Need for Compulsory Licensing of Patents

This article is written by Yukta Tomar
Final Year Student (2019-2024) from DME College, Noida

In the realm of intellectual property rights, patents play a pivotal role in incentivizing innovation by granting inventors exclusive rights to their creations for a limited period. However, this exclusivity can sometimes hinder access to essential goods and technologies, especially in critical areas such as healthcare. To address this challenge, compulsory licensing provisions exist within patent law frameworks worldwide. A patent is a legal right granted by a government to an inventor, giving them the exclusive right to manufacture, use, and sell their invention for a specified period, usually 20 years from the filing date. In return for disclosing their invention to the public, patent holders are rewarded with a temporary monopoly, providing them with the opportunity to recoup investments made in research and development and generate profits. Patents serve as powerful incentives for innovation by providing inventors with a means to protect their inventions from unauthorized use or exploitation. This protection fosters an environment conducive to investment in research and development, as inventors and companies are more likely to dedicate resources to innovation when they have assurance of exclusivity and the potential for commercial gain. Consequently, patents stimulate technological progress and economic growth by fueling competition and driving advances across various industries. Compulsory license can vary depending on the specific circumstances and the laws of the country granting the license. It may be limited to a particular use or application of the patented invention, or it may be broader in scope to address the needs of the public. The duration of a compulsory license is typically determined based on the nature of the circumstances that led to its issuance. In some cases, it may be temporary, with provisions for review and renewal as necessary, while in others, it may remain in effect for the duration of the patent term.

Patent rights are proprietary rights granted to the owner to prohibit third parties from using, selling or offering for sale and making a product or process (reverse engineering) without the owner’s permission within the jurisdiction of the country or area in which the patent is in force. The proprietor is therefore entitled to issue and license certain patents to third parties; licenses issued by the proprietors of the patent are considered to be voluntary. In such conditions, the competent national authority shall issue a so-called “compulsory” or “non-voluntary” licenses to a third party to permit the use of the patented invention during the term of the patent without the authorization of the patentee. While patents are instrumental in fostering innovation, they can also create barriers to access, particularly in sectors vital to public health and welfare. In situations where patented inventions are deemed essential for addressing pressing societal needs, compulsory licensing mechanisms can be invoked. Compulsory licensing allows governments to grant licenses to third parties to produce or use a patented invention without the consent of the patent holder. This intervention aims to ensure that critical innovations are made available to the public at affordable prices, especially in instances where patent holders fail to adequately supply or license their inventions. The implementation of compulsory licensing involves a delicate balance between incentivizing innovation and promoting access to essential technologies. While patents reward inventors for their contributions and encourage further innovation, compulsory licensing acts as a safeguard against the potential abuse of patent rights that could impede access to life-saving treatments or vital technologies. By allowing for the production of generic versions of patented drugs or facilitating access to patented technologies, compulsory licensing serves the interests of public health and welfare, particularly in developing countries where affordability is a significant concern. Despite its potential benefits, compulsory licensing is not without challenges and controversies. Critics argue that it may undermine the incentives for innovation by reducing the returns on investment for patent holders, potentially stifling future research and development efforts.

Additionally, disputes over the scope and conditions of compulsory licenses can lead to legal conflicts between patent holders and governments, raising concerns about intellectual property protection and the sanctity of contracts. Before granting a compulsory license, authorities may require the party seeking the license to negotiate with the patent holder for a voluntary license under reasonable terms. If negotiations fail or if the circumstances necessitate immediate action, a compulsory license may be granted. However, patent holders are usually entitled to compensation for the use of their invention under a compulsory license, ensuring that they are fairly remunerated for their innovation. A compulsory license can vary depending on the specific circumstances and the laws of the country granting the license. In some cases, the license may be limited to a particular use or application of the patented invention, while in others, it may be broader in scope. Regulatory oversight is essential to ensure that compulsory licenses are used appropriately and in accordance with applicable laws and international agreements.

Procedure for Obtaining a Patent in India: The patent process in India begins with the filing of a patent application with the Indian Patent Office (IPO). The application can be filed either electronically or in physical form, accompanied by the necessary forms, specifications, and fees. After filing, the patent application is published in the official journal by the IPO after 18 months from the priority date or the filing date, whichever is earlier. Within 48 months from the date of filing or the priority date, the applicant must request examination of the patent application. If not requested within this timeframe, the application will be treated as withdrawn. The patent application is examined by a patent examiner to assess its novelty, inventive step, and industrial applicability. The examiner may issue examination reports and raise objections, which the applicant must address within the stipulated time. If the patent application meets all the criteria for patentability and the objections are satisfactorily resolved, the patent is granted, and the applicant receives a patent certificate.

Patents and compulsory licensing are integral components of the intellectual property landscape, each serving distinct yet interconnected purposes. While patents incentivize innovation by granting exclusivity to inventors, compulsory licensing ensures that essential technologies are accessible to those in need, striking a delicate balance between promoting innovation and safeguarding public welfare. As the global community grapples with challenges such as healthcare access and environmental sustainability, the judicious application of patent laws and compulsory licensing mechanisms will continue to play a crucial role in shaping the future of innovation and accessibility. Navigating the patent procedure in India requires a comprehensive understanding of the Indian Patents Act and its key sections. By following the prescribed steps and adhering to the statutory requirements, innovators can protect their inventions and leverage their intellectual property for commercial success. As India continues to foster innovation and technological advancements, a robust patent regime plays a pivotal role in driving economic growth and promoting innovation-led development. compulsory licenses on patents are a vital tool for balancing the exclusive rights granted to patent holders with broader societal interests. By enabling access to essential technologies and promoting public welfare, while ensuring fair compensation for patent holders, compulsory licenses play a crucial role in advancing innovation and addressing pressing societal needs. However, it is essential to strike a delicate balance between these competing concerns and to ensure that compulsory licenses are used judiciously and in accordance with legal and ethical principles.