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Compulsory Licenses in Light of Foreign Investment Treaties

Document Type : Original Article

Authors

1 Professor of Law, Faculty of Law & Political Science, University of Tehran, Tehran.Iran Corresponding Author Email: habiba@ut.ac.ir

2 Ph. D. Candidate, Faculty of Law & Political Science, University of Tehran, Tehran.Iran

Abstract

Intellectual property constitutes one of the key protected assets of foreign investors within host countries, as recognized in most international investment treaties. These treaties generally include provisions safeguarding the intellectual property rights of investors. However, such protections are not absolute; they may be subject to limitations imposed by the public interests of the host states. Incorporating exemption clauses into international investment agreements exemplifies such limitations. According to these clauses, actions undertaken by host countries to safeguard public interests are not deemed breaches of the investor’s rights. In practice, host countries often invoke such exemption clauses, frequently through measures like issuing compulsory licenses, which impose restrictions on the intellectual property rights of investors. Such actions may be interpreted by investors as expropriation of their intellectual property, potentially giving rise to claims for compensation. This article examines whether, in accordance with the content of foreign investment treaties, international conventions, and domestic laws pertaining to intellectual property, a foreign investor is legally entitled to such claims. It also analyzes the likelihood of success, considering possible defenses that the host country might raise. Employing an analytical-descriptive methodology, this study concludes that the determination of such claims largely hinges on two factors: (1) the amount of royalty paid to the inventor, and (2) the specific language of exemption clauses within the investment treaties.

Keywords

References

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Economic and Commercial Law Researches
Volume 3, Issue 1 - Serial Number 9
June 2025
Pages 11-44
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