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Legislative Implementation of Flexibilities - South Africa

Title:Sections 55-56 of the Patents Act No. 57 of 1978 as last amended by Act, No. 58 of 2002
Field of IP:Patents
Type of flexibility:Compulsory licenses and government use
Summary table:PDF

Provisions of Law

55. Compulsory licences in respect of dependent patents.

Where the working of a patent (hereinafter referred to as a dependent patent) without infringement of a prior patent is dependent upon the obtaining of a licence under that prior patent, the proprietor of the dependent patent may, if agreement cannot be reached as to such licence with the proprietor of the prior patent, apply to the commissioner for a licence under the prior patent, and the commissioner may grant such a licence on such conditions as he may impose, but including a condition that such licence shall be used only for the purpose of permitting the dependent patent to be worked and for no other purpose: Provided that the commissioner shall not grant such a licence unless-

(a) the invention claimed in the dependent patent involves an important technical advance of considerable economic significance in relation to the invention claimed in the prior patent;

(b) the proprietor of the dependent patent granted the proprietor of the prior patent on reasonable terms a cross-licence to use the invention claimed in the dependent patent; and

(c) the use authorised in respect of the prior patent is not assignable except with the assignment of the dependent patent.

[S. 55 amended by s. 44 of Act No. 38 of 1997.]

56. Compulsory licence in case of abuse of patent rights.

(1) Any interested person who can show that the rights in a patent are being abused may apply to the commissioner in the prescribed manner for a compulsory licence under the patent.

(2) The rights in a patent shall be deemed to be abused if-

(a) the patented invention is not being worked in the Republic on a commercial scale or to an adequate extent, after the expiry of a period of four years subsequent to the date of the application for the patent or three years subsequent to the date on which that patent was sealed, whichever period last expires, and there is in the opinion of the commissioner no satisfactory reason for such non-working;

(b) [Para. (b) deleted by s. 45 (b) of Act No. 38 of 1997.]

(c) the demand for the patented article in the Republic is not being met to an adequate extent and on reasonable terms;

(d) by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry or agriculture of the Republic or the trade of any person or class of persons trading in the Republic, or the establishment of any new trade or industry in the Republic, is being prejudiced, and it is in the public interest that a licence or licences should be granted; or

(e) the demand in the Republic for the patented article is being met by importation and the price charged by the patentee, his licensee or agent for the patented article is excessive in relation to the price charged therefor in countries where the patented article is manufactured by or under licence from the patentee or his predecessor or successor in title.

(3) The patentee or any other person appearing from the register to be interested in the patent may in the prescribed manner oppose the application.

(4) (a) The commissioner shall consider the application on its merits and may order the grant to the applicant of a licence on such conditions as he or she may deem fit, including a condition precluding the licensee from importing into the Republic any patented articles.

[Para. (a) substituted by s. 45 (c) of Act No. 38 of 1997.]

(b) If the commissioner is of the opinion that an order directing the grant of a licence is not justified, he may refuse the application.

(c) A licence granted under this section shall include a provision that, subject to adequate protection of the legitimate interests of the licensee, the licence shall, on application by the patentee, be terminated if the circumstances which led to its grant cease to exist and, in the opinion of the commissioner, are unlikely to recur.

[Para. (c) added by s. 45 (d) of Act No. 38 of 1997.]

(5) Any licence granted under this section shall be non-exclusive and shall not be transferable except to a person to whom the business or part of the business in connection with which the rights under the licence were exercised has been transferred.

[Sub-s. (5) substituted by s. 45 (e) of Act No. 38 of 1997.]

(6) [Sub-s. (6) deleted by s. 45 ( f ) of Act No. 38 of 1997.]

(7) In determining the conditions on which any licence is granted the commissioner shall have regard to any relevant facts, including the risks to be undertaken by the licensee, the research and development undertaken by the patentee and the terms and conditions usually stipulated in licence agreements in respect of the subject-matter of the invention, between persons who voluntarily enter into such agreements.

(7A) The commissioner may order that a licence granted in terms of this section shall be deemed to have been granted on the date on which the application has been received by the registrar.

[Sub-s. (7A) inserted by s. 2 (b) of Act No. 76 of 1988.]

(8) Any order of the commissioner under this section shall be made with a view to avoiding the abuse found by the commissioner to have been established.

(9) The commissioner may amend or revoke any licence granted under this section.

(10) Subject to the conditions that may be attached to the licence, a licensee under this section shall have the same rights and obligations as any other licensee under a patent.

[Sub-s. (10) substituted by s. 45 (g) of Act No. 38 of 1997.]

(11) [Sub-s. (11) deleted by s. 45 (h) of Act No. 38 of 1997.]

(12) [Sub-s. (12) deleted by s. 45 (h) of Act No. 38 of 1997.]

(13) (a) The commissioner may, when ordering the grant of a licence under subsection (4) (a), award costs against the applicant or patentee concerned or any person opposing the relevant application.

(b) In so awarding costs, the commissioner shall inter alia have regard to-

(i) the nature and extent of the abuse found by him to have been established; and

(ii) whether the application for a licence under this section might have been avoided by the grant, by the patentee concerned to the applicant, of a voluntary licence on reasonable terms.

(14) For the purposes of this section the expression "patented article" includes any composition of matter or any product of a patented process or method or any product produced by a patented machine.

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