Developing Socially Responsible Intellectual Property Licensing Policies: Non-exclusive Licensing Initiatives in the Pharmaceutical Sector. (Research Handbook on Intellectual Property Licensing, Chapter 10)
(2013; 32 pages)


In the ten years since the adoption of the WTO Declaration on Public Health and Intellectual Property (the Doha Declaration) pharmaceutical research companies have increasingly been using non-exclusive license agreements and non-assert declarations to allow generic companies to market their products in a defined geographical area. This chapter will consider these developments from a public health perspective. The chapter begins with a definition of license agreements and an overview of the license initiatives in place. This is followed by an analysis of the agreements as well as projections for the future. Annex 1 provides an overview of all the identified agreements and includes information on licensees, the character of the agreement, and terms and conditions of the license regarding territory, royalties and technology transfer where such information was available. Inventions as a form of knowledge are characterized by non-excludability and non-rivalry, rather than by the properties applied to physical inventions. Once made public, the originator cannot physically exclude others from using the knowledge. The use of the knowledge by others does not prevent the originator or others from using it, thus there is no rivalry in consumption.

Intellectual property rights change these characteristics by creating legal boundaries using exclusive rights that allow the rights holders to exclude others from using the knowledge commercially, usually for a limited time. It is, however, up to the rights owner to decide whether and how he wants to exercise his exclusive rights. A patent owner thus can decide to allow others to (also) use the invention. License agreements, or simply, licenses, allow for sharing of the rights under patent protection. A license is a contract in which the patent holder allows the contracting party to use the patent, either against a payment of royalties or free of charge for a defined period of time. The rights owner is thus voluntarily sharing his/her rights under the patent with third parties. In this context, the adjective voluntarily is used as opposed to compulsory licenses that under most national legislations can be issued under certain conditions to address situations where a license is needed to address issues of public interest.

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