Compulsory licensing in France

Compulsory licensing refers to a legal mechanism by which a judicial court or the government grants a third party with a licence, without the prior consent of the patent owner, under certain circumstances and certain conditions.

• TRIPS agreements (Accords ADPIC) (Article 31)
• EU “Biotech” Directive 98/44/EC on the legal protection of biotechnological inventions (article 12)
• EU Regulation (CE) 816/2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems
• Articles L.613-11 to L.613-22-1 et seq. of the French Intellectual Property Code.

A compulsory licence could apply to any invention covered by a patent (including patent directed to semi-conductors), any new varieties of plant and could apply to any type of products or technologies.

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

There are very limited cases of compulsory licence in France. One compulsory licence has been granted on 1983 for a patent on “a coupling head intended to air brake systems on motor vehicles” and another one has been granted on 1997 for a patent on a machine for the automatic production of skewers.

Such a compulsory license may be requested by any public or private entity or any qualified person who/which would be able to exploit the patent concerned.

Yes, foreigners or foreign companies can apply for such compulsory licence, there is no specific restriction as to the nationality of the entity or the person.

There are different legal grounds depending on the type of the licence:

• Compulsory licence due to the lack of exploitation of the patent by its holder:

Such licence is granted if the patent owner has not been exploiting or seriously preparing the exploitation of the patent, or has not been commercialising its patent enough in the EU for 3 years following the grant of the patent or 4 years following the publication of the patent application (Article L.613-12 of the French Intellectual Property Code).

• Compulsory licence in respect of dependent patents:

Such licence is granted when a person owns a patent that cannot be exploited without infringing a prior patent. If the authorisation of the prior patent owner is impossible to obtain amicably, the Court may grant a licence if the invention would bring significant technical progress and is of great economic interest (Articles L.613-15 and L.613-15-1 of the French Intellectual Property Code).

• Compulsory licence in the interest of public health:

Such licence can be granted, on any patent for: a) a drug, a medical device, an in vitro diagnostic medical device, a related therapeutic product; b) a process for obtaining them, a product necessary for obtaining them or a process for manufacturing such a product; c) an ex vivo diagnostic method, when the exploitation of this patent is contrary to the interest of public health or if the quality of quantity of the products based on this patent offered to the public are not sufficient or too expensive or if such exploitation constitutes anticompetitive behaviour (Articles L.613-16 and L.613-17 of the French Intellectual Property Code).

• Compulsory licence in the interest of the national economy:

Such licence is granted if the patent owner does not exploit (or not sufficiently exploit)

the patent. The Ministry in charge of industrial property matters (Minister of Economy) can order the patent owner to exploit the patent in order to “satisfy the needs of the national economy” and if after 1 year the exploitation is not done or not sufficiently, then an order can be issued to grant compulsory licences to third parties. (Article L.613-18 of the French Intellectual Property Code)

• Compulsory licence in the interest of the national defence:

Such licence can cover any patent or patent application and is granted if the French State claim it for itself or for an exploitation on its behalf in the interest of national defence. (Article L.613-19 of the French Intellectual Property Code)

• Compulsory licence due to the lack of exploitation of the patent by its holder:

Such licence is granted if the patent owner has not been exploiting or seriously preparing the exploitation of the patent, or has not been commercialising its patent enough in the EU for 3 years following the grant of the patent or 4 years following the publication of the patent application. Any party able to prove both its ability to exploit seriously the patent and the impossibility to obtain a negotiated licence from the patent owner may claim for a licence (Article L.613-12 of the French Intellectual Property Code).

• Compulsory licence in respect of dependent patents:

Such license is granted if the authorisation of the prior patent owner is impossible to obtain amicably, so the Court may grant such licence. The part requesting the licence must prove both its ability to exploit the invention in a serious and effective manner and the impossibility of obtaining a negotiated licence from the patent owner. The owner of the prior patent is automatically granted a licence back on the dependent patent of its licensee (Article L.613-15 of the French Intellectual Property Code).

• Compulsory licence in the interest of public health:

Such licence is granted if the Ministry failed to obtain an amicable agreement with the patent owner, but no minimum duration of exploitation is required. The exploitation of the patent must be contrary to the interest of public health or the quality/quantity of the products based on this patent offered to the public must be insufficient or too expensive or such exploitation must constitute anticompetitive behaviour (Article L.613-16 of the French Intellectual Property Code).

• Compulsory licence in the interest of the national economy:

Such licence is granted if the patent owner failed to comply, after more than 1 year, with the order issued by the Ministry to operate its patent in a way sufficient to satisfy the interest of the national economy. (Articles L.613-18 and L.613-26 of the French Intellectual Property Code)

• Compulsory licence in the interest of the national defence:

Such licence is granted at any time if the French State claim for it in the interest of national defence without further justification. The license is granted at the request of the minister in charge of defense by order of the minister in charge of industrial property. (Article L.613-19 of the French Intellectual Property Code).

There are no limits on the number of compulsory licensees. Moreover, any compulsory licence is granted a non-exclusive basis.

Regardless of the type of compulsory licence, such a licence should be granted according to specific conditions, particularly with respect to duration/territory/scope of application.

Any compulsory license is granted on a non-exclusive basis.

Only a judicial court or the government are competent to grant such compulsory license depending on the type of licence to be granted.

It depends on the type of compulsory license. The application procedure can take place before a judicial court as part of a standard civil procedure but summons and pleadings must be sent to the French National Institute of the Industrial Property (INPI) within 15 days of the day of their notification to the court. For the applications taking place before the government, the applicant must request the licence to the competent ministry depending of the type of licence requested. After a consultation procedure of few months, the Ministry decides or not to issue a decision submitting the patent to compulsory licence. Then, any third party may require to be granted a licence and the Ministry will issue other decisions determining the specific conditions.

10.1 What materials need to be submitted to the competent authority?

Depending on the type of licence to be granted, it can be required to submit pre negotiations documents proving that the applicant did not succeed obtaining amicably a licence from the patent owner, documents proving the ability of the party requesting this licence to exploit the patent invention, documents proving the lack of exploitation of the patent owner etc.

10.2 How long will it take to get a compulsory licence?

It is difficult to assess but we assume at least few months depending on the application process.

A compulsory license can be granted without hearings but only under specific circumstances.

• In the interest of public health:

Such licence is granted when the exploitation of the patent is contrary to the interest of public health or if the quality of quantity of the products based on this patent offered to the public are not sufficient or too expensive or if such exploitation constitutes anticompetitive behaviour. This licence is granted if the Ministry failed to obtain an amicable agreement, but this amicable phase is not required in case of urgent situation (Article L.613-16 of the French Intellectual Property Code).

• In the interest of National defence:

The French State may claim and obtain, at any time, for the needs of national defence and without providing further justification, a license for the exploitation of an invention that is the subject of a patent application or a patent, whether such exploitation is made by itself or on its behalf. The license is granted at the request of the Minister in charge of defence by order of the Minister in charge of industrial property. This decree sets the conditions of the license with the exception of those relating to the royalties to which it gives rise. In the absence of an amicable agreement, the amount of the royalties is fixed by the judicial court (Article L.613-19 of the French Intellectual Property Code)

Yes.

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

The compulsory license can be terminated or revoked if the licensee does not comply with the conditions under which the licence was granted, the owner of the patent and, where applicable, the other licensees, may obtain the withdrawal of the licence from a Judicial Court (Article L.613-14 of the French Intellectual Property Code).

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

These issues must be determined in the court decision declaring the withdrawal of the compulsory license.

Yes.

13.2 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?

The compulsory license may provide the amount of the royalties involved.

Otherwise, in the absence of an amicable agreement between the patent owner and the licensee, the amount of the royalties is determined by a Judicial Court.

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

Not provided by law.

The terms of the compulsory license may be amended by the Court at the request of either the patent owner or the licensee. (Article L.613-12 of the French Intellectual Property Code).

Decisions granting a compulsory licence may be appealed following the regular civil appeal procedure (i.e. within one month).

Decisions of the government (any Ministry for example) may be appealed pursuant to the relevant public law provisions.

Not provided by law.

The law does not provide for confidentiality obligations except if required by the granted license and for the compulsory license granted in the interest of the national defence where all the proceedings and hearings are confidential. If obtained, a confidentiality obligation will obey to the same regime than a “normal” confidential obligation.

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? 

No specific remedies applicable to  compulsories licenses.

Not provided by law.

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

No specific requirements or limitations on the export.

No. There are currently no reported cases of compulsory licensing being used in previous health emergencies or in the present COVID-19 pandemic in France.

The law of 23 March 2020 n°2020-90 has introduced a new article L 3131-15 in the French public health code allowing to the Prime Minister to order the requisition of all goods and services necessary to fight against the sanitary disaster as well as any person necessary for the operation of these services or the use of these goods but also to take all measures allowing the provision of patients with appropriate medicines for the eradication of the sanitary disaster. The COVID-19 pandemic could obviously lead to recourse to the compulsory license mechanism.

A bill n°2808 proposed by deputies on 7 April 2020 suggests a relaxation of the conditions for granting these licenses, subject however to respecting the framework established by the TRIPS agreement.

The rights attached to compulsory licenses are personal and non-transferable, except in the case of an assignment of the business of the company or the part of the company to which the license is attached.

For the compulsory license granted on dependant patents, the license granted to the licensee (with the posterior patent) can only be transferred with the prior patent.

No legal provision as to the impact of compulsory licenses on pre-existing licensees.

The compulsory license can be terminated or revoked if the licensee does not comply with the conditions under which the licence was granted, the owner of the patent and, but also the other licensees, may obtain the withdrawal of the licence from a Judicial Court (Article L.613-14 of the French Intellectual Property Code).

There is no special labelling requirement for the products made under the compulsory license.

There is no special distribution channel requirement for the products made under the compulsory license.

There is no price requirement for the products made under the compulsory license.