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Legislative Implementation of Flexibilities - Pakistan

Title:Sections 58 and 59 of the Patents Ordinance No. LXI of 02/12/2000 (as amended by the Patents Amendment Ordinance of 2002)
Field of IP:Patents
Type of flexibility:Compulsory licenses and government use
Summary table:PDF

Provisions of Law

58. Exploitation by a Government agency or third person.-

(1) Subject to sub-section (2), where -

(i) the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy so requires; or

(ii) the Federal Government has determined that the manner of exploitation, by the owner of the patent or his licensee, is anti-competitive, and the Federal Government is satisfied that the exploitation of the invention in accordance with this sub-section would remedy such practices; or

(iii) the patent holder refuses to grant a license to a third party on reasonable commercial terms and conditions; or

(iv) where patent has not been exploited in a manner which contributes to the promotion of technological innovation and to the transfer and dissemination of technology, the Federal Government may, even without the consent of the owner of the patent, decide that a Government agency or a third person designated by the Federal Government may exploit a patented invention.

(2) The Federal Government shall, before taking any decision under sub-section (2), give the owner of the patent arid any interested person an opportunity of being heard if he wishes to be heard.

(3) The exploitation of the patented invention shall be limited to the purpose for which it was authorized and shall be subject to the payment to the said owner of an adequate remuneration therefor, taking into account the economic value of the Federal Government authorization, as determined in the said decision, and where a decision has been taken under sub-section (1), the need to correct anti-competitive practices.

(4) A request for the Federal Government authorization shall be accompanied by evidence that the owner of the patent has received, from the person seeking the authorization, a request for a contractual license, but that person has been unable to obtain such a license on reasonable commercial terms and conditions and within a reasonable time:

Provided that this sub-section shall not apply in cases of -

(i) national emergency or other circumstantial urgency provided that in such cases the owner of the patent shall he informed of the decision of the Federal Government as soon as reasonably practicable;

(ii) public non-commercial use; and

(iii) anti-competitive practices determined as such by a judicial or administrative body in accordance with clause (ii) of sub-section (1).

(5) The exploitation of a patented invention in the field of semi-conductor technology shall only by authorized either for public non-commercial use or where a judicial or administrative body has determined that the manner of exploitation of the patented invention, by the owner of the patent or his licensee, is anti-competitive and if the Federal Government is satisfied that the issuance of the non-voluntary license would remedy such practices.

(6) The authorization shall be considered on its individual merits and shall not prohibit-

(i) the conclusion of license contracts by the owner of the patent;

(ii) the continued exercise, by the owner of the patent, of his rights under section 30; or

(iii) the issuance of a non-voluntary license under section 59.

(7) Where a third person has been designated by the Federal Government, the authorization may only be transferred with the enterprise or business of the person or with the part of the enterprise or business within which the patented invention is being exploited.

(8) Where the exploitation of the invention by the Government agency or third person designated by the Federal Government is authorized under clause (i) of sub-section (1), it shall be predominantly for the supply of the market in Pakistan.

(9) Upon request of the owner of the patent, or of the Government agency or of the third

person authorized to exploit the patented invention, the Federal Government may, after hearing the parties, if either or both wish to be heard, vary the terms of the decision authorizing the exploitation of the patented invention to the extent that changed circumstances justify such variation.

(10) Upon the request of the owner of the patent, the Federal Government shall, subject to

adequate protection of the legitimate interest of the persons so authorized, terminate an authorization if it is satisfied, after hearing the parties, if either or both wish to be heard, that the circumstances which led to the decision have ceased to exist and are unlikely to recur or that the Government agency or third person designated by it has failed to comply with the terms of the decision.

(11) Notwithstanding the provisions of sub-section (10), the Federal Government shall

not terminate an authorization if it is satisfied that the need for adequate protection of the legitimate interests of the Government agency or third person designated by it justified the maintenance of the decision.

(12) An appeal shall lie to the High Court against the decisions of the Federal Government under sub-sections (1) to (9).

59. Powers of Controller in granting compulsory licenses.-

(1) On request, made in the prescribed manner to the Controller after the expiration of a period of four years from the date of filing of the patent application or three years from the date of the grant of the patent, whichever period expires last, the Controller may issue a non-voluntary license to prevent the abuses which might result from the exercise of the rights conferred by the patent, for example, failure to work.

(2) Notwithstanding the provisions of sub-section (1), a non-voluntary license shall not be issued if the owner of the patent satisfies the Controller that circumstances exist which justify the non exploitation or insufficient exploitation of the patented invention in Pakistan.

(3) The decision issuing the non-voluntary license shall fix-

(i) the scope and function of the license;

(ii) the time limit within which the licensee must begin to exploit the patented invention; and

(iii) the amount of the adequate remuneration to be paid to the owner of the patent and the conditions of payment.

(4) The beneficiary of the non-voluntary license shall have the right to exploit the patented invention in Pakistan according to the terms set out in the decision issuing the license, shall commence the exploitation of the patented invention within the time limit fixed in the said decision and, thereafter, shall exploit the patented invention sufficiently.

(5) If the invention claimed in a patent, hereinafter referred to as "later patent", cannot be exploited in Pakistan without infringing a patent granted on the basis of an application benefiting from an earlier filing or, where appropriate, priority date, hereinafter referred to as "earlier patent", and provided that the invention claimed in the later patent involves an important technical advance of considerable economic importance in relation to the invention claimed in the earlier patent, the Controller, upon the request of the owner of the later patent, may issue a non-voluntary license to the extent necessary to avoid infringement of the earlier patent.

(6) Where a non-voluntary license is issued under sub-section (5), the Controller upon the request of the owner of the earlier patent shall issue a non-voluntary license in respect of the later patent.

(7) In the case of a request for the issuance of a non-voluntary license under sub-sections (5) and (6), sub-section (3) shall apply mutatis mutandis with the provision that no time limit needs to be fixed.

(8) In the case of a non-voluntary license issued under sub-section (5), the transfer may made only with the later patent, or, in the case of a non-voluntary license issued under sub-section (6), only with the earlier patent.

(9) The request for the issuance of a non-voluntary license shall be subject to payment of the prescribed fee.

(10) The provisions of sub-sections (2) to (10) of section 58 shall apply mutatis mutandis for issuance of an non-voluntary license under this section.

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