Obligatory Licenses and Public Use Licenses for Patent Right

May 18, 2009
Obligatory Licenses and Public Use Licenses for Patent Right

Mexican law by its nature recognizes the exclusive right of an inventor to protect inventions through patents on utility models or industrial designsgranted by the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial or IMPI). Based on a recent problem related tothe A(H1N1) Human Influenza virus, it has been speculated that it could become possible for patent holders to grant “obligatory licenses” to thirdparties in the pharmaceutical industry in order to provide for adequate production of medication for the Mexican population. However, it is worthnoting that Mexico’s Industrial Property Law distinguishes the concept of “obligatory license” (which must be given under certain circumstances andonly in case an invention is not being exploited) from “public use licenses,” which must meet the following requirements: (i) a national security oremergency must exist, including serious illness declared as a public priority; (ii) the license is valid only during the cause that gave rise to it; (iii) thefailure to grant such a license would impede, slow or negatively impact the production, supply or distribution of satisfactory numbers of basic healthproducts or medication for the population in general; (iv) the General Council of Health (Consejo de Salubridad General) issue a correspondingdeclaration on its own initiative or at the behest of national institutions specializing in health matters; and (v) upon issuing such declaration,pharmaceutical companies may apply for concessions granting a license and that such will be granted upon a prior hearing before the IMPI at whichinterested parties must appear. At this point, we consider it relatively unlikely that any such licenses will be granted in the current situation,notwithstanding what other measures the government may be considering, and that in recent statements the government has confirmed that it hassufficient medication to confront the emergency, and that there have been no shortages of specific medications because current patent holders havebeen able to satisfactorily distribute their medications. However, it is still worth keeping in mind that Mexican law does provide mechanisms in case itbecomes necessary to proceed to grant these types of licenses, which would be temporary and would presumably provide a royalty to the owner of suchpatents given that the IMPI must, in a hearing before the parties, determine a reasonable amount for the payment of royalties to patent owners.

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