Professional Documents
Culture Documents
Presented by: Jon Wood, Bridgestone Americas Raj S. Dav, Morrison Foerster
Introduction
Compulsory License
The government, rather than the patent owner, grants a company a non-exclusive license to make, use or sell the patented technology The government, not the patent owner, sets the terms of the license, including the royalty
Compulsory Licenses
Why They Exist
To correct market failures Generally considered good for society
Tempers the exercise of market power Discourages abuse of a patent
Exceptions
28 U.S.C. 1498
Allows the U.S. to use an invention covered by a U.S. patent without license Patent owners remedy is an action against the U.S. for recovery of reasonable compensation
Federal Trade Commission Guidelines for Licensing of Intellectual Property Anti-trust Merger/Acquisition Certain U.S. laws (e.g., Clean Air Act)
China
Compulsory licenses are only applicable to invention patents and utility patents not design patents No compulsory license has been granted in China
China, cont.
If granted, a compulsory license must
Be non-exclusive Pay a reasonable fee to the patentee, decided by both parties through consultation Be predominately for the supply of the domestic market only Shall stipulate the scope and time for exploitation
Japan
Three instances where a compulsory license could be granted
Non-working patentee Exploitation of an improvement invention requiring license on the dominant patent Public interest
Germany
Compulsory licensing in general
Public welfare
A national government can issue an order allowing everybody to use the invention User pays fee to the government, which then pays a justified compensation to the patentee (not necessarily all of the fees collected) Requirements are very severe to grant compulsory license for the public welfare
Germany, cont.
Conditions for compulsory licensing
A voluntary license must be denied The patent must be granted Public interest must be present
Presumed if the use of the invention by a licensee has a higher value compared with the interest of the patentee
India
India has never granted a compulsory license India has not finalized the rules for the Third Patent Amendments (2005), so interpretation of the rules is a work in progress
India (cont.)
India, cont.
Changes in compulsory licensing by the Patents (Amendment) Act, 2005
Substantive
Applications claiming pharmaceutical inventions submitted between 1999 and 2005 will be subject to an automatic compulsory license to generic companies if the generic companies were producing the said drug prior to 2005 and continue to produce the drug after the issuance of the patent
Procedural
Can only apply for a compulsory license if a voluntary license cannot be obtained within 6 months from the start of negotiations
Summary
Despite detailed legislative guidelines, countries have little experience with compulsory licensing outside of the anti-trust area
Perhaps the availability of compulsory licensing is sufficient to encourage patentees to grant voluntary licenses
A country that grants compulsory licenses is likely to find its efforts to partner with companies in the future adversely affected, as it would create a less stable investment climate Furthermore, it is questionable whether a compulsory license would really be useful in the case of high-technological products
Years of additional research results in trade secrets and undisclosed information that the patent does not cover, which may be necessary to produce a productive patented invention
Acknowledgements
The presenters acknowledge the valuable contributions of the following co-authors:
Ms. Susan Finston, formerly Vice President of Pharmaceutical Association of America, President, Finston Consulting, LLC Ms. Zhongyi Tao, graduate student, Peking University Law School Mr. Zheng Zha, attorney, Freshfields Bruckhaus Deringer, Beijing, China Yukio Mr. Nagasawa, former Judge of Tokyo High Court, and now with Abe, Ikubo & Katayama, Tokyo, Japan, along with Mr. Hirokazu Honda and Mr. Makoto Hattori Mr. Heinz Goddar, partner, Boehmert & Boehmert, Munich, Germany. Mr. Shaun Fox, law student, University of Akron