The Impact of Compulsory Licensing on Foreign Direct Investment: A Collective Bargaining Approach

Patent Standards Under TRIPS and the Pharmaceutical Industries in Brazil and India

“…A compulsory license is a government authorization allowing a third party to exploit the invention in exchange for a reasonable royalty (WIPO, 2004). In effect, government use of a compulsory license forces the patent owner to give up part of its property for the benefit of the public (Bird and Cahoy, 2008;Carrea, 1999). Compulsory licenses may be granted if the patent owner fails to exercise or work the patent rights in the territory or if a nation deems it necessary to protect a public interest, such as health.…”

“…Patent protection for pharmaceuticals products and processes are a particularly apt illustration of this tension since they exist at the nexus of the two interests: the public's interest in availability of drugs, particularly for life-threatening diseases, and industry's interest in returns on investment and in research and development (R & D). While the two incentives are not mutually exclusive, the tensions between the two have become especially apparent as public health emerges as a major international priority (Bird and Cahoy, 2008) at the same time that strengthening national and international IPR regimes has become of major importance. As a preliminary matter, research on the impact of strong patent laws on innovation and R & D is made more difficult because the scope of protection and enforcement of patent laws vary from one country to another and, therefore, embody the private=public tension in different ways.…”

“…Bird and Cahoy (2008) argued that implementation of the compulsory licensing exception has great potential to impact local and foreign investment practices, particularly in the area of heath care. Eren-Vural (2007) provided examples from compulsory licensing regimes in India and Turkey that illustrate the relationship between how compulsory licenses are implemented and the survival and relative health of local pharmaceuticals industries.…”

Pros and Cons of Compulsory Licensing: An Analysis of Arguments

“…In order to protect their products from compulsory licensing, the pharmaceutical companies may find a different venue for their clinical trials. Therefore, a country may lose a potential source of economic growth by issuance of compulsory licenses [14]. Furthermore, as a result of weak intellectual property regime, a country becomes less competitive, and brain drain is an obvious result.…”

“…Public health concern as a political priority emerged for the first time at international level [47].…”