compulsory license

A compulsory license is a provision under the Indian Patent Act that allows the
government or third parties to use a patented invention without the consent of
the patent holder under specific conditions. This mechanism is designed to
balance the interests of patent holders with public health and welfare needs.
Here are key points about compulsory licensing under the Indian Patent Act:

### Legal Provisions

1. **Statutory Basis**: Compulsory licensing in India is governed by Sections
84 to 92 of the Indian Patent Act, 1970.
2. **Grounds for Grant**: A compulsory license can be granted on several
grounds, including:
- The reasonable requirements of the public with respect to the patented
invention have not been satisfied.
- The patented invention is not available to the public at a reasonably
affordable price.
- The patented invention is not worked in the territory of India.

### Application Process

1. **Application for Compulsory License**: Any person interested can apply
for a compulsory license after three years from the date of grant of the patent.
2. **Examination of Application**: The Controller of Patents examines the
application and considers factors such as the nature of the invention, the ability
of the applicant to work the invention to the public advantage, and the
applicant's efforts to obtain a license from the patent holder on reasonable
terms.

### Specific Provisions

1. **Section 84**: This section allows any person to apply for a compulsory
license on the grounds mentioned above.
2. **Section 85**: This section deals with the revocation of patents by the
Controller for non-working, on similar grounds as for the grant of a compulsory
license.
3. **Section 92**: This section provides for the issuance of compulsory
licenses in circumstances of national emergency, extreme urgency, or public
non-commercial use, without the requirement of the three-year waiting period.

### High-Profile Cases

- **Natco vs. Bayer (2012)**: Natco Pharma was granted India’s first
compulsory license to produce a generic version of Bayer's patented cancer drug
Nexavar. The grounds included the high cost of the drug and its limited
availability in India.

### International Context

- **TRIPS Agreement**: India's compulsory licensing provisions are consistent
with the TRIPS (Trade-Related Aspects of Intellectual Property Rights)
Agreement, which allows WTO member countries to issue compulsory licenses
and determine the grounds for such licenses.

### Impact and Controversies

- **Public Health**: Compulsory licensing is seen as a vital tool for improving
access to essential medicines, especially in developing countries.
- **Patent Holders**: Patent holders often argue that compulsory licensing
undermines innovation and the incentives to invest in research and
development.

### Procedure for Grant of Compulsory License

1. **Filing of Application**: Interested parties must file an application with the
Controller of Patents.
2. **Hearing**: The Controller may call for a hearing to discuss the
application.
3. **Decision**: The Controller issues a decision based on the merits of the
application and public interest considerations.

### Conclusion
Compulsory licensing under the Indian Patent Act is a crucial mechanism for
ensuring that the interests of the public are safeguarded while balancing the
rights of patent holders. It reflects India's commitment to addressing public
health needs and fostering an equitable patent system.

Or

What is Compulsory License?

A compulsory License authorised by the government allows the company or an
individual seeking other’s intellectual property to use it without having to seek
the consent of the owner/ the right holder by paying a predetermined fee for the
license. The compulsory licence is regulated by the Indian Patents Act 1970.
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.
It existed in the TRIPS Agreement, ever since it took effect in January 1995.
Indian Patent Act,1970 provides that after three years from the date of the grant
of a patent, any person can apply for the compulsory license, on certain
grounds:
The reasonable requirements of the public with respect to the patented invention
have not been satisfied
the patented invention is not available to the public at a reasonably affordable
price
Lastly, the patented invention is not used in the territory of India.
Indian Patent Act,1970 authorizes the central government to issue a compulsory
license at any time after the grant of the patent, in the case of:
National emergency; or
Extreme urgency; or
Case of public non-commercial use
How many Compulsory Licenses have been issued in India?
Only 1 compulsory license has been issued in India by the Patent Office on
March 9, 2012. The license was issued to Natco Pharma for the generic
production of Bayer Corporation’s Nexavar, which is a life-saving medicine
used for treating Cancer(Liver & Kidney).
Conditions for Issuing Compulsory License
1. The person or company applying for a licence has to have tried, within a
reasonable period of time, to negotiate a voluntary licence with the patent
holder on reasonable commercial terms. Only if that fails can a compulsory
licence be issued.
2. When a compulsory licence has been issued, the patent owner has to receive
payment. The TRIPS Agreement says “the right holder shall be paid adequate
remuneration in the circumstances of each case, taking into account the
economic value of the authorization”, but it does not define “adequate
remuneration” or “economic value”.
3. The scope and duration of the licence must be limited to the purpose for
which it was granted, it cannot be given exclusively to licensees and it should
be subject to legal review.
Fee payment procedure for Compulsory License
The fee is set by the law or through any arbitration or adjudication process.
Copyright law Many countries provide copyright law for compulsory licensing
of copyrighted works for certain uses.
In most cases, the fee or royalty to be paid for a work that is copyrighted under
the compulsory license is defined by the local law, however, it can be
negotiated.
The fee may be determined through negotiations but must contain terms within
the boundaries of the compulsory license.
Industries under Compulsory Licensing in India
Only 6 industries fall under the compulsory licensing category in India.

They are listed below:

Distillation and brewing of alcoholic drinks.
Cigars and Cigarettes of tobacco and manufactured tobacco substitutes.
Electronic Aerospace and Defence equipment: all types.
Industrial explosives including detonating fuses, safety fuses, gun powder,
nitrocellulose and matches.
Hazardous chemicals.
Drugs and Pharmaceuticals (As per the modified Drug Policy issued in
September 1994).
The Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)
does not specifically list the reasons that might be used to justify compulsory
licensing. However, the Doha Declaration on TRIPS and Public Health confirms
that countries are free to determine the grounds for granting compulsory
licences and to determine what constitutes a national emergency.