Interpretation on New Compulsory Licensing for Patent Implementation Rule

li bc archive tamiflu 300x168 Interpretation on New Compulsory Licensing for Patent Implementation RuleChina State Intellectual Property Office (SIPO) issued its No. 64 order on 15th March, 2012 to announce the promulgation of the newly revised Measures for the Compulsory Licensing for Patent Implementation (the “Measures”). The most attention catching point is the amendment of medicine patent compulsory licensing. Then, what are the specific provisions? And is there any amendment else deserve you focus? Today, we will make a brief introduction for you. (the image is the picture of Tamiflu once applied for compulsory licensing in China)

I. Medicine Compulsory Licensing

Although the adding of the compulsory licensing of medicine is most attractive, the legislation on the issue is not first made in China. In the China Patent Law revised in 2008, the articles provide:

Article 49 Where a national emergency or any extraordinary state of affairs occurs, or public interests so require, the patent administration department under the State Council may grant a compulsory license for exploitation of an invention patent or utility model patent.

Article 50 For the benefit of public health, the patent administration department under the State Council may grant a compulsory license for manufacture of the drug, for which a patent right has been obtained, and for its export to the countries or regions that conform to the provisions of the relevant international treaties to which the People’s Republic of China has acceded.

However, for the abstract provisions and no detailed implementation regulations issued latter, the application for medicine compulsory licensing is rare in China. Even the hot discussed application of Baiyunshan Pharmaceutical for the compulsory licensing of Tamiflu (note: the link is in Chinese) several years ago was finally refused by the administration, and no definite ending is known to us till now. However, the related detailed provisions are amended to the new Measures.

(1) the application made by units

As provided in the Article 7 of the Measures, for the benefit of public health, any units qualified in paten implementation may apply for the manufacture of the patented medicine and import it to the nations or regions as stated follows with the reference to the Article 50 of the Patent Law:

1) The least developed states or regions;

2) The developed or developing members of WTO as the import party and noticed to WTO by the relevant international treaties.

The above articles listed the 2 main situations for licensing application, and by our understanding, the second situation could be the main reference for domestic companies to apply for the medicine manufacture with compulsory licensing.

Surely, the articles on the unit application are also added, including:

1) the applicant shall provide the information of the importer, the demanded medicine and the compulsory licensing;

2) the licensed manufactured amount shall not be more than the actual needs of the importer and shall not be imported to any third parties;

3) the licensed manufactured medicine shall be specially marked or be labeled as “manufactured under compulsory licensing”, and also the special color, shape and package of the medicine, when no influence on the price shall hereby produce, shall also be adopted;

4) before the transportation and import of the medicine, the licensed unit shall release the information about the medicine amount and the features of the medicine provided in the Article 2 of the Measures on its website or the website of WTO.

 (2) the suggestions of the administration

It’s restated in the Measures that the patent administration under the State Council may suggest for the compulsory licensing when “it’s in urgency or extraordinary conditions”. And also the detailed implementation of the “suggestions” by the State Council are also specified in the Measures, which include the reasons for compulsory licensing, patent name, patent number, patentee name, licensing period and licensed unit information.

II. the compulsory licensing with foreign elements involved

The regulations on the patent compulsory licensing with foreign elements involved are also amended in this revision, involving the using of proof documents in foreign language and the application of compulsory licensing in China by foreigners or units.

Despite the Paragraph 1 of Article 3 is as same as the past article and demands “any documents used in the application of compulsory licensing, compulsory licensing fee adjudication and the termination of compulsory licensing” shall all be in Chinese, the change could be found in its 2nd paragraph.

According to the original regulation, “When the submitted certificate or proof documents are in foreign language, the parties related shall present the translated version at the same time. And once no such versions are presented in the legal period, it shall be deemed as presentation failure of the application”. While, such translated documents are only demanded when it’s necessary according to the judgment by the patent office according to the new Measures. Surely, the standard of the consideration of necessity needs observance in the future implementation of the laws.

Beside the proof documents in foreign languages, the new Measures also regulates that the foreigner, foreign enterprise or other foreign organization with no residence or business place shall entrust patent agency when make the application of compulsory licensing.

Other recommended posts on our website:
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4. Matters for Attention in Trademark Refusal Review in China
5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
9. Matters for Attention in the Patent Preliminary Injunction Application in China(I)

Author: Albert Chen
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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