Examining the Legality of Affordability Requirements as a Substantive Condition for Granting Compulsory Licences Pursuant to the TRIPS Agreement

Abstract

This article examines whether the so‐called reasonably affordable requirements of the public remains a valid condition under TRIPS on which World Trade Organisation members can grant compulsory licences. This article frames its analysis around Section 84 of the Indian Patent Act 1970 in relation to the compulsory licencing case between Bayer vs Natco. The author argues that despite the reasonably affordable requirements of the public not one of the common grounds on which members normally pursue for granting compulsory licences the fact that India has used similar provisions under its TRIPS‐compliant patent regime in granting a compulsory licence to Natco significantly validates the affordability requirements of the public as an independent condition that is consistent with TRIPS on which members can grant compulsory licences. This conclusion is premised on the understanding that no member state has even attempted to challenge the legality of India's decision before the WTO, under the dispute settlement understanding system and that paucity is more supportive of the thesis that, nothing in the light of TRIPS would, in fact, preclude the possibility of other developing countries amending their patent laws to demand that as substantive conditions patentees must satisfy the reasonably affordable requirements of the public.

Is the Compulsory Licensing Mechanism Guaranteed by TRIPS the Best Remedy to Improve Access to Biological Therapies Worldwide?

“…TRIPS does not list conditions in which a compulsory licence may be granted, leaving this matter to the sovereign discretion of the signatory States. The provisions refer to strictly procedural matters relating to the granting of a licence and its scope (Manu, 2015). In addition, according to article 1, TRIPS sets a minimum level of protection, which means that Member States may or may not implement more extensive protection than that required by TRIPS.…”