The State Intellectual Property Office's recently revised Measures for Compulsory Licensing of Patent Implementation came into force on May 1 2012. They combine the previous version of the measures, as promulgated in 2003, with the Special Measures for Compulsory Licensing on Patent Implementation Concerning Public Health, which were promulgated in 2005.
Under the 2003 measures an applicant could seek a compulsory licence:
- if it had been unable to obtain a licence after a reasonable period of negotiation based on fair and reasonable terms, where the implementation of an invention or utility model constituting a significant advance was reliant on the use of a previously granted patent;
- on the grounds of public health; and
- in an emergency.
The 2012 measures create two more grounds, allowing for applications for compulsory licences where:
- the patent in question has not been used for four years from the application date or three years from the grant date; or
- the act of claiming the patent right is deemed to violate the Anti-monopoly Law.
No indication is given of what constitutes sufficient or insufficient use. The State Intellectual Property Office will determine the issue on a case-by-case basis.
In addition, the public health criterion has been considerably expanded. In the 2005 measures it was limited to contagious diseases, but this restriction has been lifted.
The scope of a compulsory licence, which was formerly limited to the domestic market, has now been extended to exports.
There have been no instances of compulsory patent licensing in China since the patent legislation system was founded. Will the new measures change this?
A number of new trends could develop. Would-be applicants for compulsory licensing may start to search for unused patents as the basis for an application. Moreover, such parties may be more willing to file antitrust cases before the courts or with the Anti-monopoly Investigation Bureau in order to obtain a decision or ruling that can be used as evidence in compulsory licensing proceedings.
However, the new measures do not mean that compulsory licences will be easy to obtain. The absence of precedent under the previous measures and the sensitivity of the issue of compulsory licensing in general suggest that State Intellectual Property Office is likely to take a circumspect approach, especially in the case of patents that may affect the public interest.
For further information on this topic please contact Zhang Yan at Wan Hui Da Law Firm & Intellectual Property Agency by telephone (+86 10 6892 1000), fax (+86 10 6894 8030) or email (zhangyan@wanhuida.com).