Compulsory Licensing (CL) is one of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) It is stipulated in the Article 31 of the TRIPS. The Egyptian legislator incorporated CL in the Law on the Protection of Intellectual Property No. 82 of 2002 (IPL). Articles 23 and 24 of IPL deals with the compulsory licensing system for patents. CL is granted on patented products upon approval of a Ministerial Committee formed by a decision of the Prime Minister. Since the IPL was issued in 2002 and until today, no CL has been issued. In fact, the PM did not issue the decree forming the Ministerial Committee stipulated in Article 23 of IPL till February 2020 (PM Decree No. 251/2020). The decisions of the Ministerial Committee to approve a CL, goes into force once the Egyptian Patent Office (EPO) issues a CL decision. The decision of the EPO to issue a CL could be contested before the Egyptian administrative courts. Article 23/1 of the IP Law can be outlined as follows:
Article 23/1 of the IP Law can be outlined as follows:
According to article 23/2, special CL shall be issued by the EPO as follows
Other Cases Explained in Article 23:
EPO may subject to the approval the Ministerial Committee grant CL for the exploitation of an invention. The committee decides the financial rights of the patent owner when such CLs are issued, in any of the following cases outlined below:
Outline of CL Steps
Use of the CL shall be limited to the applicant; EPO may however grant it to a third party. Outlines of the CL steps in light of the Egyptian IP Law are as follows:
• A secretariat, within the EPO which is established, by a decision/decree issued by the Chairman of the Academy for Scientific Research and Technology) is responsible for receiving the CL application. This application shall be filed on the CL form and registered by the mentioned secretariat thereof in a special registry record where the applications shall be listed according to the date of their presentation to the EPO. Then the secretariat shall prepare the applications to be examined by the EPO.
• The applicant (for example a pharmaceutical generic company in event of pharmaceutical preparations patents) submits the CL application to the EPO on a form containing the following details:
- The name of the applicant company and its legal form JSC, Inc, LLC etc.
- The number of the patent, the name of the patent and the number of the patent application and the date of its filing.
- The form shall include the field/sort of the patent.
- The remaining period of the protection.
- The proposed royalty or compensation for obtaining the CL.
• Alongside with the CL application, the applicant shall introduce evidence proving that it has exerted, within a reasonable period, all the required diligent efforts to obtain a voluntary license from the patent owner.
So, the following documentation should be included to support the applicant’s request to be granted a CL:
- – The documentations evidencing that the CL applicant has the industrial capabilities to exploit the patent.
- – The documentation evidencing the CL applicant has diligently negotiated consensual license for a reasonable period. and the patent holder has refused the proposals.
- – Evidence that the patentee has refused the proposals of the CL applicant despite the voluntary license proposal was based on FRAND terms, fair, reasonable, and non-discriminatory terms.
• The EPO examines the CL application and its annexes. Also, in case the EPO considers such CL application satisfies the requirements that the applicant has exerted, within a reasonable period, all the required efforts to obtain a voluntary license from the patent holder, the EPO would accept the CL application along with preparing a supportive memorandum.
• The CL file annexed with EPO’s opinion/memorandum it accepts the CL application shall be then referred to the Ministerial Committee.
• The Ministerial Committee members are as follows: the Minister of Higher Education, the Minister of Supply and the Internal Trade, the Minister of Health, the Minister of Trade and Industry, the Head of the Competition Authority.
The Ministerial Committee examines the CL application, annexed documentation and the opinion of the EPO. In event of the acceptance/approval of the Ministerial Committee to grant a CL, the EPO shall issue the CL decision granting the applicant (for example a generic company) thereof. The patent holder is entitled to royalty for use of his patent as per the CL. The fair compensation by a committee constituted by the Chairman of the Academy of Scientific Research and Technology. This committee shall make its decision in view of several factors mentioned in Article (41) of the Executive Regulations. These factors are the remaining protection period of the patent, the volume and the value of production, the proportion of the price of the patented product to the average per capita general income of its expected beneficiaries, the scale of investment required for researches for the commercial launch, and the availability of a similar product in the market.
The committee shall also review whether there was any anti-competitive practices undertaken by the patent holder. The decision of the committee evaluating the fair compensation shall be reviewed by the Ministerial Committee.
The fair compensation shall be a part of the decision made by the Ministerial Committee alongside with its decision on the CL. EPO shall notify the patent holder with the decisions of granting the CL and the determination of the fair compensation by a registered letter with acknowledgment of receipt.
The patent holder may petition against the CL decision or against the estimation of the compensation. The petition shall be filed before the Petition Committee within thirty days from the dated of notification to the patent holder with the CL decision. The Petition Committee is headed by a judge from the Court of Appeals. The Petition Committee also includes a Judge from the State Council, in addition to three technical members.
The decision of the Petition Committee is appealable before the Administrative Court at the State Council within 60 days from the date the patent holder is notified of its decision.
Dr. Gihan Taha