[Ip-health] Philips seeks WTO help in Taiwan compulsory licensing dispute

[robert weissman]

I'm not sure who the unnamed IPR experts are, referenced at the bottom
of this story, but their claim that Taiwanese law conflicts with TRIPS
obligations appears specious.

The key and very interesting Taiwanese patent law provision follows this
article.

Robert Weissman
Essential Action

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Philips seeks WTO help in Taiwan dispute
By Kathrin Hille in Taipei
Financial Times
Updated: 2:40 a.m. ET Jan 16, 2007

Philips, the Dutch electronics group, will file a formal request to the
European Commission Monday to seek a ruling from the World Trade
Organisation in a patent dispute with Taiwan's government, according to
sources close to the company.

The move aims to force Taipei to respond to growing discontent among
foreign businesses with the island's attitude towards protecting
intellectual property rights.

Philips' complaint focuses on the Taiwan government's decision to grant
a compulsory licence to Giga Storage, a small local company, to produce
and sell CD-Roms using patents held by Philips.

Taipei earned praise after its WTO accession in 2002 for improving
copyright protection through legal amendments and stricter prosecution
of infringements, efforts that helped it get off the US Trade
Representative's priority watchlist of violators of intellectual
property rights in 2005.

But foreign investors and legal experts claim the island has changed
course. "The picture has been pretty grim over the past year and a
half," said John Eastwood, a lawyer at Wenger & Vieli and co-chair of
the Intellectual Property Rights Committee of the European Chamber of
Commerce, Taipei.

The Philips case is at the heart of those concerns. In a final ruling
late last year, the government confirmed the compulsory licence against
Philips' appeals. The company opposes it, claiming that the licence is
only legalising the use of patents Giga Storage had been infringing on
earlier, and that Giga Storage is a big exporter =96 contrary to the
requirement that production under compulsory licensing should be
restricted to the domestic market.

But once the dispute moves to the WTO, it is set to address a much
broader controversy. Taiwan's patent law allows compulsory licensing if
an applicant has failed to reach a licensing agreement with the patent
holder =96 a proviso that IPR lawyers believe is not in line with the
Agreement on Trade Related Intellectual Property Rights (Trips).
=A9 The Financial Times Ltd 2007. "FT" and "Financial Times" are
trademarks of the Financial Times.Copyright The Financial Times Ltd. All
rights reserved.

URL: http://www.msnbc.msn.com/id/16640622/

--
http://www.tipo.gov.tw/eng/laws/patlaw-e.asp

Patent Act (Taiwan)
Article 76

In order to cope with the national emergencies, or to make
non-profit-seeking use of a patent for enhancement of public welfare, or
in the case of an applicant's failure to reach a licensing agreement
with the patentee concerned under reasonable commercial terms and
conditions within a considerable period of time, the Patent Authority
may, upon an application, grant a right of compulsory licensing to the
applicant to put the patented invention into practice; provided that
such practicing shall be restricted mainly to the purpose of satisfying
the requirements of the domestic market. However, if the application for
compulsory licensing of a patent right covers semiconductor technology,
such application may be allowed only if the proposed practicing is
purposed for a non-profit-seeking use contemplated to enhance the public
welfare.

In the absence of the conditions set forth in the preceding Paragraph,
the Patent Authority still may, upon an application, grant to the
applicant a compulsory license to practice the patented invention in the
event that the patentee has imposed restrictions on competition or has
committed unfair competition, as confirmed by a judgment given by a
court or a disposition made by the Fair Trade Commission of the
Executive Yuan.

Upon receipt of a written application for such compulsory licensing, the
Patent Authority shall send a duplicate copy thereof to the patentee,
requesting that a response be filed within three (3) months. If no
response is filed within the specified time limit, the Patent Authority
may decide the matter at its own discretion.

The right of compulsory licensing shall not preclude other persons from
obtaining the right to practice the same patented invention.

The grantee of the compulsory license shall pay to the patentee an
appropriate compensation. In the case of dispute over the amount of such
compensation, the amount shall be decided by the Patent Authority.

The compulsory license shall be transacted together with the business
pertaining to the compulsorily licensing for assignment, trust,
inheritance, licensing or pledge creation.

Upon extinguishment of the cause of compulsory licensing, the Patent
Authority may terminate the compulsory license upon an application.

--

DOHA DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH

Paragraph 5(b):

Each member has the right to grant compulsory licences and the freedom
to determine the grounds upon which such licences are granted.

--

TRIPS ARTICLE 31

Article 31
Other Use Without Authorization of the Right Holder

     Where the law of a Member allows for other use (7) of the subject
matter of a patent without the authorization of the right holder,
including use by the government or third parties authorized by the
government, the following provisions shall be respected:

     (a) authorization of such use shall be considered on its individual
merits;

     (b) such use may only be permitted if, prior to such use, the
proposed user has made efforts to obtain authorization from the right
holder on reasonable commercial terms and conditions and that such
efforts have not been successful within a reasonable period of time.
This requirement may be waived by a Member in the case of a national
emergency or other circumstances of extreme urgency or in cases of
public non-commercial use. In situations of national emergency or other
circumstances of extreme urgency, the right holder shall, nevertheless,
be notified as soon as reasonably practicable. In the case of public
non-commercial use, where the government or contractor, without making a
patent search, knows or has demonstrable grounds to know that a valid
patent is or will be used by or for the government, the right holder
shall be informed promptly;

     (c) the scope and duration of such use shall be limited to the
purpose for which it was authorized, and in the case of semi-conductor
technology shall only be for public non-commercial use or to remedy a
practice determined after judicial or administrative process to be
anti-competitive;

     (d) such use shall be non-exclusive;

     (e) such use shall be non-assignable, except with that part of the
enterprise or goodwill which enjoys such use;

     (f) any such use shall be authorized predominantly for the supply
of the domestic market of the Member authorizing such use;

     (g) authorization for such use shall be liable, subject to adequate
protection of the legitimate interests of the persons so authorized, to
be terminated if and when the circumstances which led to it cease to
exist and are unlikely to recur. The competent authority shall have the
authority to review, upon motivated request, the continued existence of
these circumstances;

     (h) the right holder shall be paid adequate remuneration in the
circumstances of each case, taking into account the economic value of
the authorization;

     (i) the legal validity of any decision relating to the
authorization of such use shall be subject to judicial review or other
independent review by a distinct higher authority in that Member;

     (j) any decision relating to the remuneration provided in respect
of such use shall be subject to judicial review or other independent
review by a distinct higher authority in that Member;

     (k) Members are not obliged to apply the conditions set forth in
subparagraphs (b) and (f) where such use is permitted to remedy a
practice determined after judicial or administrative process to be
anti-competitive. The need to correct anti-competitive practices may be
taken into account in determining the amount of remuneration in such
cases. Competent authorities shall have the authority to refuse
termination of authorization if and when the conditions which led to
such authorization are likely to recur;

     (l) where such use is authorized to permit the exploitation of a
patent (=93the second patent=94) which cannot be exploited without
infringing another patent (=93the first patent=94), the following additiona=
l
conditions shall 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 a
cross-licence 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.