RESTRICTED
WORLD TRADE IP/C/W/71
23May1997
ORGANIZATION(97-2159)
Original: English Council forTrade-Related Aspects
ofIntellectual Property Rights
REVIEW OFLEGISLATION INTHE FIELDS OFPATENTS, LAYOUT-DESIGNS
(TOPOGRAPHIES) OFINTEGRATED CIRCUITS, PROTECTION OF
UNDISCLOSED INFORMATION AND CONTROL OF
ANTI-COMPETITIVE PRACTICES IN
CONTRACTUAL LICENCES
Replies from theCzech Republic toquestions posed by
theEuropean Communities andtheirMember States,
theUnited States andJapan
Thefollowing communication, dated 15May1997, hasbeenreceived from thePermanent
Mission oftheCzech Republic.
_______________
I. REPLY TOTHE GENERAL QUESTION CONCERNING PRIORITY RIGHTS
Does yourcountry recognize arightofpriority onthebasis ofanearlier patent application
filedinanyother WTO Member byanational ofaWTO Member?
TheCzech Republic recognizes arightofpriority under Section 27paragraph 2oftheCzech
Patent LawNo.527/1990 Coll. ofL.,onthebasis ofanearlier patent application filedinanyother
WTO Member byanational ofaWTO Member.
II. REPLIESTOQUESTIONSPOSEDBYTHEEUROPEANCOMMUNITIESANDTHEIR
MEMBER STATES
Patents
1. Isitacondition ofgranting acompulsory licence under theCzech Patent Lawthattheproposed
userhasmade efforts toobtain authorization fromtherightholder onreasonable commercial terms
andconditions andthatsuchefforts have notbeen successful within areasonable period oftime
(Article 31(b) TRIPS)?
According toSection 20oftheCzech Patent LawNo.527/1990 Coll. ofL.,thenecessary
prerequisite forthegranting ofacompulsory licence isthefailure toreach alicence agreement between
theowner ofthepatent andtheproposed user. Therequest forthegranting ofacompulsory licence
must bepreceded bynegotiations inthisrespect.
2. HowdoestheCzechPatentLawlimitthedurationofacompulsorylicence(Article31(c)TRIPS)?IP/C/W/71
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According totheCzech Patent Lawthecompulsory licence isalicence granted byanofficial
measure. Theauthority competent foritsgranting istheIndustrial Property Office which decides,
upon arequest, byitsdecision issued inadministrative procedure. Initsdecision onthegranting of
acompulsorylicencetheOfficeisobligedtospecify(accordingtoSection22oftheDecreeNo.550/1990
Coll. ofL.)thescope ofcompulsory licence, itsduration, etc.Thefinaldecision onthegranting of
acompulsory licence canbereviewed byacourt. TheOffice hasnotgranted anycompulsory licence
sofarandthelegalpossibility ofitsgranting intheliberal economic conditions oftheCzech Republic
ismost improbable.
3. Please explain whether andhowtheCzech Patent Lawcomplies withthecondition ofnon-
exclusive useofacompulsory licence (Article 31(d) TRIPS)?
Presently valid provisions oncompulsory licence oftheCzech Patent Lawandtheirpractical
application arebased ontheParis Convention ontheProtection ofIndustrial Property (Article 5A).
Inthisrespect, theCzech Patent Lawisalsoinconformity withArticle 31(d) ofTRIPS. Thedraft
ofthePatent Lawamendment which iscurrently under preparation considers anexplicit supplementing
oftheexisting regulation, although thenon-exclusive useofacompulsory licence hasnever beendoubted
intheCzech Republic.
4. DoestheCzech Patent Lawprohibit assignment ofcompulsory licences (Article 31(e) TRIPS)?
TheCzech Patent Lawhasnoexplicit provisions ontheprohibition ofassignment ofcompulsory
licence. However, itspractical application withregard tothisquestion isalsobased ontheParis
Convention (Article 5A). Inthisrespect, theCzech Patent Lawisinconformity withArticle 31(e)
ofTRIPS. From thecharacter ofcompulsory licence intheconcept ofpatent lawoftheCzech Republic
asanofficial measure itfollows explicitly thatitisnon-transferable andmaybebound onlywithsubject
specified inthedecision.
5. Does theCzech Patent Lawrequire thattheuseofacompulsory licence beauthorized
predominantly forthesupply oftheCzech market asrequired byArticle 31(f)TRIPS?
TheCzech Patent Lawhasnoexplicit provisions dealing withthisissue. Thisrequirement
isensured bythedecision-making competence oftheIndustrial Property Office which isauthorized
bytheLawtogrant acompulsory licence. Thesupply ofthedomestic market isofpriority significance
forthegranting ofacompulsory licence. ThedraftofthePatent Lawamendment envisages explicit
supplementing ofthepresent regulation.
6. CouldtheCzechRepublicexplainwhetherandhowtheCzechPatentLawprovidesfortermination
ofcompulsory licence when thecircumstances which ledtoitcease toexistandareunlikely torecur
(Article 31(g) TRIPS)?
TheCzech Patent Lawenables theIndustrial Property Office tolimitthescope andduration
ofthegranted compulsory licence andtoprovide theconditions ofitstermination initsdecision in
accordance withtherequirements ofArticle 31(g) ofTRIPS.
Protection ofundisclosed information
1. What aretherulesunder theCzech Patent Lawtoimplement Articles 39.1and39.2ofTRIPS?
Protection ofundisclosed information under Articles 39.1and39.2doesnotfallintothescope
oftheCzech Patent Lawandiscontained intheCommercial Code No.513/1991 Coll. ofL.,initsIP/C/W/71
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provisions concerning trade secret (Sections 17-20, Section 44andSection 51).Regulation oftrade
secret under theCommercial Code isinconformity withstated Articles 39.1and39.2ofTRIPS.
2. HowdotheCzech authorities provide fortheprotection against unfair commercial useof
undisclosed testorother datawhich aretobesubmitted asacondition ofapproving themarketing
ofpharmaceutical orofagricultural chemical products which utilise newchemical entities (Article 39.3
TRIPS)?
ThisprotectionisensuredbyspecialregulationswithinthecompetenceofMinistryofAgriculture
andMinistry ofHealthy, onmedicines andplant-medical care,which regulate theregistration procedure
forobtaining anapproval forthemarketing ofproducts. According totheseregulations datasubmitted
intheframework oftheregistration procedure ofmedicament mustnotbedisclosed toother people
without theauthorization ofapplicant forregistration. Intheregistration procedure ofanother
medicament these datamaybeusedonlyifa)applicant forregistration submits awritten authorization
oftheholder ofaregistration decision withtheuseofthese data, specifying thescope andgiving
limitations, ifany,fortheirdisposal orb)atleastsixyears hasexpired since theissueofregistration
decision. Similar provisions concern alsoother relevant products.
III. REPLIES TOQUESTIONS POSED BYJAPAN
Patents
1. Inyourcountry, arethefollowing subject matters protectable bypatent: (1)Plants andanimals,
and(2)Plant andanimal varieties?
According toSection 4paragraph c)oftheCzech Patent LawNo.527/1990 Coll. ofL.,patents
arenotgranted onplantoranimal varieties andbiological processes fortheproduction andimprovement
ofplants andanimals, withtheexception ofindustrial microorganisms serving forproduction and
biotechnological processes andtheproducts thereof, which arepatentable. Plant andanimal varieties
intheCzech Republic areprotected byspecial LawNo.132/1989 Coll. ofL.,andareregistered in
thestateregister. They aregranted breeders certificates withexclusive effects aspatent protection.
Thestated regulation isinconformity withArticle 27.3(b) ofTRIPS. According totheCzech Patent
Lawanimals andplants assuchdonotfallunder exclusions topatentability. However, itdoesnot
mean thatallanimals orplants areautomatically patentable. Theapplication practise intheCzech
Republic doesnotdispose ofanyprecedent ofpatent claim which would explicitly cover aplant or
ananimal.
2. Inyourcountry, istheactofoffering forsaleincluded intheexclusive rights ofpatent?
According totheLawNo.527/1990 Coll. ofL.,notonlysalebutalready theactofoffering
forsaleconstitutes aformoftheworking ofinvention andisincluded according toSection 13ofthis
lawintheexclusive rights arising from thepatent. Inthestated provision thisactiscovered bythe
expression "places onthemarket".
3. Inyourcountry, whatkinds ofactsarerecognized asexceptions totheexclusive rights conferred
byapatent right?
Asexceptions totheexclusive rights conferred byapatent areconsidered according tothe
LawNo.527/1990 Coll. ofL.,individual preparation ofmedicines, inapharmacy onbasisofmedical
prescription, theuseofpatented invention onboards vessels ofotherstates members oftheinternational
treaties towhich theCzech Republic isaparty, inthebody ofthevessel, inthemachinery, tackle,IP/C/W/71
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gearandother accessories, when suchvessels temporarily oraccidentally enter theCzech Republic,
provided thatsuchuseisexclusively fortheneeds ofthevessel, theuseofinvention intheconstruction
oroperationofaircraftorlandvehiclestemporarilyoraccidentallyentertheCzechRepublic.(Section18
oftheLawNo.527/1990 Coll. ofL.).Inaccordance withArticle 2andArticle 4ofTRIPS italso
applies toWTO Member States. These exceptions alsoinclude theuseofprotected invention forpurely
private need, iftheusedoesnotconcern economic activity andtesting ofinvention.
4. Inyourcountry, inwhich caseisusewithout theauthorization oftherightholder permitted,
including usebythegovernment orbythird parties authorized bythegovernment?
Theuseofinvention without theauthorization ofthepatent owner under theLawNo.527/1990
Coll. ofL.,mayoccur inthecaseofacompulsory licence under Section 20andinthecases stated
inreply toquestion 3)aswellasinthecaseofprior useraccording toSection 17.
5. Inyourcountry, howistheobligation under TRIPS Articles 34.1and34.2regarding theshift
oftheburden ofproof incivilproceedings forpatent infringement related toaprocess patent
implemented?
According toSection 13paragraph 2oftheLawNo.527/1990 Coll. ofL.,ifpatent hasbeen
granted foraprocess itseffects cover alsotheproducts directly obtained through theprocess; identical
products aredeemed tohavebeenobtained byapatented process unless theproof ofcontrary hasbeen
made. Thecourt isauthorized toorder thedefendant incivilproceedings ofinfringement ofpatent
process rights toprove thattheproduct hasbeenobtained byanother process different fromthepatented
one. According tovalidlegalregulation thedefendant hastoprove itinallthese cases (i.e.notonly
inthecases concerning anewproduct). Under Section 124oftheCivil Code Procedure theproof
istobemade soastoprotect state, economic, commercial andservice secrets andthestaterecognized
obligation ofsecrecy. Stated regulation complies withminimum requirements under Articles 34.1
and34.2ofTRIPS.
IV. REPLIES TOQUESTIONS POSED BYTHE UNITED STATES
Patents
1. Article3-2(d)oftheCzechPatentLaw[LawonInventions,IndustrialDesignsandRationalization
Proposals] (No.527ofNovember 27,1990) provides that"programs forcomputers" arenotconsidered
tobeinventions. Please explain whether, under thisprovision, inventions within thecategories specified
below arenoteligible tobepatented intheCzech Republic, notwithstanding thefactthattheinvention
isnovel, involves aninventive step,andisuseful:
(a) process inventions which, inwhole orinpart, consist ofsteps thatareperformed by
acomputer andaredirected byacomputer program;
(b) productinventionsconsistingofelementsofacomputer-implementedinvention,including
inparticular:
(i) machine-readable computer program codestored onatangible medium such
asafloppy disk,computer harddrive orcomputer memory; and
(ii) ageneral purpose computer whose novelty overtheprior artarises primarily
duetoitscombination withaspecific computer program.IP/C/W/71
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Ifanyofthese types ofinventions areexcluded fromeligibility tobepatented, please explain
howthepatent lawoftheCzech Republic complies withtheobligations ofArticle 27oftheTRIPS
Agreement, which mandates patent eligibility forallcategories ofinvention without discrimination.
According toSection 3paragraph 1oftheCzech Patent Lawpatents aregranted forinventions
which arenew, involve aninventive stepandaresusceptible ofindustrial application. Thisapplies
toallsubject matter ofpatent applications, ifcontaining thetechnical characteristics inthemeaning
oftheprinciples oftheLawandifthesubject matter oftheinvention represents atechnical contribution
tostateoftheart.Ifaprogram forcomputer represents atechnical solution expressed bytechnical
characteristics, e.g.acategory ofprocess invention, itiseligible forpatent protection. Itcannot,
however, represent merely thecharacteristics ofintellectual activity. Computer programs along and
assuchfallintoexclusion under theprovision ofSection 3paragraph 2oftheLawandareexcluded
from patent protection.
2. Article 11(1) oftheCzech Patent Lawdefines therights associated withapatent intheCzech
Republic tobethe"exclusive right towork theinvention, toauthorize others towork theinvention
ortoassign thepatent toothers". Article 13(1) clarifies thattheperson "working" aninvention means
theperson who"manufactures, places onthemarket orusestheproduct thatisthesubject matter of
theinvention, intheframework ofhiseconomic activity". Article 13(2) clarifies thedefinition with
respect toproducts thataretheresult ofpractice ofapatented process. Article 28.1(a) oftheTRIPS
Agreement requires WTO Members togrant thefollowing exclusive rights tothepatent owner: the
righttoprevent thirdparties nothaving theowner ’sconsent frommaking, using, selling, offering for
saleorimporting forthese purposes thepatented product. Article 28.1(b) defines theexclusive right
topractise apatented process, andextends therights associated withapatented product totheproducts
obtained directly byapatented process. Please explain howCzech lawcomplies withtheobligations
ofArticles 28.1(a) and(b)oftheTRIPS Agreement.
Theenumeration ofindividual minimum exclusive rights ofthepatent owner according to
Articles 28.1(a) and(b)ofTRIPS isfullycovered bythewording oftheprovision ofSection 13of
theCzech Patent Lawwhich isinconformity withtheTRIPS Agreement onthisrespect. Thepractical
interpretation oftheexpressions contained inthestated provision conforms withArticles 28.1(a) and
(b)andhasbeenconfirmed bylong-term practice intheCzech Republic. Thisinterpretation corresponds
tothecontent oftheexclusive rights ofthepatent owner under theCzech Patent Lawevenwithout
explicit definitions oftheindividual entitlements. According totheCzech Patent Lawnoonemay
useaninvention without theauthorization ofthepatent owner. Incaseofinfringement thepatent owner
hastherighttorequest judicial protection ofhisright.
3. Article34oftheTRIPSAgreementrequiresWTOMemberstomakeavailableincivilproceedings
toenforce aprocess patent theoption ofshifting theburden ofproof regarding useofthepatented
process toanaccused infringer whohasproduced aproduct identical tothatproduced byapatented
process. Noprovision oftheCzech patent lawappears toprovide suchanoption toapatent owner
enforcing itsrights inajudicial proceeding. Please explain whether Czech courts permit patent owners
toshifttheburden ofproof sothatanaccused infringer canberequired toprove thatithasnotused
thepatented process toproduce aproduct identical tothatwhich istheresult ofthepatented process.
Ifthisispossible inCzech courts, please explain thelegal basis forsuchanaction bythecourt. If
thisisnotpossible, please explain howCzech lawcomplies withtherequirements ofArticle 34ofthe
TRIPS Agreement.
According toSection 13paragraph 2oftheCzech Patent Law, ifthepatent hasbeengranted
totheprocess itseffect covers alsotheproducts directly obtained through thisprocess. Thisprovision
further contains thelegalassumption under which identical products aredeemed tohavebeenobtained
bythepatented process unless theproof ofcontrary hasbeenmade. Theowner ofapatent processIP/C/W/71
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neednotprove inproceeding ofprocess patent infringement under theCivil Code Procedure thatan
accused infringer hasbeenusing thepatented process. Itisamatter oftheaccused infringer toprove
thattheidentical product hasbeenobtained byprocess different fromthepatented process. Thecourt
isauthorized torequest theaccused infringer tosubmit suchproof. Thisregulation isinconformity
withArticle 34ofTRIPS. According topresently valid regulation theproof mustbemade soasto
protect state, economic, commercial andservice secrets andthestate-recognized obligation ofsecrecy.
4. Article 68oftheCzech Patent Lawprovides thatpatent-related appeals toacourt arepossible
onlywithrespect todecisions onthegranting ofacompulsory licence (Article 20),onanaction for
annulment (revocation) ofapatent (Article 23),oronadeclaratory action todefine thescope ofa
patent bythePatent Office (Article 67).Noprovision appears togiveapatent applicant therightto
appeal anegative decision bytheOffice onanapplication forpatent toajudicial orquasi-judicial
authority, asrequired byArticle 62.5oftheTRIPS Agreement. Please explain:
(a) whether itispossible toappeal anadverse decision ofthePatent Office onan
application regarding patentability toajudicial orquasi-judicial authority intheCzech
Republic, andifnot,howCzech lawcomplies withArticle 62.5oftheTRIPS Agreement;
and
(b) whether thepatent owner orpatent applicant isallowed toparticipate inthe
decision-making process.
(a)Onprinciple thedecisions oftheIndustrial Property Office canbereviewed byacourt.
According topresently validregulation arising fromtheCivilCode Procedure which entrust thereview
ofadministrative decisions tothejurisdiction ofcommon courts, however, itisnotpossible todemand
thatthefinalnegative decision onapatent application, depending ontechnical assessment, bereviewed
byacourt orbyanother quasi-judicial authority. There isnoPatent Court intheCzech Republic.
Thisquestion willbesolved bytheprepared reform ofadministrative judiciary.
(b)Inthepatent application proceedings ortheproceedings concerning thegranted patent,
theCzech Patent Lawenables thepatent applicant andthepatent owner toparticipate inthepreparation
ofmaterials concerning hisapplication orpatent andrequired forthedecision which isfullyinthe
competence oftheIndustrial Property Office. These means areboard enough andenable thepatent
applicant orpatent owner effective cooperation facilitating thedecision-making.
5. Article 20oftheCzech Patent Lawpermits thePatent Office togrant acompulsory licence
iftheowner ofapatent "does notwork thepatent atallorworks itinsufficiently andcannot give
legitimate reasons forhisfailure toact". Thisprovision thenspecifies thatthegrant ofthecompulsory
licence "shall notaffect theright oftheowner toobtain compensation inrespect ofthevalue ofthe
licence". Nootherprovision oftheCzech lawappears toaddress theterms orconditions forthegranting
ofacompulsory licence toathird party. Inrelation tothisauthority:
(a) pleaseexplainwhethertheworkingrequirementsspecifiedcanbesatisfiedbyimportation
ofproductssubjecttoapatentintotheCzechRepublic,orwhetherthepatentedinvention
mustbephysically worked intheCzech Republic;
(b) iftheinvention mustbephysically worked within theCzech Republic, please explain
howtheCzech lawcomplies withArticle 27.1, which prohibits discrimination inthe
enjoyment ofpatent rights based onwhether products areproduced locally orimported;
andIP/C/W/71
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(c) please explain howtheCzech lawcomplies withlimitations andconditions governing
theissuance ofcompulsory licences found inArticle 31(a) to(l).
(a),(b)According toSection 13paragraph 1oftheCzech Patent Law, theimportation of
patented products represents anexclusive rightofapatent owner andaformofworking oftheinvention.
Inthestated provision thisactivity iscovered bytheexpression "places onthemarket". Theimportation
ofthepatented product intotheCzech Republic means theworking ofaninvention byitspatent owner.
TheCzech Patent Lawdoesnotrequire physical working oftheinvention solely intheCzech Republic.
(c)According totheCzech Patent Lawthecompulsory licence isalicence granted byanofficial
measure. Theauthority competent foritsgranting istheIndustrial Property Office. Presently valid
provisions oftheCzech Patent Lawarebased ontheParis Convention ontheProtection ofIndustrial
Property. Requirements arising fromArticles 31(a) to(1)ofTRIPS areensured bydecision-making
competence oftheOffice. TheCzech Patent Lawenables theOffice toprovide thelimitations and
conditions initsdecision inaccordance withthese requirements. Thefinaldecision onthegranting
ofacompulsory licence canbereviewed byacourt. ThedraftofthePatent Lawamendment, which
iscurrently under preparation, considers anexplicit supplementing oftheexisting regulation.
6. Please indicate howmany compulsory licences onayearly basishavebeengranted intheCzech
Republic since 1January 1993.
According totheCzech Patent LawNo.527/1990 Coll. ofL.,theauthority competent for
granting ofacompulsory licence istheIndustrial Property Office. TheOffice hasnotgranted any
compulsory licence sofarandthelegal possibility ofitsgranting inliberal economic conditions of
theCzech Republic ismost improbable.
7. Please explain howArticles 14(2) and15theCzech Republic LawonInventions, Industrial
Designs andRationalization Proposals, which imposes alimitation ontherightofapatent owner to
assign orconclude licensing contracts bymaking anassignment orauthorization effective onlyafter
ithasbeenentered intothePatent Register, complies withArticle 28.2oftheTRIPS Agreement.
TheCzech Patent Lawdoesnotlimit theexclusive right ofapatent owner togiveconsent
withtheuseofpatented invention (Section 14)ortoassign apatent toanother party (Section 15).
Theregistration ofalicence contract orassignment agreement bytheentry intothePatent Register
keptbytheIndustrial Property Office haseffects inrelation tothird parties. Thevalidity ofthese
agreements shallnotbethereby affected.
8. Article 23(3) oftheCzech Republic LawonInventions, Industrial Designs andRationalization
Proposals states thatannulment ofapatent isretroactive tothedateonwhich thepatent became valid.
Under thisprovision, please explain whether, under thisprovision, apatent owner mustreimburse
licensees fortheconsiderations made tothepatent owner prior tothedateofannulment ofthepatent
(i.e., royalty orlicence fees).
TheCzech Patent Lawhasnospecific provisions concerning reimbursement ofe.g.licence
feesorother considerations byapatent owner inthecaseofannulment ofapatent under Section 23
oftheLaw. Inaspecific case, itwilldepend onthecontent ofalicence contract orananother
agreement. According topresently valid regulation arising from theCivil Code anyperson who,
however, hasacquired amaterial benefit without legalreason orbytheperformance duetoinvalid
legalreason, isgenerally obliged tosurrender unjustified enrichment totheparty tothedetriment of
which thisenrichment wasdue.