Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1263)
The maximum royalty rate allowed is five per cent (5%) of the net wholesale price of the articles manufactured under the royalty agreement.
Such contracts must be submitted to the Technology Resource Center for prior approval and registration.
Net wholesale price means the gross amount billed for the patented product subject to royalty less trade, quantity, or cash discounts, broker's or agent's commissions, credits or allowances for rejection or return of the product, and any tax, excise, or other government charges on the product.
Yes. In the absence of any provision to the contrary in the license contract, the licensor may grant further licenses and exploit the invention himself.
Clauses imposing specific sources for capital goods, fixing sale or resale prices by the licensor, restricting production volume or structure, prohibiting use of competitive technologies, obligating transfer of improvements to licensor, requiring royalties for unused patents, prohibiting export of licensed products, and similar restrictive clauses are null and void.
Compulsory license may be granted if the patented invention is not worked commercially in the Philippines without satisfactory reason, if demand is not met adequately, if refusal to grant license prevents new industries, if importation prevents working, or if the invention relates to matters vital to public health or safety.
The petitioner must prove capability to work the patented product, make use of it in manufacturing a useful product, or employ the patented process.
No, importation does not constitute 'working'; working means manufacture and sale by a definite and substantial establishment in the Philippines.
The maximum royalty rate is three per cent (3%) of the net wholesale price of the patented commodity or product manufactured under the patented process.
A compulsory license can only be transferred with the authorization of the Director of Patents and must be registered in accordance with Section 33-A. Transfer must include the undertaking using the patented invention.
A fine ranging from Five Thousand Pesos to Thirty Thousand Pesos or imprisonment from one to five years.
The filing fee for a petition for compulsory license is Two Hundred Pesos.
A compulsory licensee is granted the same rights as patentees referred to in Sections 37 and 42 of the Patent Law, allowing them to exploit the invention accordingly.
A notice must be given in the same manner as that provided in Section 31, including publication in a newspaper of general circulation three times for three consecutive weeks.
The licensee would not be exempted from liability for infringement; the rightful patent owner may recover royalties from the licensor.