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COMPULSORY LICENSING


Modes of transfer


Te NATCO case highlights common arguments for and against compulsory licensing. On one side, patents are used to restrict the access that TRIPS is supposed to promote, as they allow companies to charge high prices for essential technology. “I think today they hinder competition in the truest form and they are designed as a part of business strategies,” says Amin.


On the other side, investment in technology is necessary, and without adequate compensation, inventors will not have the necessary incentives. Anubhav Kapoor, general counsel and company secretary at Tata Technologies, says that compulsory licensing should be allowed “as long as certain procedures are followed and certain terms fulfilled”.


He says: “If the patent holder is adequately compensated for [its] patented technology then I feel that it will keep the inventor motivated in spite of the diminishing value of the patent.”


In Brazil, the Brazilian National Institute of Industrial Property (INPI) has not granted any compulsory licences, although one has been granted by special presidential decree. Jorge Ávila, president of INPI, says it important that “patent applications are appreciated and decided quickly”.


He says: “In normal conditions, if the patent is decided and the extension of the granted rights is clearly defined, market mechanisms should be effective in promoting the adequate dissemination of the relevant technologies. If ... the adequate technologies do not reach the potential users, it may be the case for a compulsory licence, but this should be carefully investigated in a case-by-case approach.”


Broad access to ‘clean’ or ‘green’ technology, which is different from pharmaceutical technology in terms of range, development and application, is considered to be necessary if climate change is going to be effectively tackled. As a result, green tech patents are a possible candidate for compulsory licensing. “If what we are trying to


“CLIMATE CHANGE IS A GLOBAL PROBLEM, WHICH IS LARGER THAN THE INDIVIDUAL NATIONAL JURISDICTION OF A PATENT RIGHT AND THE LIMIT IT PLACES ON A MARKET.”


the patent system that nobody dare move because there are too many deterrents,” says Amin.


do is mobilise the world to do something about climate change, we could actually be in favour of a lot of compulsory licensing,” says Kapoor.


Climate change is a global problem, which is larger than the individual national jurisdiction of a patent right and the limit it places on a market. “Global propagation of innovations is essential if clean technologies are to have the optimum effect,” says Kapoor. “If the use of a technology is limited to the country in which it was developed, or a few specified others, the environmental benefits of that technology will also be localised.”


A global fund that could acquire green tech patents and then distribute them for free is an alternative to compulsory licensing, says Kapoor. “Another reasonable alternative is the tiered pricing system that allows developing countries to obtain the patented technology at a price that is lower than that offered in developed countries,” he adds.


Mehta-Dutt says that there are methods of transfer that patent owners can employ to ensure that access to technology is as broad and as fair as possible. Te rights of the patent owner may be transferred by assignment or licensing. Assignments may include legal assignments, equitable assignments or mortgages and may be exclusive, non-exclusive or limited. She adds: “Te mode of technology transfer will depend on the specific circumstances of the case and nature of the invention.”


In both the pharmaceutical and green tech arenas, Amin believes, there are basic things that patent owners can do to promote broader access to technology without using compulsory licensing. “Tere’s such a lack of transparency in


18 World Intellectual Property Review January/February 2012


“If companies could actually say, voluntarily, or be mandated to disclose, what has expired and can be used, that would be a start. Big pharmaceutical companies in particular aren’t really innovating. Tey’re basically repackaging—re-inventing what’s already been invented. Tat is the biggest problem. People talk about compulsory licensing or standards being too high as hurting innovation; I think companies need to go for the higher line, the more daring inventions.”


Kapoor says that patent owners and inventors need more incentives. Otherwise technology, especially green tech, does not reach the right market in time or at all. “Tere is no doubt that environmentally sound technology transfer requires a careful balancing act that includes fair treatment for innovators and energy policies that stimulate diffusion of environmentally sound technology to address climate change,” he explains.


“Tis pilot programme for speeding up green patent applications will lead to significant savings in pendency which would in turn lead to green technologies reaching the market sooner. Te least governments can do is provide more and more incentives for development of these technologies. We need to ensure that innovations will have the maximum impact, and alternative transfer schemes and incentives need to be devised.”


Compulsory licensing may not be the best course of action for patent owners, but it represents a viable alternative for getting essential technology to market quickly and, once it is there, for making it as affordable as possible. It is important that broader access is made more attractive to patent owners that do the bulk of the inventing, as their efforts produce this technology in the first place. n


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