A compulsory license is a statutory licensing agreement in which a licensing fee is paid for the use of a work subject to U.S. Copyright Law and related laws contained in Title 17 of the U.S. Code. Compulsory licenses are administered by the licensing division of the U.S. Copyright Office.
Governments worldwide have adopted the use of compulsory licenses to give the public the benefit of having access to and using pertinent recordings. Governments may also enlist compulsory licenses to prevent patent abuse, which may also serve as a mechanism to control market abuses.
This term is also known as a technical license, a mechanical license, or a statutory license.
Techopedia explains Compulsory License
Once a work has been archived or copy has been written, the consumer can force a copyright office to issue a mechanical license or compulsory license. This may allow the user, for example, to record some type of audio. This type of process and permission is called a compulsory license and requires a licensing fee. The copyright owner is usually afforded a royalty through this fee.
For example, if an individual wants to record a sound-like version of a sound recording, he would obtain a compulsory license through negotiations by a copyright. This can only be done in collaboration with the owner of the sound recording. This process, or granting of licensure, is possible through a public policy claiming that everyone should have access to the sound recording.
In Canada, licenses may easily be granted for re-recording copyrighted materials for educational purposes defined under Canada’s orphan works scheme.