Under Indian patent law, a patentee has exclusive right to prevent third parties, who do not have his consent, from the act of making, using, selling, offering to sale or importing patented product in
Possession to Market
Technically, patent is a legal document (certificate) issued by the government to an applicant for an invention that gives the applicant: (1) a right to prevent unauthorized third party from making the patented invention, (2) a right to prevent unauthorized third party from using the patented invention, (3) a right to prevent unauthorized third party from selling the patented invention, (4) a right to prevent unauthorized third party from offering to sale the patented invention, (5) a right to prevent unauthorized third party from importing the patented invention, and (6) importantly a right to file an infringement suit against the unauthorized third party infringing any of the above right (1) to (5).
In other words, a patent gives an applicant bundle of exclusive rights to control the commercial activity of patented invention. Till the patentee is having patented products in his possession (not placed on the market) all of these rights are intact with the patentee, that is, patentee has sole discretion to commercialize the patented products whenever he want, whosoever he want, wherever he want and whatever price he want. However, when the patented product is first sold or marketed by the patentee (or with his consent) it ceases patentee’s certain exclusive rights on the patented product. In other words, once the patentee has been able to obtain a commercial return from the first sale or placing on the market, the purchaser of patented product is free to use and resell it without further restriction from patentee.
As illustration, consider an anticancer drug Tarceva protected by an Indian patent. Because Roche holds patent rights on that drug, it may prevent others from first-selling the anticancer Tarceva without his consent. If you buy 25 strips of Tarceva tablets from an authorized first-seller, Roche’s right in its patent is ceased, and it cannot prevent you from using the sold tablets, or from giving or re-selling to others. The patentee has lost its right to control further movement of the sold tablets. Your purchase of the Tarceva tablets does not authorize you to begin making your own generic version of Tarceva, or licensing the patent to others. In other words, the first sale does not grant you rights in the patent, but rather extinguishes Roche’s exclusive right to prevent further movement of those particular sold tablets. This phenomenon is referred as doctrine of exhaustion which can further be attributed as international and national exhaustion.
If a country recognizes doctrine of national exhaustion, a patentee’s right to prevent movement of a patented product is only extinguished by the first sale or marketing of a patented product within the territory of that country. In other words, national exhaustion does not allow the patentee to prevent third party from using and reselling patented products already sold or put on the domestic market by the patentee or with his consent. If a country recognizes a doctrine of international exhaustion, a patentee’s right to prevent movement of patented product is extinguished when a patented product is first sold or marketed anywhere in the world. Notably, the WTO member countries are free to incorporate doctrine of exhaustion under Article 6 of the TRIPS Agreement. The policy of exhaustion significantly affects the flow of patented products across borders. Under doctrine of international exhaustion, patented products flow across borders after have been first sold or placed on the market by the patentee or with his consent anywhere in the world. Under doctrine of national exhaustion, the movement of patented products across borders may be blocked by patentees.
If an importing country agrees to international exhaustion, a third party may import a product patented in importing country from anywhere in the world where the product is first sold or marketed by a patentee or with his consent. Thus, the concept of exhaustion is critical in the context of parallel importation and possibility of importation can only be there when a (importing) country agrees to doctrine of international exhaustion.
Section 107A (b): In Compliance with Principle of Importation
To be continued …