Pharmacy staff dispense medicines at the National Referral Hospital in Honiara, Solomon Islands. Image by Department of Foreign Affairs and Trade, licensed under CC BY 2.0.
A compulsory license is a state authorization to use a patented invention without the patent holder’s consent. In public health, the best-known example involves medicines: a government may allow a company to produce, import, or supply a patented product when domestic law and international rules permit that step. The patent remains in force, and the holder keeps rights, including the right to adequate remuneration. The phrase “breaking a patent” therefore obscures the legal point. The mechanism authorizes a defined use and leaves the patent intact.
Under the Agreement on Trade-Related Aspects of Intellectual Property Rights, known as TRIPS, the central legal basis is Article 31. The text uses a broader formula than “compulsory license”: “other use without authorization of the right holder,” including use by the government or by third parties authorized by the government. That language covers compulsory licenses granted to companies, government-use authorizations, and other forms of public use provided for in domestic law.
This article focuses on the mechanism itself. The wider frame linking intellectual property, medicines, and development is covered in TRIPS and access to medicines. Here the question is narrower: how compulsory licensing moves from Article 31 to Doha, Article 31bis, and the COVID-19 controversy.
Summary
- A compulsory license authorizes use of a patent without the holder’s consent and preserves the patent and the remuneration due in the circumstances.
- Article 31 of TRIPS requires individual authorization, limited scope, non-exclusive use, review, and adequate remuneration for the patent holder.
- As a rule, the prospective user must first try to obtain a voluntary license on reasonable commercial terms. In a national emergency, extreme urgency, or public non-commercial use, that requirement can give way.
- The Doha Declaration on TRIPS and Public Health confirmed that WTO members may use TRIPS flexibilities to protect public health and promote access to medicines.
- The Article 31(f) problem was practical: production under compulsory license had to supply predominantly the domestic market, which limited countries without their own pharmaceutical capacity.
- Article 31bis, in force since 2017, created a permanent basis for exporting medicines produced under compulsory license to members without sufficient production capacity.
- The 2022 ministerial decision on COVID-19 adapted rules for vaccines, and WTO members had not reached consensus by February 13, 2024, on extending the solution to diagnostics and therapeutics.
What A Compulsory License Does
A compulsory license changes who may use a patented invention in a defined situation. The permission remains tied to the product and the purpose that justify the measure. The government must act under domestic law, limit the duration of the authorization, and preserve channels for challenge. The authorization is legally exceptional, but it belongs to patent law itself: the system provides exits when private exclusivity collides with public interest.
In pharmaceuticals, that distinction matters because medicines combine two logics. On one side, patents may encourage research, development, and technical disclosure. On the other, high prices, scarce supply, or absent local production can keep the technology from reaching the patient. Compulsory licensing appears at that point of tension: it opens a legal door to produce or obtain the product after ordinary negotiation fails.
The measure is different from uncompensated expropriation. Article 31(h) requires adequate remuneration, taking into account the economic value of the authorization. The amount and the calculation method depend on national law and the concrete circumstances. That remuneration shows that the patent remains legally present in the operation, even when the specific use occurs without the holder’s consent.
How Article 31 Organizes The Authorization
Article 31 of TRIPS works as a set of safeguards. First, the authorization must be considered on its individual merits. That requirement prevents a government from treating every patent in a sector as automatically licensed without examining the concrete situation. Second, the use must have a scope and duration limited to the purpose that justified the authorization. A license issued to address a supply problem should remain tied to the product and time frame that support the measure.
The third point is the prior attempt to obtain a voluntary license. As a rule, voluntary negotiation comes before compulsory authorization: the proposed user must try to obtain authorization from the holder on reasonable commercial terms and within a reasonable period. This requirement is not absolute. Article 31 allows it to be waived in a national emergency, other circumstances of extreme urgency, or public non-commercial use. Even in those situations, the holder must be notified as soon as reasonably practicable.
The fourth point concerns the nature of the authorization. The use must be non-exclusive and, in principle, non-assignable. The authorized user receives a limited permission, not the full position of the patent holder. The legal validity of the authorization and the remuneration must be subject to judicial review or independent review by a higher authority. TRIPS designs an exception procedure with review, purpose, and payment, not a simple emergency button.
Article 31(f) created the difficulty that later dominated the public-health agenda. The rule imposed a domestic anchor for authorized production: the use had to supply predominantly the domestic market of the member granting the license. For countries with significant pharmaceutical industry, that formula could work. For countries without a pharmaceutical industrial base able to operate at scale, the flexibility was nearly empty. A national authorization does not produce tablets by itself.
Doha And Public Health
The access crisis around HIV/AIDS antiretrovirals made that limit politically visible. In the late 1990s and early 2000s, several developing countries questioned whether intellectual-property rules could obstruct public-health policies. African countries, Brazil, India, and civil-society organizations pressed the WTO to clarify the scope of TRIPS flexibilities. The dispute concerned medicine prices and the ability of public systems to turn trade rules into available treatment.
The 2001 Doha Declaration answered that conflict. It recognized the gravity of public-health problems in developing and least-developed countries. The HIV/AIDS crisis sat at the center of that debate, alongside tuberculosis, malaria, and other epidemics. The declaration held two ideas together: intellectual-property protection matters for the development of new medicines, and its effect on prices raises concern. Doha interpreted TRIPS so that public health sat inside the agreement, not as an external concession to the trade regime.
Paragraph 4 of the Declaration stated that TRIPS does not and should not prevent WTO members from taking measures to protect public health. The same passage says the agreement can and should be interpreted and implemented in a way that supports members’ right to protect public health and promote access to medicines for all. In paragraph 5, members reaffirmed the right to grant compulsory licenses and the freedom to determine the grounds for those licenses.
On emergencies, Doha was explicit. Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency. Public-health crises may represent that kind of situation, and the declaration names HIV/AIDS, tuberculosis, malaria, and other epidemics. The scope of compulsory licensing is broader than emergency, but emergency changes procedural requirements such as prior negotiation.
The Problem Of Countries Without Factories
Paragraph 6 of the Doha Declaration identified a specific problem: WTO members with insufficient or no pharmaceutical capacity could have difficulty making effective use of compulsory licensing. That sentence separates two realities that are often blurred. The right to authorize use without consent becomes access only when registered production, public procurement, possible importation, and distribution to patients exist.
The limit came from the original design of Article 31(f). If a country with industrial capacity granted a compulsory license, production had to supply predominantly its own domestic market. That restricted the possibility of producing in one country and exporting at scale to another country without factories. For the country without production capacity, the flexibility became authorization without a supplier. For the producing country, export met a legal obstacle.
The first solution came in 2003 through a temporary WTO decision. It allowed the Article 31(f) limitation to be set aside under specific conditions, creating what became known as the paragraph 6 system. In 2005, members approved a permanent amendment to TRIPS. That amendment entered into force on January 23, 2017, after reaching the required number of acceptances, and turned the system into the legal package of Article 31bis.
The WTO page on TRIPS and public health summarizes the objective: Article 31bis provides a legal basis for special compulsory licenses for the production and export of affordable generic medicines to members that cannot produce the needed medicines in sufficient quantities. The novelty was a specific export route for situations in which the importer’s domestic production could not meet the health need.
How Article 31bis Works
Article 31bis is a narrow procedural solution. It concerns pharmaceutical products and eligible importing members, especially those with insufficient production capacity. The importing country must state its need, and the exporting country issues a license aimed at production for export. Notifications make the request transparent. Quantity limits and product identification reduce the risk of commercial diversion or opportunistic re-export.
Those safeguards respond to a recurring concern among developed countries and the pharmaceutical industry: medicines produced under compulsory license for an access need could be diverted to richer markets, weakening exclusivity outside the authorized case. The mechanism therefore combines permitted export with destination and identification controls. Its architecture tries to allow productive solidarity without turning compulsory licensing into a parallel channel of pharmaceutical trade.
In practice, using the system is difficult. The importing country must turn the health need into an operational request, with a defined medicine, estimated quantity, and available financing. On the other side, the producer needs technical capacity and legal security to manufacture. The health regulator assesses the product before public procurement, and the buyer organizes logistics through the health system. A compulsory license opens the legal door. Production, registration, and public procurement get the treatment to the patient.
This point is central to evaluating the mechanism’s political reach. Supporters see Article 31bis as legal recognition of global productive inequality. Critics stress that its steps are slow and bureaucratic, especially during crises. Both readings can coexist. The mechanism corrected a design flaw in TRIPS, although a wide gap remains between an internationally permitted authorization and an effective supply of medicines.
COVID-19 And The Vaccine Waiver
The COVID-19 pandemic reopened the debate over intellectual property and access. In 2020, India and South Africa submitted a broad WTO proposal for a waiver of certain intellectual-property obligations related to COVID-19. The proposal received support from several developing countries and civil-society organizations. Developed countries and parts of the pharmaceutical industry resisted, arguing that patents were only one part of a wider bottleneck involving production, technology transfer, and regulatory authorization.
The outcome adopted at the WTO’s 12th Ministerial Conference in 2022 was narrower than the original proposal. The decision covered COVID-19 vaccines and operated within the TRIPS framework. It clarified members’ scope to limit the exclusive effect of patent rights in support of equitable vaccine access. The decision also adapted the export mechanism by recognizing humanitarian and international access programs and concerns about diversion.
The central legal point is that the decision kept TRIPS as the framework and made certain requirements more flexible for eligible members, including the prior attempt to obtain authorization from the holder. It also confirmed the possibility of exporting vaccines produced under authorization and preserved adequate remuneration. The 2022 compromise was a limited vaccine adjustment, not a general revocation of TRIPS during the pandemic.
Members also undertook to discuss a possible extension to diagnostics and therapeutics. That discussion ended without consensus. On February 13, 2024, the TRIPS Council reported continuing disagreement despite efforts to support a fact- and evidence-based discussion. The disagreement shows that compulsory licensing remains at the intersection of health policy, industrial strategy, innovation incentives, and North-South bargaining power.
What The License Does Not Solve Alone
Compulsory licensing operates as a legal instrument. Factories, regulators, and public budgets belong to another part of access policy. A country may have authorization to use a patent and still lack the technical and health-system base needed to turn that authorization into supply. Public procurement, transport, storage, and financing obstacles can block the same chain. The patent is one possible barrier. In many crises, the decisive barrier lies between legal authorization and real supply capacity.
That point preserves the value of the license within its limits. In some situations, the threat or grant of a compulsory license changes negotiation with the patent holder, lowers prices, or accelerates voluntary agreements. In others, it allows generic entry when a supplier can produce. The measure can also have symbolic and diplomatic value, signaling that public health stands above trade convenience when access is at stake. Its concrete effect depends on the medicine market and the state’s capacity to execute the measure, as well as parallel patents or technology kept as trade secret.
The national framework is decisive. TRIPS creates margins and minimum conditions, and each country needs domestic law that allows use of the flexibility. The domestic regime must identify the competent authority, explain the procedure, and provide remuneration subject to review. Health policy belongs in the same design. A poorly designed license can be challenged, delayed, or unable to generate supply. A well-designed license still needs a producer, buyer, and regulatory approval.
For that reason, serious discussion avoids two opposite simplifications. The first says compulsory licenses destroy innovation. TRIPS admits them as part of the patent system, with remuneration and review. The second says compulsory licensing is enough to solve access to medicines. The case of countries without production capacity shows the gap between legal authorization and supply policy.
Why The Issue Remains Disputed
Compulsory licensing remains disputed because it concentrates a hard question: who bears the cost of turning protected knowledge into concrete access when an intense public need exists? Patent holders fear loss of economic return, regulatory uncertainty, and precedents for other areas. Developed-country governments tend to protect research- and IP-intensive sectors. Developing-country governments emphasize public health, prices, technological dependence, and inequality in productive capacity.
Brazil and India often appear in this debate because they combine active diplomacy, experience with generics, and an interest in preserving policy space. African countries were central in the pressure that led Doha to recognize the difficulty of members without pharmaceutical capacity. South Africa also played an important role in the COVID-19 waiver proposal alongside India. The issue’s political geography follows the geography of pharmaceutical production: producers, buyers, import-dependent countries, and patent holders negotiate from very different positions.
The TRIPS balance changes through successive adjustments. The Doha Declaration, the paragraph 6 system, Article 31bis, and the 2022 decision preserved the patent system and opened space for public use under defined conditions. That is the core of compulsory licensing: intellectual property continues to exist, but exclusivity stops being the automatic answer when public health, production capacity, and access to medicines collide.