By King & Wood's Intellectual Property Group
China's State Intellectual Property Office (SIPO) is able to issue compulsory patent licenses where an entity or individual who is otherwise qualified to exploit a patent does not succeed in obtaining a license on reasonable terms and within a reasonable period from the patent holder. The new Patent Law of the PRC (the "Patent Law") and the Implementing Rules of the Patent Law of the PRC (the "Implementing Rules") both contain provisions regarding the compulsory licensing of patents. On October 12, 2011, the SIPO issued a circular to solicit public comments on the Amendments to the Measures on Compulsory Patent Licensing (Draft for Comments) (the "Draft Amendments"). The SIPO will be taking comments until November 13, 2011.
The Draft Amendments provide more detailed rules governing the submission and approval of compulsory licensing applications, the application examination procedures followed by the SIPO, and the calculation of licensing fees. The Draft Amendments also specify the conditions under which compulsory patent licenses will be granted as well as the conditions under which they will be terminated. The Draft Amendments specify that where patent rights have been granted for more than three years and where a patent application has been submitted for more than four years, if the patent holder fails to exploit or fully utilize the patent rights without justification for not doing so, qualified entities or individuals with the capacity to exploit such a patent may file applications with the SIPO for a compulsory license. For more information, please refer to: http://www.sipo.gov.cn/tz/gz/201110/P020111012508894173220.doc
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