Definition[edit | edit source]
A compulsory license is an authorization by a government for third parties (such as a company or the government itself) for the manufacture or use of a product or intellectual property without the permission of the rightsholder.
U.S. copyright law[edit | edit source]
|“||By its nature, a compulsory license "is a limited exception to the copyright holder's exclusive rights. . . . As such, it must be construed narrowly . . . ." Fame Publishing Co. v. Alabama Custom Tape, Inc. 507 F.2d 667, 670 (5th Cir. 1975) (referring to compulsory licenses in the Copyright Act of 1909). "[C]ompulsory licensing . . . break[s] from the traditional copyright regime of individual contracts enforced in individual lawsuits." Cablevision Sys. Dev. Co. v. Motion Picture Ass’n of America, Inc., 836 F.2d 599, 608 (D.C. Cir. 1988), cert. denied, 487 U.S. 1235 (June 30, 1988) (describing limited license for cable operators under 17 U.S.C. § 111); Recording Industry Ass'n of America v. Copyright Royalty Tribunal, 662 F.2d 1, 3 (D.C. Cir. 1981).||”|
U.S. patent law[edit | edit source]
The U.S. government effectively enjoys the ability to declare a "compulsory license" to a patent that allows it to use a patented invention without obtaining the permission of the patentee. In turn, the federal government has consented to suit by private patent owners in order to obtain compensation for government uses. Section 1498(a) of Title 28 of the U.S. Code provides in part:
|“||Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Claims Court for the recovery of his reasonable and entire compensation for such use and manufacture.||”|
Under §1498(a), all patent suits against the U.S. government are litigated in the U.S. Court of Federal Claims. The Court of Federal Claims has national jurisdiction, allowing the court to subpoena witnesses and documents anywhere in the United States or its possessions. Court proceedings against the government under §1498(a) are conducted using the same general standards as does litigation between private parties. The patent owner represents itself, while the Attorney General and Department of Justice are responsible for representing the U.S. government in §1498 cases. Unlike private patent suits, however, there are no jury trials in §1498 cases. Appeals from the United States Court of Claims proceed to the U.S. Court of Appeals for the Federal Circuit.
As compared to remedies available in patent infringement suits against private parties, the remedies available in §1498(a) suits are more limited. In private patent litigation, the adjudicated infringer is ordinarily enjoined from using the patented invention throughout the remaining term of the patent. The adjudicated infringer may also have to compensate the patent owner for profits lost due to the infringement. Additionally, if a court deems the defendant to have been a "willful infringer," the court may order the defendant to pay the patent owner up to three times the actual damages suffered.
In contrast, §1498(a) limits available remedies to "reasonable and entire compensation" to the patent owner. As a result, the government may not be enjoined from practicing a patented invention. The courts have also generally limited the damages that the government must pay to the patentee to the level of a "reasonable royalty." A "reasonable royalty" for purposes of patent infringement damages is “the amount that a person desiring to manufacture or use a patented article, as a business proposition, would be willing to pay as a royalty and yet be able to make or use the patented article, in the market at a reasonable profit.” Finally, tripled damages for willful infringement are not available against the government.
TRIPs agreement[edit | edit source]
Part III of the TRIPS Agreement addresses compulsory licenses. The TRIPS Agreement places some limits upon the ability of WTO member states to award compulsory licenses for the use of a private person’s patented invention. Among the most detailed provisions of the TRIPS Agreement, Article 31 imposes in part the following restrictions upon the issuance of compulsory licenses:
- Each application for a compulsory license must be considered on its individual merits.
- The proposed user must have made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions and must demonstrate that such efforts have not been successful within a reasonable period of time. However, this requirement may be waived in the case of a national emergency or other circumstances of extreme urgency.
- Any such use shall be authorized predominantly for the supply of the domestic market of the member authorizing such use.
- The compulsory license must be revocable if and when its motivating circumstances cease to exist and are unlikely to recur.
- The patent owner must be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.
- The legal validity of any decision relating to the authorization of such use shall be subject to judicial or other independent review.
References[edit | edit source]
- Lionel Marks Lavenue, "Patent Infringement Against the United States and Government Contractors Under 28 U.S.C. §1498(a) in the United States Court of Federal Claims," 2 J. of Intell. Prop. Law 389 (1995).
- 28 U.S.C. §1498(a), (b) & (e).
- From 1855 through 1982, this tribunal was known as the U.S. Court of Claims, and from 1982-1992 it was named the U.S. Claims Court.
- 28 U.S.C. §2521.
- Id. §516.
- Id. §2402.
- Id. §1295(a)(3).
- Id. §283.
- See Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978) (full-text).
- 35 U.S.C. §284.
- See Tektronix, Inc. v. United States, 552 F.2d 343 (Ct. Cl. 1977) ([552 F.2d 343 full-text]). In some cases, the U.S. government may be obliged to pay the full lost profits of the patentee rather than a reasonable royalty. See Gargoyles, Inc. v. United States, 113 F.3d 1572 (Fed. Cir. 1997) (full-text). However, reportedly the last instance that an award of lost profits was made for government use of a patented invention was in 1930. David M. Schlitz & Richard J. McGrath, "Patent Infringement Claims Against the United States Government," 9 Fed. Cir. Bar J. 351 (2000).
- Wright v. United States, 53 Fed. Cl. 466 (2002).
- DeGraffenried v. United States, 228 Ct. Cl. 780 (1981).
- 28 U.S.C. §1498(b).
- Id. §1498(e).