Patent Licenses & Assignments
Patent license contracts in Tanzania must be in writing and signed by the parties thereto. There are two types of licenses under Tanzanian patent law. These are contractual licenses and compulsory licenses.
Contractual licenses can be exclusive or non-exclusive. In the absence of any provision to the contrary in the licence contract (or provided otherwise by the patent law), the licensee is entitled to do in respect of the invention all the acts to which the owner is capable doing under the patent law without any limitation. In the absence of any provision to the contrary in the licence contract, the licensee is not allowed under the patent law to grant permission to any third person to do any of the acts granted to him under the license contract or entitled as a matter of law.
In the absence of any provision to the contrary in the licence contract, the licensor may grant permission to any third person to do, and may himself do, any of the acts he is entitled as a matter of law as the owner of a patent. If the licence contract provides that such contract or the permission granted by it, is exclusive, and unless it is expressly provided otherwise in the licence contract, the licensor may neither grant permission to any third person to do any of the acts that the owner is entitled as a matter of law or covered by the said contract, nor do himself is not allowed to do any of those acts, and the licensee is considered an exclusive licensee for the purposes of the Tanzanian patent law.
If, before the expiration of the licence contract: (a) the application is withdrawn; (b) the application is finally rejected; (c) the grant of a patent is finally refused; or (d) the patent is finally declared invalid, the court may make any order that it deems reasonable under the circumstances for the repayment of the royalties, or the return of any other consideration, paid or given under the said contract, directly relating to only such application or patent.
All licence contracts, including modifications thereof, must be submitted to the Patent Office for registration in the patent register. A petition for registration may be made by any party to the contract. The petition must be accompanied by the documents prescribed by the patent regulations and the prescribed fee must be paid. The Patent Office will issue to the applicant a receipt, which proves the fact of filing the petition and of the date on which it was filed; if no receipt is issued within fourteen days from the date of the petition, the petitioner may rely on other evidence to prove the filing fact and the date of filing.
The Patent Office may refuse to register the licence contract and, it must state the reasons for such refusal. Before the Patent Office refuses to register the licence contract, it must notify the petitioner and allow the parties, within forty five days from the date of notification, to: (i) submit any observations; (ii) correct any defect in the petition; and (iii) amend any term, or to correct any defect, in the licence contract that has been declared by the Patent Office to be a term or defect precluding registration. Failure by the parties to respond within the time stipulated will result into nullification of the license contract.
The Patent Office may, with the approval of and after consultation with other competent government authorities, refuse to register a licence contract if the effect of its terms is to:
- permit or require the importation of technology from abroad when substantially similar or equivalent technology may be obtained on the same or more favourable conditions without importation from abroad;
- require payment of a price, royalty or other consideration which is disproportionate to the value of the technology to which the contract relates;
- require the licensee to acquire any materials from the licensor or from sources designated or approved by him, unless it is otherwise impossible, for all practical purposes, to ensure the quality of the products to be produced;
- prohibit the licensee from acquiring, or to restrict his acquisition of, any materials from any source, unless it is otherwise impossible, for all practical purposes, to ensure the quality of the products to be produced;
- prohibit the licensee from using, or to restrict his use of, any materials which are not supplied by the licensor or by sources designated or approved by him, unless it is otherwise impossible, for all practical purposes, to ensure the quality of the products to be produced;
- require the licensee to sell products produced by him under the contract exclusively or principally to persons designated by the licensor;
- require the licensee to make available to the licensor without appropriate consideration any improvements made by the licensee with respect to the technology to which the contract relates;
- limit the volume of the products produced by the licensee with the help of the technology to which the contract relates;
- prohibit or restrict the export of the products produced by the licensee;
- require the licensee to employ on a permanent basis persons designated by the licensor;
- impose restrictions on research or technological development carried out by the licensee;
- prohibit or restrict the use by the licensee of any technology other than the technology to which the contract relates;
- extend the coverage of the contract to technology not required for the use of the technology which is the main subject of the contract and to require consideration for such additional technology;
- fix prices for the sale or resale of the products produced by the licensee with the help of the technology to which the contract relates;
- exempt the licensor from any liability consequent upon any defect inherent in the technology to which the contract relates or to restrict such liability;
- prohibit or restrict the use by the licensee, after the expiration of the contract, of the technology acquired as a result of the contract, subject to any right of the licensor under the patent;
- require the disputes arising from the interpretation or performance of the contract to be governed by a law other than the law of the United Republic of Tanzania or that such dispute to be brought before courts located in a country other than the United Republic of Tanzania; or
- establish the duration of the contract for a period which is unreasonably long in relation to the economic function of the contract, provided that any period which does not exceed the duration of the patent to which the contract relates will not be regarded as unreasonably long.
If the Patent Office fails: (a) to notify the petitioner of defects precluding petition or of the term or defects in the registration of the licence contract, within ninety days from the date of the petition; or (b) to notify the petitioner of his decision to refuse to register the licence contract, within ninety days from the date when the notification was supposed to be done, the licence contract shall be deemed to have been registered and the Patent Office must issue a certificate of registration to the petitioner. If no such certificate is issued within fourteen days from the expiration of the ninety days period, the petitioner may rely on other evidence.
The registration takes effect: (a) if the petition was made within sixty days from the conclusion of the contract, on the date of the conclusion of the contract; or (b) in all other cases, on the date of the petition. Where the petition is corrected or the licence contract is amended, the petition is deemed to have been made on the date when such correction or amendment was made. The registration and the certificate must state: (a) the names of the parties to the contract, and of the licensee if he is not a party; (b) the date of the registration; (c) the date of the petition; and (d) the registration number.
An appeal against a decision of the Patents Office may be made to the High Court by the petitioner within two months of the Patents Office’s refusal provided that the grounds of such an appeal must be limited to the following grounds: (a) that the decision for refusal contains no statement of the reasons for refusal; (b) that none of the reasons for refusal specified in the decision is a valid reason under the patents legislation or was rightly applied to the petition or to the licence contract; and (c) that the procedure applied by the Patent Office was irregular and prejudicial to the rights of the petitioner.
In case of non-exclusive licenses, the owner of a patent may request the Patent Office to make an entry in the register to the effect that licences under the patent are to be available as of right. The request must be notified by the Patent Office to the licensees of the patent. Any licensee may, within the prescribed time limit, object to the entry requested, on the ground that the owner of the patent is, by the relevant licence contract, precluded from granting further licences. If the Patent Office receives no objection or considers all objections made to be unfounded, it can make the requested entry in the register. While a patent is the subject of an entry, any person may require the owner of the patent to grant to that person a non-exclusive licence under the patent on terms which, in the absence of agreement between the parties, will be fixed by the court. The amount of the annual fees with respect to a patent which is the subject of an entry, falling due after the date of the entry, are reduced by half. The owner of the patent may at any time request the Patent Office to cancel an entry, and the Patent Office must cancel the entry after payment of the balance of all annual fees which would have been payable if no entry had been made provided. The Patent Office must publish the cancellation of entries.
At any time after four years from the filing date of an application or three years from the grant of a patent, whichever period last expires, any person may, in proceedings instituted by him against him by the owner of a patent, request the court for the grant of a compulsory licence on any of the following grounds– (a) that the patented invention, being capable of being worked in the United Republic of Tanzania has not been so worked; (b) that the existing degree of working of the patented invention in the United Republic of Tanzania does not meet in reasonable terms the demand for the patented product on the domestic market or for the purposes of exportation; (c) that the working of the patented invention in the United Republic of Tanzania is being hindered or prevented by the importation of the patented product; and (d) that, by reason of the refusal of the owner of the patent to grant licences on reasonable terms, the establishment or development of industrial or commercial activities in the United Republic of Tanzania, or the possibilities of exportation from the United Republic of Tanzania, are unfairly and substantially prejudiced. A compulsory licence cannot be granted in respect of a patent if the owner of the patent satisfies the court that his actions in relation to the patented invention are justifiable in the circumstances.
Where a patented invention cannot be worked without infringing rights derived from an earlier patent, the owner of the later patent may, in proceedings instituted by him against the owner of the earlier patent or in proceedings instituted against him by the latter owner, request the court at any time for the grant of a compulsory license with respect to the earlier patent to the extent necessary for the working of his invention if the invention: (a) serves industrial purposes different from those served by the invention which is the subject of the earlier patent; or (b) constitutes substantial technical progress in relation to that last mentioned invention. If the two inventions serve the same industrial purposes, a compulsory license may be granted only on condition that a compulsory license will also be granted in respect of the later patent to the owner of the earlier patent if he so requests.
The Minister responsible for industries and trade may, by order published in the Gazette, direct that, for a patented invention concerning a certain kind of product, or a process for the manufacture of such a product, declared in the order to be of vital importance for the defence or for the economy or for public health, a compulsory licence may be granted. A compulsory licence with respect to any product or process specified in the order may be requested by way of making an application to High Court at any time after the grant of the relevant patent.
A compulsory license cannot be granted unless the person requesting such license: (a) satisfies the court that he has asked the owner of the patent for a contractual license but has been unable to obtain such a license on reasonable terms and within a reasonable time, and (b) offers guarantees satisfactory to the court to work the relevant invention sufficiently to remedy the deficiencies or to satisfy the requirements, which gave rise to his request. In considering a request for a compulsory license, the court will first decide whether a compulsory license may be granted and then, if it decides in favor of the grant and taking into account any terms agreed by the parties, proceed to fix the terms, which are deemed to constitute a valid contract between the parties. In fixing the terms, the court must ensure that the compulsory license: (a) entitles the licensee to do the rights of the owner (except that this does not apply to importation unless otherwise requested by the licensee under section 55 of the patents legislation); (b) does not entitle the licensee to grant further licenses, without the consent of the owner of the patent; (c) is non-exclusive; and (d) provides for the payment to the owner of the patent of remuneration which is equitable with due regard to all the circumstances of the case.
A compulsory license may be transferred only with the industrial or commercial undertaking in which the relevant invention is used, and no such transfer is be valid until the consent of the court has been obtained.
On the application of the owner of the patent, the court may cancel a compulsory licence if: (a) the licensee fails to comply with the terms of the licence; (b) the conditions which justified the grant of the licence have ceased to exist (so however a reasonable time will be given to the licensee to cease working the relevant invention if an immediate cessation would cause him to suffer substantial damage). On the application of the Patents Office, the court will, and on the application of the owner of the patent, the court may, cancel the compulsory licence if, within two years from the grant of the licence, the licensee has not taken the necessary steps to work the relevant invention sufficiently so as to remedy the deficiencies or to satisfy the requirements which gave rise to the owner's request for the said licence. On the application of the owner of the patent or the licensee, the court may vary the terms of a compulsory licence if new facts justify the variation, and in particular and without prejudice to the generality of the foregoing if the patentee has granted contractual licences on more favourable terms.