Compulsory licensing in North Macedonia

  1.  What is the definition of compulsory licensing?
  2. What are the applicable sources of law relating to compulsory licensing?
  3. What type(s) of products or technologies do compulsory licensing applies to? 
  4. Who can apply for a compulsory licence? Are foreigners or foreign companies allowed to apply for a compulsory licence? 
  5. What are the legal grounds to grant a compulsory licence under the local laws of your jurisdiction and any applicable international treaties?
  6. Are there any preconditions to apply for a compulsory licence?
  7. Are there any limits on the number of compulsory licensees?
  8. Will there be any limitation on the scope of the compulsory licence, for example limitations on the time and the territory? 
  9. Which authority has the competency to grant a compulsory licence?
  10. What are the application procedures to get a compulsory licence?
  11. Can the competent authority grant a compulsory licence without hearings under an urgent situation?
  12. Can a compulsory licence be revoked/terminated or automatically revoked/terminated? 
  13. Does the compulsory licensee have to pay a royalty to the right holder? 
  14. Are there any legal remedies for the party who is not satisfied with the compulsory licensing decision of the competent authority?
  15. In order to implement the compulsory licence, for example, to manufacture the licenced product, is the right holder required to provide necessary support, such as know-how and training as in a voluntary agreed licence agreement? 
  16. Is the compulsory licensee subject to any confidentiality obligation? 
  17. Is the compulsory licensee allowed to export their products under the compulsory licence? 
  18. Have the laws on compulsory licensing been used in previous health emergencies and/or in the present COVID-19 pandemic in your jurisdiction?
  19. Is it possible for third parties to use the current laws on compulsory licensing in your jurisdiction to facilitate the treatment of patients infected by COVID-19?
  20. Are there any recent major regulatory exemptions and/or amendments made following COVID-19 to regulations governing compulsory licensing?
  21. Can a compulsory licence be transferred or assigned?
  22. Does the issuance of a compulsory licence have any impact on the previously agreed licence?
  23. Is there any special labelling requirement for the products made under the compulsory licence?
  24. Is there any special distribution channel requirement for the products made under the compulsory licence?
  25. Is there any price requirement for the products made under the compulsory licence?

1. What is the definition of compulsory licensing?

Compulsory licensing is defined as granting the right of using a licence to a third person followed by payment of compensation to the holder оf the patent (right holder) under the following cumulative conditions:

  1. The right holder does not use the patent, or the usage of the patent does not satisfy the needs of the domestic market;
  2. The right holder refuses to conclude an agreement on the licence or sets unfair conditions for using the patent.

2. What are the applicable sources of law relating to compulsory licensing?

Compulsory licensing is regulated in the Law on Industrial Property, Official Gazette of North Macedonia, nos. 21/2009, 24/2011, 12/2014, 41/2014, 152/2015, 53/2016 и 83/2018, and 31/2020 (“Law on IP Rights”) as well as in the Law on Ratification of the Protocol for Amending and Supplementing the Agreement on the Trade Aspects of the Intellectual Property Rights.

3. What type(s) of products or technologies do compulsory licensing applies to? 

The Law on IP Rights does not stipulate the products to which the compulsory licensing applies (i.e. there are no products or technologies excluded from its applicability).

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

There are no data on granted licences available online.

4. Who can apply for a compulsory licence? Are foreigners or foreign companies allowed to apply for a compulsory licence? 

Any person may apply for a compulsory licence. Namely, foreigners are not restricted to apply.

The Law on IP Rights stipulates that grounds for granting a compulsory licence include a court decision issued by the court that has jurisdiction to decide on IP rights. Such procedure is initiated upon a lawsuit submitted by the applicant for a compulsory licence against the right holder.

6. Are there any preconditions to apply for a compulsory licence?

The following rules and obligations apply in the procedure for granting a compulsory licence:

  1. The applicant must try to obtain consent from the right holder in the last 30 days before submitting the lawsuit for granting a compulsory licence with the competent court.
  2. Urgent situations are not a mandatory pre-condition for issuance of a compulsory licence (in case all other statutory conditions are met). As an exemption of the standard conditions, the Law on IP Right stipulates that a compulsory licence may be granted in a situation in which using the patent is necessary due to state matters, protection of the public interest related to health, nutrition, protection and improvement of the environment, or in case the licence essentially benefits certain branches of the economy. 
  3. The request for granting a compulsory licence cannot be submitted prior to expiry of four years as of submitting the patent application, or prior to expiry of three years as of recognition of the patent (if this period expiries later than the four-year period).

7. Are there any limits on the number of compulsory licensees?

The regulations on compulsory licences do not stipulate any limitation of the number of licences.

8. Will there be any limitation on the scope of the compulsory licence, for example limitations on the time and the territory? 

Yes, the limitations on the scope of compulsory licences are as follows:

  1. The compulsory licence is valid as long as the reasons for its issuance persist;
  2. The compulsory licence cannot be exclusive;
  3. It cannot be transferred to third persons, except in case of a transfer of the production unit in which the invention, subject to the compulsory licence, is used.

9. Which authority has the competency to grant a compulsory licence?

The Macedonian court has an exclusive jurisdiction to decide on granting the compulsory licence in cases where the patent for which the compulsory licence is requested, is registered in North Macedonia.

10. What are the application procedures to get a compulsory licence?

The application procedure is carried out by a competent court and is initiated by submitting a lawsuit. Such a lawsuit contains a request for granting a compulsory licence;

10.1 What materials need to be submitted to the competent authority?
  1. The Law on IP rights does not list the materials that need to be filed when applying for a compulsory licence, except for the following materials, which need to be filed when applying for a compulsory licence needed for public healthcare:
    1. Requests for issuance of compulsory licences submitted in other states for the same product;
    2. Information on the applicant or its representative;
    3. Name of the pharmaceutical product;
    4. Quantity of the planned production;
    5. Data on the state importer;
    6. Proof that negotiations were carried out with the patent holder;
    7. Proof of a request from an authorised representative from the importing country or other equivalent documentation.
10.2 How long will it take to get a compulsory licence?

The duration of the issuance procedure is not regulated by law.

11. Can the competent authority grant a compulsory licence without hearings under an urgent situation?

The issuance of a compulsory licence in an urgent situation represents an exception from ordinary procedures. However, the procedure that should be applied in urgent situations is not regulated. 

12. Can a compulsory licence be revoked/terminated or automatically revoked/terminated? 

The compulsory licence terminates as soon as the reasons for its issuance cease. However, in practice such termination is not automatic (i.e. it should be initiated by submitting an elaborated request from an interested party). A revocation may also be claimed in a court procedure when the right holder or the holder of the compulsory licence initiates a lawsuit.

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

As stated in point a above, the compulsory licence shall be terminated as soon as the reasons for its issuance cease. Additionally, the court shall rule on revocation of the licence if it ascertains that the decision on granting a compulsory licence has not been followed.

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

In case of revocation of the compulsory licence, the court imposes an obligation for the licensee to:

  1. reallocate at its own expense all the products in its possession or jurisdiction; or
  2. allow the importing country to reallocate the products; or
  3. remove the products in any other manner agreed upon with the right holder.

13. Does the compulsory licensee have to pay a royalty to the right holder? 

Yes, the licensee is obliged to pay a royalty to the right holder.

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?

The parties shall amicably determine the amount of the royalty. If such a settlement cannot be reached, the competent court shall determine the amount of the royalty.

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

There is no other remuneration available other than a royalty. 

As a general procedural rule, the parties have a right to a second-instance ruling upon a submission of an appeal against the first-instance ruling.

15. In order to implement the compulsory licence, for example, to manufacture the licenced product, is the right holder required to provide necessary support, such as know-how and training as in a voluntary agreed licence agreement? 

No, the Law on IP rights does not stipulate obligations for the right holder to provide such support.

16. Is the compulsory licensee subject to any confidentiality obligation? 

The Law on IP Rights does not regulate confidentiality obligations for the compulsory licensee. However, in terms of confidentiality in general, special rules apply for patents related to defence issues, which are within the competence of the Ministry of Defence. 

17. Is the compulsory licensee allowed to export their products under the compulsory licence? 

The compulsory licence is generally used for satisfying the needs of the domestic market.

The Law on IP rights regulates only the export of pharmaceutical products. Namely, an export to other counties may be allowed for healthcare purposes. Pharmaceutical products may be exported only in:

  • Less developed countries listed as such on the list of the UN;
  • Members of the WTO, which have sent a notification to the TRIPS council on the intention to use the system as an importing country;
  • Counties, which are not members of the WTO, but are listed as countries with low income (less that USD 745 per citizen) and have notified the Ministry of Economy of their intention to use the system as an importing country.

18. Have the laws on compulsory licensing been used in previous health emergencies and/or in the present COVID-19 pandemic in your jurisdiction?

Such information has not been made publicly available.

19. Is it possible for third parties to use the current laws on compulsory licensing in your jurisdiction to facilitate the treatment of patients infected by COVID-19?

There is no restriction to use the current laws on compulsory licensing to facilitate such treatments.

20. Are there any recent major regulatory exemptions and/or amendments made following COVID-19 to regulations governing compulsory licensing?

There are no recent amendments to the compulsory licensing regulations made during the COVID-19 state of emergency.

21. Can a compulsory licence be transferred or assigned?

In general, no. As an exception, the compulsory licence may be transferred in case of a transfer of the production unit in which the invention, subject to the compulsory licence, is used.

22. Does the issuance of a compulsory licence have any impact on the previously agreed licence?

No.

23. Is there any special labelling requirement for the products made under the compulsory licence?

Yes, this requirement refers to pharmaceutical products made under a compulsory licence. The package of these products must contain a clear indication that the products were made under a compulsory licence, the name of the court that issued the licence, the court's file number, an indication that the products have been made for export and distribution to other importing countries, and all other data required by the customs authority in North Macedonia. 

24. Is there any special distribution channel requirement for the products made under the compulsory licence?

No. The compulsory licence does not influence distribution channels.

25. Is there any price requirement for the products made under the compulsory licence?

No.

Portrait ofMarija Filipovska
Marija Filipovska Jelčić
Partner
Skopje