(Compulsory) license

Under compulsory licensing, a government grants someone a license under a patent, e.g.to produce a patented product or process, without the consent of the patent holder. The possibility of a compulsory license is included in the WTO’s TRIPS agreement.

The individual or company seeking to use another’s intellectual property may have to pay the patent holder a fee for the license. This is an exception to the general rule that the patent holder enjoys exclusive rights, which he is free (not) to license to others.

(Compulsory) license, Case Law, Germany

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The Federal Court of Justice held that a licensee’s failure to exploit an exclusive patent license can justify termination of the license agreement by the licensor, even if there is no breach of contract or default by the licensee. From an objective licensor’s perspective, however, there must be no prospect of an improvement in the…