Search Penny Hill Press

Wednesday, November 13, 2013

Compulsory Licensing of Patented Inventions

John R. Thomas
Visiting Scholar

The term “compulsory license” refers to the grant of permission for an enterprise seeking to use another’s intellectual property without the consent of its proprietor. The grant of a compulsory patent license typically requires the sanction of a governmental entity and provides for compensation to the patent owner. Compulsory licenses in the patent system most often relate to pharmaceuticals and other inventions pertaining to public health, but they potentially apply to any patented invention.

U.S. law allows for the issuance of compulsory licenses in a number of circumstances, and also allows for circumstances that are arguably akin to a compulsory license. The Atomic Energy Act, Clean Air Act, and Plant Variety Protection Act provide for compulsory licensing, although these provisions have been used infrequently at best. The Bayh-Dole Act offers the federal government “march-in rights,” although these have not been invoked in the three decades since that legislation has been enacted. 28 U.S.C. § 1498 provides the U.S. government with broad ability to use inventions patented by others. Compulsory licenses have also been awarded as a remedy for antitrust violations. Finally, a court may decline to award an injunction in favor of a prevailing patent owner during infringement litigation, an outcome that some observers believe is akin to the grant of a compulsory license.

A number of international agreements to which the United States and its trading partners are signatories, including the Paris Convention for the Protection of Industrial Property, World Trade Organization agreements, and certain free trade agreements, address compulsory licensing. In contrast to the United States, the patent statutes of many other nations include general provisions that allow for the award of compulsory licenses under specified conditions. A number of U.S. trading partners, including Brazil, South Africa, and Thailand, have invoked these provisions. The March 9, 2012, decision of the Indian government to grant a compulsory license on the chemotherapy drug sorafenib has attracted controversy.

Some commentators have expressed concern that compulsory licenses substantially diminish incentives for firms to conduct research and development. Others support the grant of such licenses under certain conditions, noting that many patent-granting states suffer from poverty, dire health needs, and a lack of access to patented technologies.

Congress has previously monitored the issuance of compulsory patent licenses by U.S. trading partners and may wish to continue to do so. Legislation dating from the 109
th Congress would have allowed the Secretary of Health and Human Services to declare a compulsory license on a patented invention that was needed to address a public health emergency. This legislation was not enacted and has not been reintroduced.

Date of Report: October 30, 2013
Number of Pages: 18
Order Number: R43266
Price: $29.95

To Order:

R43266 .pdf   to use the SECURE SHOPPING CART


Phone 301-253-0881

For email and phone orders, provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing