Requirements of applications for compulsory licences
- Compulsory licences are permissions granted by the Controller General to a
third party to manufacture, use, or sell a patented product or process without
the approval of the patent owner. This idea is recognised at both the national
and international levels, with the Indian Patent Act, 1970 and the TRIPS
Agreement specifically mentioning it. If a compulsory licence is to be granted
in someone's favour, several pre-requisite conditions must be met, as outlined
in sections 84-92.
- Any person, regardless of whether or not he already has a licence under the
patent, may submit an application.
- According to Section 84, any person, regardless of whether he is the
holder of the patent's licence, can apply to the Controller for a compulsory licence
after three years if any of the following conditions are satisfied:
- the reasonable requirements of the public with respect to the patented
invention have not been satisfied
- the patented invention is not available to the public at a reasonably
- the patented invention is not worked in the territory of India.
Every application must include a statement describing the nature of the
applicant's interest, as well as any other information that may be required,
such as the facts on which the application is based. If the controller is
satisfied, he has the authority to order the patentee to grant a licence on the
terms he sees proper.
Purpose for granting compulsory licences (Section 89)
The controller must use his powers to grant a compulsory licence to ensure the
following general objectives:
Factors to be taken into account while granting compulsory licences
- patented inventions are worked on a commercial scale in India's
territory without undue delay and to the fullest extent reasonably possible;
- the interests of anyone currently working on or developing an invention
in India under the protection of a patent are not unfairly prejudiced.
The controller must consider the following elements when making a decision on an
application for a compulsory licence:
Compulsory licences on notifications by Central Government (Section 92)
- the nature of the patent, the amount of time since the patent was
granted, and any steps taken by the patentee or any licensee to fully
exploit the patent
- the applicant's ability to use the invention for the benefit of the
- Whether the applicant has attempted and failed to secure a licence from the
patentee on acceptable terms and conditions within a reasonable time frame.
- the applicant's willingness to take on the risk of supplying funds and
putting the patent into production
If the Central Government determines that compulsory licences must be granted at
any time after the patent is sealed to work the invention in the event of a
national emergency, severe urgency, or public non-commercial usage, it may make
a declaration in the Official Gazette to that effect.
Compulsory licences for export of patented pharmaceutical products in certain
exceptional circumstances (Section 92A)
Compulsory licence to operate as deeds between parties concerned (Section 93)
- For the manufacture and export of patented pharmaceutical products to
any country with insufficient or no manufacturing capacity in the
pharmaceutical sector for the relevant product to address public health
problems, a compulsory licence would be available. However, such countries has issued a compulsory
licence or has allowed the importation of patented medicinal products from India
through notification or other means.
- The Controller shall grant a compulsory licence solely for the manufacture
and export of the concerned pharmaceutical product to such nation upon receipt
of an application in the prescribed way.
Guidelines in determining whether use is Adequate
- Any order for the award of a compulsory licence will have the same effect as
a deed granting a licence signed by the patentee and all other necessary parties
and containing the terms and conditions stipulated by the Controller.
Where patentee holds more than two patents
- It is up to the controller to decide if the extent to which the article
or process is created or carried out is adequate in each instance, and if
not, whether the explanations given are sufficient.
- A patentee who has enabled a portion of the demand in this country to be
met by importing goods from other countries cannot demonstrate that the
manufacture of the patented article or use of the patented technique in this
country is adequate.
- If the patent is being adequately worked in this country, the fact that
certain specialised uses of the invention are not being met by manufacture here
is not necessarily a reason for issuing a compulsory licence under this heading.
If the Controller is satisfied that the applicant cannot work the licence
granted to him under those patents efficiently or satisfactorily without
infringing the patentee's other patents, and if those patents involve
significant technical advancement or economic significance in relation to the
other patents, he may, by order, direct the grant of a licence in respect of the
other patents as well, allowing the licensee to work the patent or patents in
Procedure for grant of compulsory licence in case of national emergency
The Controller is satisfied on review of an application for the grant of a
compulsory licence pursuant to a government notification that it is essential in:
Power of Controller to adjourn applications for compulsory licences (Section 86)
- a situation of national emergency; or
- a situation of extreme urgency; or
- a case of public non-commercial use.
When an application is filed on the grounds that the patented invention has not
been worked in India or that the reasonable requirements of the public have not
been met, and the Controller is satisfied that the time since the patent's
sealing has been insufficient for any reason to enable the invention to be
worked on a commercial scale to an adequate extent or to the fullest extent
possible. He may postpone the subsequent hearing of the application for a period
of not more than twelve months in total if he believes it is necessary for the
invention to be worked.
Powers of Controller in granting compulsory licences (Section 88)
If the Controller is satisfied on receipt of an application that conditions
imposed by the patentee on the grant of licences under the patent, or on the
purchase, hire, or use of the patented article or process, are prejudicing the
manufacture, use, or sale of materials not protected by the patent, he may,
subject to the provisions of the Patents Act 1970, order the grant of licences
under the patent to such customers of the applicant as he thinks fit, as well as
to the applicant.
Right of licensee under compulsory licences to institute infringement actions
Any individual who has been granted a compulsory licence has the right to
insist the patentee take action to prevent any infringement of the patent. If
the patentee refuses or fails to do so within two months of being asked, the
licensee may bring infringement actions in his own name, as if he were the
patentee, making the patentee a defendant. Only if a patentee is included as a
defendant and enters an appearance and participates in the proceedings will he
be liable for costs.
Terms and conditions of compulsory licences (Section 90)
Once the controller has decided to give the obligatory licence, the terms and
conditions of the compulsory licence will be established. The controller also
determines the amount of royalties or payment due to the patentee based on the
- The investment of the patentee in the invention
- the applicant's capacity to use the patentee's invention;
- the market price of the patented items (at reasonable prices); and the licence's term.
If it is in the public interest, the government may require the controller to
authorise any licensee in respect of a patent to import the patented item or a
product or substance made by a patented process from another country at any
Revocation of patents for non-working (Section 85)
- The licensee may apply to the Controller for a revision of the terms and
conditions of a compulsory licence at any time after he has worked the invention
on a commercial scale for a minimum of twelve months on the grounds that the
said terms and conditions have proven to be more burdensome than originally
expected and that as a result the licensee is only able to work the invention at
a loss. This type of request will only be considered once.
Termination of compulsory licences (Section 94 & Rule 102) (Form 21
- Where a compulsory licence has been granted in respect of a patent, the
Central Government or any person interested may apply to the Controller for an
order revoking the patent after two years from the date of the order granting
the first compulsory licence on the grounds that the reasonable requirements of
the community with respect to the patented product have not been satisfied or
that the patented invention is not worked in the territory of India or is not
available at affordable price.
- The applicant bears the burden of proving that the patented product is
not being used to its fullest extent possible.
Case Laws on Compulsory Licencing
- On the patentee's application or any other person deriving title or
interest in the patent, the Controller may terminate a compulsory licence
issued if and when the circumstances that led to its issuance no longer
exist and are unlikely to recur
- The compulsory license holder may appeal against such termination
- A patentee's right to exclusive use of a patent for the duration of its
protection is a property right. An application for a compulsory licence is a
process that impacts that right to property, and as a result, an appeal from the
Controller's decision granting the licence would be a civil proceeding.
- Bayer Corporation Vs. Union of India and Others (Bayer v. Natco)
Decision Date: 04.03.2013
Facts of the Case:
Decision of the Controller:
- Bayer Corporation, Germany, patented "Sorafenib," an active pharmaceutical
ingredient used to treat liver and kidney cancer in India (Patent No. IN
215758). Nexavar is the brand name for sorefenib, which is sold all over the
- In 2008, the Indian generic company CIPLA began producing and marketing Sorafenib tablets with the brand name 'Soranib' and the description 'Sorafenib
Tablets 200mg.' Bayer launched an infringement lawsuit against CIPLA in an
Indian court ( CIPLA is not a Subject matter of the present case)
- Bayer charged 280,438 INR (US $ 5280) a month at the time of the suit, while
CIPLA's generic version cost 27,960 INR (US $ 525) for the same number of
- Another generic producer, Natco Pharma Limited, submitted a request for
compulsory licencing against Bayer's patent on Sorafenib before the Controller
of Patents during the continuing dispute between CIPLA and Bayer. Section 84 (1)
of the Indian Patent Act of 1970, as revised in 2005, was used to request the
- Because Bayer had failed to meet the conditions of S. 84 of the Patents
Act, 1970, the Controller determined that Natco Pharma deserved a forced licence. The
compulsory license's terms and conditions were drafted by the Controller, who
also handed Bayer a 6% royalty on profits.
- Bayer filed an appeal with the Indian Intellectual Property Appellate
against the Controller's ruling.
High Court Decision
- Bayer filed an appeal against the Controller's decision, claiming that the
Compulsory License was unnecessary because the medicine was already
available at a cheaper price (based on CIPLA's sale of Rs. 5400/- per month)
than the price set by the Controller.
- As a result, Bayer contended that if the drug is available on the market
at reasonable pricing and is not required by the patentee, section 84 (1)
(b) of the Patents Act will not apply.
- The IPAB, on the other hand, dismissed this claim, stating that Bayer was not
the one selling the drug at a reasonable price, especially because Bayer had a
lawsuit ongoing against CIPLA for the same drug.
- In order to avoid the compulsory licence, only the patentee must avoid the
grounds that are mentioned under section 84 (1) (b).
- The main legal issue before the High Court was whether supplies by
patented drug infringers (in this case, Cipla) had to be taken into consideration in
determining whether the reasonable requirement test was met?
- As a legal matter, the Court determined that the patent holder, either
alone or through its licensees, has the responsibility to meet the
reasonable requirements of the public.
Supreme Court decision:
- The Supreme Court stated in dismissing Bayer's Special Leave Petition that
"In the facts of the present case, we are not inclined to interfere. The
Special Leave Petition is dismissed, keeping all questions of law open."
- As a result, the Supreme Court's ruling restores the uncertainty that
had previously been associated with the grant of a Compulsory License in
- Monsanto Holdings Pvt. Ltd. and Ors. vs. Competition Commission of India
Facts of the Case:
- The technology for generating genetically modified cotton seeds is
patented by Monsanto Holdings Pvt. Ltd., Monsanto Company, and Mahyco Monsanto Biotech
(India) Pvt. Ltd. ("Monsanto"). Monsanto licenced this technology to a number of
seed producers, including Nuziveedu Seeds Ltd., Prabhat Agri Biotech Ltd., and
Pravardhan Seeds Pvt. Ltd. ("seed producers"). A non-refundable charge and a
recurring fee ('trait value') were paid by the seed manufacturers to Monsanto in
exchange for this sub-licensing. Monsanto's royalty fee/ trait fee charged to
seed manufacturers has been a source of contention between them.
- Cases were filed before the CCI against Monsanto in response to the royalty
fee/ trait fee charged by the company, based on a "reference" filed by the
Department of Agriculture, Cooperation and Farmers Welfare, Ministry of
Agriculture and Farmers Welfare, Government of India, and "information" filed by
seed manufacturers. In their case, the seed companies claimed that Sections 3
(anti-competitive agreements) and 4 (abuse of dominance) of the Competition Act
had been violated.
- Monsanto had a strong position in the relevant market, according to the CCI,
India's competition regulator. The CCI also found that Monsanto's actions
appeared to be in violation of section 4 of the Competition Act, and that the
sub-licence agreements' terms were severe and unreasonable for preserving patent
rights. As a result, the CCI launched an investigation into the situation.
- The order for the probe was challenged in the Delhi High Court by
Monsanto, who claimed that the CCI lacked power to investigate problems relating to the
exercise of patent rights.
- Jurisdiction of Competition Commission of India
- Monsanto stated that any alleged infringement of patent rights would be
dealt with solely through the Patents Act, and that CCI had no jurisdiction over such
- The Court held that the focus of the Patents Act and the Competition Act
are different, citing the case of Telefonaktiebolaget L.M. Ericsson vs. Competition
Commission of India & Others decided on 30 March 2016, Delhi High Court went on
to say that the two statutes don't have any irreconcilable differences.
- A single judge bench of the Delhi High Court had reviewed numerous parts
of the Competition Act as well as the Patents Act in Ericsson case, and
found that the Competition Act was enacted in addition to, not in instead
of, other legislation. As a result, the Court found that the CCI's jurisdiction to hear
complaints against patent-related abuse of dominance could not be ruled out.
- The Competition Act may apply to patent licencing agreements in certain
- Monsanto asserted that a patentee might insert any condition/obligation in
an agreement for limiting patent infringement, and that the Competition Act
did not apply to the assessment of such an agreement or provision in an
agreement for reasonableness or unreasonableness.
- According to the Court, the Competition Act recognises a person's right to
prevent patent infringement, and any arrangement entered into for that reason
would be beyond the purview of the Competition Act. However, the Court noted
that such rights are not absolute. It stated that only agreements necessary for
protecting patent rights are exempted from the Competition Act, and only to the
degree that they are necessary. The patent holder is likewise permitted to
impose reasonable requirements in such agreements, according to the Court.
Agreements that incorporate unreasonable terms that considerably beyond those
that are required, on the other hand, would be subject to the Competition Act's
- The Court went on to say that the CCI has to decide whether an agreement was
based on reasonable terms.
- Abuse of Dominance Complaints' Forum
- Monsanto argued that, in light of the Supreme Court's decision in
Competition Commission of India v. Bharti Airtel Ltd. and Ors. (Civil Appeal No.
11843/2018, decided on 05 December 2018, Supreme Court of India), the question
of whether patent rights have been abused must be decided by the Controller of
the Patent Office prior to any CCI investigation.
- The Supreme Court concluded in Bharti Airtel that the CCI could only
exercise its authority after the regulator, in that case the Telecom Regulatory
Authority of India (TRAI), had returned its findings on the complaint. The
Supreme Court further said that before the CCI could begin a probe, TRAI had to
look into the technical difficulties raised in the complaint.
- The Delhi High Court ruled that Bharti Airtel was inapplicable because
the position of TRAI as a regulator differed fundamentally from that of the
Controller of the Patent Office. The Court further noted that TRAI's powers
encompassed telecom sector regulation, whereas the Controller of Patents did not
regulate the use of patent rights in the same way as TRAI did because patents
were not an industry. Thus, the nature of TRAI's and the Controller of Patents'
regulatory functions could be plainly separated.
The Court dismissed the petition, stating that the CCI's order for an
investigation was an administrative order, and that no interference was required
unless it was found to be arbitrary, unreasonable, and failing the Wednesbury
Test (the decision was so irrational that no reasonable authority would consider
- BDR Pharmaceuticals Pvt. Ltd. Vs Bristol Myers Squibb
Response of Controller
- In the matter at hand, BDR wrote to Bristol Myers Squibb (hereinafter
referred as BMS) on February 2, 2012, requesting a voluntary licence to
manufacture DASATINIB in India
- In response to BDR's letter on 13/03/2012, BMS asked for facts demonstrating
an ability to consistently supply high volume of the API, DASATINIB, to the
market, facts demonstrating your litigation history or any other factors that
may jeopardise Bristol Myers Squibb's market position," "quality related facts,
in particular compliance with local regulatory standards and basic GMP
requirements," and "quality assurance systems."
- BDR interpreted Bristol Myers Squibb's response as "obviously indicative of
the denial of the application for voluntary licence" and did not pursue the case
further, making no additional efforts to reach a settlement, instead filing a
compulsory licence application on March 4, 2013.
Argument of BDR
- Following the Controller's review of the BDR's CL application, a notice was
issued stating that a prima facie case could not be made out for the making of
an order under Section 84 of the Act because "the applicant has not acquired the
ability to work the invention to the public advantage" in the absence of DCGI
approval, and the applicant has also not made reasonable efforts to obtain a
licence from the patentee on reasonable terms and conditions.
- A request for hearing was filed by the BDR with the Patent Office on
Decision of the Controller
- BDR argued at the Controller's hearings that by failing to respond directly
to the request for voluntary licence, the patentee may have continued to
contact, requesting more and more information, thus putting the request for
voluntary licence on hold.
- BDR also argued that if the patentee avoids specifically rejecting the
request for voluntary licence or does not address the terms for grant hereunder,
the application for compulsory licence could be delayed indefinitely due to the
patentee's lack of specific denial, unless the Controller exercises his powers
in appreciating the applicant's efforts toward meeting the requirements of
Section 84(6) (iv).
- The controller responded that the patentee cannot hold the applicant for
more than Six Months from making the request for compulsory licence.
- BDR also claimed that, much to the applicant's surprise, the patentee's
attorney publicly declared in the April 2012 issue of the 'Indian Business Law
Journal' that the patentee's strategy was to 'keep the potential licensee of a
compulsory licence engaged without a clear outright rejection' and continue with
new queries. This led applicant to the conclusion that request for compulsory
licence is the only way left.
- The phrase 'efforts' does not include the qualifier 'reasonable',
according to the Controller, and the applicant should have understood that
the responsibility imposed on him to undertake 'efforts' is unconditional,
inflexible, and without exceptions.
- The Controller, on the other hand, stated that the stage for making a
merits-based decision on the applicability of Section 84 grounds has not yet
- As a result, the controller determined that there is no prima facie case
for issuing a CL under Section 87 and rejected the CL application.
- In Re: Distribution of Essential vs Unknown on 30 April, 2021
- Following the Covid-19 outbreak, the Supreme Court (the "Court") took
notice of India's unparalleled humanitarian situation.
- The Court pointed out that the jurisdiction it assumed under Article 32
did not always imply that a High Court's jurisdiction under Article 226 was
- However, this Court has taken on jurisdiction over issues relating to
Covid-19 that cross over state borders and affect the entire country.
- The Supreme Court of India said, in this case, about the Potentiality of
Compulsory Licensing for Vaccines and Essential Drugs:
- Several medications used in the Covid therapy protocol, including
Remdesivir, Tociluzumab, and Favipiravir, are patented in India.
- In the event of a national emergency or extreme urgency, Section 92 of
the Patent Act allows for the issuance of a compulsory licence.
- The Central Government can approve some corporations to use any patents
for "government purposes" under section 100 of the Patents Act.
- While discussing royalties with patentees, Indian companies can begin
manufacturing the medications.
- If the Central Government or its authorised company is unable to
establish a deal with the patentee, the High Court must determine the patentee's
- Another option is for the government to negotiate for the patents from
the patentees under Section 102.
- In addition, the Central Government has the authority to revoke a patent
in the public interest under section 66 of the Patents Act.
- The Trade Related Aspects of Intellectual Property Agreement ("TRIPS")
mentions the use of these flexibilities. It establishes a permissive
environment for the creation of exceptions and constraints that advance
public health goals. A combined reading of Articles 7,8, 30, and 31 is
evident of this.
- The Doha Declaration's paragraphs 5(b) and (c) deal with the idea of
compulsory licencing and the reasons on which licences are awarded.
- Several countries, like Canada and Germany, have eased the rules
governing the issuance of compulsory licences.
- Garware Wall Ropes Ltd. Vs. A.I. Chopra and Konkan Railway Corp
Facts of the Case
- This case was between Pune based Garware Wall Ropes (Plaintiff/Appellant) and
A.I Chopra Engineers & Contractors (AICEC), Konkan Railway Corporation (Co-owner
of a patent) and defendant/respondent).
- IN196204 ("Steel Wire Rope Net System") and IN201177 ("Spiral Lock
System") are the patents at issue in this dispute; the first is jointly
owned by Garware
and the Konkan Railway Corp. (KRC).
- Whereas '204 is generally used in mountainous terrains to guard against
boulder rockfall, mudslides, and avalanches, '177 is used to connect two
adjacent panels of boulder nets, preventing boulders from falling through the
junction of two nets.
- Garware claimed that the first respondent AICEC infringed on the patents by
selling/using identical/substantially similar items to secure government
contracts, including in a KRC tender soliciting bids from producers of such
products. Garware requested for the ad interim injunction.
- The major defence of the defendants in this case is section 100 of the
Patents Act. Because the contract with the Railways was signed in the name of
the President of India, AICEC argued that its use of the patented inventions
fell under the provisions of government usage stated in ss.99 and 100 of the
Act, giving it immunity from infringement.
- Following the denial of his motion for an interim injunction, Garware filed
an appeal with the Bombay High Court's Nagpur Bench.
Decision of Court:
- Novelty and patentability of the subject-matter of the patents
- The scope and admissibility of a defence under section 100 of the Act
- The President is included in the description of the Central government in
section 3(8)(b) of the General Clauses Act, but the interpretation of
section 100(4) of the Patents Act suggests that the authorization must be
given by the government specifically for the use of the particular patent
- The Court then considered the information presented by the defendants to
prove a lack of novelty in the patent's subject matter.
- The Court was clear that not only was this evidence being presented anew
at the appellate level, but that the defendants had simply downloaded
materials off the internet without evaluating the patent's specification or
the invention it sought to protect.
- When the defendants claimed that the "invention" was merely an
improvement that did not qualify as an invention under the revised Act, the
Court quickly pointed out that the patent application had been filed before
- Lee Pharma v. AstraZeneca
Facts of the Case
Decision of the Court
- In this case, Lee Pharma, an Indian pharmaceutical company, filed compulsory
licence for the production and sale of pharmaceuticals at the patent office in
Mumbai on June 29, 2015. The licencing request was made in relation to a
patented medicine known as 'Saxagliptin,' which is covered under AstraZeneca's
patent number 206543. Type II Diabetes Mellitus was treated with the drug 'Saxagliptin.'
- Lee Pharma requested a licence for the medicine from AstraZeneca in the year
2014. However, AstraZeneca refused and explained reasons. AstraZeneca sent this
by email, but Lee Pharma was unsatisfied and did not consider it as a response,
so he sent other communications such as reminders before heading straight to the
patent office to obtain the compulsory licence.
While refusing Lee Pharma's application under Section 84(1), CGPTM reviewed each
of the three grounds submitted and made the following observations:
- Reasonable requirements of the public had not been satisfied: This ground
was denied because Lee Pharma failed to show what the reasonable requirement of the
public was for Saxagliptin, as well as the comparative requirement of
Saxagliptin versus other DPP-4 inhibitors.
- The patented invention was not available to the public at a reasonably
affordable price: On the basis of a price comparison of the numerous Gliptins
available in the Indian market, this ground was rejected. The CGPTM claimed
that all DPP-4 inhibitors were priced similar.
- The patented invention had not been worked in the territory of India:
This ground was denied since manufacturing the drug in India is not a
requirement for establishing working in India, and because Lee Pharma had not demonstrated the
particular requirement in India, it was difficult to determine whether
manufacturing in India was required.
- Halsbury Laws of India, The Patents Act, 1970, WIPO Website, Manupatra,
- 2014 (60) PTC 277 (Bom)
- 2020 SCC OnLine Del 598.
- Controller of Patents, Patents Office, Mumbai (BEFORE CHAITANYA PRASAD,
CONTROLLER) C.L.A. No. 1 of 2013 Decided on October 29, 2013
- Suo Motu Writ Petition (Civil) No.3 of 2021
- 2009 (111) Bom LR 479