Compulsory License

Compulsory licensing refers to a situation in which a non-exclusive license of an intellectual property right (‘IPR’) can be granted by a competent authority to a third party to make, use or sell an invention, where remuneration is paid to the right-holder and the right-holder maintains its legal intellectual property rights. Thus, Compulsory Licensing represents an exception to the normal exclusivity enjoyed by a right-holder. The legal basis for compulsory licensing is found in the TRIPS Agreement, the Paris Convention, but also in national systems of intellectual property law. As compulsory licensing represents an intrusive act by the Government into property rights, there are varying views on the economic and legal implications of the concept. In exceptional circumstances it may be that a competition authority may order the licensing of intellectual property (or analogous) rights where a refusal to licence them amounts to an abuse of a dominant position.