Pandemia Limits the Rights of Patent Owners
The patent owner has the exclusive rights to prevent third parties from using the patent without his consent or authorization. However, the alteration of the state such as the declaration of the state of emergency or other crisis can cause limitations to the rights of patent owner. The article is addressing the extent of the protection of the patent holder's rights during the state of emergency.
The entitlement of member states to input limitations on the rights of patent owner is established internationally by the World Trade Organization Agreement on Trade Relating Aspects of Intellectual Property (hereinafter: the TRIPS).
TRIPS Agreement entitles the Member States to envisage in domestic legislation cases of use of subject matter of the patent without the authorization of the patent owner. This provision is implemented in the RA national legislation in the Law on Inventions, Utility Models and Industrial designs according to which any person can be granted with a compulsory license by court decision where (1) the public interest demands, in particular, national security, nutrition, health or the development of other vital sectors so requires.
However, according to the above mentioned article the person who will be granted with a cumpolsury license bears the burden of proving that he has made efforts to conclude a license contract with the rightholder on reasonable commercial terms and that such efforts failed to succeed within a reasonable period of time. This requirement shall not be applied if a state of war or emergency has been declared.
The adequate supply of hospital equiptment and medicament is one of the conditions for maintaining national health, taking into account the situation caused by pandemia of COVID-19. As far as there is huge demand on hospital equiptment and medicament the situation of the incapability of one supplier to meet the demands of the market can have adverse effects on public health. Thus, the provision of adequate supplies of hospital equiptment and medicament can fall under the supervision of the government and the rights of private entities can be effected.
The pandemia, accordingly, can cause the application of clause regarding the limitation of patent owner’s rights. Any owner of a patent with subject matter of hospital equiptment and medicament can be temporarilly forced to narrow the scope of his rights relating to the patent.
In this situation the court order can be enough to grant a compulsory license to another entity for producing the necessary and sufficient amount of hospital equiptment and/or medicament. As long as the state of emergency is declared the person does not even have to make efforts to conclude a license contract with the rightholder.
The legal interpretation proves that public health is prioritized over the rights of patent holders, however the limitations of the patent holders' rights are also put under strict scopes for providing balance. Thus, the compulsory license can be granted for specific period of time and for the volume necessary for the purpose of the license. The compulsory license should be non-exclusive and only for the suffice of the internal market demand.
Author: Mane Hakobyan, Associate
26/1 Vazgen Sargsyan str, Yerevan 0010, Armenia
Phone: +374 11 520510
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Legelata LLC, 2020