Legal Definitions - compulsory license

A compulsory license is a legal authorization, established by law, that permits an individual or entity to use copyrighted material without needing to obtain direct permission from the copyright owner. In return for this use, the user is required to pay a predetermined fee or royalty to the copyright holder, as specified by statute.

This type of license is "compulsory" because it is mandated by legislation, rather than being the result of a voluntary agreement or negotiation between the copyright owner and the user. It often serves to balance the exclusive rights of copyright holders with broader public interests, such as promoting access to creative works or addressing market failures.

Here are some examples illustrating how compulsory licenses work:

• Cover Songs in Music: Imagine a new musical artist wants to record and release their own version of a popular song that was written and performed by another artist. Under copyright law in many countries, the new artist does not need to ask for explicit permission from the original songwriter or publisher to create this "cover" version. Instead, they can obtain a mechanical compulsory license. This license allows them to record and distribute their rendition of the song, provided they pay a statutory royalty for each copy sold or streamed to the original copyright holder. This ensures the original creator is compensated while allowing new interpretations of their work to flourish.

• Generic Drug Production During Public Health Crises: In certain urgent situations, such as a widespread pandemic, a government might issue a compulsory license for a patented pharmaceutical drug or vaccine. This legal measure allows local manufacturers to produce generic versions of the drug without the direct consent of the patent holder. The goal is to rapidly increase the availability and affordability of essential medicines to protect public health. While the original patent holder's exclusive rights are temporarily overridden, they still receive a royalty payment for each generic unit produced, as determined by the government.

• Cable Television Retransmission of Broadcast Signals: A cable television company provides its subscribers with access to various channels, including local broadcast television stations. Rather than negotiating individual licensing agreements with every single local station for the right to retransmit their signals, the law in some jurisdictions establishes a compulsory license. This allows the cable company to carry these local broadcast signals as part of its service. In exchange, the cable company pays statutory fees into a fund, which are then distributed to the copyright holders of the broadcast content. This system streamlines the process, ensuring subscribers have access to local programming while compensating broadcasters.