Introduction

In Saudi Arabia Patent Licensing is a crucial aspect of Intellectual Property Rights. It enables/ allows the inventors and patent holders to provide permission to others to use, produce or sell their patented products or processes. This licensing system of Saudi Arabia is governed by Law no. 159 - the Patents, Layout Designs of Integrated Circuits, Plant Varieties, and Industrial Models Law of 2004.By this legal framework and through the use of these licenses patent owners can grant licenses to the third party to enable them to utilize the patented technology while ensuring fair compensation for the patent holder. Licensing agreements are powerful tools for promoting innovation, fostering knowledge/ technology transfer and boosting the economic growth.

In Saudi Arabia the patent licensing process is governed by certain guideline and obligations. It enables the inventors to form mutually beneficial arrangements with licensees, thereby expanding the application and significance of their inventions. Though to protect the rights of the patent owners and stop potential abused there are certain restrictions and limitations.Saudi Arabia also acknowledges the significance of public interest in specific circumstances where a patented invention is essential for the protection of the general public or the nation. In such situations the Saudi Authority of Intellectual Property (SAIP) may grant compulsory licenses to ensure access to essential technologies and welfare of the nation.

Compulsory licenses are only issued in certain situations such as when patent hasn’t been used or when the non-use of the patent could hinder the countries technological or economic development. The new Implementing Regulations for compulsory licensing that SAIP has just released further enhances clarity and structure in process. It is to be noted that the compulsory licenses are not exclusive and do not permit the licensee to grant sub-licenses. Instead they help to maintain the balance between the public and patent owner’s interest. The patent owner may continue to operate alongside the licensee, ensuring adequate remuneration for the patent holder.

In summary patent licensing and compulsory licensing are the crucial elements of the Saudi Arabia’s patent law. They promote innovation and technological progress while allowing the inventors to safeguard their intellectual property. By adhering to a well-defined legal framework and implementing transparent regulations, Saudi Arabia aims to bolster its position as a regional hub for innovation and intellectual property protection.This blog provides an in-depth exploration of patent licensing, compulsory licenses, the role of SAIP, and how these mechanisms can promote innovation and protect public interests in the Kingdom of Saudi Arabia.

Types of Patent and licensing Restrictions

In Saudi Arabia, patents can be obtained on various inventions including software, business methods and medical procedures. Scientific theories, mathematical methods and schemes of commercial activities are some of the subject matters which are cannot be patented in Saudi Arabia. Furthermore plants, animals and specific organic processes involved in their production are also not granted patent.

In Saudi Arabia patent ownership follows specific rules. Suppose if an invention is developed by an employee during the course of their employment then in that case patent rights typically belongs to the employer unless otherwise it is stated in the employment contract. In the cases of joint ventures, co-ownership of the patent is possible depending upon the contributions made by each party to the innovation.

Voluntary Licensing and Contractual Terms

Through the help of Voluntary Licensing agreement, a patent owner may provide the license to the third party. Such agreements must be recorded with the Saudi Patent office in order to be enforceable against the third party. The license agreement may be looked at by the patent office to make sure that there are no provisions that may be construed as violating patent rights or having a negative impact on the competition.

Understanding Compulsory Licensing

It is a mechanism through which the government can authorise the use of a patented innovation to third parties without the consent of the patent owner. Compulsory Licenses are intended to make significant technologies and innovations accessible to the general public, particularly when the patent holder refuses to provide reasonable licence or fails to exploit the patent in the public interest. Compulsory licenses can be issued in Saudi Arabia for 2 types of Patents namely: patents covering integrated circuits and plant varieties.

• Compulsory License for Patents covering Integrated Circuits

The prospective licensee must fulfil the said requirements to obtain a compulsory license for an integrated circuit patent as stated in articles 24 and 25 of the Patent Law:

a. From the date of filing the patent application, the patent must have been granted for at least 3years or 4years whichever is later.

b. Either the patent has not be used or its use has not been in the public interest.

c. Reasonable attempts have been made by the prospective licensee for a reasonable timewith reasonable terms to obtain the license which all got failed.

To decide whether the Compulsory License will be granted or not a Committee is formed by the City, referring to the King Abdulaziz City for Science and Technology (KACST). The committee must specify scope and term of license, conditions of termination, fair compensation to the patent holder with an undertaking by the prospective licensee to pay the compensation amount to the patent owner.

• Compulsory License for Plant Varieties

The potential licensee must demonstrate their technical and financial competence in order to obtain a compulsory license to exploit a plant variety. It must have been impossible to get a license from the patent owner on fair terms. Compulsory Licenses for plant variety are granted for a minimum period of 2 years and a maximum period of 4 years.

Recent Developments: SAIP’s New Implementing Regulation

New Implementing Regulations were recently released for Compulsory Licensing by Saudi Authority for Intellectual Property (SAIP). These regulations have been developed based on the existing patent law, to give clarity on the process of granting compulsory licenses. In accordance with Article 2 of the Implementing Regulations, SAIP may issue a compulsory licence in certain circumstances, such as when a patent is necessary for the public's health or national security or when its non-use or insufficient usage could jeopardise Saudi Arabia's economic or technological advancement.

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On the basis of public interest, SAIP may also issue a compulsory licence; depending on the situation, this licence can be exclusive. However, licensees who have been given compulsory licenses are not permitted to provide sublicenses, and importing the subject matter of a patent is only permitted if expressly permitted under the compulsory license. SAIP ensures that the import authorization is temporary and limited to meet Saudi Arabia's demand.

Saudi Arabia and TRIP’s Agreement

Saudi Arabia has the right to issue compulsory licenses for the export of pharmaceutical products in order to address the public health needs other nations since it the member of World Trade Organisation and a signatory to the Trade Related Intellectual Property Rights (TRIPS).

Compulsory License renumeration and Non-Exclusivity

When a compulsory license is granted, the patent owner must get adequate compensation. Usually, Compulsory License are non-exclusive meaning thereby allowing the patent owner to continue operating parallel with the licensee. The public's and the patent owner's interests are both safeguarded by this non-exclusivity. Similarly, the compulsory licenses granted in Saudi Arabia are unassignable. However, in some circumstances, subject to the consent of the City Authorities, an assignment may take place where there is a complete transfer of the prospective licensee's business goodwill.

Appeal and Review Process

According to Article 35, disputes arising over Compulsory licenses are addressed by a Committee made up of 3 law specialists and 2 technical experts. This Committee is in charge of handling validity concerns, appeals, infringement complaints, and objections to mandatory licencing. The Board of Grievances, a civil court system, will hear appeals of the Committee's judgement, and its ruling is considered as final.

Conclusion

In Saudi Arabia Patent Licensing and Compulsory Licensing are essential elements of Patent Law which promote innovation, safeguard the public's interests, and provide access to critical technologies. The Saudi Authority for Intellectual Property (SAIP) has just released new Implementing Regulations that bring more structure and clarity to the process of granting compulsory licences. Understanding the complexities of patent licencing and compulsory licences will remain crucial for inventors, businesses and policymakers as Saudi Arabia moves on with its efforts to promote innovation and technological advancement. Saudi Arabia can strengthen its position as a regional engine for innovation and development by finding the correct balance between defending intellectual property and advancing social welfare.

Author : Srishti Bajaj, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

References: -

• https://wipolex-res.wipo.int/edocs/lexdocs/laws/en/sa/sa078en-related.html

• https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm

• https://www.jpo.go.jp/e/system/laws/gaikoku/document/index/saudi_arabia-e_tokkyo.pdf

• https://patentblog.kluweriplaw.com/2021/06/28/saudi-arabia-compulsory-licensing/