Compulsory Licensing of Patents in Vietnam

When granted a patent, the patent owner has the right to use, authorize the use, dispose of, and prohibit the use of the patent. However, the patent owner is not always free to exploit the patent optimally, especially in cases where it is necessary to protect the common interests of society or when the use of the patent directly affects urgent needs of the community. Therefore, the law has provisions for compulsory licensing of patents in Vietnam. Therefore, what are the legal basis, conditions, competent authorities, and procedures for applying this regulation? Below, Viet An Law will provide consultation to answer your questions.

Cases of compulsory licensing of patents in Vietnam

According to Clause 1, Article 145 of the Intellectual Property Law, the right to use a patent must be transferred to other organizations or individuals for use according to the decision of a competent state agency without the consent of the exclusive holder of the patent in the following cases:

• (1) The use of the patent is for public, non-commercial purposes, serving national defense, security, disease prevention, treatment, nutrition for the people, or meeting urgent needs of society;
• (2) The exclusive holder of the patent does not fulfill the obligation to use the patent after four years from the date of filing the patent application and three years from the date of granting the patent in the following cases:
• The patent owner is obliged to produce the protected product or apply the protected process to meet the needs of national defense, security, disease prevention, treatment, nutrition for the people, or other urgent needs of society. If these needs arise and the patent owner does not fulfill this obligation, the competent state agency may transfer the right to use the patent to another person without the patent owner’s permission.
• The transferee of the exclusive right to use the patent under an exclusive contract is obliged to use the patent as the patent owner in the above case.
• (3) The person in need of using the patent cannot reach an agreement with the exclusive holder of the patent on signing a contract for using the patent, despite having made reasonable efforts to negotiate at a fair price and on commercial terms;
• (4) The exclusive holder of the patent is deemed to have committed acts of prohibited competition restriction under the provisions of the competition law;
• (5) The use of the patent is to meet the needs for pharmaceuticals to prevent and treat diseases in another country that is eligible for importation under an international treaty to which the Socialist Republic of Vietnam is a member.

Thus, Article 145 of the Intellectual Property Law provides an important legal mechanism to ensure that patents are not used exclusively or cease to be exploited if there is an urgent need. The transfer of the right to use patents in these cases not only protects the interests of society and the community but also creates fairness in the use of intellectual property, especially in cases related to health, national security, and urgent market needs.

Conditions for restricting the right to use a patent transferred under a compulsory decision

The compulsory transfer of a patent not only falls under the cases prescribed by law but must also comply with the restrictive conditions under Article 146 of the Intellectual Property Law, specifically:

• The transferred right to use is non-exclusive;
• The transferred right to use is limited to the scope and duration sufficient to achieve the transfer objective, except in cases where the exclusive holder of the patent is deemed to have committed acts of prohibited competition restriction under the competition law.
• The transferee of the right to use is not allowed to transfer that right to others, except in the case of transferring together with their business establishment, and is not allowed to transfer secondary use rights to others.
• The transferee of the right to use must pay the exclusive holder of the patent a compensation amount as agreed upon; if no agreement is reached, it shall be implemented according to the Government’s regulations.
• The transferred right to use is primarily to supply the domestic market, except in cases where the exclusive holder of the patent is deemed to have committed acts of prohibited competition restriction under the competition law and in cases of using the patent to meet the needs for pharmaceuticals to prevent and treat diseases of another country that is eligible for importation under an international treaty to which Vietnam is a member.

These conditions ensure that the transfer of the right to use a patent can be carried out fairly and reasonably, without excessively infringing on the rights of the involved parties, especially the patent owner. At the same time, it ensures that the patent is used effectively, fairly, and for the right purposes, particularly in cases related to public interests or urgent societal needs.

Authority to issue compulsory transfer decisions for the right to use a patent

According to Clause 1, Article 147 of the Intellectual Property Law, the Ministry of Science and Technology issues decisions on the transfer of the right to use a patent based on the consideration of transfer requests, for cases (2), (3), and (4) analyzed above. Ministries and ministerial-level agencies issue decisions on the transfer of the right to use patents within their state management scope: for cases (1), (5), based on consultation with the Ministry of Science and Technology.

Right to request compulsory licensing of patents in Vietnam

According to Article 54 of Decree 65/2023/ND-CP, organizations and individuals who have the capability, duty, or need to use patents under the compulsory transfer cases specified in Article 145 of the Intellectual Property Law have the right to request the competent authority to issue a compulsory transfer decision for the right to use the patent.

Dossier for requesting a compulsory transfer decision for the right to use a patent

The dossier for requesting a compulsory transfer decision for the right to use a patent includes the documents specified in Clause 1, Article 55 of Decree 65/2023/ND-CP, specifically:

• A declaration requesting the mandatory transfer of patent use rights, prepared according to Form No. 04 in Appendix I of Decree 65/2023/ND-CP.
• Documentation proving that the request for a decision to enforce the mandatory transfer of patent use rights is well-founded.
• Authorization document (in case the request is submitted through a representative).
• Copies of payment receipts for state fees (in case of payment via postal service or direct deposit into the account of the National Office of Intellectual Property).

Note: Supporting documents proving grounds for mandatory patent use transfer include:

• Case (1): Documents proving that at the time of filing the request, there was an actual demand to use the patent for public, non-commercial purposes, such as national defense, security, or for preventing disease, treating illness, or improving nutrition for the population, or addressing other urgent societal needs. However, the patent holder has failed to use the patent, and this lack of usage impacts the achievement of those goals.
• Case (2): Documents proving that the patent holder has not fulfilled the obligation to use the patent, and at the time of submission, the following periods have ended: Four years from the filing date of the patent application; Three years from the date the patent was granted exclusive rights.
• Case (3): Documents proving that the individual or entity seeking to use the patent has failed to reach an agreement with the patent holder on signing a patent use contract, despite having made reasonable efforts to negotiate with fair prices and conditions within a reasonable timeframe. The documents must clearly state the patent usage needs, negotiation period, proposed price, and specific commercial terms offered by the entity seeking to use the patent.
• Case (4): Documents proving that the patent holder has engaged in actions deemed anti-competitive under the regulations stipulated by competition laws.
• Case (5): Documents proving that the patent use is intended to meet the demand for pharmaceuticals for disease prevention and treatment in another country eligible for importation under Article 31bis of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Authority to issue compulsory transfer decisions for the right to use a patent

Step 1: Submission of Request

The entity entitled to request a decision on mandatory transfer of patent use rights shall submit the dossier to the Ministry of Science and Technology or the relevant Ministry/Ministerial-level agency managing the patent field, depending on the specific case. The Ministry of Science and Technology, Ministries, and Ministerial-level agencies designate an authority to receive and evaluate the dossier.

Step 2: Examination of the Request

According to Clause 2, Article 56 of Decree 65/2023/ND-CP, within 2 months from the date of receipt of the dossier, the evaluating authority shall review the dossier under the following provisions:

For Valid Dossiers:

• Within 20 days from the date of receipt, the evaluating authority must notify the patent holder regarding the mandatory transfer request decision and require them to provide written comments within 1 month from the date of notification
• If no agreement is reached between the parties and it is determined that the patent holder’s refusal to sign the transfer contract is unreasonable, the authority shall report the evaluation results and propose the Minister of Science and Technology or the Minister/Head of the relevant Ministerial-level agency to issue a decision on mandatory transfer of patent use rights.
• If the request falls under Case (1) and the use of the patent is for public, non-commercial purposes, Ministries/Ministerial-level agencies may issue a mandatory transfer decision without requiring the patent holder’s comments or negotiation between the parties.

For Requests Without Adequate Grounds:

• The evaluating authority shall report the evaluation results and propose the Minister of Science and Technology or the Minister/Head of the relevant Ministerial-level agency to issue an intended refusal notice, specifying the reasons for the refusal, and set a 1-month deadline from the date of notification for the applicant to provide their response to the intended refusal.
• The time taken for the applicant to correct deficiencies in the dossier or oppose the intended refusal will not be counted in the evaluation timeline.

Note for Dossiers under Cases (1) and (5): The evaluating authorities of Ministries/Ministerial-level agencies shall forward the dossier to the Ministry of Science and Technology (via its evaluating authority) for comments before submitting it to the Minister/Head of the relevant Ministerial-level agency for a decision.

Step 3: Issuance of Mandatory Transfer Decision

• Within 20 days from the date of receipt of the evaluation report from the evaluating authority of the Ministry of Science and Technology, the Minister of Science and Technology shall review and issue a decision on the mandatory transfer of patent use rights or send the applicant a notice of refusal to enforce the mandatory transfer of patent use rights, clearly stating the reasons for refusal.
• Within 20 days from the date of receipt of the proposal from the Minister of Science and Technology, the Minister or Head of the relevant Ministerial-level agency shall review and issue a decision on the mandatory transfer of patent use rights or send the applicant a notice of refusal to enforce the mandatory transfer of patent use rights, clearly stating the reasons for refusal.
• The competent state authority that decides on the mandatory transfer of patent use rights must promptly notify the patent holder about the decision.

Request for termination of patent use rights under a mandatory decision

• The patent holder has the right to request the termination of patent use rights when the grounds for mandatory transfer no longer exist and are not likely to recur, provided that the termination does not cause damage to the transferee of the patent use rights.
• The termination of patent use rights under a mandatory decision must be decided by the Minister or the Head of the Ministerial-level agency that issued the mandatory transfer decision.

The above is a consultation on the regulations regarding the compulsory licensing of patents in Vietnam. If you have any related questions or need to register a patent, please contact Viet An Law for the best consultation and support!