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COMPULSORY LICENCES IN CASES OF ABUSE OF PATENT RIGHTS

The Patent Act provides for grant of a compulsory licence against a patent to any person who can show that the rights in the patent are being abused.

The rights in a patent are deemed to be abused if:

a)         The invention is not being worked in the Republic on a commercial scale and there is no satisfactory reason for the non-working, (grace period: 3 years after grant / 4 years after application).

b)         Demand for the patented article in the Republic is not being met to an adequate extent and on reasonable terms;

c)         By reason or refusal of the patentee to grant a licence on reasonable terms the trade, industry or agriculture of the Republic or any class of persons in the Republic is being prejudiced and it is in the public interest that a licence should be granted;   or

d)         The demand in the Republic for the patented article is being met by importation and the price charged is excessive in relation to the price charged in the country of manufacture.

We can advise on further detailed provision of the Act, if required.

If you are not yet working or about to work the invention in South Africa and if you are concerned about the implications of the above, the following procedures may be considered by you:

1.         NOMINAL WORKING

In cases where actual working of  the invention is not carried out in South Africa, the practice has arisen of  "nominal working", comprising the placing of advertisements offering a licence on reasonable terms.  The value of  "nominal working" has not been tested in our Courts but the opinion of the profession on the whole is that it may provide at least a prima facie rebuttal of some of the grounds for grant of a compulsory licence. The fee for the service of nominal working is normally USD 261.00 plus the cost of the actual advertisements in two trade journals.

2.         ACTIVE LICENSING

If the patentee is actively interested in obtaining licenses we may be able to make appropriate proposals on how to assist the patentee if we are given the following information:

i)          How well developed is the invention and what know-how is available ?

ii)         Is the invention already being successfully exploited elsewhere, and if so, how, where, and on what  scale ?  Please supply full details, brochures, etc., if possible.

iii)         What attempts, if any, have already been made to commercialise the invention ?

            (a)        In South Africa (who has been approached ?)

            (b)        Elsewhere ?

            and what reaction has been received ?

We shall be glad to be of assistance regarding any aspect of the above, and we look forward to receiving your instructions herein.