Compulsory licensing in the Netherlands

There is no specific legal definition for compulsory licensing under Dutch law. However, the Dutch Patents Act 1995 contains a number of requirements for obtaining a compulsory licence.

The Dutch Patent Act 1995 states that "The Minister may, if he considers it in the public interest, grant a licence under a patent, the contents of which shall be described precisely by him, to a party designated by him."

The Dutch Patents Act 1995 (Rijksoctrooiwet 1995, "ROW"); The Seeds and Planting Materials Act 2005 (Plant Variety Rights); the Dutch Copyright Act; and the General Administrative Law Act (Algemene wet bestuursrecht, "Awb");

Other sources are international agreements such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). In addition, the Dutch Competition Act (Mededingingswet) may also be applicable. The information below will focus on the Patent Act (ROW).

There is no limitation on the types of products or technologies, which compulsory licensing is applicable or potentially applicable to.

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

Other than two old cases (in 1936 and 1945 under the previous Dutch Patent Act) in which a compulsory licence was granted, no compulsory licences have been issued in the Netherlands. These two old cases related to a "low frequency amplifier" and technology related to the manufacture of "blueprint paper" respectively.

Foreign companies are allowed to apply for a compulsory licence, as long as they are qualified as an interested party.

A compulsory licence on the grounds of public interest is granted by ministerial order of the Minister of Economic Affairs and Climate Policy. The compulsory licence can only be granted to a party specifically designated by the Minister.

According to Article 1:2 (3) Awb, the interested party needs to be a legal entity. In principle, 'legal entity' means a legal person within the meaning of Book 2 of the Dutch Civil Code (BW), although legal persons under foreign law may also be interested parties.

• Article 57(1) ROW: public interest. According to the intention of the legislator, this concept must be interpreted broadly. According to the Minister of Economic Affairs and Climate Policy, this generally includes all of the government's policy objectives. According to the Secretary of State, an example might be in the case of combatting an epidemic where the patent holder has insufficient production capacity to meet the demands for his effective drug (for which there are no equivalent alternatives).
• Article 57(2) ROW: non-use for three years
• Article 57(4) ROW: dependency of a younger patent
• Article 57(5&6) ROW: dependency in plant breeders' rights
• Article 59(1) ROW: (national) defence purposes
• Article 60(1) ROW: under the Euratom Treaty

For a compulsory licence on the grounds of public interest (article 57(1) ROW), the granting of the licence is entrusted to the Ministry of Economic Affairs and Climate Policy (with the possibility of an appeal to the administrative court). A request for a compulsory licence must be addressed to the Minister. The law provides for the possibility that the Minister grants a compulsory licence "to itself" in case the government feels a public-interest need to be able to exploit an invention.

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

No negotiations between stakeholders and the holder of the patent are required for the Minister to grant the licence.

However, before making its decision, the Minister shall, unless the urgency of the matter dictates otherwise, examine whether the patent holder is willing to grant the licence voluntarily on reasonable terms. The patent holder will be allowed to put forward its objections in writing and orally. There is no minimum number of years required for the patent to be granted and/or implemented in order to be subject to compulsory licensing.

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

Urgency is not a formal requirement. However, regarding the most important category of compulsory licences for reasons of "public interest", such public-interest cases will likely involve an element of urgency.

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?

For compulsory licences based on public interest, there is no minimum number of years required in order to be subject to compulsory licensing. As for the other grounds, only a compulsory licence for non-use requires three years of non-usus for it to be applicable.

None. Article 58a(1) ROW states that a licence granted on the basis of Article 57 ROW is not exclusive. Furthermore, when public interest is the grounds for being granted, only a person designated by the Minister can be granted it. This may be several persons, but not an unspecified generalisation.

Compulsory licences by their nature give the licensee the right to apply the patent within the limits of the compulsory licence. The compulsory licence granted by Minister of Economic Affairs and Climate Policy will be limited to the Netherlands.

The provision does not further regulate how the terms of the compulsory licence are to be determined. The parties are expected to agree on this themselves.

However, the compulsory licence is strictly 'personal': the licensee may only apply the acts reserved to the patent holder himself under the compulsory licence. Please note that pursuant to Art. 58(a)(3) ROW, a compulsory licence may be revoked if, taking into consideration a reasonable protection of the licensee’s justified interests, the circumstances that led to the

licence being granted have ceased to exist and it is unlikely that they will be revived. On the grounds of a substantiated request, the authority that granted the licence shall investigate whether the aforementioned circumstances continue to apply.

Note that the Minister may impose upon the licensee the obligation to provide security within a certain term.

The Minister of Economic Affairs and Climate Policy is competent authority for granting a compulsory licence on the grounds of public interest. In other cases, interested parties can institute legal proceedings before the Hague Court. The Hague Court has jurisdiction to grant compulsory licences based on the ROW.

The application for a decision shall be submitted in writing to the administrative body competent to decide on the application, which is in this case the Minister of Economic Affairs and Climate Policy (article 4:1 Awb).

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

The application shall be signed and contain the minimum information (article 4:2(1) Awb):

• the name and address of the applicant;
• the date;
• an indication of the decision, which is requested.

Article 4:2(2) stipulates: the applicant shall also provide such information and documents as may reasonably be obtained to enable him to take a decision on the application.

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

Article 4:13 Awb: An order must be given within the period prescribed by law or, in the absence of such a period, within a reasonable period of time after receipt of the application. The reasonable period shall in any case have expired if the administrative body has not issued a decision within eight weeks of receipt of the application, unless the administrative body informs the applicant of this within this period, stating a reasonable period within which the decision can be expected (article 4:14 (3) Awb).

For other cases: The regular court procedures of the Hague Court apply.

For the grounds of public interest:

According to the TRIPS Treaty, it must be examined whether the patent holder is or is not willing to grant a licence voluntarily (as Article 31 TRIPs Treaty sub b prescribes). As discussed in sub 4, the patent holder will be allowed to put forward its objections to the Minister in writing and orally.  According to Art. 57(1) RPOW, if there is urgency, the Minister is not obliged to examine whether the patent holder is willing to grant the licence voluntarily on reasonable terms.  This would imply that under such circumstances of urgency, the compulsory licence could be granted without hearings.

Article 58a(3) ROW stipulates that a granted compulsory licence may be revoked in certain circumstances.

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

The conditions for such revocation is when, after taking into account a reasonable protection of the legitimate interests of the licensee, the circumstances that led to the granting of the licence cease to exist and are unlikely to be revived. The authority that granted the licence shall, upon a well-reasoned request, investigate the circumstances above.

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

How products made under a compulsory licence should be treated if the compulsory licence is terminated/revoked is not specified in the ROW.

A compulsory licence will require payment of a licence fee by the licensee. Parties are expected to agree on this themselves. If they do not agree on the fee to be paid, article 58(6) ROW stipulates that the Hague Court will determine the fee.

The court has jurisdiction for all compulsory licences except those pursuant to the Euratom Treaty for determining the fee to be paid by the licensee.

The Minister may make the licence conditional upon the provision of security, but the determination of the fee to be paid is reserved to the court pursuant to article 58(6) ROW.

The applicant can within six weeks of the decision of the Minister lodge a notice of objection with the Minister. The applicant shall be obliged to state any new facts or changed circumstances (article 4:6 Awb). After this, the applicant can file an appeal with the court of The Hague. This objection has suspensive effect, unless the Minister has decided otherwise for reasons of urgency.

For other grounds, the regular appeal procedure of the Hague Court of Appeal applies.

There is no requirement under Dutch (patent) law for the right holder to provide know-how and support to the licensee.

There is no such requirement under Dutch law. As a patent embodies technology that is made publicly available through publication in the respective patent registries, it is also not likely that any confidentiality obligations are violated by the mere use of a granted licence. Of course, as parties will usually negotiate contractual arrangements for the granting of a compulsory licence, such arrangement might well include (contractual) confidentiality obligations.

There are no express restrictions against the export of products produced under a compulsory licence granted under Article 57 of the ROW.  However, as suggested above, the Minister, when granting a compulsory licence for reasons of public interest, can determine the scope and conditions of the licence.

No.

When third parties are interested parties, they could theoretically apply to the Ministry Economic Affairs and Climate Policy for a compulsory licence on the grounds of public interest.

However, in the Netherlands as stated in legislative history, the compulsory licence is generally considered a drastic measure and a last resort option. However, one could argue that given the current COVID-19 crisis, public interest would constitute a valid reason for a compulsory licence for the use of patented inventions relating to the treatment and the diagnosis of COVID-19 in instances where the right holders do not make such inventions sufficiently available to the market.

Note that granting of a compulsory licence does not mean that a patented treatment will become available to patients. Many other factors could hinder such availability, such as data-exclusivity and market-exclusivity periods and the fact that many patents require access to the know-how of the right holder to be able to efficiently produce the product.

On March 26, 2020, the Dutch parliament suggested that "all means, including a compulsory licence, should be used if necessary when fighting COVID-19". All political parties agreed. A member of parliament (Ploumen) has also submitted on 5 June 2020 a legislative proposal amending the ROW to give special power to the Minister of Health, Welfare and Sport to grant a compulsory licence for combating the spread of COVID-19. However, no specific legislation or measures are in place yet.

Transfer of a compulsory licence is only possible to a limited extent, namely only together with the transfer of the company - or part of the company - in which the compulsory licence is applied, see 58(2) ROW.

There are no specific provisions in Dutch law that relate to the impact of a compulsory licence on a previously agreed licence.

There is no such special labelling requirement in the statutory provisions relating to compulsory licensing in the Netherlands.

There is no such special distribution channel requirement in the statutory provisions relating to compulsory licensing in the Netherlands.

There are no express price requirements in the statutory provisions relating to compulsory licensing in the Netherlands.