In the Chinese Patent Law, there are a number of provisions directed to Compulsory License. Some patentees, especially those in the pharmaceutical sectors, may worry that the Compulsory License could be applicable to their patent.
In fact, although the Chinese Patent Law indicated quite a few scenarios where compulsory license could be applicable, however, in practice, there is no single successful case so far where a compulsory license was granted.
Even during the Beijing Olympic Games in 2008 and the COVID-19 pandemic in 2020, no patentee was coerced to sign any compulsory patent license. Therefore, most IP practitioners believe that the compulsory license in China is more like “a weapon for negotiation between parties, by using national interest or public interest as a legitimate excuse”, while the possibility of actual being granted with a compulsory license by the CNIPA is extremely low.
In any event, Articles 48-58 of the current Chinese Patent Law are related to compulsory license provisions.
Particularly, Article 48 stipulates that “Under any of the following circumstances, the patent administration department under the State Council may, upon application made by any unit or individual that possesses the conditions for exploitation, grant a compulsory license for exploitation of an invention patent or utility model patent:
(1) When it has been three years since the date the patent right is granted and four years since the date the patent application is filed, the patentee, without legitimate reasons, fails to have the patent exploited or fully exploited; or
(2) The patentee's exercise of the patent right is in accordance with law, confirmed as monopoly and its negative impact on competition needs to be eliminated or reduced.”
Article 49 stipulates that “Where a national emergency or any extraordinary state of affairs occurs, or public interests so require, the patent administration department under the State Council may grant a compulsory license for exploitation of an invention patent or utility model patent.”
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