According to “The Paris convention of 1883” each contracting state had to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent. Further, the compulsory licensing of pharmaceutical products was addressed by the Doha Declaration which allowed members to issue compulsory license to export generic versions of patented medicines to countries with insufficient or no manufacturing capacity in the pharmaceutical sector.
Many developed countries had effectively applied the concept of compulsory licensing and after Doha Declaration which addressed the concerns related to public health various developing and less-developing countries have also adopted it.
The existing legal framework for the issue of compulsory license in India is comprehensive and meets all the obligations provided under Article 31 of TRIPS. According to the compulsory licensing system, the controller is empowered to allow third parties to manufacture and market a patented product or process with or without the patentee’s consent.
The Indian regime incorporates provisions for the grant of compulsory licenses to any person interested on request in case of;
a. Non-working of patent,
b. Reasonable requirement of the public are not met and,
c. Non availability to the public at a reasonably affordable price
In deciding on application for compulsory licences several factors are considered by the controller including the nature of the invention, the time which has elapsed since the sealing of the patent, the measures taken by the patentee to make full use of the invention, the ability of the applicant to work the invention to the public advantage, and the applicant’s capacity to take capital risk.
Compulsory license may also be granted to third party for manufacture and export of patented pharmaceutical products in certain exceptional circumstances wherein any country has insufficient or no manufacturing capacity for the concerned product, provided compulsory license has been granted by such country or such country has, by notification, allowed importation of the patented pharmaceutical products. Further, in order to prevent re-imports of products so exported are identified by special color, packaging etc.
Additionally, if the government is satisfied, then without the consent of the patentee the controller may in case of national emergency, extreme urgency or public non-commercial use including public health crises or other epidemics may grant a compulsory license to third party to work the invention.
While settling the terms and conditions for granting a compulsory license the controller endeavor to secure that the royalty and other remuneration reserved to the patentee is reasonable and the patented invention is worked to the fullest extent by the licensee. Moreover, the license granted is a non-exclusive license and non-assignable for the balance term of the patent unless a shorter term is consistent with public interest.
Compulsory licensing provisions are foreseen as sustaining a balance between the needs of technology consumers and innovators. In a developing country such as India, compulsory licensing is probably the most effective safeguard against the potential abuse of monopoly by patentees. However, while the provisions and procedure are detailed under the law, only one compulsory licences has been issued in India till date.