Patents Ordinance, 2000 — section 58

58. Exploitation by a Government agency or third person..—(1) Subject to sub-section

(2), where

(i)the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy so requires; or

(ii)the Federal Government has determined that the manner of exploitation, by the owner of the patent or his licensee, is anti-competitive, and the Federal Government is satisfied that the exploitation of the invention in accordance with this sub-section would remedy such practices 1[; or] 2 [(iii) the patent holder refuses to grant a licence to a third party on reasonable commercial terms and conditions; or

(iv)where patent has not been exploited in a manner which contributes to the promotion of technological innovation and to the transfer and dissemination of technology.] the Federal Government may, even without the consent of the owner of the patent, decide that a Government agency or a third person designated by the Federal Government may exploit a patented invention.

(2)The Federal Government shall, before taking any decision under sub-section (2), give the owner of the patent and any interested person an opportunity of being heard if he wishes to be heard.

(3)The exploitation of the patented invention shall be limited to the purpose for which it was authorized and shall be subject to the payment to the said owner of an adequate remuneration therefore, taking into account the economic value of the Federal Government authorizations, as determined in the said decision, and where a decision has been taken under sub-section (1), the need to correct anti-competitive practices.

(4)A request for the Federal Government authorization shall be accompanied by evidence that the owner of the patent has received, from the person seeking the authorization, a request for a contractual license, but that person has been unable to obtain such a license on reasonable commercial terms and conditions and within a reasonable time: Provided that this sub-section shall not apply in cases of

(i)national emergency or other circumstantial urgency provided that in such cases the owner of the patent shall be informed of the decision of the Federal Government as soon as reasonably practicable;

(ii)public non-commercial use; and

(iii)anti-competitive practices determined as such by a judicial or administrative body in accordance with clause (ii) of sub-section (1). 1 Subs. by the Patents (Amdt.) Ordinance, 2002 (95 of 2002), s. 13, for “Comma”. 2 New sub-clauses (iii) and (iv) ins. ibid.,

(5)The exploitation of a patented invention in the field of semi-conductor technology shall only be authorized either for public non-commercial use or where a judicial or administrative body has determined that the manner of exploitation of the patented invention, by the owner of the patent or his licensee, is anti-competitive and if the Federal Government is satisfied that the issuance of the non- voluntary license would remedy such practices.

(6)1[The authorization shall be considered on its individual merits and shall not prohibit.]

(i)the conclusion of license contracts by the owner of the patent;

(ii)the continued exercise, by the owner of the patent, of his rights under section 30; or

(iii)the issuance of a non-voluntary license under section 59.

(7)Where a third person has been designated by the Federal Government, the authorization may only be transferred with the enterprise or business of the person or with the part of the enterprise or business within which the patented invention is being exploited.

(8)Where the exploitation of the invention by the Government agency or third person designated by the Federal Government is authorized under clause (i) of sub-section (1), it shall be predominantly for the supply of the market in Pakistan.

(9)Upon request of the owner of the patent, or of the Government agency or of the third person authorised to exploit the patented invention, the Federal Government may, after hearing the parties, if either or both wish to be heard, vary the terms of the decision authorizing the exploitation of the patented invention to the extent that changed circumstances justify such variation.

(10)Upon the request of the owner of the patent, the Federal Government shall 2[subject to adequate protection of the legitimate interest of the persons so authorized,] be inserted; and shall terminatean authorization if it is satisfied, after hearing the parties, if either or both wish to be heard, that the circumstances which led to 3[the] decision have ceased to exist and are unlikely to recur or that the Government agency or third person designated by it has failed to comply with the terms of the decision.

(11)Notwithstanding the provisions of sub-section (10), the Federal Government shall not terminate an authorization if it is satisfied that the need for adequate protection of the legitimate interests of the Government agency or third person designated by it justifies the maintenance of the decision.

(12)Any appeal shall lie to the High Court against the decisions of the Federal Government under sub-sections (1) to (9). 1 Subs. by the Patents (Amdt.) Ordinance, 2002 (95 of 2002), s. 13, for “the authorization shall both exclude.” 2 Ins.Ibid s. 13. 3 Subs. ibid., for “his”.