Industrial Property Law

An administrative or automatic license can be imposed on the patentee by the administrative authority in the circumstances set out in Articles L. 613-16 to L. 613-19-1 of the Intellectual Property Code. It responds to a need to safeguard a general interest that outweighs the patentee's private interest. There are five types of automatic licenses: automatic licenses in the interest of public health …

Automatic license

An administrative or automatic license can be imposed on the patentee by the administrative authority in the circumstances set out in Articles L. 613-16 to L. 613-19-1 of the Intellectual Property Code. It responds to a need to safeguard a general interest that outweighs the patentee's private interest. There are five types of automatic licenses: automatic licenses in the interest of public health (Art. L. 613-16 and L. 613-17 IP Code), in the interest of national economy (Art. L. 613-18 IP Code), national security (Art. L. 613-19 IP Code), livestock breeding (Art. L. 5141-13 Public Health Code) and pharmaceutical products intended for export (Art. L. 613-17-1 IP Code).

Automatic licenses are not exclusive. The rights attached to them may only be transferred with the business, undertaking or part of the undertaking to which they are attached (Article L. 613-13 IP Code). The proprietor of an automatic license may bring an infringement action if, after receiving a formal demand, the patent owner fails to do so (Article L. 615-2, para. 4, IP Code).

1) Automatic licensing in the interest of public health

The granting of compulsory licenses in the interests of public health is designed to prevent laboratories in a dominant position from abusing their monopoly on a patent to prevent or slow down the development of generic medicines. If the interests of public health so require, and in the absence of an amicable agreement with the patent proprietor, the Minister responsible for industrial property may, at the request of the Minister of Public Health, subject by order any patent granted for a medicine, a medical device, an in vitro diagnostic medical device, an ancillary therapeutic product, a process for obtaining them, a product necessary for obtaining them or a process for manufacturing such a product, or an ex vivo diagnostic method, to an automatic license (Article L. 613-16, para. 1, IP Code).

Patents for these products, processes or diagnostic methods may only be subject to automatic licensing in the interests of public health when these products, or products derived from these processes, or these methods, are made available to the public in insufficient quantity or quality, or at abnormally high prices, or when the patent is exploited under conditions contrary to the interests of public health or constituting practices declared anticompetitive following a final administrative or court judgment (Article L. 613-16, al. 2, IP Code). Before resorting to an automatic license, the Minister responsible for industrial property is required to seek an amicable agreement with the patentee, except where the license is intended to remedy a practice declared anticompetitive or in cases of urgency (Art. L. 613-16, al. 3, IP Code).

2) Automatic license in the interest of the national economy

Pursuant to Article L. 613-18 of the Intellectual Property Code, the Minister responsible for industrial property may give formal notice to owners of patents other than those referred to in Article L. 613-16 to start exploiting them in such a way as to meet the needs of the national economy. If the demand has not been acted upon within one year, and if the absence of exploitation or the insufficient quality or quantity of the undertaking seriously harms economic development and the public interest, the patents which are the subject of the demand may be placed under automatic license by decree approved by the Council of State. The Minister responsible for industrial property may extend the time-limit of one year stipulated after the formal notice if the proprietor of the patent can justify legitimate reasons compatible with the requirements of the national economy.

From the date of publication of the decree making the patent subject to automatic license, any qualified person may apply to the Minister responsible for industrial property for the grant of an exploitation license. This license is granted by order of the Minister on specific terms as to its duration and scope, excluding the fees to which it gives rise. Failing amicable agreement, the amount of the fees is set by the judicial court. The automatic license takes effect on the date of notification to the parties of the order subjecting the patentee to the automatic license regime (Article L. 613-18, paragraphs 5 and 6, IP Code).

3) Automatic license in the interests of national security

The French State may at any time, for the purposes of national security, obtain an automatic license for the exploitation of an invention which is the subject of a patent application or patent, whether such exploitation is carried out by the State itself or on its behalf (Article L. 613-19, para. 1, IP Code).

The automatic license is granted at the request of the Minister of Defense by order of the Minister responsible for industrial property. This order sets the conditions of the license, excluding those relating to the fees to which it gives rise (Article L. 613-19, para. 2, IP Code). It is entered in the national patent register (Article R. 613-35 IP Code). Failing amicable agreement, the amount of the fees is set by the judicial court. At all levels of jurisdiction, hearings take place in chambers (Article L. 613-19, al. 4, IP Code). The license takes effect on the date of application for the automatic license (art. L. 613-19, al. 3, IP Code).

If the State considers such a license to be insufficient, it may then proceed to the expropriation of the invention covered by the patent, by means of the regulations provided for in Article L. 613-20 of the Intellectual Property Code.

4) Automatic license in the interests of the livestock industry

Without prejudice to the application of the provisions of Article L. 613-16 of the Intellectual Property Code, patents granted for veterinary medicinal products may also, when required by the needs of livestock farming, be automatically licensed by order of the Minister of Industrial Property, at the request of the Minister of Agriculture (Art. L. 5141-13 Public Health Code).

5) Compulsory license for patents on pharmaceutical products intended for export

On 30 August 2003, the WTO General Council adopted a judgment designed to enable undertakings in WTO member countries, in particular industrially developed countries, to obtain a license to produce medicines for export to developing and least-developed countries, without the agreement of the patentee. The provisions of this decision were incorporated into Regulation No 816/2006 of 17 May 2006 .

In France, the Law of 29 October 2007  incorporated into the Intellectual Property Code Article L. 613-17-1, which stipulates that an application for a compulsory license, presented in application of Regulation No 816/2006, may be made to the administrative authority. The license is issued in accordance with the conditions set out in Article 10 of the regulation. The order granting the license sets the amount of the royalties due ( Article L. 613-17-1, para. 1, IP Code). The license takes effect on the latest date on which the order is notified to the applicant and the proprietor (Art. L. 613-17-1, para. 2, IP Code).

Pharmaceutical products intended for export and manufactured under such a license may not be diverted to an EU country for marketing. Any violation of this prohibition constitutes an infringement punishable by three years' imprisonment and a fine of EUR 300,000 (Article L. 613-17-2 IP Code).

Regulation (EC) No 816/2006 of 17 May 2006 on compulsory licensing of patents relating to the manufacture of  pharmaceutical products for export to countries with public health  problems, OJEU L 157 of 9 June 2006, 1.

Law No 2007-1544 of 29 October 2007 on the fight against IP infringement, OJ No 252 of 30 October 2007.

Industrial Property Law

342. Automatic license

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342. Automatic license

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Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise