Compulsory Licensing of Patents in Nigeria

Compulsory Licensing of Patents in Nigeria

A patent is an exclusive right granted for an invention. The invention could be a product, a solution, or a process that provides, in general, a new way of doing something or offers a new technical solution to a problem. The owner of a patent (a “Patentee”) has the legal right to exclude others from making, using, or selling the patented invention for a limited period. However, this legal right comes with certain limitations. One of the statutory exceptions to the exclusive right to the use of a patent by a Patentee is a Compulsory License (“CL” the “License”).

Compulsory licensing occurs when a regulatory authority allows someone else to produce a patented product or process without the consent of the Patentee. CLs are also considered when a government intends to use a patent-protected invention for the public interest.

Some of the treaties ratified by Nigeria which regulate CL worldwide include the World Trade Organization’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, the Doha Declaration 2001, and the Protocol Amending TRIPS 2005.

Importance of Compulsory Licensing
Compulsory licensing comes in handy in relation to pharmaceuticals and other life-saving solutions. In the general case, the regulatory authority may grant a CL to a patented invention without the consent of the Patentee. The owner of a CL may go on to produce generic copies of the invention. However, the generic copy is produced mainly for the domestic market and not for export. The owner of the CL is typically required to pay compensation to the Patentee for copies of the products made under the CL.

CLs are particularly useful in cases of national or global exigencies impacting public health and safety, i.e., the COVID-19 pandemic.
Procedure for grant of a CL in Nigeria.

The Patents and Designs Act 2004 (the “Act”) provides that a person may apply to the Federal High Court (the “Court”) for the grant of a CL. The Act further provides that any such application shall be made upon expiration of three years after the grant of a patent or four years after the filing of a patent (whichever period last expires) on any of the following grounds:

1. That the patented invention is capable of being worked on in Nigeria and it has not been worked on;
2. That the working on the patent in Nigeria does not meet the demand for the product;
3. That the working on the patent in Nigeria is being hindered by the importation of the patented invention; and
4. That the Patentee refused to grant a patent license on reasonable terms and the establishment or development of industrial activities in Nigeria is unfairly and substantially prejudiced.

A CL on a patent may be granted where working on another patent subsequently granted will amount to a breach of the initial patent. Furthermore, the License would be granted on the basis that it is necessary to develop the latter patent provided that the industrial purpose served by the two patents is different and the latter invention constitutes substantial improvement. However, a CL shall not be granted in respect of a patent if the Patentee satisfies the court that his/her actions in relation to the patented invention are justifiable in the circumstances, but he/she shall not be held to have satisfied the court if he/she merely shows that the patented invention is freely available for importation.

Additionally, the applicant for a CL must prove to the court that he/she requested a contractual license from the Patentee on reasonable terms and was refused. The applicant shall also offer a guarantee to the court to work on the invention. The CL is non-exclusive, and the CL licensee cannot grant a further license. A CL may contain additional obligations and restrictions as regards both the licensee and the patentee.

Withdrawal of a CL
The Act provides that a CL may be withdrawn where;

1. The CL licensee fails to comply with the terms of the CL.
2. The conditions which justified the grant of the license have ceased to exist.

Conclusion

CLs have proven to be a beneficial exception to the exclusive right of patents worldwide, albeit less explored in Nigeria. However, some may argue that it prevents a Patentee from enjoying the benefits of his/her invention; others have argued that the greater good outweighs the requirement for exclusivity.