Compulsory license

As a compulsory license, a state-ordered restriction of the effect of an intellectual property right is referred to. Such a restriction has the consequence that the owner of the right has its privileges arising therefrom may be prohibited or restricted assert.

Legal foundations

In the German Patent Act as amended in 1877 a judicial redemption of patents was intended to exercise in cases of public interest forced to a patent holder to the effect can be to grant licenses. Since 1911, a court- enforceable compulsory license is provided in German patent law. 2005, the requirement of public interest for owner -related rights has been dropped.

Compulsory licenses are normalized in § 24 of the Patent Law. The utility model law refers in § 20 to the corresponding provisions of the Patent Act. As far as in the text of patents is mentioned, so use patterns are also meant.

Compulsory licenses may indirectly from other legal sources, particularly from the antitrust laws, result.

Requirements

General Requirements

In order to obtain a compulsory license, a licensee must have tried unsuccessfully to obtain from the owner of the property right a license in any case initially.

Furthermore, the property right must already have effect. In a patent application and the granting no property right is created, hence no license to its use may be required.

The licensee must themselves have the ability and the will to use the intellectual property rights for their own account. Thus, a compulsory license may not be assigned to third parties.

If these conditions are met, there are two conditions for the grant of a compulsory license:

• The licensee has a dependent of the property right to be licensed, which represents a significant advancement of technology
• There is a public interest in the grant of a compulsory license.

Public interest

The requirement of public interest is a problem of interpretation and general clause Its content of the concept must be adjusted by considering the particular case of social change. The public interest must be so great that it justifies the serious interference with a property right. Of the cases where the public interest was affirmed, two are particularly relevant:

Barrier to market entry by an intellectual property right related standard

This case is based on the anti-trust law, particularly the Law against Restraints of Competition ( ARC).

When to use an industry standard or a standard similar agreement, the use of a property right is necessary, then, the title owner entrant could arbitrarily exclude from the market, which is operated with the industry standard. This right is a fundamental part of the effect of a property right. In addition to "reward " the monopoly of the right holder, a protective law also aims to encourage competitors to find more, not affected by the intellectual property rights solutions to a problem when a licensing - is not possible - for whatever reason.

Where a market participant, however, compelled by a Standard or an agreement that eludes his influence to use a property right, then he does not have the possibility of switching to alternative solutions. Can he not use the intellectual property right, so he is excluded from its market. This would enable the right-holder, would you give him to arbitrarily keep competitors. This is contrary to the public interest, which is to have a functioning competition. This weighs heavier than in the present case the public interest in the reward of technical development.

Is there any antitrust claim for a compulsory license, it can be asserted by way of objection in violation process. In patent law practice, this claim has gained special importance, since proprietary technologies are increasingly being taken into account in the definition of standards.

General Health Care

A public interest is also the fact that medical cure processes and pharmaceuticals principle ( in the legal sense ) each should be accessible. This accessibility is not thereby not already given that a healing process or a drug is offered subjectively too expensive. Rather, a particularly high benefit must be available, for example, by the fact that common diseases with good chances of success are treatable for the first time, the domestic market is insufficient supply istoder if the new drug therapeutic properties that could previously not achieved or achieved only with side effects have. Public interest is not, however, be given when the therapeutic results can be achieved with other, more or less equivalent, alternative preparations.

Other examples

Other cases in which the public interest was affirmed, related to the increase in the reliability and security of employment, the prevention of redundancies in a large scale due to the danger of industries and ensuring the uninterrupted supply of electricity.

Procedures and judgment

The Patent Act provides that a compulsory license by action before the Federal Patent Court can be achieved. Such an action must be directed against the registered owner in the register, not against an exclusive licensee.

A claim under the antitrust laws, however, is to sue before the ordinary courts.

In its judgment, the scope of the compulsory license must be set. A compulsory license may be extensive or limited. It is conceivable, a time limit or a restriction on a particular claim. It is also possible to include a condition subsequent, for example, for the case that the supply situation in the country improves.

Effects

Licensee is granted the compulsory license the right to use the intellectual property right. In return, he must pay an adequate remuneration.

If the compulsory license on an older patent has been granted, of which a recent patent by the licensee is dependent, so the owner of the earlier patent by the licensee may request a cross-license.

In voluntarily concluded license agreements is usually agreed that the License Agreement is to be resolved if the licensee engages the intellectual property right, such as with an action for annulment. This restriction does not apply to a compulsory license.

Compulsory license in copyright

In § 42a German Copyright Act ( Copyright Act) a compulsory license for phonogram producers is provided. Once an originator to a phonogram producer grants a right of reproduction and distribution of the protected work, he or she must also each phonogram producers, who has a seat on the scope of the Copyright Act, grant on reasonable terms.

Excluded are copyright, which have given the rights to a collecting society.