COMPULSORY LICENSES

• May 4, 2022
• Maichael Bessada

INTRODUCTION[1]

The following Member States (or territories) indicated that their applicable laws provided for exceptions and/or limitations related to compulsory licenses: Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Bhutan, Bolivia (Plurinational State of), Bosnia and Herzegovina, Brazil, Bulgaria, Burkina Faso, Canada, Chile, China and Hong Kong (China), Congo, Costa Rica, Croatia, Cyprus, Czech Republic, Democratic People’s Republic of Korea, Denmark, Djibouti, Dominican Republic, El Salvador, Finland, France, Gambia, Germany, Greece, Honduras, Hungary, India, Indonesia, Israel, Italy, Japan, Jordan, Kenya, Kyrgyzstan, Latvia, Lithuania, Madagascar, Malaysia, Mauritius, Mexico, Monaco, Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan, Peru, Philippines, Poland, Portugal, Qatar, Republic of Korea, Republic of Moldova, Romania, Russian Federation, Sao Tome and Principe, Saudi Arabia, Serbia, Slovakia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Tajikistan, Thailand, Turkey, Uganda, Ukraine, the United Kingdom, the United Republic of Tanzania, the United States of America, Viet Nam, Zambia and Zimbabwe (87 in total).

Public Policy Objectives for Providing the Exception

The above-listed Member States indicated provisions in their national legislation that allow, in general, the government and/or third parties, under certain circumstances and conditions, to use a patented invention without the authorization of the right holder. While the public policy objectives that compulsory licensing provisions in the applicable laws of Member States pursue show some differences, most Member States provided responses which can generally be categorized into the following public policy objectives:

Balancing of interests

Many Member States underlined the balancing aspect of the exception, in particular, noting that the exception, as provided in their applicable law, aimed at striking a balance between the interest of patentees and of third parties and/or public interest and/or society. For example, the responses from Kenya and Saudi Arabia noted that public policy objectives of the compulsory licensing provisions were “to ensure a balance between the rights of the patentee and the public interest”.  Similarly, in El Salvador, the objective of the exception was to “balance between private interest and the interest of society”. In addition, the response from Chile stated that the objective of the exception was “to provide the industrial property system with balance, by providing tools that limit the right where committed higher interests exist”. The response from Canada stated that the overall purpose of the compulsory licensing provision was “to ensure a balance of rights is maintained by preventing anticompetitive behavior or other activities by patent holders that are not in the public interest”.

Preventing abuses of rights

Another public policy objective pursued by some Member States (or territories) is to prevent abuses which may result from the exercise of the exclusive rights. For example, the response from Germany noted that the objective of the exception was “to protect the public from any abuse of the exclusive right to which the patent owner is entitled”.   The response from Hong Kong (China) stated that the objective underlying the grant of compulsory licenses was to

“prevent abuse of monopoly rights by patent proprietors and to encourage manufacture”. The response also stated that compulsory licenses “ensure that patented inventions are applied practically to their fullest extent and patent rights are exercised without prejudice to the development of industry”.  Similarly, a few other Member States noted the objective of “industrial development” or “establishment or development of industrial and commercial activities in the State” with reference to preventing abuse of rights.

Promoting the public interest at large

Many other Member States in describing the public policy objectives of the compulsory licensing provisions, as provided in their applicable laws, focused on the interest of the State or the public at large, which are described as, for example, “public interest and interest of society”, “public interest considerations”, “urgent needs of the society”, “development of the economy and the well-being of the society”, “vital interest to the economy of the country, public health or national defense, or where non-working or insufficient working of such patents seriously compromises the country’s needs” and “situations of public interest and emergency motivated by considerations of public health, nutrition and national security”.

The response from Cyprus highlighted the importance of using patents “in order to encourage innovation and the further advancement of science and technology by other interested persons” and to “promote trade and to boost the economy of [the] country by using patents as a source of potential income not only to the patentees but also to the whole of [the] country”. The response of Netherlands stated that in the case of “exceptional circumstances and national security […], the right of the patentee should be put aside”, it also noted that “innovation would be hampered if a patent holder could prevent, by not providing licenses [for dependent patents], the use and further improvements of an invention”.

Many Member States pursued multiple policy objectives through provisions on compulsory licenses, including the above. For example, the response from Portugal stated that policy objectives of the compulsory licensing provisions were “to avoid abuse of the monopoly […]; to avoid obstacles to technological and economical development; to promote public health; to guarantee national security”. In the response from China, it was stated that the policy objectives of the exception were “to prevent right holders from abusing their rights, to promote application of inventions and creations, to guarantee the normal operation of the patent system, and to safeguard the interests of the State and the public”. Similarly, the response from Mexico noted that such objectives were: “to avoid misuse on behalf of patent owners, […] [to] contribute to the transfer and dissemination of technology […]. The use of the technology for the benefit of the economy and […] the preservation of national health and security as the supreme interest above and beyond all the rights of the patent owner”.

Some other Member States also highlighted that the policy objectives for compulsory licenses included access to products and “consumer protection” so that the “businesses and consumers have reasonable access to patented products at reasonable prices” and products were “available to potential users”.  The response from the United Kingdom stated that the compulsory licensing provisions, inter alia, could act as “an incentive for parties to negotiate and agree voluntary licensing agreements rather than go through what is essentially inter partes litigation in order to attempt to obtain a compulsory license” which could “prevent or repress anti-competitive behavior”.

Some Member States (or territories) also noted specific public policy objectives on public health. Hong Kong (China) referred to the specific policy objectives which were “to make use of the system under the Protocol amending the TRIPS Agreement (adopted by the General Council of the WTO on December 6, 2005) to import medicine” and to “export pharmaceutical products to other WTO Members” in situations of a national emergency or other circumstances of extreme urgency. Similarly, the response from Canada stated the policy objective was to “to give effect to Canada’s and Jean Chrétien’s pledge to Africa by facilitating access to pharmaceutical products to address public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”  The response from a few Member States, in responding to the question on public policy objectives, referred in general to obligations under the TRIPS Agreement and/or EU directives.

The Applicable Law and the Scope of the Exception

Out of 87 responses to the Questionnaire received from Member States, 86 responses indicated that the applicable laws provided for exceptions and/or limitations related to compulsory licenses through statutory means.

In general, there are a number of common elements or requirements among compulsory license provisions in national laws. These include: (i) beneficiaries and the competent body (bodies) which grants compulsory licenses; (ii) the grounds on which compulsory licenses may be granted; (iii) prior efforts to be made by the requester of a compulsory license to obtain a voluntary license (with certain exceptions); (iv) limitation of the scope and duration of a compulsory license to meet the purpose of the authorization; (v) non-exclusive license; (vi) non-transferability, except with the business; (vii) authorization predominantly for the supply of the domestic market (with certain exceptions); (viii) remuneration to be paid to the patentee; and (ix) the possibility of review regarding the issuance of the compulsory license as well as decisions relating to remuneration.

Grounds for the grant of compulsory license

The vast majority of responses from Member States indicated several grounds on which compulsory licenses may be requested under the respective applicable law. The grounds to which many responses referred are: “non-working or insufficient working” of the patented invention found in 71 responses; “refusal to grant licenses on reasonable terms” found in 60 responses; “dependent patents” found in 57 responses; “public health” found in 56 responses; “national security” found in 52 responses; “anti-competitive practices and/or unfair competition” found in 47 responses; “national emergency and/or extreme urgency” found in 46 responses; and “other grounds” in 26 responses.

In addition to the above grounds, some Member States applicable laws provided for other grounds for the grant of compulsory licenses, such as: “development of other vital sectors of the national economy” , “needs of national economy” , “public interest” , “public necessity” , “serious public interest menace” , “failure to meet market demand on reasonable terms” ,“non-exploitation of the patent for failure to manufacture or incomplete manufacture of the product […] or commercialization that does not satisfy the needs of the market” , “public non-commercial use; reasonable requirement of the public not satisfied; the patented invention is not available to the public at a reasonably affordable price”,  “sold at unreasonably high prices or not meet the public demand”,  “a market for the patented invention is not being supplied, or is not being supplied on reasonable terms”,  “where the working of a patented invention is particularly necessary for the public interest”,  “the use is necessary […] for non-commercial public good”,  “overlapping rights of biotechnological patent owner and a plant variety owner”,  “compulsory cross-licensing when an invention is related to the protected plant variety”,  “compulsory license for plant breeder; compulsory license as a result of the Euratom Treaty”,  “plant varieties”,²⁸ “where patent has not been exploited in a manner which contributes to the promotion of technological innovation and to the transfer and dissemination of technology”,  “environmental protection”,  “impeding the establishment or development of industrial and commercial activities”,  “insufficient supply of appropriate goods, works or services on the market as a result of the specified non-use (insufficient use); the willingness of any person to use the patented subject matter specified”,  “food and the development of other vital sectors of the national economy”  or the “specific provisions under the Clean Air Act, and under the rules of the Nuclear Regulatory Commission”.

In addition, some Member States (or territories) have reported specific provisions contained in their applicable laws that allow for a grant of compulsory license for the purpose of facilitating access to pharmaceutical products in countries with insufficient or no manufacturing capacities in the pharmaceutical sector.  

In the United Kingdom, the grounds that apply differ depending on whether or not the proprietor of the patent is a “WTO proprietor” i.e. is a national of, or is domiciled in, a Member of the World Trade Organization, or has a real and effective industrial or commercial establishment in such a Member.

Non-working or insufficient working

With regard to the ground of “non-working”, the main elements to which Member States referred were that the patent was not worked within a certain timeframe in the territory or insufficiently worked to satisfy the demand of the market of the territory, without legitimate reasons. The applicable laws of many Member States define the beneficiary of such license as “a person”, “any person” or “any legal entity or natural person” or “any interested party”.  In few Member States, a compulsory license may be granted to a person who can demonstrate the capability to exploit the patented invention, provided all the requirements defined in the law are met.  For example, in Brazil “[a] license may be requested only by a person having a legitimate

interest and having technical and economic capacity to effectively exploit the object of the patent”.

In the law of the United Kingdom, in relation to the patented invention which may be subject to compulsory license on the ground of “not being so worked or is not being so worked to the fullest extent that is reasonably practicable” it is specified that a compulsory license may only be requested in relation to a patented invention owned by a non-WTO proprietor.

The applicable laws of most Member States did not expressly provide a definition of the terms “non-working” and “insufficient working”. However, the responses of few Member States explained that “abuse” or “non-working” occurs if the “exploitation”, or “working on a commercial scale” or “adequate use” or “sufficient and continuous working” of the patented invention did not take place within a certain period of time without a legitimate reason.  Some other Member States (or territories), in defining what constituted a “non-working or insufficient working”, referred to situations where the demand for the patented product was not satisfied in local market on reasonable terms.  Some other Member States (or territories) explained that non-working meant, inter alia, that “the reasonable requirements of the public with respect to the patented invention have not been satisfied”, or where the patented invention was capable of being commercially worked in the country, “is not being so worked or is not being so worked to the fullest extent that is reasonably practicable”, or the patented invention is not available to the public at a “reasonably affordable prices”, and/or “sufficient quantities or quality”.

In few Member States, a lack of preparations to work is one of the grounds for compulsory licenses, for example, a compulsory may be granted where a patentee has “not started to work or to make effective and serious preparations to work”.  A few Member States, with reference to the definition of terms “non-working” and “insufficient working”, generally noted that the patentee was obliged to “exploit” or “manufacture” a patented invention directly or through a person authorized by him.

• Does importation constitute “working” of the patent?

Some Member States do not consider importation as working of the patentor do not specify such issue in their applicable legal provisions or the issue is sub judice. However, under most of the laws, importation is considered as working of the patent. Thus, the grant of compulsory licenses for “non-working” or “insufficient working” in those countries (or territories) cannot be obtained in the case of importation of a patented product or a product manufactured using a patented process. However, conditions are applicable in some Member States. For example, in South Africa, an importation is only considered as working “as far as it is not involving excessive pricing”. In Oman, the unavailability of the invention “in sufficient quantities or quality or at predetermined reasonable prices in [internal market], either through manufacture in Oman or through importation”, constitutes “non-working”. In Denmark and Finland, “subject to reciprocity” the working of the invention in another country shall be equivalent to working in those respective Member States. Further, the responses from a few Member States, specified that importation of patented products into at least one Member State of the European Union and/or European Economic Area or Member of the WTO was considered “working” of the patented invention. In Hungary and Poland, “the importation per se does not constitute

‘working’ of the patent; however, a legitimate import can mean that the patented invention is exploited in the territory of the country in order to satisfy the domestic demand”. In Norway, while import of the patented product from another country will not necessarily prevent the grant of a compulsory license, “in the case of import, the patentee may have legitimate reasons for the failure to work the invention”. Contrary to that, in Qatar, the law clarifies that “importing the product shall not serve as legitimate reason”. In Brazil, a compulsory license can be granted, inter alia, in case of non-exploitation of the patented invention within its territory for “failure to manufacture or incomplete manufacture” of the product or the patented process, “except cases where this is not economically feasible, when importation shall be permitted”.

• Time period to be respected before the grant of a compulsory license in case of non-working or insufficient working

In most Member States, the time period during which compulsory licenses may not be granted on the grounds of non-working or insufficient working is three years from the date of the grant of the patent or four years from the filing date of the application. The applicable laws of many Member States further specify that the said time period lasts three years from the date of grant or four years from the filing date, whichever period expires later. In addition, in a few Member States, a compulsory license may be granted if the exploitation of the patented invention has been interrupted for more than one year , and in two Member States, for more than three years.  Some other variations found in the applicable laws are, for example, “three years from the date of the grant of the patent”,  “three” or “five” years from the date of publication of the mention of the grant , “3 years after sealing”, or “three years of non-working”,  and “four years from the filing date of the application”.

In Zimbabwe, the compulsory license in case of, inter alia, insufficient use of patent rights may be requested “within a period of six months from the initial request for a voluntary license”.

• Definition of “legitimate reasons”

In the majority of Member States that allow grant of the compulsory license on the ground of “non-working or insufficient working” it is possible to justify such non-working or insufficient working with legitimate reasons. In this regard, some Member States made a reference to, for example, “legitimate grounds” , “reasonable ground”, “valid reasons”, “good reason”, “duly justified reasons” or “satisfactory reason” for failing to work the invention, or “acceptable reason for the non-use of the invention”.

Those legitimate reasons are, in most of those Member States, of a technical, economic, legal nature, or force majeure. For example, in the response from Turkey, it was stated: “technical or economic or legal reasons of an objective nature shall be deemed to constitute legitimate excuses for the inability to put the patent to use. The reasons accepted […] are those which are beyond the control and will of the patentee.” Similarly, in Argentina, the legitimate reasons are explained as “objective difficulties of a technical and legal character, such as delays in obtaining registration for marketing approval from Public Bodies, which are beyond the patent owner’s control and which make the exploitation of the invention impossible […]”. In the Dominican Republic and Honduras, “force majeure, or circumstances independent of the will or beyond the control of the patent owner”, can “justify the non-working or insufficient working”. In addition, the response from China clarified that “for example, if the production, importing or marketing is prohibited by the Government, no compulsory license should be issued on the grounds of non-working or insufficient working”. In Brazil, in addition to a justification of non-use for “legitimate reasons” and based on “grounds of an obstacle of legal nature”, a compulsory license shall not be granted “if, on the date of the application, the titleholder proves that serious and effective preparations for exploitation have been made”. The response from Norway stated that even the “difficulties in providing raw material or has been struggling with lack of resources, this cannot be considered as legitimate reasons”; however, “if the working of the invention has been impeded by public regulations, there might be legitimate reasons”. In addition, in the responses of some Member States it was noted that the lack of financial resources or the lack of financial feasibility of the exploitation, did not constitute legitimate reasons.

Further, while the applicable law of many Member States provided that a compulsory license shall be refused if the patentee justifies his inaction by legitimate reasons, the law in those Member States does not expressly define what those legitimate reasons are. Some of those Member States (or territories) noted that that would be determined on a case-by-case basis, or by court. Some responses explained that the patentee had to provide “evidence that the circumstances made it impossible to remedy the lack or insufficiency of exploitation of his patent”, or “to prove the legitimacy of the reasons which resulted in the non-working of the patented solution”. In Cyprus, there is a specific test which takes into account the following factors: the nature of the invention; the time elapsed and the measures already taken by the proprietor of the patent or any licensee to make full use of the invention; the ability of any person to whom a license would be granted under the order concerned to work the invention to the public advantage; and the risks to be undertaken by that person in providing capital and working the invention if the application for an order is granted. Yet, according to the applicable law of Jordan, the patentee may be granted an additional grace period if the Minister deems that reasons beyond the control of the patentee have prevented exploitation.

1. Compulsory license on the ground of refusal by the patentee to grant licenses on

“reasonable terms and conditions” and within “reasonable period of time”

With reference to the grant of compulsory license on this ground, the response from Germany stated that “in this case the public interest must, in addition, command the grant of a compulsory license”. Regarding the definition of the terms “reasonable terms and conditions” and “reasonable period of time”, the applicable law of most Member States did not provide any further explanations. Some responses stated that the expression “reasonable terms and conditions” and “period of time” would be decided, for example “based on the facts and circumstances of each case”, on “a case-by-case basis”, “on the conditions pursuant to the common practice” or “on such terms and conditions as are consistent with prevailing practice”. The response from China noted that the reasonableness would be “determined by the specific circumstances”, such as “fields of technologies, marketing prospects, royalties of similar technologies, the funds invested in making the invention”. The response from the Dominican Republic referred to “the economic value of the authorization […] bearing in mind the rate of average royalties for the sector in question, in relation to commercial license contracts between independent parties”. The response from Israel clarified that the conditions “are not fair under the circumstances of the case, do not take account of the public interest and arise essentially out of the existence of the patent”.

In South Africa, the reasonableness “requires consideration of the patentee’s cost of production and marketing the article, the terms and conditions on which it negotiates with customers, and whether the trade can carry that price”. The response from the United Kingdom explained that what constituted reasonable terms depended on “a careful consideration of all the surrounding circumstances in each case, e.g. the nature of the invention, the terms of any licenses under the patent, the expenditure and liabilities of the patentee in respect of the patent, and the requirements of the purchasing public. The price charged by the patentee should be a bona fide one and not one adopted to suppress or depress demand”. A test applied by court in that state was “how much are manufacturers who are anxious to make and deal with the patented article on commercial lines ready and willing to pay?”

With reference to the reasonable time period to obtain a voluntary license, few Member States refer to time period of three or six months. For example, the response from Oman stated

“a period of up to a maximum of six months between the date on which the patent owner was informed by the proponent of the request and the proposed conditions for a voluntary license and the date on which the proponent of the voluntary license was informed by the patent owner on his final decision to refuse the proposal shall be deemed a reasonable time”, whereas the law in Slovakia provided that a period of “three months from the request for the license” was a reasonable period. The response from China noted that what would constitute a reasonable period of time should be determined by taking into consideration the time needed by the right holder to make a decision after evaluating both the economic and technological aspects of the inventions. In Argentina, where efforts to obtain a license have not been successful following a period of “150 consecutive days as of the date on which the corresponding license was requested”, a compulsory license may be granted. Finally, the response from Pakistan stated that it was the government which determined what constituted “reasonable terms and conditions and reasonable period of time”.

• Compulsory license on the ground of anti-competitive practices

As regards the grant of a compulsory license on the ground of anti-competitive practices, many Member States did not provide further explanations. The responses of few Member States noted that on the establishment of anti-competitive practice adopted by the patentee, it was not required to seek “an amicable agreement” or to make a prior “efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period”.

Some Member States, in explaining what constituted “anti-competitive practice” under their applicable laws, referred to an enumerative list of anti-competitive practices. For example, in some Member States such practices referred, inter alia, to: “the fixing of excessive or discriminatory prices for patented products” and “the lack of market supply on reasonable commercial conditions”. Further, anti-competitive practices might be related to “denying a competitor access to essential facility” or “the lack of market supply on reasonable commercial conditions”. Another type of anti-competitive practices related to the exclusion of competitors, for example, by “the obstruction of commercial or production activities” or “engaging in an exclusionary act”.

Some Member States’ applicable laws also provide for a more general wording for the determination of anti-competitive practices, such as “any other act which national legislation characterizes as anti-competitive, limiting or restrictive of competition”, “anti-competitive practice which operated or may be expected to operate against the public interest”, “if the patentee exercises his rights in such a way as to prevent others from competing fairly” or “restraint of trade and contrary to public policy”.

Some Member States’ applicable law did not expressly define which practices were considered “anti-competitive”. The responses from some Member States indicated that the determination or declaration of anti-competitive practices was deferred to specific bodies, such as a “judicial or administrative body”, “any anti-monopoly agency or the judicial judgment by any court”, “administrative or court proceedings”, the “Federal Government and [a] judicial body”, the “Competition Commission, the Secretary of State or a Government Minister”, or the “Court of Free Competition”.

In the United Kingdom, a compulsory license “following a merger or market investigation to remedy, mitigate or prevent a competition matter […]” may be applied for by the relevant authorities. In Germany, compulsory licenses may arise from the cartel law.

Some Member States limited the grant of compulsory licenses on the ground of anti-competitive practices to the area of public health and/or semiconductor technology. In case of a semiconductor technology, the response from a few Member States noted that a compulsory license may be granted only for a use for public non-commercial purposes or to remedy a practice declared anti-competitive following court or administrative proceedings.

• Grant of compulsory licenses on the ground of dependent patents

Most of the Member States that allowed the grant of compulsory licenses on the ground of dependent patents, .i.e., where the exploitation of the patent (“the second patent”) was not possible without infringing the another patent (“the first patent”), stated that, in general, the following three conditions should apply: (i) the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent; (ii) the owner of the first patent shall be entitled to obtain a cross-license on reasonable terms to use the invention claimed in the second patent; and (iii) the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent”.

• Definition of the term “dependent patents”

In relation to the term “dependent” different wordings were envisaged in the applicable laws of some Member States, for example, “If a patented invention cannot be exploited without infringing an invention patented with a better priority (earlier patent)”; “patent is included in the scope of another, earlier patent”; “If the invention claimed in a patent may not be worked industrially in the country without infringing an earlier patent”; “[…] the working or efficient working in Cyprus of any other patented invention which makes a substantial contribution to the art is prevented or hindered”; or the patentee/ licensee is “prevented or hindered without such license from working the other invention efficiently or to the best advantage possible”.

• Other details on conditions applied in case of dependent patents

Some variations also found in relation to the conditions applied in case of dependent patents. For example, in India, the license may be requested if, inter alia, “the other invention has made a substantial contribution to the establishment or development of commercial or industrial activities” in that country. In Poland, the compulsory license may be granted if the holder of the earlier patent “prevents, by refusing to conclude a license contract, the meeting of home market demands through the exploitation of the patented invention (the dependent patent), whose exploitation would encroach upon the earlier patent”. In Portugal, if the two inventions are used “for different industrial purposes”, a license may only be granted if the “first invention is essential to the exploitation of the second”, and “only in the part necessary for said exploitation”.

In addition, some responses noted that, in case of dependent patents, it was further required that the party was not able to obtain the patent owner’s consent to exploit the invention under “fair conditions”, “reasonable terms”, “reasonable conditions usual in trade” “on the conditions that are in compliance with the common practice”, within a reasonable period of time.

In Japan, the person can request the patentee to hold consultations on the grant of a non-exclusive license. In Netherland, the law obliges the patentee at all times to grant a license required for the use of a second patent, as defined in the law; however the patent holder will be obliged to grant a license required for the use of a European patent “only after the term for filing an opposition to the European patent has expired or after opposition proceedings thus instituted have ended”.

A few Member States also noted that a compulsory license granted in case of dependent patents “may not be exclusive”, or that such a license should be limited in the scope and volume that are necessary to exploit the invention by the owner of the second patent.

In addition, in construct with above-described three conditions applied by many Member States in case of dependent patents, few Member States’ laws provided different criteria. For example, in Turkey, the owner of the second patent may request the court to grant license for using the first patent owned by another person by bringing evidence that his patent, with reference to the first patent, will serve a “different industrial purpose” or “achieves significant technical improvement”. Similarly, in the United Republic of Tanzania, the grant of compulsory license may be requested if the second patent serves “industrial purposes different from those served by the invention which is the subject of the earlier patent”; or “constitutes substantial technical progress” in relation to that earlier patent.

The applicable laws of a few Member States stated that compulsory licenses in case of dependent patents may be requested by “the owner of the second patent”, “his licensee”, or “the beneficiary of a compulsory license for the later patent”. Similarly, the law in India provides that: “any person who has the right to work any other patented invention either as patentee or as licensee thereof, exclusive or otherwise” may apply for the grant of a license.

• Cross-license on reasonable terms

While, in most of the Member States, the owner of the first patent is entitled to obtain a cross-license on reasonable terms to use the invention claimed in the second patent, some differences were also found in some laws. For example, in Finland, the owner of a first patent may obtain a compulsory license to exploit the second patent “unless there are special reasons to the contrary”. In Portugal, the previous patentee may also demand a compulsory license if inventions protected by dependent patents “serve the same industrial purpose”. In addition, the law in Portugal provides that with respect to an invention concerning a “process for preparing a chemical, pharmaceutical or food product”, and “whenever this process patent represents notable technical progress in relation to the previous patent” both the holder of the process patent and the holder of the product patent are entitled to request a compulsory license for the other holder’s patent.

In addition, few Member States noted a specific case of compulsory cross-licenses where a plant variety right could not be obtained or exploited without infringing the rights conferred by a previous patent, or a patent could not be exploited without infringing a prior plant variety right.

• d.    Grant of compulsory licenses on the ground of national emergency or circumstances of extreme urgency

The applicable laws of most of those Member States (or territories) that provided for compulsory licenses on the grounds of “national emergency” or “circumstance of extreme urgency” did not provide for a definition of such circumstances. In some Member States, national emergencies were defined by listing examples, such as “state security, protection of public interest in the field of health and nutrition, protection and improvement of human environment, or special interest in a particular branch of economy […]”, “war, uprising, or other similar emergency”, “disasters, catastrophes or big accidents”, “national defense, emergency or noncommercial public good”, or “national security, public interest protection in the field of health, food supplying, environmental protection and improvement, specific commercial interest”.

The responses from India and Hong Kong (China) stated that examples of such circumstances may include public health problems resulting from “HIV/AIDS, tuberculosis, malaria and other epidemics”. In the Republic of Moldova, the term “extreme situation” defined generally as “interruption of normal life and activity of the population […] in a region as a result of accidents, disasters, natural or socio-biological calamities which resulted or could result within human and economic losses”. In Serbia, the circumstances of “national emergency” or “circumstances of extreme urgency” were defines as public emergency which “endangers the survival of the state or its citizens”. The response from China, with reference to national emergency, referred to “wars or any emergency that endangers the country or any natural disasters or pandemic diseases”.

Some Member States’ responses referred in general to situations of “public interest”, which were defined by Denmark as, for example, concerning “national security, the population’s access to medical products and food, power supply, communication lines etc.” Whereas the response from Spain explained that reasons of public interest were invoked when: “(i) the increase or generalization of working of the invention, or improvement of the conditions in which it is being worked, are of paramount importance for public health or national defense; and (ii) failure to work or insufficient quality or quantity of working leads to serious prejudice for Spain’s economic or technological development”.

In Mexico, “national emergency or security” included “serious diseases declared as a priority by the General Health Council”. In Pakistan, the Federal Government was the authority to determine the grounds for national emergency or circumstances of extreme emergency. The response from Sri Lanka stated that the determination of such circumstances was within the competence of the court.

In addition, in relation to the grant of compulsory licenses on the ground of national emergency or circumstances of extreme urgency, the response from Hong Kong (China) referred to the provisions under its applicable law related to compulsory licenses to import pharmaceutical products into Hong Kong (China) and to export such products to other WTO Members.

In addition, in relation to the time period to be respected before the grant of compulsory license on this ground, in the responses from a few countries it was noted that where “public interest” requires, a compulsory license may be granted without observing any specific time limit.

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[1] – EXCEPTIONS AND LIMITATIONS TO PATENT RIGHTS: COMPULSORY LICENSES AND/OR GOVERNMENT USE (PART I), Document prepared by the Secretariat, Standing Committee on the Law of Patents, Twenty-First Session, Geneva, November 3 to 7, 2014,