A compulsory licence grants the owner of a patent or copyright the right to use their rights for a fee set by law or determined by adjudication or arbitration. In essence, a compulsory licence allows an individual or company to use another’s intellectual property without the rights holder’s consent, and for a set fee. This is an exception to the general rule that intellectual property owners have exclusive rights that they can licence – or not licence – to others.
A compulsory licence is not the same as a statutory licence in the UK. Legislative licence rates are set by law; compulsory licence rates are negotiable or decided by a court.
In some countries, copyright law requires mandatory licences for specific uses. Royalties received for a copyrighted work under compulsory licence are often specified by local law, but may also be negotiated. Compulsory licencing can be established by negotiating licences that meet the parameters. In essence, compulsory licencing restricts how copyright owners can exercise their exclusive rights under copyright law.
Obtaining a compulsory licence
The Indian Patent Act provides for mandatory licencing in line with international agreements. The purpose of granting a compulsory licence is to protect the interests of anyone working on or developing a patentable invention in India.
Indian Patents Act, 1970, Section 84 (1) defines the purpose of compulsory licences and requires that when granting them, the general considerations stated in this section be followed. To work a patent in India is required by the Indian Patent Act. The Indian Patent Act allows compulsory licences to be granted three years after the patent is granted. The grounds include:
1. The patented invention does not meet the reasonable needs of the public;
2. The patented invention is not available to the public at a reasonable cost; or
3. The patented invention is not worked in India.
A trade or industry is harmed if the patentee refuses to grant a reasonable licence or licences; or b) demand for the patented article is inadequately met; or
c) a market for export of the patented article manufactured in India is not supplied or developed.
d) The patentee restricts the use of the patented invention in India;
e) Importation from abroad prevents commercial use of the patented invention in India.
Section 146 (2) of the Indian Patent Act requires patentees and licensees to provide information on the extent of commercialization of their inventions in India.
Patentees and licensees must complete Form 27. It must be filed within three months of the end of each calendar year.
The data includes:
1: if the invention has been tested
2: In case of non-working, the reasons and steps taken to work the invention.
3: Quantity and value of patented product;
4: If made in India;
5: Imports from other countries with details;
6: Year-end licenses and sub licenses;
Whether the public need has been partially, adequately, or fully met at a reasonable cost.
The Central Government can grant a compulsory licence Suo moto under Indian Patent Act section 92(1) in cases of national emergency, extreme urgency, or public non-commercial use.
Section 100 of the Indian Patent Act allows the government to issue compulsory licences for patented drugs. In Garware Wall Ropes Ltd. vs. A.I. Chopra and Konkan Railway Corp., the Bombay High Court allowed third parties to use a patented invention for the government.
Government can obtain a pending or granted patent for public use under Indian Patent Act section 102. In return, the Government must pay the patentee royalties as agreed.
Obtaining a compulsory licence
The Indian Patent Office accepts requests for compulsory licences online or by mail using Form 17. The form 17 must state the applicant’s interest, as well as the facts and details supporting the application.
The Controller at the Indian Patent Office (Controller) shall analyse the prima facie case made by the applicant against the patentee. the applicant made reasonable efforts to obtain a licence from the patentee, and 4. if such efforts were unsuccessful within a reasonable time period.
If the Controller is dissatisfied with the request, he will notify the applicant and refuse the compulsory licence. If the applicant does not receive a hearing within one month of rejection, they may appeal. After the hearing, the Controller will make a decision.
If the matter is decided in favour of the applicant, the compulsory licence terms and conditions will be decided. The Controller will decide on the patentee’s royalties. Applicant’s workability of patentee’s invention, selling price and licence terms will be considered.
When the Controller determines that a national emergency or circumstance of extreme urgency exists, the Section 87 procedure does not apply.
Refusal of the grant
The patentee or any other person desiring to oppose the grant of a compulsory licence may do so by filing a notice of opposition on Form 14 with the prescribed fee. After receiving notice, the Controller will notify the applicant and allow both parties to be heard before making a decision.
Obligatory licence revoked
A patentee or other party to the patent may request termination of the compulsory licence granted under Section 84 by submitting Form 21 with supporting documentation.
The Appellate Board can review the Controller’s decision to grant or deny a compulsory licence. 1. Section 91 Licensing of related patents;
2. Section 92 Special provisions for Compulsory License on notifications by Central Government; 3. Section 94 Termination of Compulsory License.
BDR vs. Bristol-Myers Squibb
The following case illustrates Sprycel, a cancer treatment drug.
Sprycel, a cancer drug, was refused an obligatory licence by BDR Pharmaceuticals (BDR) on March 4, 2013. The controller said BDR failed to make a case for a compulsory licence. According to the Controller, BDR did not make a credible attempt to obtain a licence from the patent holder, and neither did the applicant. So, no compulsory licence.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
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