Lots of people (wrongly) believe that, once a technology has been patented, the owner of the patent can make use of his invention and the related technology as if he had a real property right, similar to what you can have on a real estate, and that it is not subjected to limitations. But it is not like that …
Michela Maggi
Lots of people believe that, even if the owner of the patent does not produce or market any product according to the patent, he always remains anyway the only subject who, until the natural expiry of the patent itself, will be authorized to exploit the technology of the patent and that no other will be allowed to do that.
Well: it is not like that. We must in fact consider that inside the discipline about patents there are some provisions that in a certain sense prevent the monopoly technologies for its own sake, which would be in fact contrary to the public interest, which is on the contrary the implementation, diffusion, circulation, exploitation and experimentation of the existing technologies.
The regulations at stake provide in fact for a strong limitation to the powers of the patent owner, whenever he has not produced or imported objects based on the patent, directly or by means of one or more licensees, once elapsed a certain period of time from the date of release or of filing of the patent (three years from the patent release date or four years from the application filing date if this term expires after the previous one). In this precise case, special regulations establish that a third party (which might hypothetically be also a competitor of the patent owner) can ask for a use licence of the technology to the owner itself, licence that the owner must mandatorily grant, without being entitled to refuse it.
It is clearly a pro-competitive provision that allows the circulation of technologies irrespective of the will of those that create and implement them, if the latter does not exploit them as much as possible, and that should then have positive repercussions on the technology world and on the competition among enterprises.
How can you succeed in obtaining the compulsory licence? First of all, the interested party must preventively turn to the patent owner and ask to the latter of signing a contractual licence, obviously at fair conditions (therefore not under heavy conditions established by the patent owner). Only if the owner refuses to grant the licence or to apply fair conditions, then the interested party will ask for the concession of a compulsory licence, proving that he has tried to obtain a contractual licence a priori.
What will the essential conditions and warranties of this licence? First of all, it is worth noticing that the compulsory licence can be granted only against payment, by the interested party and in favour of the patent owner, of a fair amount. Besides, the applicant should provide the necessary warranties concerning a satisfactory implementation of the invention according to specific conditions established in the licence itself; concerning this, we should consider that the compulsory licence can be granted also for an exploitation of the invention prevailingly oriented to the provisioning of the home market. As far as the duration is concerned, the compulsory licence can be obviously granted for a period non exceeding the remaining duration of the patent and besides (unless there is the consent by the patent owner or of his successor in title), it can be transferred only with the company of the interested party or the particular branch where the licence itself is used. The fact that the concerned party becomes licensee according to the granting of the compulsory licence does not prejudice then the exercise by the same interested party of the prosecution aimed at requiring the validity of the patent or the extension of the rights deriving from it. In the decree of concession of the licence issued by competent authorities are then determined in detail the ambit, the duration, the accomplishment modalities, the warranties and other conditions to which is subordinate the concession, the extent and the payment modalities of the due amount.
The compulsory licence is always granted on non-exclusive basis and then the owner is always free of granting other non-exclusive licences to third parties. Nevertheless, if the owner of the patent, for which compulsory licence has been granted, concedes the use of the same patent to third parties at more advantageous conditions than those established for the compulsory licence, the same conditions are extended to the compulsory licence, upon request of the concerned party. The licence conditions can be modified only by decree of the Ministry of Productive Activities, upon request of each of the concerned parties, provided that there are valid reasons. The compensation on the contrary can be modified, if some facts have occurred or have been revealed that make the already fixed compensation appear evidently inadequate. In this case the determination of the measure and the modalities of the compensation payment is provided for by a board of arbitration, composed by three members, one appointed by each of the parties and the third appointed by the first two or, in case of disagreement, by the president of the board of appeal by the Italian Patent and Mark Office. If, after this determination, the amount is clearly unfair or erroneous or if one of the parties refuses to appoint its own arbitrator, the determination is done by the judge.
Who has counterfeited a product protected by patent, can anyway obtain the licence? Obviously the counterfeiter cannot obtain the compulsory licence, it is even expressly excluded by law that he can apply for it. This unless he demonstrates his good faith.
There are other cases, besides the non-use of the patent for a certain period, which can allow third parties to obtain a compulsory licence. This happens, in particular, when the owner of a patent has implemented it to the extent of turning out in “serious disproportion with the needs of the Country” (this is the generic statement of the regulation), or when the implementation of the invention has been, for over three years, suspended or reduced in such a way as to turn out in serious disproportion with the needs of the Country.
The occurred concession of the compulsory licence does not exonerate however the owner of the patent from the burden of anyway implementing the invention. As a matter of fact, if the invention is not carried out either by the licensee or by the patent owner within two years from the date of granting of the first compulsory licence or if it has been implemented in such a way as to turn out in serious disproportion with the needs of the Country, the patent is subjected to forfeiture.
There are then some cases in which the compulsory licence is not granted, that’s to say, in other words, cases in which the owner of the patent is justified for not having used and implemented the invention.
This happens if the missing or insufficient implementation of the technology by the owner is due to causes beyond his control. Among these causes might, at least theoretically, be considered relevant the missing demand from the market, the absence of technical times for the invention implementation (according to the patent duration), the presence on the market of so numerous counterfeiting initiatives as to discourage any investment on the matter. It is worth noticing that the special laws expressly exclude from the causes beyond the patent owner’s will (and therefore do not prevent the granting of the compulsory licence), the shortage of the owner’s financial resources and, if the product is diffused abroad, the missing demand in the home market for the product patented or obtained with the patented process. In other words, if an enterprise does not fulfil the invention for a certain time because affected by a financial crisis, a competitor can obtain a compulsory licence. It has also been affirmed that the granting of a compulsory licence cannot be excluded in case of failure or inertia of the licensee or of the owner, as well as in case of absence of necessary administrative authorizations (provided that they have been timely requested).
ABOUT TIMES …
After three years from the patent release date or four years from the demand filing date, if this term expires after the previous one, a third party can ask for a use licence of the technology to the owner of the patent, licence that the owner must compulsorily grant if in this lapse of time he has neither produced or imported objects based on the patent, directly or by means of one or more licensees.
