Compulsory Licensing Manufacturing may Slow Investments EU

India’s adoption of Compulsory Licensing (CL) in industrial sectors risks affecting the flow of capital and technology from overseas, a senior European Union (EU) official said.

  • The official’s comments come in the backdrop of the imminent finalization of India’s National Intellectual Property Rights (IPR) policy as well as the EU’s resumption of bilateral meetings on a proposed free trade agreement (FTA).

Compulsory Licensing (CL)

  • CL is the grant of permission by the government to entities to use, manufacture, import or sell a patented invention without the patent-owner’s consent.

India – EU FTA

  • The proposed India-EU FTA would include provisions on IPR protection of which CL is an aspect.
  • The IPR policy is also expected to cover CL as the Patents Act (of India) also deals with CL.
  • CL is permitted under the WTO’s TRIPS (IPR) Agreement provided conditions such as ‘national emergencies, other circumstances of extreme urgency and anti-competitive practices’ are fulfilled.

National Manufacturing Policy (NMP)

  • India’s National Manufacturing Policy (NMP) also supports the application of CL across different manufacturing sectors, more specifically to ensure access to the latest green technologies that are patented.
  • The government is relying on NMP to ensure that its ‘Make In India’ initiative is successful.
  • The NMP provides the “option” to entities such as the Technology Acquisition and Development Fund “to approach the government for issue of a CL for the technology which is not being provided by the patent holder at reasonable rates or is not being ‘worked in India’ to meet the domestic demand in a satisfactory manner.”
  • The NMP, however, states that such CLs will be issued only within the provisions of the TRIPS Agreement. According to the NMP, reasonable royalty will be paid to the patent holder in such cases.

Compulsory Licensing (CL) Issued in India

  • So far, India has issued only one CL. In March 2012, Natco Pharma was granted a license for an anti-cancer medicine Nexavar patented by Bayer.