Compulsory licensing in Czech Republic

There is no legal definition of compulsory licence under Czech legislation.

• Act No. 527/1990 Coll., on Inventions, Industrial Designs and Rationalisation Proposals;
• Act. No. 478/1992 Coll., on Utility Designs;
• Decree No. 550/1990 Coll.;
• Act No. 206/2000 Coll., on protection of biotechnological inventions;
• Act No. 408/2000 Coll., on plant variety rights protection;
• Act No. 89/2012 Coll., the Civil Code;
• Regulation (EC) No 816/2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems;
• Paris Convention for the Protection of Industrial Property;
• The Agreement on Trade-Related Aspects of Intellectual Property Rights.

No specific limitation on the types of products or technologies to which compulsory licensing is applicable on top of the limitations according to the subject matter of the individual legal acts.

3.1 Has any compulsory licence ever been issued in your jurisdiction? If yes, on what type of technology? 

No.

In relation to patents, utility designs, biotechnology patents, plant variety rights, and patents and supplementary protection certificates concerning the manufacture of pharmaceutical products for export to countries with public health problems (“pharmaceutical patents”), any individual or entity who meets the legal requirements can apply for a compulsory licence, including foreigners.

The compulsory licence to patent and utility design might be granted by the Industrial Property Office (“IPO”) upon justified request if the patent or utility design holder does not use the invention or the utility design without due reason at all or uses it insufficiently and it has not accepted a proper offer for concluding a licensing agreement. It might also be granted in case of an immediate threat to the public interest. A compulsory licence won’t be granted within the first four years from the filing the patent or utility design application or within the first three years from the granting of the patent or utility design (whichever period expires later).

The compulsory licence to a biotechnology patent might be granted by the IPO to a plant or animal variety right holder who unsuccessfully negotiated with the patent holder about a licence and if the plant or animal variety is considered a technical advance of considerable economic significance compared to the biotechnological invention protected by the patent. The patent holder is entitled to a cross-licence of the plant or animal variety right of the licensee.

The compulsory licence to a plant variety right might be granted by the Ministry of Agriculture (“MA”) if the plant variety right holder refuses to grant the licence and the use of the protected plant variety is in the public interest. The compulsory licence might be also granted to the biotechnology patent holder in case the biotechnology patent cannot be used without infringement of the plant variety right and the patent holder unsuccessfully negotiated with the plant variety right holder about a licence and if the invention is considered a technical advance of considerable economic significance compared to the protected plant variety. The plant variety right holder is in the latter case entitled to cross-licence the biotechnology patent of the licensee.

The compulsory licence to pharmaceutical products might be granted by the IPO upon a justified request when such products are intended for export to eligible importing countries in need of such products in order to address public health problems and if the applicant has made efforts to obtain authorisation from the rights holder and that such efforts have not been successful within a period of thirty days before submitting the application.

6.1 Any negotiation required between the applicant and the right holder before applying for a compulsory licence? 

In most cases, it is required that the applicant unsuccessfully negotiated with the right holder about a contractual licence on reasonable commercial terms and conditions.

6.2 Any urgent situation required in order to grant a compulsory licence?

In relation to patents, utility designs and biotechnology patents, in case of threat to the public interest, the requirement of prior unsuccessful negotiations between the applicant and the right holder might be waived.

6.3 Any minimum number of years required for the patent to be granted and/or implemented in order to be subject to compulsory licensing?

In relation to patents and utility designs, the compulsory licence won’t be granted within the first four years from filing of the patent application or within the first three years from the grant of the patent (whichever period expires later). This does not apply in case of a threat to the public interest.

No.

Yes.

The compulsory licence for patents, utility designs, biotechnology patents and pharmaceutical patents will be limited by the IPO.

In addition, in relation to patents and utility designs, it shall be used primarily for deliveries to the Czech market.

In relation to pharmaceutical patents, the amount of products manufactured under the compulsory licence shall not exceed what is necessary to meet the needs of the importing country or countries cited in the application. The duration of the licence shall be indicated. The licence shall be strictly limited to all acts necessary for the purpose of manufacturing the product in question for export and distribution in the country or countries cited in the application.

The MA will limit the compulsory licence to plant variety rights.

The Industrial Property Office (for patents, utility designs, biotechnology patents and pharmaceutical patents) and the Ministry of Agriculture (for plant variety rights).

The application procedure for compulsory licences is regular administrative proceedings with varying procedures for patents, utility designs, biotechnology patents and pharmaceutical patents:

1. The proceedings for granting a compulsory licence is initiated upon the request of the potential compulsory licensee – the application can be in electronic or paper form. Subsequently, the relevant authority will assess the request and allow both parties to provide their statements in the matter and afterwards, the relevant authority will decide on the matter;
2. The potential compulsory licensee must submit relevant evidence to prove that the conditions for the granting of the compulsory licence are fulfilled – any document can serve as evidence in the proceedings;
3. In relation to plant variety rights, the competent authority must decide within 30 days after receiving the request; in relation to patents, utility designs, biotechnology patents and pharmaceutical patents, there is no time limitation for the proceedings and there is also no prior practice that would indicate the duration.

No.

Yes.

12.1 What are the conditions for the revocation/termination of a compulsory licence? 

In relation to patents, utility designs and biotechnology patents, the holder might submit a request to revoke the compulsory licence if: (i) the circumstances for granting the compulsory licence have changed and are unlikely to recur; or (ii) the licensee has not used the compulsory licence for a period of one year, or the licensee does not respect the conditions required by the compulsory licence. The IPO might decide to either revoke the compulsory licence completely or amend the conditions, duration or scope of the compulsory licence.

In relation to plant variety rights, after one year from the granting of the licence, each of the parties might submit a request to revoke or change the decision on granting the compulsory licence to the MA. The sole ground for such a request is a change of circumstances.

In relation to pharmaceutical patents, the compulsory licence may be terminated by a decision of the IPO if the conditions of the licence are not respected by the licensee. The IPO shall review upon reasoned request by the licensor or the licensee whether the licence conditions have been respected. This review shall be based on the assessment made in the importing country where appropriate.

12.2 How should products made under a compulsory licence be treated if the compulsory licence is terminated/revoked?

There is no specific regulation in this regard. Therefore, general conditions on licensing shall apply.

Yes.

13.1 If the compulsory licensee is required to pay a royalty, how is the amount of royalty determined and who will decide the amount of the royalty?

In relation to patents, utility designs and biotechnology patents, the licensor and the licensee might reach an agreement regarding the royalty amount. If they are unable to reach an agreement, a competent court will determine the amount.

In relation to plant variety rights, the MA will determine the amount of the royalty.

In relation to pharmaceutical patents, the IPO shall determine the adequate remuneration as follows: (i) in cases of national emergency or other circumstances of extreme urgency or in cases of public non-commercial use under Article 31(b) of the TRIPS Agreement, the remuneration shall be in a maximum amount of 4 % of the total price paid by the importing country or on its behalf; (ii) remuneration shall be determined taking into account the economic value of the use authorised under the licence to the importing country or countries concerned, as well as humanitarian or non-commercial circumstances relating to the issue of the licence.

13.2 Is there any remuneration available for the right holders other than royalty?

In relation to biotechnology patents and plant variety rights, the licensor is entitled to cross-licence the biotechnology patent or the plant variety right of the licensee.

In general, it is possible to submit an appeal against the decision of the IPO or the MA.

Should the appeal be unsuccessful, it is possible to submit lawsuit against the decision to the relevant administrative court.

Czech legislation does not explicitly specify any such rule. However, both the IPO in relation to patents, utility designs and biotechnology patents and the MA in relation to plant variety rights can specify conditions for compulsory licences.

15.1 Will this provision of know-how and support be compensated and how is the amount of such compensation determined?

Czech legislation does not explicitly specify any such rule. Nevertheless, we assume that it would have to be included in the royalty.

Yes. Generally, the licensee shall conceal from third persons documents and information received from the licensor, unless the agreement or the nature of the underlying documents and communications indicate that the licensor has no interest in concealing them. After the termination of the licence, the licensee shall return the underlying documents; the licensee shall keep the information confidential until it becomes generally known.

16.1 If the compulsory licensee discloses the confidential information in violation of its obligation, does the right holder have a basis of claim against the compulsory licensee? 

Yes.

In relation to patents, utility designs, biotechnology patents and plant variety rights, this will depend on the individual conditions of the compulsory licence. 

In relation to pharmaceutical patents, the scope of the licence is to all acts necessary for the purpose of manufacturing the product in question for export and distribution in the country or countries specified in the application. No product made or imported under the compulsory licence shall be offered for sale or put on the market in any country other than that cited in the application (exception applies).

17.1 If the compulsory licensee is permitted to export products under the compulsory licence, are there any requirements and limitations on the export of such products?

In relation to patents, utility designs, biotechnology patents and plant variety rights, this will depend on the individual conditions of the compulsory licence. 

No.

Yes, it is possible since facilitating the treatment of patients infected by COVID-19 might be considered in the public interest, which is a legal ground on which a compulsory licence might be granted. However, currently there is no special legal regulation in connection to the COVID-19 outbreak. The third parties must, therefore, follow the standard procedure.

No.

In relation to patents, utility designs, biotechnology patents and pharmaceutical patents, the compulsory licence may be assigned or transferred only within the enterprise (or its part) where the compulsory licence is being used.

No.

In relation to patents, utility designs, biotechnology patents and plant variety rights, there is no such obligation to products made under the compulsory licence.

In relation to pharmaceutical patents, the products made under the compulsory licence shall be clearly identified, through specific labelling or marking, as being produced pursuant to the EU Regulation. The products shall be distinguished from those made by the rights holder through special packaging and/or special colouring/shaping, provided that this distinction is feasible and does not have a significant impact on price. The packaging and any associated literature shall bear an indication that the product is subject to a compulsory licence under the EU Regulation, giving the name of the IPO and any identifying reference number, and specifying clearly that the product is exclusively for export to and distribution in the importing country or countries concerned.

No.

No.