US Demands Amendment to Compulsory License Articles of the Patent Law.　IPO Will Formulate Measures to Cope with the Future Amendment.

CD-R dispute between Gigastorage and Philips sets up the first case of “compulsory license” in Taiwan. Learning of this case, the US demanded to amend the conditions of “compulsory license” in the Patent Law by removing “commercial terms and conditions”; that is, the government’s interference by compulsory license is not allowed if the patent dispute involves commercial conditions. the government shall not interfere in by way of compulsory licensing if the patent dispute is under commercial conditions. Intellectual Property Office (IPO) expressed that this indeed complied with the further amendment to the Patent Law, and they would formulate measures to avoid impacting domestic industry.

 

Article 78 of the Patent Law states that in order to cope with the national emergencies, or to make non-profit-seeking use of a patent for enhancement of public welfare, or in the case of an applicant’s failure to reach a licensing agreement with the patentee concerned under reasonable commercial terms and conditions within a considerable period of time, the Patent Authority may, upon an application, grant a right of compulsory licensing to the applicant to put the patented invention into practice; provided that such practicing shall be restricted mainly to the purpose of satisfying the requirements of the domestic market.” In July 2004, Gigastorage invoked this article to request IPO’s interference to settle the long-drawn-out dispute of patent royalty with Philips. IPO finally ruled that Gigastorage is granted the right of compulsory license to legally use Philips’ 5 CD-R patents.

 

It is reported that patent value, as reckoned by the US, should be demonstrated through market competition; public powers’ interference in commercial disputes is detrimental to market balance instead. The US expects to remove the “commercial terms and conditions” from the conditions of compulsory license upon signature of FTA, and Taiwan surely should follow this tendency. The IPO’s official states that Singapore indeed made such amendment in 2003 when signing FTA with the US. (2004.11)

CYJ/CCS