Compulsory License

Definition of Compulsory License

A compulsory license is a legal mechanism that permits the use of intellectual property, such as patents or copyrighted material, without the authorization of the rights holder. This is typically granted by a government or regulatory body to ensure public access to essential innovations or creative works. Compulsory licenses are often issued under specific circumstances, such as addressing public health crises or promoting competition.


The phonetic pronunciation of the keyword “Compulsory License” is:kəm-ˈpəl-sə-ree ˈlaɪ-səns

Key Takeaways

  1. Compulsory License is granted by the government, allowing a party to use a patented invention without the owner’s consent, under certain circumstances.
  2. This legal mechanism aims to balance the patent owner’s rights with the public interest, such as addressing public health crises or promoting innovation when patent holders refuse to license the invention willingly.
  3. Compulsory licenses are subject to specific terms and conditions, including reasonable compensation to the patent holder and, in some cases, a restricted scope of use for the licensed invention.

Importance of Compulsory License

The term “Compulsory License” holds significance in the technology realm as it represents a legal mechanism that enables the use or distribution of copyrighted material without obtaining the copyright holder’s explicit permission.

This concept is important as it balances the rights of the copyright holder with public interest, thereby promoting innovation, competition, and wider dissemination of vital knowledge.

Compulsory licenses often come into play in situations where access to software, patented technology, or other intellectual property is critical for development or research purposes, but may involve unreasonably high fees or restricted availability.

It ensures that technology can continue to advance, and benefits of such advancements can reach more people without infringing on the rights of the creator.


A compulsory license serves as a crucial mechanism in the world of intellectual property, fostering a balance between the private rights of patent holders and broader public interests like accessibility, affordability, and innovation. This legal provision comes into play when a government permits a third party to produce, use, or sell a patented product or process, without requiring the consent of the patent holder.

While compulsory licensing may appear to infringe upon the rights of intellectual property holders, it is implemented under specific circumstances to promote the greater good, such as addressing public health crises, ameliorating market monopolies, or preventing the abuse of exclusive rights. In practice, compulsory licensing has played a crucial role in the realm of public health, often making life-saving drugs and medical technologies more accessible and affordable to populations in need.

For example, during the HIV/AIDS crisis, many low and middle-income countries invoked compulsory licenses to provide affordable, generic versions of patented antiretroviral medications to save millions of lives. Alongside public health, compulsory licensing can also help foster technological advancements by providing opportunities to innovators or manufacturers to explore new ideas and improvements.

While the patent holder is still entitled to compensation for their intellectual property, compulsory licensing ensures that essential resources and advancements are accessible to everyone, ultimately benefiting society as a whole.

Examples of Compulsory License

Compulsory licensing is a legal mechanism that allows a government to authorize the use of a patented product or technology without the consent of the patent holder. This usually occurs in situations of public health emergencies or other urgent national needs. Here are three real-world examples of compulsory licensing:

Brazil’s Compulsory License for AIDS Medication (2007)In 2007, Brazil’s government issued a compulsory license for the antiretroviral drug Efavirenz, which is used to treat HIV/AIDS. This action allowed the country to import cheaper generic versions of the drug from India, significantly reducing the cost of the medication and expanding access to life-saving treatment for thousands of Brazilian citizens living with HIV/AIDS. The decision was made in the context of a public health emergency, as the high cost of the branded drug presented a major barrier to access for many patients in need.

South Africa’s Draft IP Policy and Access to Cancer Medications (2017)In 2017, South Africa’s government introduced a draft Intellectual Property (IP) Policy that included provisions for compulsory licensing, particularly in regard to high-priced cancer medications. The draft policy recognized that the high cost of certain patented drugs placed a significant financial burden on the country’s healthcare system and patients, preventing many from accessing essential treatments. While the policy has not yet been fully implemented, it represents an important step towards expanding the use of compulsory licensing in the public interest.

Thailand’s Compulsory Licensing for Access to Patented Drugs (2006–2008)Between 2006 and 2008, Thailand’s government issued several compulsory licenses for a range of patented pharmaceutical products, including drugs for treating HIV/AIDS, heart disease, and cancer. The decision allowed Thailand to import and produce generic versions of these medications at a lower cost, significantly improving access to essential medicines for many Thai citizens. This move met with significant international controversy and criticism from the pharmaceutical industry, but it also resulted in lower prices that benefited both patients and the country’s healthcare system.

Compulsory License

1. What is a Compulsory License?

A compulsory license is a legal provision that allows a third party to use and exploit a copyrighted work without the direct permission of the copyright owner, under certain specific conditions. This is usually done to ensure the availability of works to the public and to balance the benefits for both the copyright owner and the user.

2. When is a Compulsory License issued?

A compulsory license is typically issued when the copyright owner is unable to meet the demand for their work, or when the copyrighted material is required for certain public interest purposes. The terms and eligibility for compulsory licensing may vary between jurisdictions.

3. How does a Compulsory License affect the copyright owner?

While a compulsory license allows a third party to use the copyrighted work without the permission of the copyright owner, it does not strip the owner of their copyright. The owner still retains the exclusive rights, but their ability to control all uses of the work is somewhat limited. Moreover, the copyright owner is generally entitled to receive royalties or other payments for the use of their work under a compulsory license.

4. What are some common examples of Compulsory License in use?

Compulsory licenses are often utilized in industries like music and publishing. Examples of compulsory licensing in practice include reproducing copyrighted musical works in the form of cover songs, broadcasting works on television or radio, and using copyrighted content in educational or research settings.

5. How to obtain a Compulsory License?

Obtaining a compulsory license generally involves following a specific procedure outlined by the respective jurisdiction’s copyright law. It may include informing the copyright owner of the intended use, complying with any specific requirements, and paying a predetermined royalty fee or entering into negotiations to determine a reasonable fee. It is important to consult legal advice and the specific regulations of the relevant jurisdiction before proceeding.

Related Technology Terms

  • Copyright Law
  • Intellectual Property Rights
  • Patent Infringement
  • Royalty Payments
  • Government Authorization

Sources for More Information


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