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Legislative Implementation of Flexibilities - Malaysia

Title:Sections 49-51 and 84 of the Patents Act No. 291 of 1983 as last amended on 2006
Field of IP:Patents
Type of flexibility:Compulsory licenses and government use
Summary table:PDF

Provisions of Law

Section 49. Application for compulsory licences. (1) At any time after the expiration of three years from the grant of a patent, or four years from the filing date of the patent application, whichever is the later, any person may apply to the Registrar for a compulsory licence under any of the following circumstances:

(a) where there is no production of the patented product or application of the patented process in Malaysia without any legitimate reason;

(b) where there is no product produced in Malaysia under the patent for sale in any domestic market, or there are some but they are sold at unreasonably high prices or do not meet public demand without any legitimate reason.

(2) A compulsory licence shall not be applied for unless the person making the application has made efforts to obtain authorization from the owner of the patent on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time.

(3) The application for a compulsory licence shall be in compliance with such regulations as may be prescribed by the Minister.

Section 49A. Application for compulsory licence based on interdependence of patents. (1) If the invention claimed in a patent ("later patent") cannot be worked in Malaysia without infringing a patent granted on the basis of an application benefiting from an earlier priority date ("earlier patent"), and if the invention claimed in the later patent constitutes, in the opinion of the Corporation, an important technical advance of considerable economic significance in relation to the invention claimed in the earlier patent, the Corporation, upon the request of the owner of the later patent, the licensee of a licence contract under the later patent or the beneficiary of a compulsory licence under the later patent, may grant a compulsory licence to the extent necessary to avoid infringement of the earlier patent.

(2) If a compulsory licence is granted under subsection (1), the Corporation, upon the request of the owner of the earlier patent, the licensee of a licence contract under the earlier patent or the beneficiary of a compulsory licence under the earlier patent, may grant a compulsory licence under the later patent.

Section 50. Request for grant of compulsory licence. (1) In an application for a compulsory licence under section 49 or section 49A, the applicant shall set forth the amount of royalty, the conditions of the exploitation of the patent and the restrictions of the rights of the licensor or the licensee, as the case may be, and a request for the said licence.

(2) Where an application for a compulsory licence is filed pursuant to section 49 or section 49A, and this section, the Registrar shall notify the applicant, the licensor or the licensee, as the case may be, of the date the application shall be considered by the Corporation.

(3) The licensor or the licensee, as the case may be, shall be furnished with a copy of the application as mentioned in subsection (1).

Section 51. Decision by the Corporation. (1) In considering the application for a compulsory licence under section 49 or section 49A, the Corporation may require the applicant, the licensor or the licensee, as the case may be, to appear before the Corporation to give a statement or to hand to the Corporation any document or any other item.

(2) When the application has been considered by the Corporation and a decision has been made, the applicant, the licensor or the licensee, as the case may be, shall be notified of the decision.

Section 84. Rights of Government. (1) Notwithstanding anything contained in this Act-

where there is national emergency or 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 Government, so requires; or

where a judicial or relevant authority has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive,

the Minister may decide that, even without the agreement of the owner of the patent, a Government agency or a third person designated by the Minister may exploit a patented invention.

(2) The owner of the patent shall be notified of the decision of the Minister as soon as is reasonably practicable.

(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 owner of the patent of an adequate remuneration for such exploitation, taking into account-

(a) the economic value of the Minister's authorization as determined in the decision; and

(b) where a decision has been taken under paragraph (1)(b) , the need to correct anti-competitive practices.

(4) The Minister shall make his decision under subsection (3) after hearing the owner of the patent and any other interested person if they wished to be heard.

(5) The exploitation of a patented invention in the field of semi-conductor technology shall only be authorized either-

(a) for public non-commercial use; or

(b) where a judicial or relevant authority 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 Minister is satisfied that the authorization would remedy such anti-competitive practice.

(6) The authorization shall not exclude-

(a) the continued exercise by the owner of the patent of his rights under subsection 36(1) ; or

(b) the issuance of compulsory licences under Part X.

(7) Where a third person has been designated by the Minister, the authorization may only be transferred with the goodwill or business of that person or with that part of the goodwill or business in which the patented invention is being exploited.

(8) The exploitation of the invention by the Government agency or the third person designated by the Minister shall be predominantly for the supply of the market in Malaysia.

(9) Upon the request of-

(a) the owner of the patent; or (b) the Government agency or the third person authorized to exploit the patented invention,

the Minister 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 Minister shall terminate the authorization if he is satisfied, after hearing the parties, if either or both wish to be heard, that the circumstances mentioned in subsection (1) which led to his decision have ceased to exist and are unlikely to recur or that the Government agency or the third person designated by him has failed to comply with the terms of the decision.

(11) Notwithstanding subsection (10) , the Minister shall not terminate the authorization if he is satisfied that the need for adequate protection of the legitimate interests of the Government agency or the third person designated by him justifies the maintenance of the decision.

(12) The owner of a patent, a Government agency or the third person authorized to exploit a patented invention may appeal to the Court against the decision of the Minister under this section.

(13) In this section "Government agency" means the Federal Government or the Government of a State and includes a Ministry or Department of that Government.

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