Common use of Compulsory Licences Clause in Contracts

Compulsory Licences. Where the law of a contracting party allows for the grant of compulsory licences, such licences shall not be granted in a manner which distorts trade, and the following provisions shall be respected : (1) Compulsory licences shall be non-exclusive and non-assignable except with that part of the enterprise or goodwill which exploits such licence. (2) They shall provide for the payment of an equitable remuneration to the right holder corresponding to the economic value of the licence. (3) Except in the case of a manifest national emergency, a compulsory licence may only be issued after unsuccessful efforts made by the applicant in line with normal commercial practices to negotiate a voluntary licence with the right holder. (4) Compulsory licences may not be issued for non-working or insufficiency of working on the territory of the granting authority if the right holder can show that the lack or insufficiency of local working is justified by the existence of legal, technical or commercial reasons. (5) Each case involving the possible grant of a compulsory licence shall be considered on its individual merits. (6) Compulsory licences shall not concern know-how related to the exploitation of the invention. (7) Any compulsory licence shall be revoked when the circumstances which led to its granting cease to exist and are unlikely to recur, taking into account the legitimate interests of the right holder and of the licencee. The continued existence of these circumstances shall be reviewed upon request of the patent holder. (8) All decisions concerning compulsory licences shall be subject to judicial review.