Compulsory licensing in Portugal

  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 not defined in the Portuguese legislation.

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

The applicable sources of law in Portugal regarding compulsory licences are the following:

  • Portuguese Industrial Property Code;
  • Regulation (EC) no 816/2006 of the European Parliament and of the Council of 17 may 2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems;
  • TRIPS Agreement (Agreement on trade related aspects of Intellectual Property Rights).

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

Compulsory licensing applies to any invention patent and utility model patent.

Though there are some limitations under certain circumstances. For example for patents directed to semi-conductors, the compulsory licence shall only be granted for public interest and not for commercial purposes.

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

No.

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

  • Any entity or individual that is interested in the application of a compulsory licence.
  • There are no restrictions on foreigners or foreign companies in relation to applying for a compulsory licence under the applicable Portuguese law.

The legal grounds for granting a compulsory licence are established in the Portuguese Industrial Property Code, and include the following:

  • Lack or insufficiency of exploitation of the patented invention;
  • Dependency between patents; and
  • Public interest.

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? 

According to the applicable Portuguese law, compulsory licences can only be granted where the prospective licensee has made efforts to obtain a contractual licence from the patent holder on acceptable commercial terms and such efforts have not been successful within a reasonable time.

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

No. But if the public interest so requires, INPI may grant a compulsory licence to exploit the patent for an invention or a utility model.

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?

It depends. For compulsory licensing based on non-exploitation or non-full exploitation by the patentee without any legitimate reason, the patent has to be granted three years as of the date of the issuance and four years as of the date of filing the application for the patent.

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

The applicable Portuguese law does not address this point.

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

The Portuguese Code of Industrial Property does not provide rules in this regard. However, the TRIPS agreement provides in the article 31 (c) that: Where the law of a Member allows for other use of the subject matter of a patent without the authorisation of the right holder, including use by the government or third parties authorised by the government, the following provisions shall be respected: the scope and duration of such use shall be limited to the purpose for which it was authorised, and in the case of semi-conductor technology shall only be for public non-commercial use.

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

The competent authority is the Portuguese Institute of Industrial Property (INPI). For compulsory licences on the grounds of public interest, the government is the competent authority.

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

Anyone who requests a compulsory licence shall submit a written request for a compulsory licence to INPI with the relevant supporting documents.

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

The Portuguese Code of Industrial Property does not address this point.

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

Unclear. The applicable Portuguese law does not provide specific deadlines for the Portuguese PTO to issue a final decision.

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

Oral hearings are not required in order to grant a compulsory licence. However, upon receipt of the application for a compulsory licence, the INPI notifies and instructs the patent owner to submit its observations and relevant evidence within two months.

According to the applicable Portuguese law, there are no exceptions even during an urgent situation.

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

The compulsory licence can be revoked.

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

The compulsory licence may be revoked, subject to adequate protection of the legitimate interests of the licensee, if and when the circumstances that substantiated the decision cease to exist and are not likely to recur.

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

The Portuguese applicable law does not specify how to treat the products made under a compulsory licence if the compulsory licence is terminated or revoked.

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

Yes, the Portuguese Industrial Code determines that the right holder has a right to obtain a “remuneration”.

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 patent holder will receive remuneration appropriate to each individual case, taking into account the economic value of the licence. Hence, if INPI decides to grant the compulsory licence, it notifies the parties to appoint an expert in order to reach an agreement on the compensation to pay to the patent owner.

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

No.

Yes. The Party who is not satisfied with the decision of INPI of granting or refusing the licence, or only the conditions under which it was granted, can file a judicial appeal to the competent court within three months of the date of notification.

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? 

The Portuguese applicable law does not address this point.

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

The applicable Portuguese law does not specify on this point.

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

The applicable Portuguese law does not address this point.

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? 

The applicable Portuguese law does not address this point. However, the right holder may have a claim on the basis of trade-secrets infringement if the parties establish that the compulsory licence is subject to confidentiality obligations.

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

Yes. According to Regulation (EC) no. 816/2006 of the European Parliament and of the Council of 17 may 2006, for the purpose of public health, any person may request a compulsory licence for the manufacture of a patented pharmaceutical product exported to:

  • any less-developed country appearing as such in the UN list;
  • any member of the WTO, other than the less-developed country members referred to in the previous point, that has made a notification to the Council for TRIPs of its intention to use the system as an importer, including whether it will use the system in its entirety or in a limited way;
  • any country that is not a member of the WTO, but is listed on the OECD Development Assistance Committee's list of low-income countries with a gross national product per capita of less than USD 745, and has made a notification
  • to the Commission of its intention to use the system as an importer, including whether it will use the system in its entirety or in a limited way.
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?

Yes. The following requirements regarding the export of pharmaceutical products are applicable under Portuguese Law:

  • The amount of products manufactured based on a compulsory licence shall not exceed the amount needed by the importer, and all products must be exported to the importer;
  • 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;
  • Specific labels or marks shall be indicated on the products manufactured under a compulsory licence clearly indicating that they are manufactured according to the compulsory licence;
  • The products shall be distinguished from those made by the rights holder through special packaging and/or special colouring/shaping, provided that such distinctions are feasible and do not have a significant impact on price;
  • Before the shipment of products, the entity that has obtained the compulsory licence shall publish on a website the amount of products shipped to the importer and the special production characteristics of the products referred to in the above items.

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?

In theory, yes. However, until the present date, no applications for compulsory licences related to Covid-19 have been filed.

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

Not yet.

21. Can a compulsory licence be transferred or assigned?

Compulsory licences may only be transferred with that part of the business or establishment, which exploits them.

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

The applicable law does not address this point.

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

Yes, at least for pharmaceutical products. Specific labels or marks shall be indicated on the products manufactured under a compulsory licence clearly indicating that they are manufactured according to the compulsory licence; and the products shall have specific colours or shapes, or be packed in a particular manner if feasible, and the price of the products will not be significantly affected.

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

Yes. At least for pharmaceuticals products produced under the compulsory licence, the importing countries to which they are supplied, must be mentioned on the relevant website.

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

According to article 10 (9) of the Regulation (EC) no 816/2006 of the European Parliament and of the Council of 17 may 2006, the licensee shall be responsible for the payment of adequate remuneration to the rights holder as determined by the competent authority as follows:

  1. in cases referred to in Article 9(2), which are related to situations 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 a maximum of 4% of the total price to be paid by the importing country or on its behalf;
  2. in all other cases, the 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.

For general compulsory licences, the applicable Portuguese law provides that the patent holder will receive a remuneration appropriate to each individual case, taking into account the economic value of the licence. Hence, if INPI decides to grant the compulsory licence, it notifies the parties to appoint an expert in order to reach an agreement on the compensation to pay to the patent owner.

Diogo Frada de Almeida
Portrait ofJoão Leitão Figueiredo
João Leitão Figueiredo
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