For foreign patentees, India presents a patent system where post-grant obligations and public interest considerations are more actively integrated into the legal framework than in many other jurisdictions. One of the most significant manifestations of this approach is the concept of compulsory licensing. While not frequently invoked, it remains a credible risk in certain sectors and must be factored into overall patent strategy.
Compulsory licensing in India is governed primarily by Section 84 of the Patents Act, 1970. It permits any interested person to apply for a licence to work a patented invention without the consent of the patentee, subject to satisfaction of statutory conditions. The provision reflects a policy balance between exclusive patent rights and the requirement that inventions serve public needs.
An application for compulsory licence can be made only after the expiration of three years from the date of grant of the patent. This waiting period is intended to provide the patentee with a reasonable opportunity to commercialize the invention in India. However, once this period has elapsed, the patent becomes open to scrutiny on specific statutory grounds.
The primary grounds for seeking a compulsory licence are framed in terms of public interest. The applicant may assert that the reasonable requirements of the public with respect to the patented invention have not been satisfied, that the invention is not available to the public at a reasonably affordable price, or that the invention is not worked in the territory of India. These grounds are often interrelated and are assessed based on the factual circumstances of each case.
For foreign patentees, the concept of “working” is particularly important. Indian law does not require local manufacturing in all cases, but the invention must be made available to the public in India on a commercial scale. Importation may constitute working, provided it meets market demand and ensures accessibility. However, absence of commercial activity or limited availability can strengthen a compulsory licensing claim.
Pricing is another critical factor. The assessment of whether a product is available at a reasonably affordable price is context-specific and may take into account the nature of the technology, the target market, and the extent of access. In sectors such as pharmaceuticals, pricing considerations have played a central role in compulsory licensing discussions.
The Controller of Patents evaluates compulsory licence applications by examining evidence relating to demand, supply, pricing, and efforts made by the patentee to meet market requirements. The applicant must also demonstrate that they have made efforts to obtain a voluntary licence from the patentee on reasonable terms and that such efforts have not been successful within a reasonable period.
From a strategic perspective, compulsory licensing risk is not uniform across all technologies. It is more pronounced in areas where public access and affordability are closely scrutinized, such as pharmaceuticals, medical devices, and essential technologies. In such sectors, both working status and pricing strategy can influence exposure.
The relevance of Form 27 working statements becomes evident in this context. Disclosures relating to whether a patent is being worked in India, and the extent of such working, may be examined in compulsory licensing proceedings. Inconsistent or incomplete disclosures can weaken the patentee’s position.
For foreign patent owners, the key issue is not the frequency of compulsory licences but the conditions under which they may be granted. A patent that is not actively commercialized in India, or one that is perceived as inaccessible due to pricing or supply limitations, is more vulnerable to challenge.
In managing this risk, early alignment between patent strategy and commercial planning is essential. Decisions relating to market entry, licensing, distribution, and pricing should be considered alongside patent protection. In some cases, voluntary licensing arrangements may serve as a practical mechanism to address market demand while retaining control over the technology.
Compulsory licensing in India is not an exceptional remedy. It is an integral part of the patent framework designed to ensure that patented inventions contribute to public welfare. For foreign patentees, understanding how and when it can be invoked allows for better preparation and more resilient patent positioning in India.
For assistance with patent strategy, post-grant compliance, and risk assessment in India, please contact us at https://origiin.com/contact-us/. To understand the India PCT national phase procedure and broader compliance framework, please visit https://origiin.com/pct-national-phase-entry-india/.
