Does the law of your jurisdiction provide for a regime for compulsory licensing with respect to patents? Please answer YES or NO and add a brief explanation.

YES

Article 36 of the Swiss Federal Act on Patents for Inventions (hereinafter PatA) states with regard to dependent inventions that if a patented invention cannot be used without infringing a prior patent, the proprietor of the later patent has the right to a non-exclusive license to the extent required to use his invention, provided that the invention represents an important technical advantage of considerable economic significance in relation to the invention that is the subject-matter of the prior patent.

Article 36a PatA states with regard to dependent plant variety rights that when a plant variety right may not be claimed or used without infringing an earlier-granted patent, the plant breeder or the owner of the plant variety has the right to a non-exclusive license to the extent required to obtain and use his plant variety right, provided that the plant variety represents an important advance of considerable economic significance in comparison to the patent-protected invention.

Article 37 PatA states with regard to exploitation of the invention in Switzerland that three years from the date of the grant of the patent, or at the earliest four years after filing the patent application, any person with a legitimate interest may apply for the grant of a non-exclusive license to use the invention if the proprietor of the patent has not sufficiently exploited it in Switzerland by the time of the action and cannot justify such a failure. Importing is also considered domestic exploitation.

Article 40 PatA states with regard to a license in the interest of the public that where public interest so dictates, the person whom the proprietor of the patent has, without sufficient reason, refused to grant the license requested, may apply to the court for the grant of a license to use the invention.

Article 40a PatA states with regard to compulsory licenses in the field of semi-conductor technology that for inventions in the field of semi-conductor technology, a non-exclusive license may only be granted to remedy a practice held to be anti-competitive in court or administrative proceedings.

Article 40b PatA states with regard to research tools that any person who intends to use a patented biotechnological invention as an instrument or means for research is entitled to a non-exclusive license.

Article 40c PatA states with regard to compulsory licenses for diagnostic tools that for inventions concerning a diagnostic product or procedure for humans, a non-exclusive license shall be granted to remedy a practice held to be anti-competitive in court or administrative proceedings.

Article 40d PatA states with regard to compulsory licenses for the export of pharmaceutical products that any person may bring an action to be granted a non-exclusive license for the manufacture of patent-protected pharmaceutical products and for their export to a country that has insufficient or no production capacity of its own in the pharmaceutical sector and which requires these products to combat public health problems, in particular those related to HIV/AIDS, tuberculosis, malaria and other epidemics (beneficiary country).

Article 13(b) of the Swiss Federal Act on Cartels and other Restraints of Competition (hereinafter the Cartel Act or CartA) allows for a compulsory patent license for elimination of or desistance from the hindrance of competition.

According to Art. 39 PatA, the Federal Council may decree Arts. 37 and 38 PatA to be inapplicable with regard to nationals of countries granting reciprocity. This partially applies to the United States of America (Federal Council Decree of 28 January 1908; SR 232.149.336).

Have the provisions of the TRIPS Agreement concerning compulsory licensing (Articles 31 and 31bis TRIPS and TRIPS COVID-19 Vaccines Decision, MC12, June 2022) been implemented in your jurisdiction? Please answer YES or NO and add a brief explanation.

YES

The provisions of the TRIPS Agreement concerning compulsory licensing have been implemented in Switzerland.

a) Have compulsory licenses been applied for or granted in your jurisdiction? Please select the alternative that represents your jurisdiction and provide a brief explanation for your choice.

YES

Compulsory licenses have been applied for and granted.

b) If your answer to subpoint (a) was YES:

i) For which industries the compulsory licenses have been applied or granted for:

1) Pharmaceuticals? Please add a brief explanation below.

Granted: No

To the best of our knowledge. See for instance the decision of the Court of Commerce of the Canton of Zurich Kirin-Amgen v Company X (2 July 1996) «Erythropoietin II», wherein the Court refused to grant a compulsory license, holding that there was no sufficient public interest for the purpose of granting a compulsory license. As another example, see the decision of the Swiss Supreme Court BGE 93 II 504, where the Supreme Court refused to grant a compulsory license for the alleged dependent invention relating to the production of the antibiotic chloramphenicol.

2) Biotech or other life sciences fields (excluding pharma)? Please add a brief explanation below.

Applied: No

To the best of our knowledge.

3) Semiconductors? Please add a brief explanation below.

Applied: No

To the best of our knowledge.

4) Technologies relating to protection of the environment or the climate? Please add a brief explanation below.

Applied: No

To the best of our knowledge.

5) Cybersecurity? Please add a brief explanation below.

Applied: No

To the best of our knowledge.

6) National security? Please add a brief explanation below.

Applied: No

To the best of our knowledge.

7) Others? Please add a brief explanation below.

Granted: Yes

The Swiss Supreme Court granted a compulsory license for a dependent invention in the decision BGE 29 II 564 «pupitre d’écolier».

ii) Have the compulsory licenses been applied for or granted based on:

1) Circumstances referred to in Article 31 of the TRIPS Agreement (e.g., national emergency or other circumstances of extreme urgency or in cases of public non-commercial use or in any other scenario)? Please answer YES or NO and add a brief explanation.

NO

To the best of our knowledge.

2) Other circumstances? Please answer YES or NO and add a brief explanation.

YES

The Swiss Supreme Court granted a compulsory license for a dependent invention in the decision BGE 29 II 564 «pupitre d’écolier».

What are the conditions for the grant of a compulsory license? Please provide a brief explanation. In more specific: Please answer YES or NO and add a brief explanation.

a) Have the requirements for granting a compulsory license been clearly or expressly specified in the law of your jurisdiction?

YES

b) Does the grant of a compulsory license require that the applicant for the compulsory license has made attempts to seek voluntary licensing prior to seeking a compulsory license?

YES

c) What kind of interests constitute an overriding interest giving rise to compulsory licensing?

(see below)

d) Are there any technical fields, industries, or applications for which compulsory licensing is not available?

NO

e) Are there any technical fields, industries, or applications for which there are special conditions or other special considerations for granting a compulsory license?

YES

Brief explanations:

a) See explanations re Arts. 36–40e PatA above.

b) Depends on the nature of the compulsory license:

YES; Art. 40e para. 1 PatA states that the licenses provided for in Art. 36–40d PatA are granted only if efforts of the applicant to obtain a contractual license on appropriate market terms within a reasonable period of time have been unsuccessful. According to Art. 111 para. 4 lit. a Patent Ordinance there is a need to bring proof of effort to seek for a license under Art. 40e PatA.

No; Regarding an action for the grant of a license in the event of insufficient exploitation in Switzerland according to Art. 37 PatA, it has been noted in the literature (Schweizer/Zech – Seitz, Art. 37 PatG, N 18) that it is not a requirement for the action that the plaintiff has first attempted to enter into negotiations with the patent proprietor.

Moreover, efforts to obtain a license are not required in situations of national emergency or other circumstances of extreme urgency or in cases of public non-commercial use, Art. 40e para. 1 PatA.

c) See explanations re Art. 36–40e PatA above.

d) Swiss Patent Law does not exclude any fields or industries but rather provides special conditions for certain fields and industries.

e) Article 40a PatA states that for inventions in the field of semi-conductor technology, a non-exclusive right may only be granted to remedy a practice held to be anti-competitive in court or administrative proceedings.

Article 40c PatA states that for inventions concerning a diagnostic product or procedure for humans, a non-exclusive license shall be granted to remedy a practice held to be anti-competitive in court or administrative proceedings.

Who can apply for a compulsory license? Please add a brief explanation.

i) Any person?

YES

ii) Only a specified category of persons/parties?

YES

1) Person with specific interest?

YES

2) Government?

NO

3) Commercial operators?

NO

4) Other?

NO

i) YES; In the event of:

A license in the interest of the public (Art. 40 PatA);

Use of a patented biotechnological invention as an instrument or means for research (Art. 40b PatA);

Manufacture of patent-protected pharmaceutical products and for their export to a country that has insufficient or no production capacity (Art. 40d PatA).

ii)

1) YES in case of:

A proprietor of an earlier invention that represents an important technical advance of considerable economic significance in relation to an older invention (Art. 36 para. 1 PatA);

A plant breeder or owner of the plant variety that represents an important advance of considerable economic significance (Art. 36a Para. 1 PatA);

Any person with a legitimate interest may apply for a license in the event of insufficient exploitation in Switzerland (Art. 37 Para. PatA).

2) (not applicable)

3) (not applicable)

4) (not applicable)

Does your current law specify mandatory scope or characteristics for a compulsory license? E.g., (territory (i.e., internal market only or including export), duration, field of use/intended purpose, (non-)transferability, (non-)exclusivity, (non-)sublicensability, the period of time that has passed since the date of the grant of the patent or the filing of the patent application, etc.)? Please answer YES or NO and add a brief explanation.

YES

Article 40e paras. 1–4 PatA states that the scope and term of the compulsory license are limited to the purpose for which it has been granted. The license may only be transferred with that part of the enterprise which uses the license. This also applies to sub-licenses. The license is primarily granted for supplying the domestic market. Article 40d PatA, i.e. manufacture of patent-protected pharmaceutical products and for their export to a country that has insufficient or no production capacity of its own, remains reserved.

Does a compulsory license also cover patent applications (i.e. prior to grant) and/or patent term extensions (e.g. supplementary protection certificates)? Please answer YES or NO and add a brief explanation.

According to the literature, a compulsory license can only cover a granted patent, not a patent application. However, a right to a compulsory license may be asserted in judicial proceedings even before the grant of a patent, if there is a justified interest in clarifying the legal situation. In case such a claim is accepted by the court, the compulsory license would only become effective upon grant of the patent (Schweizer/Zech – Gasser, Art. 36 PatG, N 10).

Does the current law provide for other mandatory obligations (if any) for the patentee vis-à-vis the licensee? E.g.:

a) Is the patent holder required to provide further information on the implementation of the patent to the compulsory licensee?

NO

b) Is the patent holder required to provide to the compulsory licensee trade secrets or other know-how for the purposes of the compulsory licensee to work the invention effectively?

NO

The Swiss provisions refer to the use of the invention, i.e. to a license relating only to the patent and not to further information or other rights.

a) Who has the power to decide on grant a compulsory license in your jurisdiction? Please add a brief explanation.

i) Patent authority (e.g., patent office)?

NO

ii) Court?

YES

iii) Other governmental body?

NO

iv) Arbitration?

NO

The court. See above and especially Art. 40e para. 6 PatA, stating that the court shall decide on the grand and revocation of licenses, on their scope and duration as well as on the remuneration payable.

According to Art. 26 para. 1 lit. a of the Patent Court Act (hereinafter PatCA), the Swiss Federal Patent Court has exclusive jurisdiction for issuing a license in respect of patents. The President of the Federal Patent Court decides as a judge sitting alone on actions for the granting of the license under Art. 40d PatA (Art. 23 lit. d PatCA).

b) Does the same body decide on remuneration? Please answer YES or NO and add a brief explanation.

YES

See above, the court shall decide on the grant and revocation of licenses, on their scope and duration as well as on the remuneration payable (Art. 40e para. 6 PatA).

c) Can the decision on compulsory license be appealed and to whom? Please answer YES or NO and add a brief explanation.

YES

The decision can be appealed to the Swiss Federal Supreme Court (Art. 75 para 1 of the Federal Court Act (FCA)). If a compulsory license is granted under Art. 40d PatA, the appeal must be filed within ten days, and the Supreme Court has to render its decision within one month.

a) Does the patentee have a right to receive prior notification of compulsory licensing? Please answer YES or NO and add a brief explanation (in particular of any exceptions and of any distinction made between situations of extreme urgency and other situations).

YES

Unless there are situations of national emergency or other circumstances of extreme urgency, or in case of public non-commercial use, see Art. 40e(1) PatA, stating that licenses provided for in Arts. 36–40d PatA are granted only if efforts by the applicant to obtain a contractual license on appropriate market terms within a reasonable period of time have been unsuccessful. In the case of a license in accordance with Art. 40d PatA, a period of 30 working days is regarded as reasonable.

As compulsory licenses are granted in court proceedings, the patentee’s right to be heard is consistently safeguarded. According to the literature, a grant of a compulsory license in ex parte proceedings should not exist.

b) Does the patentee have a right to be heard in cases of compulsory licensing? Please answer YES or NO and add a brief explanation (in particular of any exceptions and of any distinction made between situations of extreme urgency and other situations).

YES

See previous question.

Specifically, according to Art. 37(2) PatA relating to actions for the grant of a license to use the invention if the proprietor has not sufficiently exploited it in Switzerland, at the request of the plaintiff, the court may grant a license immediately after the action has been filed without prejudice to the final judgment providing that the plaintiff provides prima facie evidence that he has an interest in the immediate use of the invention and that he provides adequate security to the defendant; the defendant shall be given the opportunity to be heard beforehand.

c) What defenses/grounds are available to a patentee against applications for a compulsory license? Please add a brief explanation.

As compulsory licenses are granted in court proceedings, the patentee’s right to be heard is consistently safeguarded. According to the literature, a grant of a compulsory license in ex parte proceedings should not exist.

d) Are there any special provisions for independent inventor or small entity patentees? Please answer YES or NO and add a brief explanation.

NO

The Swiss Patent Act and the prevailing doctrine remain silent on special provisions but refer to «proprietor of the later patent» (Art. 36(1) PatA), the «plant breeder or the owner of the plant variety» (Art. 36a(1) PatA), «any person with a legitimate interest» (Art. 37(1) PatA), «any person with a proven interest» (Art. 38(1) PatA), «the person to whom the proprietor has refused to grant the license requested» (Art. 40(1) PatA), «any person who wants to use a patented biotechnological invention» (Art. 40b(1) PatA), «any person may bring an action before the court» for a compulsory license for the export of pharmaceuticals (Art. 40d(1) PatA).

a) Is the patentee always entitled to receive remuneration for the compulsory license? Please answer YES or NO.

YES

b) How and when is the adequacy of the remuneration and the economic value of the compulsory license assessed?

Article 40e(5) PatA states that in assessing the remuneration, the circumstances of the individual case and the economic value of the license are taken into account. In the case of a license under Art. 40d, the remuneration is determined by taking into account the economic value of the license in the importing country, its level of development and the urgency in public health and humanitarian terms. The Federal Council shall specify the method of calculation. Article 40e(6) PatA states that the court shall decide on the grant and revocation of licenses, on their scope and duration as well as on the remuneration due. In particular, it shall revoke an entitled person’s license on request if the circumstances that led to its being granted no longer apply and it is not expected that they will arise again. Appropriate protection of the legal interests of the entitled person remains reserved. According to Schweizer/Zech – Gasser, Art. 36 PatG, N 28), the calculation is based on the presumed net income if a license agreement were voluntarily concluded under the existing market conditions (Troller, Immaterialgüterrecht, 854); whereby, the license rates customary in the industry must be taken into account (Calame, SIWR IV, S. 492).

c) Does the patentee have the opportunity to participate in setting the remuneration level? Please answer YES or NO.

YES

As compulsory licenses are granted in court proceedings, the patentee’s right to be heard is consistently safeguarded.

d) Is there a cap on the level of remuneration? Please answer YES or NO and add a brief explanation.

NO

There are no such provisions under Swiss law.

Reporting and monitoring. Does your current law specify any mandatory monitoring or reporting requirements for compliance with the terms of the compulsory license? Please answer YES or NO and add a brief explanation.

NO

There are no such provisions in Swiss law.

Can a compulsory license be revoked or otherwise terminated during its term? Please answer YES or NO and add a brief explanation.

YES

a) If the answer to above was YES, what kind of reasons give rise to termination or revocation of a compulsory license under the law of your jurisdiction:

i) End of the situation giving rise to the compulsory license?

YES

ii) Breach of the compulsory license?

YES

iii) Failure to pay remuneration for the compulsory license?

YES

iv) Other?

YES

Please add a brief explanation.

Article 40e(2) PatA states that the scope and term of the license are limited to the purpose for which it has been granted. Article 40e(6) PatA states that the court shall revoke an entitled person’s license on request if the circumstances that led to its being granted no longer apply and it is not expected that they will arise again.

b) Aside from potential termination of the compulsory license, are there any other remedies available for the patentee against breach of the compulsory license? Please answer YES or NO and add a brief explanation.

NO

There are no such provisions specifically referring to compulsory licenses under Swiss law.

According to the opinion of your Group, is your current law regarding compulsory licensing adequate and/or sufficient? Please answer YES or NO and please explain your chosen view briefly.

YES

The Swiss Group is of the opinion that the current Swiss law regarding compulsory licensing is both adequate and sufficient. Generally, compulsory licenses have been more of theoretical interest with very limited to no practical relevance.

However, the Group is of the opinion that certain aspects of compulsory licensing in Swiss law may be clarified, including:

– Availability of compulsory licenses for supplementary protection certificates (SPCs);

– Availability of compulsory licenses for pending patent applications;

Furthermore, deletion of Art. 38 PatA (cancellation of patent if grant of compulsory licenses does not suffice to meet the demand of the domestic market) has been suggested in the literature for the following reasons (Schweizer/Zech – Seitz, Art. 38 PatG, N 2–11):

– Article 38 para. 1 PatA is subsidiary to Art. 37 PatA; it covers only a hypothetical scenario and is problematic under the TRIPS Agreement;

– Article 38 para. 2 PatA is only applicable to non-Paris Convention (London Revision) countries.

The contradiction between Art. 36 para. 2 PatA and Art. 40e para. 3 PatA should be resolved. According to the literature, Art. 40e para. 3 PatA is not applicable to licenses granted under Art. 36 PatA (Schweizer/Zech – Seitz, Art. 40a PatG, N 9). Article 40e PatA should be reworded accordingly.

According to the opinion of your Group, what is or should be the policy rationale for compulsory licensing?

The Swiss Group is of the opinion that the policy rationale for compulsory licensing should generally be public interest.

Is there any evidence in your jurisdiction to show that a compulsory license improved access, led to reduced prices or increased availability of a product?

NO

The Swiss Group is not aware of such an example.

Are there any other policy considerations and/or proposals for improvement to your Group’s current law falling within the scope of this Study Question?

NO

Do you consider that there is a continued need to have harmonization regarding the compulsory licensing regime? Please answer YES or NO and add a brief explanation.

YES

In light of the recent COVID-19 pandemic and the extensive discussion and negotiation about the TRIPS waiver for COVID-19 vaccines, harmonization of different IP regimes would, in the opinion of the Swiss Group, be desirable in order to be able to react in a timely manner to situations of worldwide urgency.

If your answer was YES, please continue to answer the questions below. Even if you answered NO, please address the following questions to the extent your Group considers that the current law or practice could be improved.

Should the existing provisions of the TRIPS Agreement (e.g., Art. 31 and 31bis TRIPS) be considered sufficient for addressing harmonization? Please answer YES or NO and add a brief explanation.

NO

If you answered NO, what kind of issues/aspects should in general be subject to additional harmonization?

The Swiss Group believes the separate agreement regarding COVID-19 vaccines has shown that Art. 31 and 31bis TRIPS are not entirely sufficient to address all situations in which compulsory licenses might be needed.

Should the grant of compulsory licenses be limited to certain specific overriding interests? Please answer YES or NO and add a brief explanation.

In more specific, what kind of interests should constitute an overriding interest giving rise to compulsory licensing:

a) Public health (e.g., pandemics such as COVID-19, epidemics such HIV/AIDS, tuberculosis, other public health crises)? Please answer YES or NO, you may add a brief explanation.

YES

To ensure that property rights are not undermined, in the opinion of the Swiss Group, it would make sense to limit compulsory licenses to certain public interests, such as public health or security. Another option would be to exclude certain interests, such as (purely) economic interests. Also, the interests of developing countries should be taken into account.

b) Environmental circumstances and events (e.g., natural disasters, environmental protection, climate change)? Please answer YES or NO, you may add a brief explanation with examples.

YES

c) Cybersecurity? Please answer YES or NO, you may add a brief explanation.

YES

d) Security of national infrastructure (incl. biological threats)? Please answer YES or NO, you may add a brief explanation.

YES

e) National defense? Please answer YES or NO, you may add a brief explanation.

YES

f) Economic security? Please answer YES or NO, you may add a brief explanation.

NO

g) Others? Please answer YES or NO, you may add a brief explanation.

NO

Should cross-jurisdictional compulsory licensing be available for any of the interests set forth in question 3 (or for any other interests)? Please answer YES or NO, you may add a brief explanation.

YES

a) If you answered YES to question 4, should cross-jurisdictional compulsory licensing be categorically available for:

i) Public health (e.g., pandemics such as COVID-19, epidemics such HIV/AIDS, tuberculosis, other public health crises)? Please answer YES or NO, you may add a brief explanation.

YES

Especially in a situation of cross-jurisdictional crises, such as pandemics.

ii) Environmental circumstances and events (e.g., natural disasters, environmental protection, climate change)? Please answer YES or NO, you may add a brief explanation.

YES

For example for such environmental circumstances and events that threaten public well-being.

iii) Cybersecurity? Please answer YES or NO, you may add a brief explanation.

NO

iv) Security of national infrastructure (incl. biological threats)? Please answer YES or NO, you may add a brief explanation.

NO

v) National defense? Please answer YES or NO, you may add a brief explanation.

NO

vi) Economic security? Please answer YES or NO, you may add a brief explanation.

NO

vii) Others? Please answer YES or NO, you may add a brief explanation.

NO

b) If you answered YES to a), should there be a special organization or committee for operating such cross-jurisdictional compulsory licensing? Please answer YES or NO, you may add a brief explanation.

YES

In theory, a special organization or committee for operating such cross-jurisdictional compulsory licensing issues would be good in order to streamline processes and maintain an overview of concerns of the general public that would warrant issuing compulsory licenses.

However, the Swiss Group acknowledges this will most likely be difficult to implement.

c) If you answered YES to question a), should the modalities enshrined in Article 31bis of the TRIPS Agreement be extended to such other cases? Please answer YES or NO, you may add a brief explanation.

YES

In order to ensure a consistent and comprehensive process.

When an overriding interest is present, under what kind of grounds should a compulsory license be available? In more specific, should the following be categorically considered a justified ground for granting a compulsory license in the presence of an overriding interest:

a) National emergency (or regional emergency as applicable). Please answer YES or NO, you may add a brief explanation.

YES

If the compulsory license is needed to resolve the national emergency and no less severe measure available.

b) Other circumstances of extreme urgency. Please answer YES or NO, you may add a brief explanation.

YES

If the compulsory license is needed to resolve the circumstances of extreme urgency and no less severe measure available.

c) General public interest. Please answer YES or NO, you may add a brief explanation.

NO

As this notion is unclear and would therefore lead to a lack of predictability.

d) Public non-commercial use. Please answer YES or NO, you may add a brief explanation.

NO

As this leads to an exceedingly broad application of the compulsory license.

e) Unmet needs. Please answer YES or NO, you may add a brief explanation.

NO

Due to lack of clarity.

f) Unreasonable pricing. Please answer YES or NO, you may add a brief explanation.

NO

Other mechanisms should exist to address pricing concerns.

g) Non-working/insufficient working. Please answer YES or NO, you may add a brief explanation.

NO

But only to the extent necessary to create incentives towards patent use.

h) Related or dependent patent. Please answer YES or NO, you may add a brief explanation.

YES

To the extent this creates incentives to use and further develop.

i) To remedy anti-competitive practice(s). Please answer YES or NO, you may add a brief explanation.

NO

Other mechanisms should exist to address competition issues.

j) Other. Please answer YES or NO, you may add a brief explanation.

NO

a) Should compulsory licenses be available for both patents and pending patent applications alike? Please answer YES or NO, you may add a brief explanation.

YES

Available for both. The Swiss Group believes that restricting the compulsory license access only to granted patents would unduly restrict and go against the aims of compulsory licenses.

b) Should compulsory licenses also be extended to patent term extensions (e.g. supplementary protection certificates). Please answer YES or NO, you may add a brief explanation.

YES

To the extent Swiss law is silent on SPCs. Swiss law should be clarified. The Swiss Group is of the opinion that the same conditions should apply.

c) Provided that other criteria for the grant of a compulsory license are met, should compulsory licenses be available for any person:

No, only to certain categories of local or foreign compulsory licensees.

d) Should in general compulsory licenses be available for:

i) Governmental bodies? Please answer YES or NO, you may add a brief explanation.

YES

ii) Non-commercial research organizations? Please answer YES or NO, you may add a brief explanation.

YES

iii) Other non-profit organizations? Please answer YES or NO, you may add a brief explanation.

YES

iv) Commercial entities? Please answer YES or NO, you may add a brief explanation.

YES

However, special attention needs to be paid to pricing (pricing for the patent and pricing of the product that resulted of the use of such patent).

v) Other? Please answer YES or NO, you may add a brief explanation.

NO

In general, compulsory licenses should only be granted to corporations, organizations and other entities that have the means to make use of the compulsory license so as to benefit society as a whole or those in most need.

Article 31 of the TRIPS Agreement lays out certain requirements (e.g., required effort to obtain a voluntary license for a reasonable period of time) for a compulsory license to be granted. Are there other or more detailed conditions that should be met prior to the grant of a compulsory license? E.g.:

a) Should there continue to be a requirement of an effort to obtain a license on commercial terms (a voluntary license)? Please answer YES or NO, you may add a brief explanation.

YES

The Swiss Group believes a compulsory license should remain the exception. If a license can be achieved on commercial terms or voluntarily, this process should be preferred.

i) If your answer to subpoint a) above was YES, what kind of efforts should be considered sufficient? E.g., what role should the express refusal or express willingness to license play in assessing whether compulsory license should be granted?

The Swiss Group is of the view that a certain amount of negotiations need to have taken place. The party seeking to obtain a license should have to be willing to pay the fair market value of the license and be able to use it.

ii) For how long period of time should voluntary licensing negotiations have been ongoing before a compulsory license could be applied for and subsequently granted?

About six months to a year, with a reduction of time in urgent cases (for example, healthcare crises that warrant a timely response).

iii) Should disagreement on the cost of a voluntary license in itself constitute a sufficient criterion for initiation of procedure of compulsory licensing? Please answer YES or NO, you may add a brief explanation.

NO

With exceptions in demonstrably urgent cases.

b) Should there be any minimum requirements for working/non-working of the patent? E.g.:

i) Compulsory license should be available irrespective of how the patent has been, or has not been, worked within the jurisdiction involved; Please answer YES or NO, you may add a brief explanation.

YES

ii) Compulsory license should not be available if the patent is currently being worked within the jurisdiction involved; Please answer YES or NO, you may add a brief explanation.

NO

iii) Compulsory license should not be available if the patent is currently not being worked within the jurisdiction involved but has in the past been worked within the jurisdiction involved. Please answer YES or NO, you may add a brief explanation.

NO

a) Who should bear the burden of proof of establishing that conditions for the grant of a compulsory license are met?

The Swiss Group considers this burden should be on the would-be licensee.

b) Should the patentee always have a right to receive prior notification of a potential compulsory license before such is granted? Please answer YES or NO and add a brief explanation (in particular of any exceptions).

YES

Even in urgent situations it is necessary to give the patentee a right to be heard and that cannot be achieved without prior notification. However, in urgent situations, the time limit for reply might be shortened.

c) Should the patentee always have a right to be heard in cases of compulsory licensing? Please answer YES or NO and add a brief explanation (in particular of any exceptions).

YES

In order to protect fundamental procedural and constitutional rights.

a) Should compulsory licenses be categorically: [please choose one alternative, you may add a brief explanation]

i) Non-exclusive; YES

ii) Exclusive; NO

iii) Depend on the case; NO

The Swiss Group is of the opinion that compulsory licenses, as a rule, should be non-exclusive.

b) Transferable/Non-transferable/Non-transferable except in the context of transfer of the relevant business/assets/Depend on the case [please choose one alternative, you may add a brief explanation]

The Swiss Group is of the opinion that compulsory licenses, as a rule, should be non-transferable, except in the context of transfer of the relevant business/assets.

An exception to this rule is, for instance, the situation under Art. 36 para. 2 PatA, where a license to use an invention that is the subject-matter of a prior patent maybe transferred jointly with a later patent.

c) Sublicensable/Non-sublicensable/Non-sublicensable except as needed to effect the exploitation of the permitted license (e.g., sublicensing required within supply chain)/Depend on the case [please choose one alternative, you may add a brief explanation]

The Swiss Group is of the opinion that this depends on the nature of a specific compulsory license.

d) Available for all activities (manufacturing, selling, using, etc.) within the scope of the patent. Please answer YES or NO and add a brief explanation.

The Swiss Group is of the opinion that this depends on the nature of a specific compulsory license. As a general rule, a compulsory license should intervene with a patent right only to such an extent as necessary for achieving the purpose of the license.

How should the territorial scope of a compulsory license be determined?

The Swiss Group is of the opinion that this depends on the specific case. Especially, the territorial scope of a compulsory license should not automatically be identical to the territory in which the underlying patent is effective. As a general rule, a compulsory license should intervene with a patent right only to such an extent as necessary for achieving the purpose of the license.

11. Term of a Compulsory License

i) For the duration of the existence of the overriding interest?

ii) For fixed term(s)?

iii) Other? Please add a brief explanation.

The Swiss Group is of the opinion that this should depend on the specific case. Overriding interest is not the only reason for the grant of a compulsory license. As a general rule, the term of a compulsory license should be kept to the minimum necessary for achieving the purpose of the license, which may be for the duration of the existence of the overriding interest.

i) Specified products/processes?

ii) Specified quantities or volumes?

iii) Specified uses of the patented invention?

The Swiss Group is of the opinion that this should depend on the specific case. As a general rule, a compulsory license should intervene with a patent right only to such an extent as necessary for achieving the purpose of the license.

What kind of obligations (if any) should the patentee have vis-à-vis the licensee? E.g.:

a) Should the patent holder be required to provide further information on the implementation of the patent to the compulsory licensee? Add a brief explanation.

NO

b) Should the patent holder be required to provide to the compulsory licensee trade secrets or other know how for the purposes of the compulsory licensee to work the invention effectively? Add a brief explanation.

NO

The Swiss Group is of the opinion that the patentee should have no obligations vis-à-vis the licensee.

How should the remuneration to the patentee be determined:

a) Should the patentee be always entitled to a remuneration for the compulsory license? Please answer YES or NO and add a brief explanation.

YES

The patentee should generally be entitled to remuneration for a compulsory license, but the specific determination of remuneration may vary.

b) How and when should the adequacy of the remuneration be determined?

The adequacy of remuneration should be assessed on a case-by-case basis, balancing the rights of the patent holder with the public interest that necessitated the compulsory license. The goal should be to provide fair compensation to the patent holder while ensuring the license can effectively serve its intended purpose. The commercial value of the license may be a key factor in determining the remuneration. The remuneration should typically be comparable to royalty rates for voluntary licenses in the same sector under normal market conditions. The nature of the invention and the circumstances of the case should be considered. Generally, the remuneration should be determined at the time the compulsory license is granted.

c) Should remuneration be based on reasonable compensation comparable to a license fee. Please answer YES or NO and add a brief explanation. If you answered YES to a), how should the reasonable compensation be determined?

YES

Remuneration for compulsory licenses should generally be based on reasonable compensation comparable to a license fee.

The remuneration should take into account the economic value of the license. This aligns with the concept of reasonable compensation comparable to typical license fees. Some guidelines suggest using methods like the Tiered Royalty Method (TRM) or considering industry-specific average royalty rates (e.g., 4–5% in the pharmaceutical sector). This approach aims to align compulsory license fees with market rates. The remuneration should be determined based on the circumstances of each individual case, allowing for adjustments to reflect the specific situation. The remuneration should balance the rights of the patent holder with the public interest that necessitated the compulsory license.

d) Should there be a fixed cap on remuneration (e.g., a certain percentage of revenue)? Please answer YES or NO and add a brief explanation.

NO

There should be no fixed cap as the circumstances of the individual case and the economic value of the license should be considered. The remuneration could be in the form of a lump sum, a royalty, or another form of compensation.

e) Who should determine the remuneration?

The remuneration could be determined by a court with input from experts or the patent office or similar specialized bodies.

f) Should the method for calculating the remuneration be the same for compulsory licenses granted in situations of extreme urgency and of other nature? Please answer YES or NO and add a brief explanation.

YES

The method for calculating remuneration for compulsory licenses should generally be consistent to ensure fairness and predictability. There should be flexibility within that method to account for the specific circumstances of each case, including situations of extreme urgency and other nature. In cases of national emergency or extreme urgency, there may be justification for expedited processes or adjusted calculations to address immediate needs. While the calculation method may be similar, the weight given to various factors, e.g., public interest or humanitarian circumstances, might differ in urgent situations.

a) What kind of reporting obligations should apply with respect to compulsory licenses:

i) Should the compulsory licensee be required to provide periodic reporting of the exploitation of the license? Please answer YES or NO and add a brief explanation.

YES

Ensuring that the licensee complies with the obligations of the compulsory license and fulfills its duties toward the licensor is crucial. This compliance allows the patentee to potentially return to court to request the lifting of the compulsory license if the licensee fails to meet its obligations or if the original purpose for granting the license is no longer relevant. Therefore, the rationale for granting such a compulsory license is grounded in these conditions, providing a system of checks and balances.

ii) Should the patentee have the right to audit the compulsory licensee? Please answer YES or NO and add a brief explanation.

YES

The patentee should have the ability to verify that the licensee is utilizing the patented invention within the agreed-upon boundaries and as intended. The audit should specifically ensure that financial expectations are being met.

iii) Other? Please add a brief explanation.

YES

Other measures could include a quality control mechanism to ensure that the compulsory license product meets the standards of the original product. For the compulsory license product, there should be price monitoring, especially a periodic reassessment of the remuneration based on market performance, sales volumes, or profit margins. Measures should be taken into account to ensure that the product is being developed for the intended market and nothing else. Finally, there should be direct measures in case of non-use or non-exploitation of the compulsory license.

b) What kind of other measures should be in place to ensure that the use of the compulsory license remains within its permitted sphere? Please add a brief explanation.

Beyond the measures mentioned above, one could include reporting requirements (such as production volumes and market reach), market compliance checks, and clear penalties for non-compliance with the terms of the compulsory license.

a) Should a compulsory license be revocable or otherwise capable of being terminated during its term? Please answer YES or NO and add a brief explanation.

YES

A compulsory license should be revocable or capable of being terminated during its term if the licensee fails to comply with the terms of the license or if the original reasons for granting the license are no longer applicable. This ensures that the license remains justifiable and aligned with its intended purpose.

b) What kind of reasons should give rise to termination or revocation of the compulsory license:

i) Circumstances having led to the compulsory license ceasing to exist or being unlikely to recur?

YES

If the circumstances that justified the issuance of the compulsory license no longer exist or are unlikely to recur, it would be reasonable to terminate the license. This ensures that the license is only in effect as long as it is necessary to address the specific needs or issues that warranted its grant.

ii) Breach of the compulsory license?

YES

A breach of the compulsory license terms should be grounds for termination rights. Compliance with the agreed-upon terms is essential for maintaining the integrity of the license, and failure to adhere to these terms undermines the purpose of the agreement. However, one issue the Swiss group sees with the right to termination is that it may lead to new compulsory license requests, which could burden the courts and impact their efficiency.

iii) Failure to pay remuneration for the compulsory license?

YES

Failure to pay the agreed-upon remuneration should lead to revocation of the license, under specific circumstances that do not necessarily include delayed payment. Payment is a fundamental aspect of the licensing agreement, compensating the patent holder for the use of its intellectual property. Non-payment violates the terms and justifies termination.

iv) Other?

YES

Other potential reasons for termination include the licensee’s inability to effectively utilize the technology, resulting in market inefficiencies or unmet public needs. Additionally, termination could be triggered if the licensee engages in unethical practices or uses the licensed technology in a way that harms public interest or the invention itself.

c) Who should bear the responsibility of monitoring that the conditions for grant of a compulsory license continue to subsist during the term of the compulsory license?

d) Aside from potential termination of the compulsory license, should there be other remedies available for the patentee against breach of the compulsory license?

i) Damages?

YES

The Swiss Group is of the opinion that the patentee should have the right to seek damages for any losses incurred due to a breach of the compulsory license. This includes compensation for financial losses and any harm caused to the patentee’s business or reputation.

ii) Fines?

YES

The Swiss Group is of the opinion that imposing fines on the licensee for non-compliance can help ensure compliance with the license terms.

iii) Other remedies?

YES

The Swiss Group believes that additional remedies for a breach of a compulsory license should include injunctive relief. This legal measure could serve as a powerful tool to prevent ongoing or future breaches of the licensing terms.

Please comment on any additional issues concerning any aspect of compulsory licensing that you consider relevant to this Study Question.

The Swiss Group is of the opinion that it is important for policymakers to understand that granting compulsory licenses could impact incentives for future innovation. The Swiss Group also believes that ensuring transparency and fairness in these processes is critical for the issuance of compulsory licenses.

Please indicate which industry sector views provided by in-house counsels are included in your Group’s answers to Part III.

The Swiss group included a member who is an in-house counsel from the pharmaceutical industry.