Ancillary Orders of Compulsory Licensing and Their Compatibility with the TRIPS Agreement

Abstract

Compulsory licensing is a well-recognized institution for striking a balance between patent and copyright protection and social or economic goals in general. For a compulsory license to work effectively, three conditions must be met at first: competent licensees with sufficient capacities, adequate market size, and access to necessary know-how. If the third condition is missing, the authority granting such licenses may issue a know-how transfer order to fill in the gap. Ancillary orders may also direct non-voluntary licensees to address specific harms to public interest, ensuring the attainment of their policy goals. In addition, the granting authority can issue a side-effect averting order to alleviate unnecessary impact that the license may impose on the patent or copyright holders. Given that no exception to the protection of undisclosed information is expressly acknowledged in the TRIPS Agreement, there are some doubts about the TRIPS compatibility with know-how transfer orders. These doubts are not well founded. On the other hand, orders requiring local manufacturing are likely to violate the principle of non-discrimination between imports and local production as enshrined in Article 27.1 of the TRIPS Agreement.