Compulsory licensing in Ukraine

  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 a procedure under which it is permissible to use a patented IP object (inventions, utility models, industrial designs, integrated circuits, plants varieties) without the IP right holder’s permission.

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

The applicable sources of law are:

  1.  Civil Code of Ukraine;
  2. Law of Ukraine on the Protection of Rights to Inventions and Utility Models;
  3. Law of Ukraine on the Protection of Rights to Integrated Circuits;
  4. Law of Ukraine on the Protection of Rights to Industrial Designs;
  5. Law of Ukraine on the Protection of Rights to Plant Varieties;
  6. Cabinet of Ministers of Ukraine (the CMU) Resolution on the Procedure of Granting a Licence for the Use of a Patented Invention (Utility Model) or Registered Topography of Integrated Circuit by the Cabinet of Ministers of Ukraine;
  7. Cabinet of Ministers of Ukraine Resolution on the Procedure of Granting a Compulsory Licence for the Use of Plant Varieties;
  8. Cabinet of Ministers of Ukraine Resolution on the Procedure of Granting a Licence for the Use of a Patented Invention (Utility Model), related to a pharmaceutical by the Cabinet of Ministers of Ukraine.

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

 Types of products to which compulsory licensing applies:

  • inventions, utility models, industrial designs, integrated circuits and plant varieties;
3.1 Has any compulsory licence ever been issued in your jurisdiction? If yes, on what type of technology? 

Not aware of any cases.

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

Under current regulations, any person or legal entity can apply for or claim a compulsory licence. No exceptions are provided for regarding non-residents.

Under Ukrainian legislation a compulsory licence may be granted:

  1. in the event of non-usage or insufficient usage of a patented (registered) IP object subject to compulsory licensing, provided that the IP right holder unreasonably refuses to grant licences to such objects;
  2. in the event of urgent social necessity provided that either martial law or state of emergency is in place (for plants varieties);
  3. in a public health, state defence, environmental security or other social-interest matter (for inventions, utility models, integrated circuits);
  4. for dependent patents (for inventions and utility models).

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

Preconditions for a court to grant a compulsory licence based on the “non-usage grounds”:

  1. the patented or registered IP object is not used, is inefficiently used by the holder within three years after its registration,  its last use is without objective grounds;
  2. the IP rights holder unreasonably refuses to grant a licence under reasonable conditions to a person seeking such a permit;
  3. for plant varieties: the person asking for a licence is capable, from the financial and any other aspect, of competently and effectively executing the right granted under the licence.

Preconditions for the CMU granting a compulsory licence:

  1. before applying for a compulsory licence related to pharmaceuticals, an applicant must prove that the patent holder cannot satisfy the need for the relevant pharmaceutical by means usually used for the manufacturing of such pharmaceuticals; additionally, the applicant must show evidence that the right holder unreasonably refuses to grant the relevant licence;
  2. before applying for a compulsory licence to use inventions, utility models or integrated circuits, an applicant must first ask the right holder to issue such licence, and only after the holder unreasonably refuses to issue the licence may the person seeking it apply for a compulsory licence;
  3. a compulsory licence for a plant variety can only be issued if either martial law or a state of emergency is declared.

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

Not specified.

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

The scope of a compulsory licence is always limited and is defined by a competent authority (court or the CMU) in each case individually.

If the CMU grants a compulsory licence for a plant variety on the grounds of urgent social necessity, the licensing period cannot exceed four years.

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

A compulsory licence on the grounds of non-usage or insufficient usage of a patented (registered) IP object subject to compulsory licensing is granted by courts of general jurisdiction.

Under the other grounds, the competent authority to grant such licences is the CMU.

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

Application procedure for compulsory licence for pharmaceuticals with the CMU:

  1. The motion must include the international non-proprietary name of the pharmaceutical, the title of the invention (i.e. utility model), the patent number, information about its holder (or holders), its (their) address or location, the name of the applicant, and its location.
  2. Materials attached to the motion must include a justification of the need to use the patented invention (utility model) indicating the specific circumstances of the case and the necessary term of the licence, a technical and economic justification of expediency, capacity, and conditions to use the patented invention (utility model), documentary confirmation of the groundless refusal of the patent holder to issue a licence to use the patented invention (utility model), and a calculation of the amount of compensation offered by an applicant to the patent.
  3. The term for issuing a decision granting the licence is not specified.

Application procedure for obtaining compulsory licences for inventions and utility models (other than pharmaceuticals) and integrated circuits with the CMU:

  1. The applicant must file a motion seeking the licence, which must include the name of the object, the number of the relevant patent (certificate), information about its holder, address (or location) as well as information about the groundless refusal of holder to issue a licence to use the object.
  2. The materials filed must include a justification of the need to use the object in the interests of society, indicating specific circumstances; a technical and economic justification of expediency, capacity, and conditions to use the object, and capacity to compensate the holder of the relevant patent (certificate) for the use of the object.
  3. The term for issuing a decision on the granting of the licence is not specified.

Application procedure for obtaining a compulsory licence for plant varieties with the CMU:

  1. The application for a compulsory licence to use a plant variety must include the number of the patent, the name of the plant variety, the term for which the licence is requested, compensation details, and the motivation to obtain the licence.
  2. The applicant may submit documents confirming the attempt to obtain the licence directly from the patent holder and the holder’s refusal to grant the licence.
  3. The term for issuing a decision granting the licence is not specified.

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

If a licence is being granted in court proceedings, the hearings are obligatory under civil procedural rules. 

No hearings are provided for when a licence is granted by the CMU.

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

A compulsory licence is automatically terminated after the term set out by the court or by the CMU granting the licence expires. The granting of the licence can be objected to in court when granted by the CMU, or in the appeal court when granted by a court.

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

If a licence is granted by the CMU (regarding inventions, utility models and integrated circuits), it can be revoked by the CMU when the grounds (circumstances) on which it was granted cease to exist, or when the term set out by the CMU expires. It may also be revoked under a motion by the licensee or if the licensee fails to follow the licence conditions or requirements set by the law.

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

A compulsory licence for a pharmaceutical can also be revoked by the CMU if a legal entity (licensee) ceases to exist or if it is established that the licensee submitted misleading (inaccurate) information when filling for the licence to be granted.

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

The compulsory licensee must pay a royalty to the rights’ holder.The amount is decided by the authority granting the licence (i.e. the court or the CMU). The legislation only provides a formula for determining the royalty for the use of inventions related to pharmaceuticals. This formula reflects the maximum amount of compensation and is calculated based on the Tiered Royalty Method.

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

No other remuneration is available for the right holders other than royalties.

The decision granting a licence can be objected to in court when granted by the CMU; the claimant may simultaneously claim damages caused by the granting of such a licence.

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? 

When the CMU grants a compulsory licence to use patented plant varieties, it may also require the patent holder to provide the licensee with the materials needed to propagate the variety in amounts sufficient for the proper exercise of the rights granted by the compulsory licence. No compensation is provided for in the current legislation.

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

No specific requirements.

A licence for a secret invention (utility model) can only be granted to a person who has permission to access the invention (utility model) from a State expert.

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

Under the general rule, there are no limitations on the export/import of products under compulsory licences.

However, the use of inventions, utility models (other than pharmaceuticals) and integrated circuits under a compulsory licence granted by the CMU is allowed primarily to meet the needs of the internal market.

As for compulsory licences related to pharmaceuticals that are granted by the CMU, products under such licences cannot be exported, as the use of such inventions and utility models is only allowed to meet the needs of the internal market.

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, any third party may file for a compulsory licence based on the grounds and under the conditions specified above.

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

A draft law introducing changes related to the compulsory licensing of pharmaceuticals concerning COVID-19 was announced, but not yet introduced in the parliament.

21. Can a compulsory licence be transferred or assigned?

Under a general rule, a compulsory licence cannot be transferred. The only exception relates to inventions, utility models and integrated circuits, when such a licence is being transferred along with the respective business as a whole (or its respective part).

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?

No.

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

No.

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

No.

Portrait ofOlga Belyakova
Olga Belyakova
Partner
Kyiv (CMS CMNO)
Portrait ofAnna Pogrebna
Anna Pogrebna
Partner
Kyiv (CMS RRH)
Portrait ofDiana Valyeyeva
Diana Valyeyeva
Lawyer
Kyiv (CMS RRH)