Industrial and Commercial Property (Protection) Act, 1927

Prevention of abuse of monopoly rights.

43.—(1) Any person interested may at any time apply to the controller alleging in the case of any patent that there has been an abuse of the monopoly rights thereunder and asking for relief under this section.

(2) The monopoly rights under a patent shall be deemed to have been abused in any of the following circumstances:—

(a) if at any time after the expiration of three years, in the case of a British patent which is by virtue of this Act deemed to have been granted under this Act, from the commencement of this Part of this Act, or in the case of any other patent, from the date of the application for the patent, the patented invention (being one capable of being worked in Saorstát Eireann) is not being worked within Saorstát Eireann on a commercial scale, and no satisfactory reason can be given for such non-working:

Provided that, if an application is presented to the controller on this ground, and the controller is of opinion that the time which has elapsed since the date of the patent has by reason of the nature of the invention or for any other cause been insufficient to enable the invention to be worked within Saorstát Eireann on a commercial scale, the controller may adjourn the application for such period as will in his opinion be sufficient for that purpose;

(b) if the working of the invention within Saorstát Eireann on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by the patentee or persons claiming under him, or by persons directly or indirectly purchasing from him, or by other persons against whom the patentee is not taking or has not taken any proceedings for infringement;

(c) if the demand for the patented article in Saorstát Eireann is not being met to an adequate extent and on reasonable terms, regard being had amongst other circumstances, to the potential demand that might be evoked if the patented article were sold at a lower price;

(d) if the price at which the patented article is sold is, having regard to all the circumstances, unreasonably high in comparison with that at which the article is sold in other countries;

(e) if, by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry of Saorstát Eireann or the trade of any person or class of persons trading in Saorstát Eireann, or the establishment of any new trade or industry in Saorstát Eireann is prejudiced, and it is in the public interest that a licence or licences should be granted;

(f) if any trade or industry in Saorstát Eireann or any person or class of persons engaged therein, is unfairly prejudiced by the conditions attached by the patentee, whether before or after the passing of this Act, to the purchase, hire, licence, or use of the patented article, or to the using or working of the patented process:

Provided that, for the purpose of determining whether there has been any abuse of the monopoly rights under a patent, it shall be taken that patents for new inventions are granted not only to encourage invention but to secure that new inventions shall so far as possible be worked on a commercial scale in Saorstát Eireann without undue delay.

(3) On being satisfied that a case of abuse of the monopoly rights under a patent has been established, the controller may exercise any of the following powers as he may deem expedient in the circumstances:—

(a) he may order the patent to be indorsed with the words “licences of right” and thereupon the same rules shall apply as are provided in this Act in respect of patents so indorsed, and an exercise by the controller of this power shall entitle every existing licensee to apply to the controller for an order entitling him to surrender his licence in exchange for a licence to be settled by the controller in like manner as if the patent had been so indorsed at the request of the patentee, and the controller may make such order; and an order that a patent be so indorsed may be made notwithstanding that there may be an agreement subsisting which would have precluded the indorsement of the patent at the request of the patentee;

(b) he may order the grant to the applicant of a licence on such terms as the controller may think expedient, including a term precluding the licensee from importing into Saorstát Eireann any goods the importation of which, if made by persons other than the patentee or persons claiming under him, would be an infringement of the patent, and in such case the patentee and all licensees for the time being shall be deemed to have mutually covenanted against such importation. A licensee under this paragraph shall be entitled to call upon the patentee to take proceedings to prevent infringement of the patent, and if the patentee refuses, or neglects to do so within two months after being so called upon, the licensee may institute proceedings for infringement in his own name as though he were the patentee, making the patentee a defendant. A patentee so added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings. Service on him may be effected by leaving the writ at his address for service given on the register. In settling the terms of a licence under this paragraph the controller shall be guided as far as may be by the same considerations as are specified in this Act for his guidance in settling licences under patents indorsed “licences of right”;

(c) if the controller is satisfied that the invention is not being worked on a commercial scale within Saorstát Eireann, and is such that it cannot be so worked without the expenditure of capital for the raising of which it will be necessary to rely on the patent mono-poly, he may, unless the patentee or those claiming under him will undertake to find such capital, order the grant to the applicant, or any other person, or to the applicant and any other person or persons jointly, if able and willing to provide such capital, of an exclusive licence on such terms as the controller may think just, but subject as hereinafter provided;

(d) if the controller is satisfied that the objects of this section cannot be attained by the exercise of any of the foregoing powers, he may order the patent to be revoked, either forthwith or after such reasonable interval as may be specified in the order, unless in the meantime such conditions as may be prescribed in the order with a view to attaining the objects of this section are fulfilled, and the controller may, on reasonable cause shown in any case, by subsequent order extend the interval so specified:

Provided that the controller shall make no order for revocation which is at variance with any treaty, convention, arrangement, or engagement with any foreign country or British dominion made by or binding on Saorstát Eireann;

(e) if the controller is of opinion that the objects of this section will be best attained by making no order under the above provisions of this section, he may make an order refusing the application and dispose of any question as to costs thereon as he thinks just.

(4) In settling the terms of any such exclusive licence as is provided in paragraph (c) of the last preceding sub-section, due regard shall be had to the risks undertaken by the licensee in providing the capital and working the invention, but, subject thereto, the licence shall be so framed as—

(a) to secure to the patentee the maximum royalty compatible with the licensee working the invention within Saorstát Eireann on a commercial scale and at a reasonable profit;

(b) to guarantee to the patentee a minimum yearly sum by way of royalty, if and so far as it is reasonable so to do, having regard to the capital requisite for the proper working of the invention and all the circumstances of the case;

and, in addition to any other powers expressed in the licence or order, the licence and the order granting the licence shall be made revocable at the discretion of the controller if the licensee fails to expend the amount specified in the licence as being the amount which he is able and willing to provide for the purpose of working the invention on a commercial scale within Saorstát Eireann, or if he fails so to work the invention within the time specified in the order.

(5) In deciding to whom such an exclusive licence is to be granted the controller shall, unless good reason is shown to the contrary, prefer an existing licensee to a person having no registered interest in the patent.

(6) The order granting an exclusive licence under this section shall operate to take away from the patentee any right which he may have as patentee to work or use the invention and to revoke all existing licences, unless otherwise provided in the order, but on granting an exclusive licence the controller may, if he thinks it fair and equitable, make it a condition that the licensee shall give proper compensation to be fixed by the controller for any money or labour expended by the patentee or any existing licensee in developing or exploiting the invention.

(7) Every application presented to the controller under this section must set out fully the nature of the applicant's interest and the facts upon which the applicant bases his case and the relief which he seeks. The application must be accompanied by statutory declarations verifying the applicant's interest and the facts set out in the application.

(8) The controller shall consider the matters alleged in the application and declarations, and, if satisfied that the applicant has a bonâ fide interest and that a primâ facie case for relief has been made out, he shall direct the applicant to serve copies of the application and declarations upon the patentee and upon any other persons appearing from the register to be interested in the patent, and shall advertise the application in the Journal.

(9) If the patentee or any person is desirous of opposing the granting of any relief under this section, he shall, within such time as may be prescribed or within such extended time as the controller may on application further allow, deliver to the controller a counter statement verified by a statutory declaration fully setting out the grounds on which the application is to be opposed.

(10) The controller shall consider the counter statement and declarations in support thereof and may thereupon dismiss the application if satisfied that the allegations in the application have been adequately answered, unless any of the parties demands a hearing or unless the controller himself appoints a hearing. In any case the controller may require the attendance before him of any of the declarants to be cross-examined or further examined upon matters relevant to the issues raised in the application and counter statement, and he may, subject to due precautions against disclosure of information to rivals in trade, require the production before him of books and documents relating to the matter in issue.

(11) All orders of the controller under this section shall be subject to appeal to the court, and on any such appeal the law officer or such other counsel as he may appoint shall be entitled to appear and be heard.

(12) In any case where the controller does not dismiss an application as hereinbefore provided, and—

(a) if the parties interested consent; or

(b) if the proceedings require any prolonged examination of documents or any scientific or local investigation which cannot in the opinion of the controller conveniently be made before him;

the controller may at any time order the whole proceedings or any question or issue of fact arising thereunder to be referred to an arbitrator agreed on by the parties, or in default of agreement appointed by the controller, and, where the whole proceedings are so referred, the award of such arbitrator shall, if all the parties consent, be final, but otherwise shall be subject to the same appeal as the decision of the controller under this section, and, where a question or issue of fact is so referred, the arbitrator shall report his findings to the controller.

(13) For the purposes of this section, the expression “patented article” includes articles made by a patented process.