Health Care and IP : Compulsory Licensing in Europe and Russia
The Commission has granted interim measures ordering IMS to license the use of the 1860 brick structure to its current competitors on non-discriminatory, commercially reasonable terms. The royalties to be paid to IMS will be agreed by IMS and the party requesting a licence, or in case of disagreement, will be determined by independent experts on the basis of transparent and objective criteria.
In October 2000, Chiron and Roche resolved all pending litigation between them in the United States, Italy, Japan, the Netherlands, Belgium, Germany and Australia regarding HCV and HIV nucleic acid technology. Among the settlement provisions, Chiron granted Roche licenses to manufacture and sell HCV and HIV nucleic acid clinical diagnostic tests. Chiron also agreed to license Roche for a limited time period to sell HCV and HIV nucleic acid tests for blood screening.
In December 2000, Roche initiated two nullity actions against Chiron's German national patents (the '104, '524 and '527 patents), and the European '931 patent in the German Federal Patent Court ("Bundespatentgericht"). In January 2001, the Bundespatentgericht divided the German patent suit into three individual actions.
As a result, we now are confronted with the situation that plaintiffs and defendants may employ their respective patents to block each other from exploiting interferon [W]ic agent against rheumatoid arthritis. If the market does not rectify this `patent failure', the public may have to wait twenty years before gaining access to this therapeutic agent. A compulsory license in situations involving dependent patents, as provided for in various countries, is a means to correct patent failure coupled with market failure. One should not forget that patents represent a interventionist instrument, ultimately for the sake of community welfare. Thus intervention to restrict some of the effects of patents may be required, when the community welfare is [no] longer served, e.g. when product patent and dependent patent block each other.
In practice, compulsory licensing is not greatly used. Between 1991 and 1993 the Patent Office did not receive any applications for compulsory licences, although between 1988 and 1990 it received eight (9). As Jeremy Phillips has pointed out however, these figures do not necessarily tell the whole story. The licensing provisions also act as a form of deterrent against abuse - or, to look at it another way, of encouragement to grant licences voluntarily. Actual applications under s.48 may therefore be regarded as instances where the compulsory licence provisions have failed, while on many other occasions they may have been successful in encouraging voluntary agreements.
French law, for example, provides that "if required in the interest of public health" (Article L.613-16 of the Code on Intellectual Property), patents issued for drugs may be subject to the regime of compulsory licenses. The law authorized this procedure when the patented drugs "are only made available to the public in insufficient quantity or at abnormally high prices."
If an invention is in the public interest or if the patentee misuses the rights granted by a patent as described in Article 32 of this Law, a compulsory license for the use of the invention may be granted to another person.
It shall be deemed that a misuse . . takes place particularly when the patentee, either himself or through a third party, does not work or insufficiently works a patented invention and refuses to license other persons to work the protected invention or imposes unjustified conditions on them.