Compulsory license
Encyclopedia
A compulsory license, also known as statutory license or mandatory collective management, 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 arbitration
.
provide the legal basis for compulsory licensing at 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:
The "preceding article" mentioned in Article 11bis(2) is Article 11bis(1), which establishes that:
Article 13(1) states that:
In addition to the exclusive rights mentioned in Article 11bis(1) and 13(1) the Berne Convention also provides that members may determine or impose such conditions for the exercise of exclusive rights in cases where an exclusive right is not provided as remuneration right and not as an exclusive right of authorisation, for example in the case of the resale right, or droit de suite (Article 14ter), and the so called "Article 12 rights" of performers and producers of phonograms. Members to the Berne Convention may also determine or impose such conditions where the restriction of an exclusive right to the mere right to remuneration is allowed, for example the right to reproduction (Article 9(2)), and in the case of "residual rights", that is, a right to remuneration, usually for authors or performers, that survives the transfer of certain exclusive rights.
, including for non-dramatic musical compositions, public broadcasting, retransmission by cable systems, subscription digital audio transmission, and non-subscription digital audio transmission such as Internet radio
. The compulsory license for non-dramatic musical compositions under Section 115 of the Copyright Act of 1976
allows a person to distribute a new sound recording of a musical work, if that has been previously distributed to the public, by or under the authority of the copyright owner. There is no requirement that the new recording be identical to the previous work, as the compulsory license includes the privilege of rearranging the work to conform it to the recording artist's interpretation. This does not allow the artist to change the basic melody or fundamental character of the work. In order to take advantage of this compulsory license the recording artist must provide notice and pay a royalty. The notice must be sent to the copyright owner, or if unable to determine the copyright owner, to the Copyright Office
, within thirty days of making the recording, but before distributing physical copies. Failure to provide this notice would constitute copyright infringement. In addition to the notice to the copyright owner, the recording artist must pay a royalty to the copyright owner. This royalty is set by three copyright royalty judges. Though the compulsory license allows one to make and distribute physical copies of a song for a set royalty, the owner of the copyright in the underlying musical composition can still control public performance of the work or transmission over the radio. If the underlying musical work is well known, the work can be licensed for public performance through a performance rights organization such as ASCAP, BMI
, or SESAC
.
According to Register of Copyrights
Marybeth Peters
, use of the section 115 license prior to the 1995 enactment of the Digital Performance Right in Sound Recordings Act
was extremely rare, with the U.S. Copyright Office receiving fewer than 20 notices of such licenses per year. By 2003, that number had risen to 214, which, while higher, was not considered by the Register to be significant.
of 1883 provides that each contracting State may take legislative measures for the grant of compulsory licences. Article 5A.(2) of the Paris Convention reads:
According to historian Adrian Johns, the idea of compulsory licensing "seems to have originated as a serious proposition in the 1830s, although predecessors can be traced back into the eighteenth century," and it was popular in the British anti-patent movement of the 1850s and 1860s. More recently an area of fierce debate has been that of drugs for treating serious diseases such as malaria
, HIV and AIDS
. Such drugs are widely available in the western world and would help to manage the epidemic of these diseases in developing countries. However, such drugs are too expensive for developing countries and generally protected by patents.
(TRIPs) also sets out specific provisions that shall be followed if a compulsory license is issued, and the requirements of such licenses. All significant patent systems comply with the requirements of TRIPs. The principal requirement for the issue of a compulsory license is that attempts to obtain a license under reasonable commercial terms must have failed over a reasonable period of time. Specific situations in which compulsory licenses may be issued are set out in the legislation of each patent system and vary between systems. Some examples of situations in which a compulsory license may be granted include lack of working over an extended period in the territory of the patent, inventions funded by the government, failure or inability of a patentee to meet a demand for a patented product and where the refusal to grant a license leads to the inability to exploit an important technological advance, or to exploit a further patent. TRIPs also provides that the requirements for a compulsory license may be waived in certain situations, in particular cases of national emergency or extreme urgency or in cases of public non-commercial use. Article 31.f of TRIPS requires that compulsory licenses be used "predominantly" for local markets, a requirement that complicates the ability of countries to import drugs manufactured overseas.
which recognized the problem and required the TRIPs council to find a solution. On 17 May 2006 the European Commission's official journal published Regulation 816/2006, which brings into force the provisions of the Doha Declaration. This means that the declaration now has legal effect in the European Union, and also in Canada who implemented it in 2005. The declaration allows compulsory licences to be issued in developed countries for the manufacture of patented drugs, provided they are exported to certain countries (principally, those on the UN's list of least-developed countries and certain other countries having per-capita incomes of less than US$745 a year).
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
or copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
licenses the use of their rights against payment either set by law or determined through some form of arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
.
Copyright law
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.Berne Convention
Article 11bis(2) and Article 13(1) of the Berne Convention for the Protection of Literary and Artistic WorksBerne Convention for the Protection of Literary and Artistic Works
The Berne Convention for the Protection of Literary and Artistic Works, usually known as the Berne Convention, is an international agreement governing copyright, which was first accepted in Berne, Switzerland in 1886.- Content :...
provide the legal basis for compulsory licensing at 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."
The "preceding article" mentioned in Article 11bis(2) is Article 11bis(1), which establishes that:
"Authors of literary and artistic works shall enjoy the exclusive right of authorising: (i) the broadcasting of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images; (ii) any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organisation other than the original one; (iii) the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work."
Article 13(1) states that:
Each country of the Union may impose for itself reservations and conditions on the exclusive right granted to the author of a music work and to the author of any words, the recording of which together with the music work has already been authorised by the latter, to authorise the sound recording of that musical work, together with such words, if any; but all such reservations and conditions shall apply only in the countries which have imposed them and shall not, in any circumstances, be prejudicial to the rights of these authors to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority."
In addition to the exclusive rights mentioned in Article 11bis(1) and 13(1) the Berne Convention also provides that members may determine or impose such conditions for the exercise of exclusive rights in cases where an exclusive right is not provided as remuneration right and not as an exclusive right of authorisation, for example in the case of the resale right, or droit de suite (Article 14ter), and the so called "Article 12 rights" of performers and producers of phonograms. Members to the Berne Convention may also determine or impose such conditions where the restriction of an exclusive right to the mere right to remuneration is allowed, for example the right to reproduction (Article 9(2)), and in the case of "residual rights", that is, a right to remuneration, usually for authors or performers, that survives the transfer of certain exclusive rights.
United States
There are several different compulsory license provisions in United States copyright lawUnited States copyright law
The copyright law of the United States governs the legally enforceable rights of creative and artistic works under the laws of the United States.Copyright law in the United States is part of federal law, and is authorized by the U.S. Constitution...
, including for non-dramatic musical compositions, public broadcasting, retransmission by cable systems, subscription digital audio transmission, and non-subscription digital audio transmission such as Internet radio
Internet radio
Internet radio is an audio service transmitted via the Internet...
. The compulsory license for non-dramatic musical compositions under Section 115 of the Copyright Act of 1976
Copyright Act of 1976
The Copyright Act of 1976 is a United States copyright law and remains the primary basis of copyright law in the United States, as amended by several later enacted copyright provisions...
allows a person to distribute a new sound recording of a musical work, if that has been previously distributed to the public, by or under the authority of the copyright owner. There is no requirement that the new recording be identical to the previous work, as the compulsory license includes the privilege of rearranging the work to conform it to the recording artist's interpretation. This does not allow the artist to change the basic melody or fundamental character of the work. In order to take advantage of this compulsory license the recording artist must provide notice and pay a royalty. The notice must be sent to the copyright owner, or if unable to determine the copyright owner, to the Copyright Office
United States Copyright Office
The United States Copyright Office, a part of the Library of Congress, is the official U.S. government body that maintains records of copyright registration in the United States. It is used by copyright title searchers who are attempting to clear a chain of title for copyrighted works.The head of...
, within thirty days of making the recording, but before distributing physical copies. Failure to provide this notice would constitute copyright infringement. In addition to the notice to the copyright owner, the recording artist must pay a royalty to the copyright owner. This royalty is set by three copyright royalty judges. Though the compulsory license allows one to make and distribute physical copies of a song for a set royalty, the owner of the copyright in the underlying musical composition can still control public performance of the work or transmission over the radio. If the underlying musical work is well known, the work can be licensed for public performance through a performance rights organization such as ASCAP, BMI
Broadcast Music Incorporated
Broadcast Music, Inc. is one of three United States performing rights organizations, along with ASCAP and SESAC. It collects license fees on behalf of songwriters, composers, and music publishers and distributes them as royalties to those members whose works have been performed...
, or SESAC
SESAC
SESAC, originally the Society of European Stage Authors & Composers, is the smallest of the three performance rights organizations in the United States. SESAC was founded in 1930, making it the second-oldest performing rights organization in the U.S. SESAC is also the fastest-growing PRO in the...
.
According to Register of Copyrights
Register of Copyrights
The Register of Copyrights is the director of the United States Copyright Office within the Library of Congress, as provided by . The Office has been headed by a Register since 1897...
Marybeth Peters
Marybeth Peters
Marybeth Peters served as the 11th United States Register of Copyrights from August 7, 1994 to December 31, 2010...
, use of the section 115 license prior to the 1995 enactment of the Digital Performance Right in Sound Recordings Act
Digital Performance Right in Sound Recordings Act
The Digital Performance Right in Sound Recordings Act of 1995 is a United States Copyright law that grants owners of a copyright in sound recordings an exclusive right “to perform the copyrighted work publicly by means of a digital audio transmission.” The DPRA was enacted in response to the...
was extremely rare, with the U.S. Copyright Office receiving fewer than 20 notices of such licenses per year. By 2003, that number had risen to 214, which, while higher, was not considered by the Register to be significant.
Patents
Many patent law systems provide for the granting of compulsory licenses in a variety of situations. The Paris ConventionParis convention
The Paris convention might refer to:* The Paris Convention on Third Party Liability in the Field of Nuclear Energy* The Paris Convention for the Protection of Industrial Property...
of 1883 provides that each contracting State may take legislative measures for the grant of compulsory licences. Article 5A.(2) of the Paris Convention reads:
- "Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work." (See also Article 5A.(3) to (5) of the Paris Convention.)
According to historian Adrian Johns, the idea of compulsory licensing "seems to have originated as a serious proposition in the 1830s, although predecessors can be traced back into the eighteenth century," and it was popular in the British anti-patent movement of the 1850s and 1860s. More recently an area of fierce debate has been that of drugs for treating serious diseases such as malaria
Malaria
Malaria is a mosquito-borne infectious disease of humans and other animals caused by eukaryotic protists of the genus Plasmodium. The disease results from the multiplication of Plasmodium parasites within red blood cells, causing symptoms that typically include fever and headache, in severe cases...
, HIV and AIDS
AIDS
Acquired immune deficiency syndrome or acquired immunodeficiency syndrome is a disease of the human immune system caused by the human immunodeficiency virus...
. Such drugs are widely available in the western world and would help to manage the epidemic of these diseases in developing countries. However, such drugs are too expensive for developing countries and generally protected by patents.
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)
The Agreement on Trade-Related Aspects of Intellectual Property RightsAgreement on Trade-Related Aspects of Intellectual Property Rights
The Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...
(TRIPs) also sets out specific provisions that shall be followed if a compulsory license is issued, and the requirements of such licenses. All significant patent systems comply with the requirements of TRIPs. The principal requirement for the issue of a compulsory license is that attempts to obtain a license under reasonable commercial terms must have failed over a reasonable period of time. Specific situations in which compulsory licenses may be issued are set out in the legislation of each patent system and vary between systems. Some examples of situations in which a compulsory license may be granted include lack of working over an extended period in the territory of the patent, inventions funded by the government, failure or inability of a patentee to meet a demand for a patented product and where the refusal to grant a license leads to the inability to exploit an important technological advance, or to exploit a further patent. TRIPs also provides that the requirements for a compulsory license may be waived in certain situations, in particular cases of national emergency or extreme urgency or in cases of public non-commercial use. Article 31.f of TRIPS requires that compulsory licenses be used "predominantly" for local markets, a requirement that complicates the ability of countries to import drugs manufactured overseas.
Doha Declaration
This issue of compulsory licensing of drugs treating serious diseases was addressed by the Doha DeclarationDoha Declaration
The November 2001 Doha Declaration on the TRIPS Agreement and Public Health was adopted by the WTO Ministerial Conference of 2001 in Doha on November 14, 2001...
which recognized the problem and required the TRIPs council to find a solution. On 17 May 2006 the European Commission's official journal published Regulation 816/2006, which brings into force the provisions of the Doha Declaration. This means that the declaration now has legal effect in the European Union, and also in Canada who implemented it in 2005. The declaration allows compulsory licences to be issued in developed countries for the manufacture of patented drugs, provided they are exported to certain countries (principally, those on the UN's list of least-developed countries and certain other countries having per-capita incomes of less than US$745 a year).
See also
- Agreement on Trade-Related Aspects of Intellectual Property RightsAgreement on Trade-Related Aspects of Intellectual Property RightsThe Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...
- Canada's Access to Medicines Regime
- Copyright collectiveCopyright collectiveA copyright collective is a body created by copyright law or private agreement which engages in collective rights management...
- Extended collective licensingExtended collective licensingExtended collective licensing are collective copyright and related rights laws and licensing agreements. ECL agreements by law extend to rights owners who are not members of the collecting society agreeing the licence with a user...
- Doha DeclarationDoha DeclarationThe November 2001 Doha Declaration on the TRIPS Agreement and Public Health was adopted by the WTO Ministerial Conference of 2001 in Doha on November 14, 2001...
- Intellectual propertyIntellectual propertyIntellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
- Mechanical licenseMechanical licenseA mechanical license is a license that grants certain limited permissions to work with, study, improve upon, reinterpret, re-record something that is neither a free/open source item nor in the public domain....
- Open Music ModelOpen Music ModelThe Open Music Model is an economic and technological framework for the recording industry based on research conducted at the Massachusetts Institute of Technology...
- Orphaned WorksOrphaned worksAn orphan work is a copyrighted work for which the copyright owner cannot be contacted. In some cases the name of the creator or copyright owner of an orphan work may be known but other than the name no information can be established...
- Pharmaceutical companyPharmaceutical companyThe pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices...
- Webcasting
- Section 115 Reform Act of 2006Section 115 Reform Act of 2006The Section 115 Reform Act of 2006 was a bill introduced June 8, 2006 in the 109th United States Congress by Howard Berman and Lamar Smith as part of...
(United States)