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The Implications Of Compulsory Licensing Under Patent Law

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Making billions of investments in research and development of the pharmaceutical sector isn’t easy for all the nations around the world especially when it comes to the Least Developing Countries. This is why the notion of compulsory licensing becomes inevitable for securing public health and ensuring easy access to medicines which are the two most fundamental duties of every state. Compulsory licensing[1] as defined by the World Trade Organisation (WTO) 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 for the government to ensure that the public not only has easy access but also be able to afford the medicines. One of the hurdles that might arise in the way of achieving these goals is that of patent protection. Through patent protection, the patentee/inventor can claim an exclusive right of using/exploiting the invention thereby excluding all others to have a right over it. This exclusive right might also result in situations wherein the public is deprived of bearing the fruit of the invention especially when it comes to pharmaceutical products. The concept of compulsory licensing thus protects the interest of the public by ensuring that the product is brought into the public domain and can be used for the public good. It thus protects the interest of the public by maintaining a balance between conflicting claims of the inventors and the citizens. Compulsory licensing has also been duly recognized by various international conventions and treaties. For the first time, it was incorporated in Paris Convention, 1883 which provide for the grant of compulsory license and to prevent the abuse of patented invention. In addition to this, Agreement on Trade Related Aspects of Intellectual Property Rights(TRIPS), 1994 too lays down provisions for grant of compulsory licensing. It lays down that a before applying for a compulsory license, sufficient efforts shall be made to procure a voluntary license and it is only in case of failure that an application of compulsory licensing can be considered. It helps in reducing the cost of the medicines and make it affordable for the general public which is not always well off and struggles to purchase the life-saving drugs at exorbitant prices charged by the MNCs. When it comes to India, the case of NATCO Pharma Ltd. v. BAYER Corporation[2] is a classic example of how the prices of the medicines drop significantly once compulsory license is granted. The Indian Patent Act, 1970 also envisages provisions which provide special powers to the controller to procure a license in case of national emergency, extreme urgency and public non-commercial use. Thus, the entire concept revolves around public good which is always kept at the highest pedestal. However, while granting compulsory license the rights of the inventor should not be ignored unreasonably. He shall be paid adequate remuneration while his invention is exploited by others. The inventor’s rights should not be compromised in any way. The authorities have taken progressive steps towards it. In 2013, the controller rejected an application of BDR Pharma for the compulsory license on the ground the absolutely no efforts were made to procure a voluntary license first. In another case, the controller rejected the application of Lee Pharma as it failed to prove that there was a reasonable requirement of the drug in public. No one shall be allowed to get unjustly enriched by the using inventor’s patented product. Thus, Compulsory licensing acts as an exception to the general rule and protection granted to one’s patented products. What is essential is to strike a balance between the interest of the patentee and of the patients which is why compulsory licensing is one of the most controversial topics in the regime of patent law.  


[1] www.wto.org

[2] Order No. 45/2013, Intellectual Property Appellate Board, Chennai 0 List Table 7


Written by Priyanshi, BA LLB, 4th Year, (priyanshi.0697@gmail.com), Vivekananda Institute of Professional Studies, I.P. University, Delhi

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