Compulsory Licensing – UPSC GS3

CL is the grant of permission by the government to entities to use, manufacture, import or sell a patented invention without the patent-owner’s consent. Patents Act (of India) also deals with CL. CL is permitted under the WTO’s TRIPS (IPR) Agreement provided conditions such as ‘national emergencies, other circumstances of extreme urgency and anti-competitive practices’ are fulfilled.

CL is problematic for foreign investors who bring technology as they fear misuse of CL to replicate their products. It is impacting India-EU FTA negotiations.
So far, India has issued only one CL. In March 2012, Natco Pharma was granted a license for an anti-cancer medicine Nexavar patented by Bayer.
Compulsory licensing is a special provision granted to governments when the TRIPS agreement was moved forward to regulate IP regime throughout the world. It grants governments powers to USE, MANUFACTURE or SELL a patented invention.
It is permitted only during:
1. National emergency
2. Extreme urgency
3. Ensuring supply of essential medicines
4. In India, it can also be used to promote Green Technology
In fact the generic medicine industry of India more or less thrives on this provision.
It is given under Indian Patent Act, 1970
  1. Commercial use of CL is not allowed. EU recently alleged India has been using CL for commercial purposes
  2. Unclear conditions for usage in India
  3. Was considered a primary factor for India’s low ranking in US IPR index, which led to India’s private assurance to USIBC (US India Business Council) that it will no longer use CL in commercial purposes
  4. Affects trade relations and investments
Issue with private assurance given to USIBC
  1. Lack of transparency, because after all it was private
  2. Will affect generic drug industry which provides cheap medicines. It is of importance to consider that Indian Generic Pharma Industry caters to the needs of all developing countries
  3. Lack of faith in govt processes



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