can be sold for the purpose of conducting research that meets India's regulatory standards, there can be no obstacle or interpretation that limits the scope of such sales. Many governments may mandate national experimentation or research to be done in order to supervise the process and oversee the conclusion, according to the court. As a result, restricting a research exemption within the territory of India does not allow India to impose its will on the behaviour and legal requirements of other nations. However, the court recognized that the Bolar exception could be abused and recommended that measures be implemented to prevent unregulated export activities.

The court ultimately decided that the sale, use, and construction of patented products by third parties for purposes both within India and abroad is permissible and legal under Section 107A, provided that the seller ensures that the end use and purpose of the sale or export is reasonably related to the research and development of information in accordance with India's or the importing country's laws. It also stated that any dispute over such a sale should be resolved through civil remedies only, and that no writ petitions under Article 226 should be considered. The court cited a number of variables, including:

• the nature of the patent awarded;
• the nature of the products or elements requested to be exported;
• the party's details;
• the quantity of the product; and
• other data about the product's eventual use.

Conclusion

In India, the Bolar exemption has been expanded. Patented products can be transported overseas without the approval of the patent holder for additional modifications, advances, or clinical trials under Section 107-A of the Indian Patents Act, 1970. This means that generic producers can conduct high-quality research and tests using the newly developed medications. Despite the fact that such a product is protected by law, the maker can sell, use, and distribute it to the broader public if necessary. The bolar exemption is supposed to be for the welfare of society, but at the same time, the patent holder's rights must not be violated or taken away. It is important to note that under the bolar exemption, no one can manufacture patented products for profit or profit-making purposes. The main idea is that individuals should be able to obtain medicine or patented inventions at a low cost. To alleviate the cost burden on patients, the Medical Association of India must issue a directive to all registered doctors to suggest generic drugs. In this regard, the bolar exemption under the Indian Patents Act, 1970, might be considered a strong protection against patent infringement. The preceding decisions appear to have given the interpretation of the rule regarding the export of a patented invention for research and regulatory purposes a sense of finality. The court's 'reasonable relation' standard for restricting exports under the Article 30 of the TRIPS Agreement is welcome, and it will almost definitely be used by the courts in future cases. It would not be presumptuous to predict that jurisprudence in this area of Indian patent law will continue to evolve and develop in the future years.

Author: Anuja Saraswat - a student of NMIMS Kirit P. Mehta School of Law (Mumbai), in case of any queries please contact/write back us at support@globalpatentfiling.com or Global Patent Filing.