After receiving the exclusive right to intellectual property, their owners are faced with the question of production and entry into the market. Often this issue remains unresolved or drags on for a long time. In this case, any interested party can forcibly deprive the copyright holder of the exclusive rights to its development through the court. That is, the patent owner may lose the monopoly on the use of his own invention, utility model or industrial design.
Patent law is based on the fact that the patent holder has a legal monopoly (exclusive right) over intellectual property (IP), but in some cases the copyright holder can abuse his right. To prevent abuse, the Civil Code of the Russian Federation provides for a measure of compulsory licensing, which states that the court can, at the request of an interested person, grant him, under certain conditions, the exclusive right to use a patented IP object, which was insufficiently or not used at all by the patent holder.
Article 1362 of the Civil Code of the Russian Federation states that non-use or limited use of an invention/industrial design by the patent holder within four years from the date of issue of the patent, and a utility model within three years leads to insufficient supply of the corresponding goods, works or services on the market. In this case, any interested party, if the patent holder refuses to conclude a license agreement with him on terms consistent with established practice, has the right to file a lawsuit against the patent holder for a compulsory simple license to use his invention, utility model or industrial design. In this case, the statement of claim must propose the conditions for granting the license, the scope of use of the invention, utility model or industrial design, as well as the amount, procedure and terms of payments.
In turn, the patent holder, in order to maintain a monopoly on the production and sale of his product on the market, must prove that his non-use or limited use of the IP object is due to valid reasons. In this case, the exclusive right is not issued to the interested person, but if the evidence is not presented or is presented insufficiently, the court may decide to issue a compulsory license to the interested person. In this case, the total amount of payments for it is established by a court decision not lower than the price of the license determined under comparable circumstances.
A compulsory license may be terminated at the request of the patent owner if the circumstances that served as the reason for issuing such a license cease to exist, and their occurrence again is problematic. The term and procedure for termination of a compulsory license are established by the court.
A compulsory license can also be obtained by the patent holder of a dependent patent for an invention, utility model or industrial design from the copyright holder of the main patent if he refused to conclude a license agreement on terms consistent with established practice. At the same time, the statement of claim must also indicate the conditions proposed by the owner of the second patent for granting him such a license, as well as the scope of use of the invention or utility model, the size, procedure and terms of payments.
If the patent holder of a dependent invention proves that his invention represents an important technical achievement and has greater economic advantages over the invention or utility model of the owner of the first patent, the court will make a positive decision to issue him a compulsory license. However, the right to use the invention protected by the first patent obtained under this license cannot be transferred to other persons, except in the case of alienation of the second patent. The amount of payments for a compulsory license is also established by the court.
It should be noted that the owner of the first patent also has the right to obtain a compulsory license to use the dependent invention or utility model from the copyright holder in connection with which the compulsory license was issued to him.
Based on the above material, there are a number of main criteria for obtaining a compulsory license for an invention, industrial design, utility model, among which are:
- the object of patent protection should not be used by the patent owner or underused;
- non-use or limited use must occur within a certain time period: for an invention or industrial design - four years from the date of issue of the patent; for a utility model - three years;
- the actions of the patent holder must lead to insufficient supply of the relevant goods, works or services on the market;
- the patent holder refuses to conclude a license agreement.
That is, compliance with all of the above conditions serves as the basis for creating favorable conditions for an interested person to file a claim for the issuance of a compulsory license to the object of patent protection of its copyright holder.
In conclusion, as an example of obtaining a compulsory license, we can cite the case of its provision to the company JSC Pharmasyntez for the drug Remdesivir (a medicine against Covid-19). Despite the fact that the drug belonged to the American company Gilead Sciences and was protected by patents in Russia, the Government of the Russian Federation decided to allow Pharmasyntez JSC to produce and sell it during the pandemic as vital for the population.
