Compulsory licensing: a mechanism in balancing the rights to patents and the need to protect health

The topic of Compulsory licensing (CL) is right in the centre of a huge controversy of intellectual property and the fundamental right to health. As nations attempt to increase pharma innovations, and at the same time to make life saving drugs affordable, CL emerges as the most appropriate legal solution. It is where governments permit third parties to manufacture or utilize patented goods without the permission of its owner provided they pay them a reasonable price. I will dissect the court proceedings, the legal framework, and what is happening elsewhere in this post based on the global agreements and the evolving policy arena and the legislative and judicial process in India.

Finding the Patent System and Getting Medicine.

Inventors are provided with a 20-year exclusivity by patent law in order to recover their investment in research and development. Encouraging the pharmaceutical advancement though, it ends up escalating to extreme costs that not many people can afford, particularly in the third world countries. Getting medicines is not only a business matter, but it is a human rights matter, which stems out as supported by the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights. The right to health implies that the governments have to take necessary medicines, ensure their availability, and that they are accessible and affordable. It is this conflict between creating something new and making the greater good of health come first that has led to the view that compulsory licensing is a safety valve to the patent system. CL safeguards societal health and does not fully invalidate patent privileges when states have the authority to circumvent monopolies when they are at their worst.

Global Law TRIPS and the Doha Declaration.

CL should have the global basis provided in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Article 31 specifies such conditions as prior consultation with the patent owners, fair remuneration, and to an overwhelming extent remains within the country. Vague words such as reasonable commercial terms and extreme urgency restricted application to reality initially. Doha declaration on TRIPS and Public Health 2001 reversed the game and stated that member states are entitled to compulsory licensing and liberty to decide the conditions under which compulsory licensing is issued. It was able to recognize that any national health crisis in public health is the case of HIV/AIDS, TB, malaria. Article 31bis was included and thus countries without a manufacturing potential had the opportunity to import generic products which were prepared in other nations on compulsory licences. Although the system remains disorganized, it is an essential direction to health equity in the world.

Compulsory Licensing of Indian Patent Law.

 The CL rules are the most difficult in India, by the Patents Act of 1970. Section 84 of the act allows any interested party to seek a compulsory licence 3 years after a patent has been granted on the basis of unmet demands within the country, it being un-affordable or the company is not using the invention in India. Section 92 itself literally allows the government to license itself in emergencies or during outbreaks of illnesses. The 2012 case of Nexavar in India is historic. Natco Pharma was granted a mandatory licence to manufacture Sorafenib Tosylate, which is a cancer medication patent of Bayer. Bayer had fewer than sufficient stock, and charged the drug in all the sky–in India it was some 2.8 lakh rupees a month. It was being sold at approximately 8,800 rupees per month by Natco where a fee of 6 percent royalty was given to Bayer. The case established a world precedent of how CL can facilitate the availability of affordable treatments in the world. Nonetheless, India has been cautious as it has previously been the case with BDR Pharma, 2013, in the case. The BristolMyers Squibb case where the licence was rejected due to the fact that they did not pursue a voluntary licence in a proper manner.

Comparative Approaches:

Brazil, Thailand, South Africa, and More. The 2006-2008 CLs that Thais have on HIV/AIDS and heart-disease medicines reduced prices and expanded access on a gigantic scale. Like an athlete demonstrating that power of CL does not only lie in its application, but also its threat, Brazil tends to employ the threat of CL as a bargaining tool to lower prices of vital drugs. The example of South Africa demonstrates that the political reaction was strong: political attempts at CL and parallel importation expansion were made in the late 1990s, and then 39 pharma firms initiated legal claims, which were lowered following an international backlash. In the US, meanwhile, other methods such as the case of march-in rights under Bayh-Dole have been utilized, but not too often, even where the interest of the people is high. Innovation and Public Health Policy Dilemma. The opponents claim that CL has the negative side of damaging arms in case of pharma R&D, or diseases prevalent in developing countries. They cite the necessity of recovering the R&D investments, expensive trials and other risks. Conversely, lobbyists in the field of public health contend that CL is necessary in ensuring that there is an egalitarian universality of the usage of medicines especially in remote settings that trimester monopolistic prices cull out susceptible populations. Locating that middle-ground requires prudent policy. People in government must only implement CL where it is truly required and adhere to transparent procedures. The patent owners should be given relevant and viable amount of royalty and not a joke. Simultaneously, various innovation models are to be diversified, such as public-private collaboration, research conducted by the state, open-source drug research, and incentive plans that compel development and do not use exclusivity only.

Strengthening CL Effectiveness Recommendations.

 To help the concept of compulsory licensing be more effective at promoting the health of the whole population, I would recommend the following reforms:

1. Define technically such terms as the reasonably affordable price and public requirement.
2. Increase the pace of operations in order to reduce red tape.
3. Develop local production to an extent that CLs are literally available drugs.
4. Make Article 31bis more accessible to smooth cross-border access.
5. Advance voluntary licensing systems, such as the Medicines Patent Pool, to reduce the requirement upon CL.
6. Design other forms of incentives such as tax credits, patent buyouts, expedited approvals etc so that innovation is not limited to exclusivity.

Conclusion 

Compulsory licensing is neither a radical disruption of patent rights nor a cure‑all for public health inequalities. Instead, it is a vital legal mechanism that ensures the patent system remains aligned with societal needs. Its judicious use reaffirms that intellectual property rights exist not as ends in themselves but as tools to promote human welfare. In a world marked by health crises, rising drug prices, and global disparities, compulsory licensing remains an essential means to balance innovation with equity—ensuring that life‑saving medicines reach those who need them most.

Author: Yashvardhan Dixit, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD. 

References :

• https://www.aeaweb.org/articles?id=10.1257/aer.102.1.396
• https://library.oapen.org/bitstream/handle/20.500.12657/51469/9783030831141.pdf?sequence=1#page=8
• https://heinonline.org/HOL/Page?handle=hein.journals/cmpetion8&div=26&g_sent=1&casa_token=-cc_HGk3fw0AAAAA:F9SxusSswL9Cu8vVjKwMKzYLCvEp3juokl1ykUN4KqPkkXb14XYkynz_-9bjYs9V2VERQoi50wE
• https://heinonline.org/HOL/Page?handle=hein.journals/marq18&div=19&g_sent=1&casa_token=&collection=journals