Compulsory licensing in Peru

  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?

Peruvian law does not establish a definition of compulsory licences. However, Peruvian laws establish four types of compulsory licences:

  • Compulsory licence for lack of exploitation.
  • Compulsory licence for reason of public interest, emergency or national security.
  • Compulsory Licences for Anti-competitive Practices.
  • Compulsory licence for dependency of the patent.

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

The regulations applicable to Peru regarding compulsory licences are:

  • Decision 486 of the Andean Community of Nations (CAN);
  • Legislative Decree No. 1075 issued by the Peruvian Government;
  • Resolution No. 2706-2019 / DIN-INDECOPI – Guidelines for the authorisation of compulsory licences of Patents issued by the National Institute for the Defence of Competition and Protection of Intellectual Property (INDECOPI);
  • Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organisation (WTO).

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

Compulsory licences can be requested for any kind of patent.

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

According to the public information of INDECOPI, no compulsory licence has been issued in Peru.

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

Any natural or legal person, regardless of their nationality, including foreign companies, can apply for a compulsory licence.

The  local regulations for the granting of a compulsory licence are:

  • Legislative Decree No. 1075 issued by the Peruvian government;
  • Resolution No. 2706-2019/DIN-INDECOPI - Guidelines for the authorisation of compulsory licences of Patents issued by INDECOPI; 
  • Decision 486 of CAN;
  • Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

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

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

Yes, the applicant for a compulsory licence must present satisfactory evidence to the Office of Inventions and New Technologies of INDECOPI that he has made an effort to obtain the authorisation of the rights holder and that such efforts have not been successful for a period of 30 days prior to submitting the application.

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

Compulsory licences can be granted for reasons of public interest, emergency or national security declared by the Peruvian state through a Supreme Decree.

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?

After the expiration of three years from the granting of the patent or four years from its application, whichever is longer, the authority, at the request of any interested party, will grant a compulsory licence mainly for the industrial production of the product object of the patent or the integral use of the patented procedure, only if at the time of its request the patent has not been exploited, or if the exploitation of the invention has been suspended by more than a year.

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

Peruvian  laws establish four types of compulsory licences:

  • Compulsory licence for lack of exploitation.
  • Compulsory licence for reason of public interest, emergency or national security.
  • Compulsory Licences for Anti-competitive Practices.
  • Compulsory licence for dependency of the patent.

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

The scope and duration of compulsory licences will be limited according to the purposes for which they were granted and solely to supply the national market. Likewise, at the request of the patent rights holder or licensee, the conditions of compulsory licences may be modified by the National Patent Office when new facts justify it and, in particular, when the patent rights holder grants another licence under more favourable conditions than those established in the compulsory licence.

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

The Office of Inventions and New Technologies of INDECOPI.

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

The application for a compulsory licence must follow the following procedure:

  • Submit a written application to the Office of Inventions and New Technologies of INDECOPI that must contain i) the data that identifies the applicant and the address for notifications and POA, if necessary; ii) Patent registration number; iii) documents supporting the granting of the compulsory licence; and iv) the administrative fee.
  • Upon receipt of the application, the authority will assess whether it meets the requirements for its submission. If such requirements are not met, it will grant the applicant a non-extendable period of 30 working days to correct the omissions of the application.
  • After verifying the requirements for filing the application, the patent rights holder will be informed so that he can present the documents he deems necessary, for a non-extendable period of 60 working days. The notification will be made at the last address indicated in the patent application file.
  • The procedure before the Office of Inventions and New Technologies has a period of 180 working days.
  • The decision of the Office of Inventions and New Technologies can be appealed before the Specialised Chamber on Intellectual Property of INDECOPI within a period of 15 working days.
  • The procedure before the Specialised Intellectual Property Chamber has a period of 180 working days.
  • If at the end of the procedure, the compulsory licence is granted, the Economic Studies Department of INDECOPI will determine the amount of financial compensation that corresponds to the patent rights holder.
  • Both parties – the patent rights holder and the applicant for the compulsory licence – must submit the information requested by the Economic Studies Department, within ten working days. In the event of non-compliance with this request, INDECOPI may initiate a sanctioning procedure.
  • With the information available, the Economic Studies Department will issue a technical opinion on the amount of economic compensation for the patent rights holder within 30 working days.
10.1 What materials need to be submitted to the competent authority?

Any document or information that may support the application, including evidence that shows that a prior attempt was made to obtain a contractual licence from the patent rights holder without success.

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

The procedure lasts 180 working days. In the event of an appeal, the period is extended to another 180 additional working days.

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

No, the Peruvian authority must notify the patent rights holder of the compulsory licence application. However, the patent rights holder is not obliged to present a document opposing or supporting the application for a compulsory licence.

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

Yes, a licence can be revoked or terminated.

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

The compulsory licence can be revoked or terminated when the patent expires or when the factual assumptions that justified it ends.

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

Peruvian law does not establish provisions for the treatment of products made under a compulsory licence that has been terminated or revoked.

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

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?

If at the end of the application procedure, the compulsory licence is granted, the Economic Studies Department will determine the amount of economic compensation that corresponds to the patent holder, as detailed in question 10.

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

No, there is not.

The party that is not satisfied with the result of the compulsory licence procedure can file an action with the Peruvian judiciary within a period of three months in order to request that a judge nullify the decision.

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? 

Peruvian law does not address this matter.

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

Peruvian law does not address this matter.

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

Peruvian law does not address this matter.

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

No.

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

No.

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?

Yes.

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

No.

21. Can a compulsory licence be transferred or assigned?

Yes, the compulsory licence may only be transferred with a part of the company or with the company's intangible asset that allows for its industrial exploitation. Proof must be rendered in writing and registered with the Office of Inventions and New Technologies. Otherwise, the transfer will not have legal effect. Sub-licences are not granted.

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

Peruvian law does not address this matter.

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

Peruvian law does not address this matter.

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

Peruvian law does not address this matter.

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

Peruvian law does not address this matter.

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Maria Delia Oxley
Partner
Lima