Common use of Compulsory Licensing Clause in Contracts

Compulsory Licensing. On the basis that the establishment of a legal basis for involuntary authorization of access to essential technology on fair and reasonable terms amounts juridically to the compulsory licensing of intellectual property, legislation would be needed: (1) to set out the circumstances in which national intellectual property rights might be compulsorily licensed; (2) to authorize (in the case of national legislation) a national public authority or (in the case of EU legislation) to require Member States to authorize their respective national authorities, to grant compulsory licences of national intellectual property rights, subject to review on legal grounds by an appropriate court; (3) to set out the circumstances in which and the bodies by which pan-EU (pursuant to Article 118 TFEU) intellectual property rights might be compulsorily licensed; (4) to authorize and require Member States to authorize their respective national authorities, to grant, for the national territory, compulsory licences of pan-EU (pursuant to Article 118 TFEU) intellectual prop- erty rights, subject to review on legal grounds by an appropriate court; (5) if objections, including those of the European Court of Justice (see below), can be overcome, to select and authorize an institution of the European Union itself to grant compulsory licences of pan-EU (pursuant to Article 118 TFEU) intellectual property rights, subject to review on legal grounds by the Court of Justice. The international principles on compulsory licensing are set out in the TRIPS Agreement at Article 31. They include strict limitations, of which the following are particularly significant: