Compulsory licensing

A compulsory license provides that the owner of a patent or copyright licenses the use of their rights against payment either set by law or determined through some form of adjudication or arbitration. In essence, under a compulsory license, an individual or company seeking to use another's intellectual property can do so without seeking the rights holder's consent, and pays the rights holder a set fee for the license. This is an exception to the general rule under intellectual property laws that the intellectual property owner enjoys exclusive rights that it may license – or decline to license – to others.

Under UK patent law, a compulsory license is different from a statutory license. Under statutory license, the rate is fixed by law, whereas in case of compulsory license, the rate is left to be negotiated.

In a number of countries, copyright law provides for compulsory licenses of copyrighted works for specific uses. In many cases the remuneration or royalties received for a copyrighted work under compulsory license are specified by local law, but may also be subject to negotiation. Compulsory licensing may be established through negotiating licenses that provide terms within the parameters of the compulsory license. Essentially compulsory licensing provide that copyright owners may only exercise the exclusive rights granted to them under copyright law in a certain way and through a certain system.

Article 11bis(2) and Article 13(1) of the Berne Convention for the Protection of Literary and Artistic Works provide the legal basis for compulsory licensing at the international level. They specify under which conditions members to the Berne Convention may determine or impose conditions under which exclusive rights may be exercised, for example through compulsory licensing. The Berne Convention states that member states are free to determine the conditions under which certain exclusive rights may be exercised in their national laws. They also provide for the minimum requirements to be set when compulsory licenses are applied, such as that they must not prejudice the author's right to fair compensation.

Article 11bis(2)states that:

It shall be a matter for legislation in the country of the Union to determine the conditions under which the rights mentioned in the preceding paragraph may be exercised, but these conditions shall apply only in the countries where they have been prescribed. They shall not in any circumstances be prejudicial to the moral rights of the author, nor to his right to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority.

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Wikipedia