IntroductionA patent is a form of intellectual property that gives the patent holder an exclusive right to an invention. A patent gives the patent holder the negative right to prevent others from making, using, distributing, or selling a patented product. The owner of a patent can choose to exercise these rights personally or can transfer it through inheritance or by license. The patent in a certain sense guarantees the owner a monopoly on the market for a specific period of time. The ultimate goal of the patent system would be to encourage innovation. The system was designed to encourage inventiveness and maximize progress in science and technology through the free dissemination of knowledge. For an applicant to obtain a patent, the invention should meet certain patentability standards such as novelty, usefulness, non-obviousness, etc. ., and once these standards are met, the exclusive right will be granted to the inventor or his successor in title in exchange for public disclosure of the invention . The rationale behind this is that inventors will be able to recoup what they spent on research and product development thanks to the exclusive right and it will also increase innovation due to the fact that information relating to the invention will be readily available. public domain. In this article we will largely look at innovation in the pharmaceutical industry and how it is affected by compulsory licensing. A compulsory license is an authorization granted by the government or a national authority to a third party to use, make or sell a patent, without the consent of the patent owner. Section 84 of ...... middle of the document ...... contains the concept of active compulsory licensing in India. Given its status as a developing nation, large international companies should not get the wrong idea that they can come to India and charge an outrageous price for their products without any objection from the Indian government because they would be keen to bring these companies in India. In my opinion, this decision in the Bayer case is one of many similar decisions that would follow suit, but just because the first case proved useful to the general public, this does not mean that compulsory licensing is a fixed concept in India now. Going by past trends it would not be wrong to say that it will take a good few years for India to practice compulsory licensing regularly and its true effects will be known only when a few more licenses are issued.