[Pharm-policy] FTAA text on compulsory licensing of patents
James Love
love@cptech.org
Tue Jul 3 18:36:05 2001
These are the various provisions under consideration
for compulsory licensing, in the July 3, 2001 FTAA
negotiating text.
[Article XX. Other Use Without Authorization of the Right
Holder
Article 31 of the TRIPs Agreement shall apply , mutatis
mutandis, to use without the right holder's authorization. ]
[Article XX. Other Use Without consent of the Right Holder
When the law of a Party allows for other use of the subject
matter of a patent, different from those permitted under the
previous article, 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 Party 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;
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 Party 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;
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;
k) The Parties shall not be 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; and
l) where such use is authorized to permit the exploitation
of a patent ("the second patent") which cannot be exploited
without infringing another patent ("the first patent"), the
following additional 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-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. ]
[Article XX. Other Use Without Authorization of the Right
Holder]
1. [Members shall have the right to determine the grounds or
reasons for authorizing use, by third parties without the
authorization of the right holder, that are different from
the limitations and exceptions established in this chapter.]
2. Where the law of a Member allows for other use 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 o 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 ("the second patent") which
cannot be exploited without infringing another patent
("the first patent"), the following additional
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-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.
3. Each Member shall have the right to take legislative
measures providing for the grant of compulsory licenses to
prevent the abuses which may result from the exercise of the
exclusive right to conferred by the patent , for example,
failure to work.]
4. [A compulsory license may not be applied for on the
ground of failure to work or insufficient working before the
expiration of a period of four years from the date of filing
of the patent application or three years from the date of
the grant of the patent, whichever period expires last; it
shall be refused if the patentee justifies his inaction by
legitimate reasons. Such a compulsory license shall be non-
exclusive and shall not be transferable, even in the form of
the grant of a sub-license, except with that part of the
enterprise or goodwill which exploits such license.]
[ Article XX: Other Uses without the Consent of the Right
Holder
When the national legislation of a Party authorizes other
uses 1 of the patent product without the consent of the
copyright holder, including the use by government or third
parties authorized by government, the following provisions
shall be respected:
a) Authorization for said uses shall be considered
according to their particular circumstances;
b) Those uses will be permitted only when, before
granting them, the potential user attempted to receive
the copyright holder's authorization to use those
rights under reasonable commercial terms and
conditions, and those attempts did not have the desired
effect in a reasonable period of time. The Parties may
be exempted from this commitment in cases of national
emergency or other circumstances of extreme urgency, or
for non-commercial public use. However, in situations
of national emergency or other circumstances of extreme
urgency, the copyright holder shall be informed of this
fact as soon as is reasonably possible. In the case of
non-commercial public use, when the government or
contractor, without undertaking a patent search, knows
or has demonstrable reasons to believe that a valid
patent is or will be used by or for a government, the
copyright holder shall be informed without delay.
c) The scope and duration of the uses shall be limited
to the purposes for which they were authorized and in
the case of semi-conductor technology, they can only be
used for non-commercial public use or to correct a
practice declared to be contrary to competition due to
an administrative or legal procedure;
d) The uses will be of a non-exclusive nature;
e) The uses shall only be ceded with that part of the
enterprise or its intangible assets that benefit from
them;
f) These uses shall be authorized mainly to supply the
domestic market of the Party granting such uses;
g) The authorization for said uses may be withdrawn on
condition that the legitimate interests of the persons
who have received the authorization for those uses are
adequately protected, if the circumstances leading to
this situation have disappeared and are not likely to
reoccur. The competent authorities shall be authorized
to examine if those circumstances still exist, if a
previous justified request has been made;
h) The copyright holder shall receive appropriate
remuneration, according to the individual circumstances
of each specific case, bearing in mind the economic
value of the authorization;
i) The legal validity of any decision relative to the
authorization of these uses shall be subject to legal
review or another independent review by a different
higher authority from the same Party;
j) Any decision referring to the established
remuneration for those uses shall be subject to legal
review or another independent review by a different
higher authority from the same Party;
k) The Parties shall not be obliged to apply the
conditions set out in sections b) and f), when
authorization has been granted for those uses to remedy
a practice which, due to a legal or administrative
procedure, has been found to be anti-competitive. The
need to correct the anti-competitive practices may be
considered when determining the amount of remuneration
for those cases. The competent authorities shall have
the power to refuse revocation of the authorization, if
it is probable that the conditions, which gave rise to
that situation, might reoccur;
l) When the authorization for those uses has been
granted to allow the exploitation of a patent ("second
patent") that cannot be exploited without infringing
upon another patent ("first patent"), the following
additional conditions must be followed:
i) The invention claimed in the second patent
assumes that an important technical development of
considerable economic value has been made in
comparison to the invention claimed in the first
patent;
ii) The holder of the first patent shall have the
right to a crossover license with adequate
conditions to exploit the claimed invention of the
second patent; and
iii) The authorized use for the first patent may
not be transferred without the surrender of the
second patent. ]
[ Article XX. Other uses without consent of the right holder
1. On expiration of a three-year period following a patent
grant, or four years following the application for a patent,
whichever is longer, the competent national office may grant
a compulsory license mainly for the industrial manufacture
of the product covered by the patent, or for full use of the
patented process, at the request of any interested party,
but only if, at the time of the request, the patent had not
been exploited in the manner specified in Articles 59 and
60, in the Party in which the license is sought, or if the
exploitation of the invention had been suspended for more
than one year.
2. Compulsory licenses shall not be granted if patent
owners are able to give valid reasons for their failure to
act, which may be reasons of force majeure or an act of God,
in accordance with the domestic provisions in effect in each
Party.
3. A compulsory license shall be granted only if, prior to
applying for it, the proposed user has made efforts to
obtain a contractual license from the patent holder on
reasonable commercial terms and conditions and that such
efforts were not successful within a reasonable period of
time
4. Following the declaration by a Party of the existence
of public interest, emergency, or national security
considerations, and only for so long as those considerations
exist, the patent may be subject to compulsory licensing at
any time. In that case, the competent national office shall
grant the licenses that are applied for. The owner of the
patent so licensed shall be notified as soon as is
reasonably possible.
5. Parties shall specify the scope or extent of the
compulsory license and, in particular, the term for which it
is granted, the subject matter of the license, and the
amount of remuneration and the conditions for its payment.
6. The grant of a compulsory license for reasons of public
interest shall not reduce the right of the patent owner to
continue exploiting it.
7. Parties shall refuse termination of a compulsory
license if and when the conditions that led to the granting
of the license are likely to recur.
8. Parties shall grant a license, upon request by the
owner of a patent whose exploitation necessarily requires
the use of another patent, and that right holder has been
unable to secure a contractual license to the other patent
on reasonable commercial terms. That license shall subject
to the following conditions:
a) 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;
b) the owner of the first patent shall be entitled to a
cross-license on reasonable terms to use the invention
claimed in the second patent; and,
c) the license authorized in respect of the first patent
shall be non-assignable except with the assignment of the
second patent.
9. The provisions of this article shall be applied to
cases covered by Title XIII of the present agreement. ]
_______________________________
1 The words "other uses" refer to uses different to those
authorized by the preceding article.