[Pharm-policy] Dominican IPR legislation (compulsory licensing sections)

[Thiru Balasubramaniam]

Proposed Dominican Republic legislation on Industrial Property

The USPTO provided Consumer Project on Technology this December 1999
English translation of the proposed Dominican Republic legislation on
Industrial Property. These are the sections
pertaining to compulsory licensing. 

http://www.cptech.org/ip/health/domrep/driprdec99.html

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SECTION IV

OBLIGATORY LICENSES AND OTHER MEASURES RELATED TO THE
EXPLOITATION OF PATENTS

Article 347.- Exploitation of the Patent

For the effects of Article 349 of this law, exploitation of a patent is
understood as follows:

a) When the patent has been granted for a product or for a procedure for
the obtaining of a product, supply to the internal market in reasonable
quantity, quality and price, through production in this country and
importation.

b) When the patent has been granted for a procedure not included in
subparagraph a), the use of the procedure on a commercial scale in this
country.

Article 348: Obligatory Licenses

348.1 When a potential user has attempted to obtain the granting of a
license from the patent. holder under reasonable--commercial terms and
conditions and such attempts have not been effective after a period of
one hundred eighty (180) days, counted from the date on which the
respective license was applied for, the General Agency for Industrial
Property, after prior hearing of the holder, shall issue obligatory
licenses relating to that patent.

348.2 To determine what is understood by reasonable commercial terms and
conditions, the particular circumstances of each case and the economic
value of the authorization must be taken into account, keeping in mind
the average rate of royalties for the sector in question in contracts
for commercial licenses between independent parties.

Article 349.- Obligatory License for Lack of Exploitation

349.1 After three (3) years from the granting of the patent, or four (4)
years from the filing of the application, applying whichever term
expires later, if the invention has not been exploited or when the
exploitation of the same has been interrupted for more than one (1) year
without justifiable cause, any person with the ability to exploit the
invention may apply to the General Agency for Industrial Property to
grant him or her an obligatory license for the patent in question.

349.2 An obligatory license shall not be granted when it is demonstrated
that the lack or insufficiency of exploitation is due to fortuitous
circumstances or force majeure, or to circumstances beyond the will or
control of the patent holder and which justify the lack or insufficiency
of exploitation. The lack of economic
resources and the lack of economic viability of the exploitation are not
considered justifying circumstances.

Article 350.- Obligatory Licenses for Anti-competitive Practices

350.1 Obligatory licenses shall be granted when the General Agency for
Industrial Property has determined that the patent holder has indulged
in anti-competitive practices. In such cases, without prejudice to the
appeals available to the patent holder, the concession shall be carried
out without the need to apply the procedure set forth in subparagraph c)
of Article 352.

350.2 For the purposes of this law, the following practices, among
others, are considered to be anti-competitive: a) Setting excessive or
discriminatory prices for the patented products. In particular, when
there are offers of supply to the market at prices significantly lower
than those offered by the patent holder for the same product.

b) Failure to supply the market under reasonable commercial
conditions.

c) Hindrance of commercial or productive activities

d) The other actions set forth as such by this code and every other
action, which national legislation typifies as anti-competitive,
limiting or restrictive to competition.

Article 351: Application for and Granting of Obligatory Licenses

351.1 Any person interested in obtaining an obligatory license must
apply for it to the General Agency for Industrial Property.  The
application must indicate the conditions under which he or she intends
to obtain the obligatory license.

351.2 The person applying for an obligatory license must confirm that he
or she has previously requested a contractual license from the patent
holder, and has not been able to obtain it under the conditions and
within the time limits set forth in Article 348. It shall not be
necessary to fulfill this requirement in cases of national emergency or
extreme urgency, or cases of a commercial use of the invention by a
public agency. In such cases the patent holder shall be informed without
delay of the granting of the license. Nor shall it be necessary to
fulfill that requirement when the purpose of the license is to remedy an
anti-competitive practice.

351.3 Without prejudice to that which is set forth in Article 351.2, the
General Agency for Industrial Property shall notify the patent holder of
an application for obligatory license within a period of thirty (30)
days, counted as of day of the filing of the application.

351.4 The patent holder must present his statements and arguments within
a time limit no more than sixty (60) days, counted from the date of
notification of the application for an obligatory license. If this time
limit passes without the holder having expressed himself, the conditions
presented by the applicant shall be considered as accepted.

351.5 In case the holder responds, the General Agency for Industrial
Property, after first hearing the parties and if they should not come to
agreement, shall set a reasonable remuneration which the patent holder
shall receive, which shall be established according to Article 348.

351.6 The decisions with reference to the granting of these uses must be
adopted within one hundred twenty (120) days from the filing of the
application and the same shall be appealable. The substantiation of the
appeal shall not have the effect of suspension.

Article 352.- Conditions for the Granting of Obligatory Licenses

352.1 To grant obligatory licenses, the following provisions must be
observed:

a) The granting of same must be by the General Agency for Industrial
Property.

b) The circumstances of each case shall be considered.

c) The obligatory licenses shall be extended to patents relating to the
components and processes permitting their exploitation

d) The granting of these licenses shall not be exclusive.

e) They may not be assigned, except for that part of the company or of
its intangible asset that forms part of it.

f) They shall be granted principally to supply the internal market,
except in the cases established in Articles 349 and 354.

g) The patent holder shall receive a reasonable remuneration, according
to the circumstances of each case, taking into account the economic
value of the authorization. In determining the amount of the
remuneration in cases in which the obligatory licenses have been granted
to remedy anti-competitive practices, the necessity of correcting such
practices shall be taken into account and the revocation of the grant
may be denied if it is considered probable that the conditions that
caused that granting have been repeated.

352.2 The person to whom the obligatory license is granted must begin
its exploitation within two years of the granting of the license to him.

352.3 When the patent protects any semiconductor technology, obligatory
licenses shall be granted only for non-commercial public use, or to
rectify a practice declared to be contrary to competition.

352.4 An obligatory license may be completely or partially revoked by
the court created by this Code, upon request by the holder, if the
circumstances that gave rise to the license have ceased to exist and it
is improbable that they will again arise, so long as such revocation
does not affect the legitimate interests of the licensee.

352.5 An obligatory license can be modified by the court created by this
Code, upon application by an interested party, when so justified by new
facts or circumstances.

Article 353: Obligatory License in the Case of Dependent Patents

353.1 When an invention claimed in a subsequent patent cannot be
exploited in this country without infringing an earlier patent, the
General Agency for Industrial Property, upon the request of the holder
of the first mentioned patent or of his licensee, or of the beneficiary
of an obligatory license for that patent, may grant an obligatory
license with regard to the earlier patent insofar as may be necessary to
avoid the infringement.

353.2 The obligatory license shall be granted only when the invention
claimed in the subsequent patent implies an important technical advance
of considerable economic significance with regard to the invention
claimed in the earlier patent.

353.3 When an obligatory license is granted in conformity with Article
353.1, an obligatory license may be granted in the same circumstances
with regard to the later patent, if the holder of the earlier patent,
his licensee or the beneficiary of an obligatory license for said
earlier patent applies for it.

353.4 An obligatory license of those set forth in this article cannot be
granted as exclusive. This obligatory license can only be the object of
transfer simultaneously with the dependent patent the industrial
exploitation of which requires the license.  The transfer of the
obligatory license shall be subject to the provisions of Article 340.2,
insofar as is appropriate.

353.5 The provisions of Articles 351 and 35L insofar as they are
appropriate, are applicable to the licenses set forth in this article.

Article 354: Public Interest Licenses

For reasons of public interest, and in particular for reasons of
emergency or national security declared by the Executive Power, the
General Agency for Industrial Property, at the request of any interested
person or competent authority, or on its own initiative, shall at any
time order the following:

a) that an invention which is the object of a patent or patent
application being processed be exploited by a government agency or by
one or more public or private persons designated for the purpose.

b) that an invention that is the object of a patent or of a patent
application being processed be open for the granting of licenses in the
public interest, in which case the General Agency for Industrial
Property. shall grant a license for exploitation to any person who
applies for it and has the ability to carry out such exploitation in
this country.

Article 355: Conditions for Public Interest Licenses

355.1 Every public interest license implies the corresponding payment to
the patent holder. After prior hearing of the parties, and in the
absence of an agreement, the amount and method of payment shall be set
by the General Agency for Industrial Property.

355.2 A public interest license can refer to the execution of any of the
actions referred to in Article 337.1

355.3 The provisions of Articles 351 and 352, insofar as appropriate,
are applicable to the granting of public interest licenses.

355.4 The granting of an obligatory license by reason of public interest
shall not diminish the right of the patent holder to continue exploiting
it.

Article 356: Revocation of the Patent in Case of Abuse

356.1 At the request of any interested person or of any competent
authority, the General Agency for Industrial Property can revoke a
patent when the rights conferred by the patent are abused with regard to
anti-competitive practices or abuse of a dominant market position in
such a way that the national economy is unduly affected.

356.2 The request for revocation may not be presented until two years
have passed counting from the date of granting of the first obligatory
license.