Compulsory Patent Licensing in Pakistan (2026)

Compulsory Patent Licensing In Pakistan (2026)

Understand compulsory patent licenses in Pakistan. Learn Section 58-60 Patents Ordinance rules, TRIPS flexibilities, pharmaceutical waivers, and royalties.

By Syed Asad Hussain Zaidi · 8 September 2026

Author Note / Last Updated: Updated September 2026 by Syed Asad Hussain Zaidi | Advocate High Court | Senior Patent Prosecution & Public Policy Counsel.

A patent is a formidable 20-year legal monopoly granted by the State, conferring upon the patentee the exclusive right to exclude all other market participants from manufacturing, using, importing, or selling the patented invention. However, in emerging markets like Pakistan, this economic monopoly is not absolute. When a foreign multinational hoards a critical pharmaceutical drug, charges extortionate prices that put life-saving medicines out of reach of ordinary citizens, or refuses to manufacture a vital technological invention domestically, the law provides a crucial sovereign emergency brake: Compulsory Patent Licensing.

Codified primarily in Chapter XI (Sections 58 through 63) of the Patents Ordinance, 2000 (Ordinance LXI of 2000), compulsory licensing empowers the Federal Government and the Controller of Patents to authorize domestic manufacturers to produce and distribute a patented invention without the consent of the patent owner, subject to payment of reasonable statutory royalties.

Anchored firmly in the WTO TRIPS Agreement (Article 31) and the historic Doha Declaration on TRIPS and Public Health (2001), compulsory licensing sits at the delicate crossroads of international trade commitments, pharmaceutical patent protection, and constitutional guarantees of the right to health.

This legal analysis provides pharmaceutical executives, health policy strategists, and corporate IP attorneys with an exhaustive guide to compulsory patent licensing under Pakistani law.

1. The Statutory Architecture: Balancing Monopolies with Public Interest

The underlying philosophy of Pakistani patent law is that patents are granted not only to reward inventors, but to ensure that inventions are worked within Pakistan on a commercial scale without undue delay:

| Statutory Route | Governing Provision | Prerequisites & Grounds | Procedural Mechanism | | :--- | :--- | :--- | :--- | | Routine Commercial Application | Section 58 of Patents Ordinance 2000 | Non-working of patent on commercial scale or prohibitive pricing in Pakistan (minimum waiting period: 4 years from filing or 3 years from grant). | Requires prior unsuccessful bona fide voluntary license negotiations with patentee. | | Emergency Public Health Authorization | Section 59 of Patents Ordinance 2000 | National emergency, extreme urgency, public non-commercial use, or remedying anti-competitive practice. | Direct Federal Government authorization without prior commercial negotiations with patentee. |

International Law Alignment: Article 31 of TRIPS & Doha Declaration

Under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), developing countries retain inherent sovereign "flexibilities" to safeguard public health:

Pakistan integrated these international flexibilities directly into Sections 58, 59, and 60 of the Patents Ordinance, 2000.

2. Statutory Grounds for Compulsory Licensing (Section 58)

Under Section 58(1) of the Patents Ordinance, 2000, any interested person may apply to the Controller of Patents for the grant of a compulsory license on any of the following statutory grounds, provided that four (4) years from the date of filing of the patent application or three (3) years from the date of the grant of the patent (whichever expires later) have elapsed:

| Statutory Ground | Legal Trigger under Section 58(1) | Statutory Standard | | :--- | :--- | :--- | | Non-Working | Patented invention is not worked in Pakistan on a commercial scale. | Patentee fails to exploit the invention in Pakistan to the fullest practical extent. | | Exorbitant Pricing | Market demand for patented item is unfulfilled on reasonable terms. | Product sold at excessive, extortionate prices that prejudice public availability. | | Refusal to License | Patentee refuses voluntary license on reasonable terms. | Refusal unfairly prejudices the establishment or development of domestic Pakistani trade or manufacturing. |

Ground 1: Failure to Work the Invention in Pakistan

A patentee cannot simply obtain a patent in Pakistan to lock the market and prevent domestic industrial development. If the invention is not being manufactured or worked within Pakistan on a commercial scale, or is only being imported in negligible quantities, a compulsory license may be granted to a domestic manufacturer equipped to satisfy demand.

Ground 2: Unmet Market Demand and Exorbitant Pricing

If the reasonable requirements of the Pakistani public with respect to the patented invention have not been satisfied, or the patented article is sold at prices that are artificially exorbitant compared to production costs (e.g., expensive imported cancer therapies or hepatitis antivirals), domestic generic companies can apply for a license to manufacture affordable local equivalents.

Ground 3: Refusal to License on Reasonable Commercial Terms

If an interested domestic manufacturer approached the patent owner with a bona fide commercial offer to license the patent on fair, reasonable, and non-discriminatory (FRAND) terms, and the patentee unreasonably rejected the offer, resulting in prejudice to the establishment of a new domestic trade or industry in Pakistan.

Ground 4: Dependent Patents (Section 58(2))

If a Pakistani inventor develops a second, highly significant technological improvement that cannot be worked without infringing an earlier basic patent, the Controller may grant a compulsory license for the earlier patent, provided the second invention involves an important technical advance of considerable economic significance.

3. The Emergency Track: Section 59 Public Health & Crisis Powers

While Section 58 governs routine commercial applications, Section 59 of the Patents Ordinance, 2000 establishes the sovereign emergency mechanism:

[!IMPORTANT]
Emergency Government Exploitation under Section 59(1):
> "Where the Federal Government is satisfied that a patent is not being worked, or is being worked in a manner which is prejudicial to the public interest, or in cases of national emergency or extreme urgency, or in the case of public non-commercial use, the Federal Government may authorize any person or agency to exploit the invention without prior negotiations with the patent owner."
> Public Health Protection: Empowers the state to issue immediate generic manufacturing authorizations to respond to epidemics, vital medicine shortages, or national healthcare crises.

The Power of Immediate Exploitation:

  1. Waiver of Prior Commercial Negotiations: In a national healthcare emergency (e.g., widespread dengue outbreaks, respiratory pandemics, or critical antibiotic shortages), the applicant or domestic pharmaceutical plant is not required to spend months attempting to negotiate a voluntary license. The Federal Government issues an immediate executive directive.
  2. Notification Post-Facto: The patentee is simply notified of the government authorization as soon as is reasonably practicable.
  3. Defense Against Injunctions: A foreign patent owner cannot obtain a civil injunction from the High Court to halt production authorized under Section 59, as the statutory authorization operates as a matter of sovereign public policy.

4. The Procedural Roadmap to Obtain a Compulsory License

Securing a compulsory license through the Patent Office at Karachi involves a rigorous quasi-judicial process:

| Step | Phase | Action Required | | :--- | :--- | :--- | | 1 | Commercial Negotiation | Make formal written request to patentee for voluntary commercial license on reasonable terms (under Section 58). | | 2 | Petition on Form 7 | File formal petition on Form P-7 with Controller of Patents setting out grounds and applicant technical capabilities. | | 3 | Notice to Patentee | Controller serves notice upon patent proprietor, who may file written counter-statement within statutory window. | | 4 | Technical Inquiry & Hearing | Controller convenes formal evidentiary hearing and reviews domestic manufacturing readiness. | | 5 | Royalty Determination | Controller determines adequate remuneration / royalty schedule taking into account economic value. | | 6 | License Grant Order | Controller issues formal Compulsory License Order specifying terms, scope, and duration. |

Phase 1: The Preliminary Negotiation Requirement (Section 58)

For non-emergency applications, the applicant must demonstrate that they made efforts to obtain authorization from the patentee on reasonable commercial terms and conditions, and that such efforts were not successful within a reasonable period of time (typically 90 to 180 days).

Phase 2: Lodging Form 7 and the Statement of Grounds

The applicant files a formal petition on Form 7 accompanied by the prescribed fee, verified by an Advocate of the High Court. The petition must provide:

Phase 3: Controller's Notice & Hearing

The Controller serves a copy of the petition upon the patentee. The patentee is granted an opportunity to submit a written reply contesting the grounds (e.g., arguing that manufacturing in Pakistan is economically unfeasible or that market demand is fully met via authorized imports). The Controller convenes a formal hearing where technical experts, economists, and legal counsel present arguments.

5. Terms, Conditions & Royalties under Section 60

A compulsory license is not an outright confiscation of the patent; it is a strictly regulated statutory license subject to mandatory statutory safeguards under Section 60 of the Patents Ordinance, 2000:

| Statutory Condition | Legal Provision | Operational Constraint | | :--- | :--- | :--- | | Non-Exclusive License | Section 60(a) | License cannot be exclusive; patentee retains right to exploit patent and grant voluntary licenses. | | Non-Assignable | Section 60(b) | Licensee cannot sub-license or transfer the license except together with that part of enterprise exploiting it. | | Predominantly Domestic | Section 60(c) / TRIPS Art. 31(f) | Production must be authorized predominantly for the supply of the domestic Pakistani market. | | Adequate Remuneration | Section 60(d) | Patentee must receive adequate remuneration taking into account economic value and public interest. |

Determining "Adequate Remuneration" (Royalty Benchmarks):

Pakistani law and international TRIPS jurisprudence reject both zero-royalty confiscation and exorbitant licensing demands. The Controller determines royalties based on established global guidelines:

6. Real-World Case Scenarios: Pharmaceuticals & DRAP Synergy

The primary battlefield for compulsory patent licensing in Pakistan is the healthcare sector:

| Case Study Stage | Factual Dynamic | Legal & Humanitarian Resolution | | :--- | :--- | :--- | | 1. Patentee Pricing | Foreign patentee markets oncology therapeutic at PKR 350,000 per month. | Therapy is priced beyond reach of 99% of cancer patients in Pakistan. | | 2. Domestic Petition | Local cGMP pharma consortium files Section 59 emergency petition. | Demonstrates capacity to formulate bioequivalent generic locally at PKR 18,000 per month. | | 3. Government Order | Federal Ministry authorizes generic manufacture with 3.5% royalty to patentee. | Life-saving therapy becomes widely accessible while ensuring fair statutory remuneration. |

Navigating DRAP (Drug Regulatory Authority of Pakistan) Linkage:

A compulsory patent license from the Patent Office grants permission under IP law, but the generic product cannot be sold in pharmacies without DRAP Drug Registration (Form 5 / Marketing Authorization).

7. Strategic Checklist for Domestic Manufacturers & Patent Holders

Whether seeking to unlock a patented technology or defending an international patent portfolio in Pakistan, verify these strategic checkpoints:

For Domestic Manufacturers Seeking a License:

For Foreign Patent Owners Defending Against Compulsory Licensing:

Conclusion: Balancing Innovation Incentives with Sovereign Public Welfare

Compulsory licensing under the Patents Ordinance, 2000 is not an instrument of hostility against foreign innovation; it is a vital constitutional and economic balancing mechanism designed to prevent patent abuse and protect public welfare.

For domestic Pakistani manufacturers, it offers a lawful, internationally sanctioned pathway to produce vital medicines, agricultural technologies, and industrial machinery at prices the nation can afford. For foreign patent owners, understanding statutory working obligations and pricing benchmarks is essential to safeguarding valuable corporate portfolios.

For specialized legal advice on compulsory patent licensing petitions, TRIPS flexibilities, DRAP regulatory coordination, or defending international patents before the Controller in Karachi, contact our Patent & Public Policy Practice Group at TaxCalc.pk / Zaidi & Associates.

Legal & Statutory Notice: The information provided in this publication is for general educational, academic, and statutory informational purposes only under the relevant laws of Pakistan (including the Income Tax Ordinance, 2001, the Companies Act, 2017, and the Trade Marks Ordinance, 2001). This content does not constitute formal legal, financial, or tax advice. For specific assessments, consult a licensed Advocate or qualified tax professional.