Chinese Patent Law-Compulsory Licensing of Patent Enforcement

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Release time:2016-07-19

Chapter VI Compulsory Licensing of Patent Enforcement

Article 48 Under any of the following circumstances, the Patent Administration Department under the State Council may grant a compulsory license to implement a patent for invention or utility model on the basis of an application by an entity or individual that is qualified for implementation:

(I) the patentee fails to implement or insufficiently implement his patent without justifiable reasons within three years from the date of grant of the patent right and four years from the date of filing the patent application;

(II) the patentee's act of exercising the patent right is recognized as a monopolistic act in accordance with the law, in order to eliminate or reduce the adverse impact of the act on competition.

Article 49 In the event of a state of emergency or an extraordinary situation in the country, or for the purpose of public interest, the patent administration department under the State Council may grant a compulsory license to enforce the patent for invention or utility model.

Article 50 For the purpose of public health, the patent administration department under the State Council may grant a compulsory license to manufacture and export a pharmaceutical for which a patent right has been granted to a country or region that complies with the provisions of the relevant international treaty to which the People's Republic of China is a party.

Article 51 Where an invention or utility model for which a patent right has been obtained is a major technological advance of significant economic significance over an invention or utility model for which a patent right has been obtained previously, and its implementation depends on the implementation of the previous invention or utility model, the patent administration department under the State Council may, upon the application of the latter patentee, grant a compulsory license to implement the previous invention or utility model.

Where a compulsory license is granted in accordance with the preceding paragraph, the patent administration department under the State Council may, upon the application of the previous patentee, also grant a compulsory license to implement the latter invention or utility model.

Article 52 Where the invention-creation involved in the compulsory license is semiconductor technology, its implementation shall be limited to the purpose of public interest and the circumstances specified in Item (II) of Article 48 of this Law.

Article 53 Except for the compulsory license granted in accordance with Item (II) of Article 48 and Article 50 of this Law, the compulsory license shall be implemented mainly for the purpose of supplying the domestic market.

Article 54 An entity or individual applying for a compulsory license in accordance with the provisions of Item (I) of Article 48 and Article 51 of this Law shall provide evidence to prove that it has requested the patentee to license it to work the patent on reasonable terms, but has failed to obtain the license within a reasonable time.

Article 55 Where the administrative department for patent under the State Council makes a decision to grant a compulsory license for exploitation, it shall promptly notify the patentee, and shall register and announce it.

The decision to grant a compulsory license for implementation shall stipulate the scope and time of implementation in accordance with the reasons for the compulsory license. When the reasons for the compulsory license are eliminated and no longer occur, the patent administration department of the State Council shall, upon the request of the patentee, make a decision to terminate the compulsory license after examination.

Article 56 A unit or individual that has obtained a compulsory license for implementation shall not have the exclusive right to implement it and shall not have the right to allow others to implement it.

Article 57 The entity or individual that obtains a compulsory license for exploitation shall pay the patentee a reasonable royalty or deal with the issue of the royalty in accordance with the provisions of the relevant international treaties to which the the People's Republic of China is a party. Where a royalty is paid, the amount shall be negotiated between the two parties; if the two parties fail to reach an agreement, the patent administration department under the State Council shall make a ruling.

Article 58 If the patentee is not satisfied with the decision of the administrative department for patent under the State Council on the compulsory license, if the patentee and the unit or individual that has obtained the compulsory license are not satisfied with the ruling of the administrative department for patent under the State Council on the royalties for the compulsory license, they may, within three months from the date of receipt of the notice, bring a suit in a people's court.