1. Motive and Purpose of Research
After the TRIPS Agreement, a global standard of intellectual property rights binding all WTO member state was established. The globalized trends of patent protection were driven by countries with advanced technology as well as strong economic power seeking to urge countries with loose patent protection to strengthen their patent laws. Due to disparate level of development among the member countries of WTO, the influence of globalized patent protection on nation’s domestic interests conflicts with each other. Developed countries sought for rigid legislations. On the contrary, strict patent protection would impede technology exploitation and access to essential medical treatments in less developed countries without sufficient necessary infrastructure. As a result, during the negotiations and preparations for the international agreement of intellectual property rights protection, there were many compromises made by the involving countries.
Compulsory license came along with the compromise between the developed countries and the less developed countries. Therefore, the language used in Article 31 of the TRIPS Agreement is full of ambiguity and subject to flexible interpretation.
Advocates of public interest tend to explain the context of compulsory license broadly, making compulsory licensing mechanism easier to be invoked when necessary. As for proponents of stronger patent protection, they interpret the provision relatively narrowly and limited. Whatever stance a nation takes, since the TRIPS has permitted such licensing means, the issuance of compulsory license is deemed as a countermeasure against patent abuse or public crisis.
No matter for what good reasons, compulsory licensing takes away the owner’s
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property right essentially. In order to compensate the affected patent owners of non-voluntary licensing, the TRIPS Agreement requires nation to pay “adequate”
remuneration for the licensor. However, the definition and specific requirement in regard of adequate remuneration are not stipulated in TRIPS, and thus leave considerable room for each WTO member nation’ discretion.
Despite that economic returns are the most important concerns for patent holders, there are only few articles written by the scholars dealing with the issue of adequate compensation. An international standard of royalty setting in remuneration can be difficult considering various situations facing each countries and hugely different financial affordability among WTO member nations. Nevertheless, a flexible working system adjusting to each country’s need could be a feasible way to make the compensation decision more predictable and transparent, which would lead to an efficient licensing process and thus benefit both the patent holders as well as the authorities concerns.
In Taiwan, the new amendment of Taiwanese Patent Act was passed by the Legislative Yuan in November 29th, 2011 and will come into effect in the end of 2012.
Article 88 of the New Patent Act stipulates ”A decision on an application for compulsory licensing shall be made in writing, and shall indicate the reasons, scope, time period, and the required compensation.” However, the provision does not specify the approach of how to determine the compensation at issue regarding compulsory license. The research on the remuneration issue is also scarce.
Therefore, this thesis intends to introduce the examples and experiences of compensation setting in compulsory licensing cases worldwide to find the feasible approaches for domestic administrative process in Taiwan. At the same time, by introducing the compulsory licensing cases in Taiwan and interviewing the official of the authorities concerned who is in charge of the affairs, it also elaborates an in-depth
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analysis from another perspective. Considering the lack of experiences about determining compensation in Taiwan, the research may provide some references for future cases.
2. Research Methodology
In order to establish a model for the references of remuneration in compulsory licenses, both the academic research and practices in the real world were studied and analyzed. Compensation for compulsory license can be divided into two categories, the general compulsory license and the pharmaceutical compulsory license regarding public health issues. The discussion within the thesis would also follow the pattern of dichotomy. In respect of the general compulsory licensing, the cases in the U.S. are largely depended on. As for the pharmaceutical aspect, the thesis focuses on the report conducted by the UNDP (United Nations Development Programme) and the methods of calculation used in Canada, Japan, taking into account other approaches proposed by the researchers and scholars.
According to the UNDP report conducted by James Packard Love, it indicates numerous royalty-setting ways concerning non-voluntary licensing in both the developed and developing nations. Besides, in pharmaceutical aspect, it introduced four methods in determining the compensation of compulsory licenses and each provides different points to the consideration of setting the royalties. By comparing those various royalty setting methods, it may draw some conclusions for the administrative decisions in Taiwan.
As a result of the empirical study in the thesis, the official of the authorities concerned (Intellectual Property Office) in Taiwan provides her personal opinions on the remuneration issues, which allows us to look at such issue from the government’s
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perspective and makes the study more complete.
3. Structure of the Thesis
Chapter 1 introduces the general idea of compulsory license and explains the motive and purpose of focusing on the remuneration part of non-voluntary licensing.
Chapter 2 starts with the history of patent protection, providing the background of the formation of patent system and its serving purposes. These factors evaluated for the developing legislative decree concerning patent protection would become the reasons why each nation took different approaches to accomplish their legislations. Some countries cared more about public welfare. The other counties fought for their patent holder’s private interests. However, both benefits were considered in the evolution of patent laws domestically and internationally. Before the concept of private property appeared, the transfer of new technology and the promotion of innovations that had benefited the society might be the first priorities. Private interests could be merely reflecting advantages when the government pursued the public welfare. But after the notion of personal property began to formed, more and more efforts and capital were poured into the pool of research and development of new technology. Thus, the section tells the story of historical overview on patent protection which sowed the seeds of controversy of compulsory license and how economic interests became the core of patent protection.
Chapter 3 deals with the contradicting ideas of compulsory license and promoting innovation. Since patent rights enable its owners to have the exclusive rights of authorization, patent holders are entitled to sell their patented inventions at will as long as there is a buyer. Nevertheless, under certain circumstances governments may step in the trade and make the rules of the trading when it is
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necessary for various grounds. Compulsory license is a balancing tool for public interests and patent protection adopted by the TRIPS agreement. The part illustrates the justifications and legal resources of compulsory license based upon the international agreements and scholars’ opinions. Also, it introduced some of the most worth referring cases worldwide in order to give an example of how the mechanism can be used to achieve better good for the nations, especially in the public health.
However, the patent holders’ right cannot be taken without proper compensation and that lead us to the discussions in Chapter 4 and 5.
Chapter 4 and 5 deals with concrete legal texts in the international agreements and the specific remuneration guidelines used by certain countries and proposed by the scholars. The most relied document is the UNDP report conducted by James Packard Love. The various royalties setting reflected the approaches that different countries adopted based upon their overall evaluation. Adequate remuneration is interpreted differently from market to market. Thus, the part suggests that it is difficult and almost impossible for every nation taking the same standardized method.
Therefore, a more flexible mechanism which is able to adjust to varied situation is preferable.
Chapter 6 introduces the two compulsory licensing cases in Taiwan. Upon the empirical study, the official of Taiwan Intellectual property Office was interviewed to deliver her personal opinions on the subject of “adequate remuneration” and the ensuing actions after the issuance of compulsory licenses in Taiwan. This might give the readers a general idea of the Taiwanese government’ perspective when it comes to compensation in such cases.
Lastly, Chapter 7 concludes the thesis and proposed some personal suggestions to the remuneration issues in compulsory licenses, which may be slightly helpful for the further study in the future.
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