Compulsory License

Compulsory license is generally defined as “authorization permitting a third party to make, use, or sell a patented invention without the patent owner’s consent.” Under Indian Patent Act, 1970, the provision with regard to compulsory licensing is specifically given under Chapter XVI.

India has issued only one compulsory license so far, which was given in 2012 to Natco, for Bayer’s cancer drug Nexavar

Bottlenecks in the production of antiviral drug remdesivir have led to policymakers threatening compulsory licensing and economic sanctions.

What is compulsory licensing?

Compulsory license is when a government allows someone else to produce a patented product or process without the consent of the patent owner or plans to use the patent-protected invention itself. It is one of the flexibilities in the field of patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.

In current public discussion, this is usually associated with pharmaceuticals, but it could also apply to patents in any field.

The agreement allows compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs. 

Process of Compulsory License:

As per Section 84 of India Patents Act 1970, any person, regardless of whether he is the holder of the license of that Patent, can make a request to the Controller for grant of compulsory license on expiry of three years, when any of the following conditions is fulfilled –

  1. the reasonable requirements of the public with respect to the patented invention have not been satisfied
  2. the patented invention is not available to the public at a reasonably affordable price
  3. the patented invention is not worked in the territory of India.

Further, compulsory licenses can also be issued suo motu by the Controller under section 92, pursuant to a notification issued by the Central Government if there is either a “national emergency” or “extreme urgency” or in cases of “public non-commercial use”.

Meaning of Patent

Patenting: WTO members have to provide patent protection for any invention, whether a product (such as a medicine) or a process (such as a method of producing the chemical ingredients for a medicine), while allowing certain exceptions. Patent protection has to last at least 20 years from the date the patent application was filed. 

Non-discrimination: Members cannot discriminate between different fields of technology in their patent regimes. Nor can they discriminate between the place of invention and whether products are imported or locally produced. 

Three criteria: To qualify for a patent, an invention has to be new (“novelty”), it must be an “inventive step” (i.e. it must not be obvious) and it must have “industrial applicability” (it must be useful)

Important Topics Prelims 2020

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