News & insights

Implementing Regulations for Compulsory Licensing Issued in Saudi Arabia

July 6, 2020

The Saudi Authority for Intellectual Property (SAIP) recently issued a new set of Implementing Regulations for the compulsory licensing of patents. This update comes in light of SAIP’s mission to lead the national strategy for the promotion of IP, revising and issuing regulations, providing services in a timely and high-quality manner, increasing IP awareness and providing education and training for all stakeholders, and coordinating IP enforcement efforts with other local Ministries and Departments.

The newly published Implementing Regulations for the compulsory licensing of patents have been developed by SAIP based on the Law of Patents, Layout-Designs of Integrated Circuits, Plant Varieties, and Industrial Designs of 2004. With the Implementing Regulations in force, it is worth noting that compulsory licensing provisions existed in the aforementioned legislation and the practice is now clearly regulated by SAIP.

Article 2 of the Implementing Regulations states that SAIP is entitled to grant a compulsory license if the patent is essential for public health or national defense purposes; or the non-use or insufficient use of the patent in terms of quality or quantity could cause serious damage to Saudi Arabia’s economic or technical development. Furthermore, depending on the circumstances, a compulsory license that is granted on grounds of public interest can be an exclusive license. If a compulsory license is granted, the licensee has no right to grant sub-licenses. Having said that, SAIP permits the patent’s subject matter to be imported only if the licensee is explicitly authorized to do so in the compulsory license. In such cases, SAIP necessitates the import authorization to be issued on a temporary basis and limited in order to meet the required demand in Saudi Arabia.

By way of background, Saudi Arabia has been a member of the World Trade Organization and a party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) since December 2005. With that in mind, it is worth noting that the Implementing Regulations include a provision concerning Article 31bis. This means that Saudi Arabia is also entitled to grant compulsory licenses for the exportation of pharmaceutical products for addressing public health needs in other countries.

To date, however, there has not been one compulsory license granted in the Saudi Arabia, or any other jurisdiction in the Middle East and North Africa region. The assertion and enforcement of patents is a challenging and labor intensive process that requires special consideration and handling, especially during a pandemic. Inventors and owners must be able and ready to adopt a model that incorporates both legal as well as regulatory approaches in order to arrive at a well-established protection strategy in the MENA.

With that in mind, even if a compulsory license is granted, it still requires adequate remuneration of the patent owner. A compulsory license in most cases is non-exclusive which means that the patent owner can still operate in parallel with the compulsory license owner.

Should you have any questions, or require any additional information, please contact us at news@sabaip.com