law enforcement

Compulsory Licence for Exploitation of a Patent

Compulsory Licence for Exploitation of a Patent

Article 48 Where any entity which is qualified to exploit the invention or utility model has made a request for authorization from the patentee of an invention or a utility model to exploit its or his patent on reasonable terms and has been unable to obtain such authorization within a reasonable period of time, the patent administration department under the State Council may, upon the application of that entity, grant a compulsory license to exploit the patent for the invention or utility model.

Article 49 Where a national emergency or an extraordinary state of affairs occurs, or where the public interest so requires, the patent administration department under the State Council may grant a compulsory license to exploit the patent for invention or utility model.

Article 50 Where the invention or utility model for which the patent right has been granted constitutes important technical advance of considerable economic significance compared with another invention or utility model for which a patent right has been granted earlier and the exploitation of the later invention or utility model depends on the exploitation of the earlier invention or utility model, the patent administration department under the State Council may, upon the request of the later patentee, grant a compulsory license to exploit the earlier invention or utility model.

Article 51 Any entity or individual applying for a compulsory licence in accordance with the provisions of this Law shall furnish proof that it or he has not been able to conclude a licensing contract on reasonable terms with the patentee.

Article 52 The decision made by the patent administration department under the State Council granting a compulsory license for exploitation shall be notified promptly to the patentee concerned, and shall be registered and announced.

In the decision granting the compulsory license for exploitation, the scope and duration of the exploitation shall be specified on the basis of the reasons justifying the grant. If and when the circumstances which lead to such compulsory license cease to exist and are unlikely to recur, the patent administration department under the State Council may, upon the request of the patentee, terminate the compulsory license after examination.  

Article 53 Any entity or individual that is granted a compulsory licence shall not have an exclusive right to exploit the patent in question, nor shall it or he have the right to authorize exploitation of the patent by others.

Article 54 Any entity or individual that is granted a compulsory licence shall pay the patentee a reasonable exploitation fee. The amount of the fee shall be decided by both parties through consultation. Where the parties fail to reach an agreement, the patent administration department under the State Council shall make a ruling. 

Article 55 Where the patentee is not satisfied with the decision of the patent administration department under the State Council granting a compulsory license for exploitation, or where the patentee or the entity or individual that is granted the compulsory license for exploitation is not satisfied with the ruling made by the patent administration department under the State Council  regarding the fee payable for exploitation, he or it may, within three months from the date of receipt of the notification, institute legal proceedings in the people’s court.