An International Guide to
Patent Case Management for Judges

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6.10 Selected topics

6.10.1 Compulsory licenses and public prejudice

Compulsory license is not directly relevant to the revocation of a patent. However, unlike voluntary licensing, it is a form of licensing that is involuntary and coercive in nature. Consistent with Article 31 of the TRIPS Agreement and the Doha Declaration, where there is a failure to fulfill the reasonable demand for the patented invention, or in a case of unreasonable pricing or failure to work the invention on a commercial scale, an interested person can seek a compulsory license.242 The conditions for invoking compulsory licensing provisions are strict and must be fulfilled before such a license can be issued. Thus, there are hardly any compulsory licenses issued in India. The rare occasion when such a license was issued is a case of a cancer drug in which the courts came to the conclusion that the requirements of the public were not being met.243

Such compulsory licenses, if issued, would ordinarily only be for the domestic market and, among other stipulations, upon payment of a reasonable royalty.244 Pursuant to Article 31bis of the TRIPS Agreement, a compulsory license can also be granted for the export of pharmaceutical products to countries with insufficient or no manufacturing capacity for that product. Although it is directed toward the greater public interest, compulsory license proceedings are adversarial in nature, and a detailed procedure complying with natural justice has been prescribed,245 as have appeals from such decisions.246 Under Section 92(3), the Central Government may notify the existence of a national emergency, extreme emergency or a case of public noncommercial use, and the detailed procedure would stand suspended.

However, in the unique and exceptional situation where the underlying cause resulting in the compulsory license is not addressed even after two years from the date of granting the compulsory license, the Central Government may, for any interested person, apply to the Controller to revoke the patent.247 Interestingly, the Justice N Rajagopala Ayyangar Committee had proposed this provision on the logic that the threat of revocation was a sufficient incentive for the patentee to share any know-how associated with the working of the invention. This relation between the working of the invention and the sharing of associated know-how has been raised in the context of COVID-19 vaccination.248

Similarly, the Patents Act, 1970, also empowers the Central Government to use the invention for the purposes of the Government,249 and, if the patentee refuses to comply with the Government’s request and on unreasonable terms, the Central Government is authorized to seek revocation of the patent before the High Court.250

Independently, Section 66 of the Act reserves to the Central Government the residual power to declare a patent as revoked if the patent or the mode in which it is exercised is mischievous to the state or generally prejudicial to the public. This provision requires an opportunity for hearing being granted to the patentee before any such declaration or decision.