Examining the legality of abuse by failure to manufacture patents locally as a substantive condition for granting compulsory licences pursuant to the TRIPS Agreement

Abstract

This article assesses whether abuse by failure to manufacture patents locally remains a valid condition for granting compulsory licences under TRIPS. The author examines Article 27(1) of TRIPS, which stipulates that patent rights shall be enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced, and Article 5(A)(2) of the Paris Convention, which recognises failure to manufacture locally as an example of the abuse of patent rights, and argues that the former is incorporated into Article 2 of TRIPS, thus validating the same as a condition for granting compulsory licences under TRIPS. This argument rests on the notion that India has used Section 84(1) of its TRIPS-compliant Patent Act, related to a requirement that patented inventions be manufactured locally, as a condition for granting a compulsory licence to Natco, and this decision remains unchallenged within the WTO DSU system.