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Legislative Implementation of Flexibilities - Philippines

Title:Sections 74, 93-97 and 100 of the Intellectual Property Code, Act No. 8293 of 06/06/1997 (as last amended by Act No. 9502 of 2008)
Field of IP:Patents
Type of flexibility:Compulsory licenses and government use
Summary table:PDF

Provisions of Law

Use of Invention by Government.-

74.1 A Government Agency of third person authorized by the Government may exploit the invention even wothout the agreement of the patetn owner where:

(a) The public interest, in particular national security, nutrition, health or the development of other sectors, as determined by the appropriate agency of the government, so requires;

or

(b) A judicial or administative body has determined that the manner of exploitation, by the owner of the patent or his licensee, is anti-competitive; or

( c) In the case of drugs and medicines, there is a national emergency or other circumstance of extrem urgency requiring the use of the invention; or

(d) In the case of drugs and medicines, there is non-commercial use of the patent by the patentee, without satisfactory reason; or

(e) In the case of drugs and medicines, the demand for the patented article in the Philippines is not being met to an adequate extent and on reasonable tems, as determined by the Secretary of the Department of Health.(…)

Grounds for Compulsory Licensing

93. The Director General of the Intellectual property Office may grant a license to exploit a patented invention, even without the agreement of the patent owner, in favor of any person who has shown his capability to exploit the invention, under any of the following circumstances:

1. National emergency or other circumstances of extreme urgency;

2. Where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the Government, so requires; or

3. Where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive; or

4. In case of public non-commercial use of the patent by the patentee, without satisfactory reason;

5. If the patented invention is not being worked in the Philippines on a commercial scale, although capable of being worked, without satisfactory reason: Provided, That the importation of the patented article shall constitute working or using the patent; (Secs. 34, 34-A, 34-B, R.A. No. 165a) and

6. Where the demand for patented drugs and medicines is not being met to an adequate extent and on reasonable terms, as determined by the secretary of the Department of Health.

Procedures on Issuance of a Special Compulsory Locense under the TRIPS Agreement.

93 A.1 The Director General of the Intellectual property Office, upon the written recommendation of the Secretary of the Department of Health, shall, upon filing of a petition, frnat a special compulsory license for the importation of patented drugs and medicines. The special compulsory license for the importation comtemplated under this provision shall be an additional special alternative procedure to ensure access to quality affordable medicines and shall be primarly for domestic consumption: Provided, that adequate remuneration shall be paid to the patent owner either by the exporting or importing country. The compulsory license shall also contain a provision directing the grantee the license to exercise reasonable measures to prevent the re-exportation of the product imported under this provision.

The grant of a special compulsory licens eunder this provision shall be an exception to Section 100.4 and 100.6 of Republic Act No. 8293 and shall be immediately executory.

No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or such other provisional remedies that wwill prevent the grant of the special compulsory license.

93 A.2. A compulsory license shall also be available for the manufacture and export of drugs and medicines to any country having insufficient or no manufacturing capacity in the pharmaceutical sector to address public health problems: Provided, that, a compulsory license has been granted by such country or such country has , by notification or otherwise, allowed importation into its jurisdiction of the patented drugs and medicines from the Philippines in compliance with the TRIPS Agreement.

93 A. 3 The right to grant a special compulsory licens eunder this section shall not limit or prejudice the rights, obligations and flexibilities provided under the TRIPS Agreement and under Philippines laws, paricularly Section 72.1 and section 74 of the Intellectual property Code, as amended under this Act. It is also without prejudice to the extent to which drugs and medicines produced under a compulsory license can be exported as allowed in the TRIPS Agreement and applicable laws.

Period for Filing a Petition for a Compulsory License

94.-1. A compulsory license may not be applied for on the grounds stated in Subsection 93.5 before the expiration of a period of four (4) years from the date of filing of the application or three (3) years from the date of the patent whichever period expires last.

2. A compulsory license which is applied for on any of the grounds stated in Subsections 93.2, 93.3, 93.4 and 93.6 and Section 97 may be applied for at any time after the grant of the patent. (Sec. 34(1), R.A. No. 165)

Requirement to Obtain a License on Reasonable

Commercial Terms

95.-1. The license will only be granted after the petitioner has made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time.

2. The requirement under Subsection 95.1 shall not apply in the following cases:

(a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or administrative process to be anti-competitive;

(b) In situations of national emergency or other circumstances of extreme urgency;

(c) In cases of public non commercial use.

(d) In cases where the demand for the patetnted drugs and medicines in the Philippines is not being mat to an adequate extent and on reasonable terms, as determined by the Secretary of the department of Health

3. In situations of national emergency or other circumstances of extreme urgency, the right holder shall be notified as soon as reasonably practicable.

4. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly. (n)

5. Where the demand for the patented drugs and medicines in the Philippines is not being met to an adequate extetn and on reasonable terms, as determined by the secretary of the department of Health, the right holder shall be informedpromptly.

Compulsory Licensing of Patents Involving Semi-Conductor Technology

96. In the case of compulsory licensing of patents involving semi-conductor technology, the license may only be granted in case of public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive. (n)

Compulsory License Based on Interdependence of Patents

97. If the invention protected by a patent, hereafter referred to as the "second patent," within the country cannot be worked without infringing another patent, hereafter referred to as the "first patent," granted on a prior application or benefiting from an earlier priority, a compulsory license may be granted to the owner of the second patent to the extent necessary for the working of his invention, subject to the following conditions:

1. The invention claimed in the second patent involves an important technical advance of considerable economic significance in relation to the first patent;

2. The owner of the first patent shall be entitled to a cross-license on reasonable terms to use the invention claimed in the second patent;

3. The use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent; and

4. The terms and conditions of Sections 95, 96, and 98 to 100 of this Act. (Sec. 34-C, R.A. No. 165a)

Terms and Conditions of Compulsory License

100. The basic terms and conditions including the rate of royalties of a compulsory license shall be fixed by the Director of Legal Affairs subject to the following conditions:

1. The scope and duration of such license shall be limited to the purpose for which it was authorized;

2. The license shall be non-exclusive;

3. The license shall be non-assignable, except with that part of the enterprise or business with which the invention is being exploited;

4. Use of the subject matter of the license shall be devoted predominantly for the supply of the Philippine market: Provided, That this limitation shall not apply where the grant of the license is based on the ground that the patentee's manner of exploiting the patent is determined by judicial or administrative process, to be anti-competitive;

5. The license may be terminated upon proper showing that circumstances which led to its grant have ceased to exist and are unlikely to recur: Provided, That adequate protection shall be afforded to the legitimate interest of the licensee; and

6. The patentee shall be paid adequate remuneration taking into account the economic value of the grant or authorization, except that in cases where the license was granted to remedy a practice which was determined after judicial or administrative process, to be anti-competitive, the need to correct the anti-competitive practice may be taken into account in fixing the amount of remuneration. (Sec. 35-B, R.A. No. 165a)

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