Director of Patents Can Fix the Terms and Conditions of the Compulsory License

Petitioner questioned the upholding the Director’s unilateral determination of the terms and conditions of the compulsory license, without affording the parties an opportunity to negotiate the terms and conditions freely and by themselves.

 
The Supreme Court disagreed.
The terms and conditions of the compulsory license were fixed by the Director of Patents after a hearing and careful consideration of the evidence of the parties and in default of an agreement between them as to the terms of the license. This he is authorized to do under Section 36 of Republic Act No. 165 which provides:
Sec. 36. GRANT OF LICENSE.—If the Director finds that a case for the grant of license under Section 34, hereof made out, he may order the grant of an appropriate license and in default of agreement among the parties as to the terms and conditions of the license he shall fix the terms and conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final, shall operate as a deed granting a- license executed by the patentee and the other patties in interest.
and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:
Sec. 35. GRANT OF LICENSE.—(1)If the Director finds that a case for the grant of a license under Sec. 34 hereof has been made out, he shall within one hundred eighty (180) days from the date the petition was filed, order the grant of an appropriate license. The order shall state the terms and conditions of the license which he himself must fix in default of an agreement on the matter manifested or submitted by the parties during the hearing (Barry John Price, John Watson CLITHERON and John Bradshaw, assignors to Allen & Hanburys Ltd.’ Vs. United Laboratories, Inc. (or UNILAB), G.R. No. 82542 September 29, 1988).

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