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Compulsory Licensing In India

Compulsory licensing is a provision in the Indian Patents Act, 1970 that allows the government to grant licenses to third parties to manufacture and sell a patented product or process without the consent of the patent holder. This provision is aimed at ensuring that essential medicines and other products are available at reasonable prices, especially for those who cannot afford them.

The Indian Patents Act, 1970Chapter XVI, when combined with the Indian PatentRules, provides the legal framework for compulsory licenses. Thus, the Indian Patent Act’s compulsory licencing provisions are well-defined and compliant with international agreements.

Conditions to Get A Compulsory License

n India a compulsory license can only be issued three years after obtaining a patent. To obtain a compulsory license in India, a third party must demonstrate that the patented product or process is not being made available to the public at a reasonable price, or that it is not being used in India. The government can then grant a compulsory license to the third party to manufacture and sell the product or process, subject to payment of a reasonable royalty to the patent holder.The grounds of granting   compulsory licence is stated in Section 84 (1) of the Patents Act.

  • The reasonable requirements of the public with respect to the patented invention have not been satisfied; or
  • The patented invention is not available to the public at a reasonably affordable price; or
  • Patented invention is not worked in the territory of India.

In India, the issue of compulsory licensing gained prominence in 2012, when the government granted its first compulsory license to Natco Pharma to manufacture and sell a generic version of Bayer’s cancer drug Nexavar. The decision was made on the grounds that the drug was too expensive and not accessible to most patients in India. Since then, compulsory licensing has become an important tool for the Indian government to ensure access to affordable medicines.

A compulsory licence may be given suo moto by the Central Government under Section 92(1) of the Indian Patents Act for the manufacturing and exportation of patented pharmaceutical products into any nation that lacks the manufacturing capabilities to address public health issues 

Government can get a pending or already-granted patent for public purpose under section 102. As mutually agreed upon by the parties, the Government must pay the patentee royalties in exchange.

Lee Pharma vs. Astrazeneca

The most recent ruling concerns a request made by Lee Pharma for the drug Saxagliptin by AstraZeneca. The Controller rejected Lee Pharma’s request primarily on the grounds that the applicant was unable to substantiate that the public’s need wasn’t being met and the drug was out of reach for the general public.

Healthcare and Compulsory Licensing

Voluntary licencing has shown to be an effective method for producing and distributing medicines around the world. Compulsory licencing is an extreme phenomena used to attempt and assure the manufacturing and distribution of vaccines not just in India but also around the world.

The relationship between pharmaceutical availability, compulsory licencing, and parallel importation has long been at the center of the debate between IPR and public policy goals.


In conclusion, compulsory licensing is an important provision in the Indian Patents Act that enables the government to ensure access to affordable medicines for all. While it has been effective in making essential medicines more affordable, it is also important to balance the rights of patent holders with the need to ensure access to affordable medicines. The Indian government’s approach of using compulsory licensing only in exceptional circumstances and subject to strict conditions is a step in the right direction towards achieving this balance.

Author: Mahima Agarwal, Legal Intern at PA Legal.

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