Compulsory Licences II

Compulsory Licenses

A licence may be sought once three years have passed since the first publication of the patent. The application may be for a licence under the patent or for an entry on the register to the effect that licenses are to be available as of right. Until 2006 the grounds on which a compulsory licence may be granted were broader.

A compulsory license may be granted if

• the patent holder is not meeting the demand for the invention in the State on reasonable terms
• demand is being met by importation from non-World Trade Organisation countries. Most countries in the world are members of the WTO
• the establishment or development of commercial or industrial activities in the State is unfairly prejudiced.

The demand is public demand for the product or process.  Demand on reasonable terms means that which exists under current conditions.

The demand must be at a reasonable price. The failure must result in an export market not being supplied, the working of another substantial invention being prevented or hindered or the establishment of commercial or industrial activities in Ireland being unfairly prejudiced.

If an invention protected by a patent cannot be exploited in the State without infringing rights deriving from another patent, the proprietor of the second patent may apply to the Controller for a licence under the patent to the extent necessary for the exploitation of the invention concerned, provided that such invention involves an important technical advance of considerable economic significance in relation to the invention claimed in the first patent.

Process

The person seeking the compulsory license must first approach the patent holder, seeking a licence on reasonable, in a reasonable time. The Controller determines the terms of the compulsory license.

To seek a compulsory licence, the applicant must show a prima facie case. The application is served on the patent holder and other interested parties on the register.  It is advertised in the Official Journal.

Within three months afterwards, it may be opposed by the patentee or others with an interest.  An arbitrator may be appointed. This will be appropriate if particular investigations or technical issues arise.

Licence Granted

The licence must be non-exclusive.  It may only be assigned with the consent of the controller and as part of the assignment of the enterprise or goodwill which uses the invention.

The Controller shall, in determining whether to make an order, take account of the following matters

• the nature of the relevant invention,
• the time which has elapsed since the grant of the patent and
• the measures already taken by the proprietor or any licensee to make full use of the invention,
• the ability of any person to whom a licence would be granted under the order to exploit the patent to the public advantage, and
• the risks to be undertaken by that person in providing capital and exploiting the patent if the application is granted.

The primary purpose of the licence is for domestic demand.  However, the provisions must be exercised in a manner which is consistent with EU law.

Remuneration

The level of remuneration is determined by the Controller.  The  Controller must take account of certain matters, including

• the nature of the invention,
• how long the patent has been granted,
• measures taken by the patentee or licensee to make full use of the invention;
• the ability of the licensee to exploit the patent to the public advantage;
•  risks to be taken by the licensee in providing capital and exploiting the patent.

A licensee under compulsory license may sue for infringement in the same way as a licence.

As of Right Entry

At any time after the expiration of the period of three years beginning on the date of the publication of notice of grant of a patent, or such other period as may be prescribed), any Minister of the Government may apply to the Controller upon any one or more of the grounds specified above for an entry in the register to the effect that licences under the patent are to be available as of right, or for the grant to any person specified in the application of a licence under the patent, and the Controller may, if satisfied that any of those grounds are established, make an order in accordance with the application.

Any Minister of the Government may, at any time after the making of an application for a patent, do for the service of the State any of the following acts in the State in relation to an invention which is the subject of the application or patent, without the consent of the applicant for or the proprietor of the patent, that is to say—

•  where the invention is a product, make, use, import or stock the product or dispose of or sell or offer to dispose of or sell it to any person;
• where the invention is a process, use it or do in relation to any product obtained directly by means of the process
• supply or offer to supply to any person any of the means relating to an essential element of that invention for putting the invention into effect.

Service of the State implies service funded by public monies. This right is recognised internationally, provided that adequate remuneration is paid to the patent holder.

Under Irish legislation, terms may be agreed upon or referred to the High Court, which can refer the matter to an arbitrator.

Exceptional State Licence

Where the Government is of the opinion that, owing to the existence of exceptional circumstances, it is desirable in the interests of the community that the below power should be available, they may by order declare that the power shall be available. During any such period,  the Minister shall have the power to use the invention for any purpose which appears to be necessary or expedient is permitted

• for the maintenance of supplies and services essential to the life of the community;
• for securing a sufficiency of supplies and services essential to the well-being of the community;
• for promoting the productivity of commerce and industry, including agriculture;
• generally for ensuring that the whole resources of the community are available for use and are used in a manner best calculated to serve the interests of the community;
• for assisting the relief of suffering and the restoration and distribution of essential supplies and services in any country or territory other than the State that is in grave distress; or
• for ensuring the public safety and the preservation of the State.

Void Conditions

The following contract clauses are void in patent licences and assignments.

• a prohibition of or limitation on the use of a product supplied by or of a patented protected process owned by anyone other than the supplier, licensor or nominee,
• a requirement to purchase other products from the patent holder or his nominee.

The above conditions can be validly contracted if the licensee or purchaser can enter the contract on reasonable terms and can relieve himself from his liability to comply with the conditions on giving the other party three months’ notice and on payment of compensation or royalty.

A licence agreement relating to a patented product or process may be terminated by three months’ notice in the event that the patent ceases to have effect.  This applies irrespective of any term to the contrary.

It shall not be lawful to include in any contract in relation to the sale or lease of, or licence to use or work, any product or process which is the subject of a patent application or patent a condition which, directly or indirectly, would

• prevent or restrict a party to the contract from using any product or process, whether or not the subject of a patent application or patent, which in either case is supplied or owned by any person other than a party to the contract or his nominee;
• require any such party to acquire from any other such party, or his nominee, any product which is not the subject of a patent application or a patent; and any such condition, if so included, shall be null and void;