According to the provisions of the Patent Law, under the following circumstances, the administrative department for patent in the State Council may grant a compulsory license to exploit a patent for invention or utility model upon the application of a unit or individual with the conditions for implementation:
1. It has been three years since the patent right was granted and four years since the patent application was filed, and the patentee has not implemented or fully implemented his patent;
2. The patentee's behavior of exercising the patent right is recognized as monopolistic behavior according to law, so as to eliminate or reduce the adverse effects of this behavior on competition.
Legal basis: People's Republic of China (PRC) Patent Law.
Article 48 Under any of the following circumstances, the administrative department for patent in the State Council may grant a compulsory license to exploit a patent for invention or utility model upon the application of a unit or individual with the conditions for implementation:
(1) It has been three years since the patent right was granted and four years since the patent application was filed, and the patentee has not implemented or not fully implemented his patent;
(2) The patentee's act of exercising the patent right is recognized as a monopolistic act according to law, so as to eliminate or reduce the adverse effects of the act on competition.
Article 49 In case of national emergency or special circumstances, or for the purpose of public interest, the patent administration department in the State Council may grant a compulsory license to exploit a patent for invention or utility model.
Article 50 For the purpose of public health, the patent administration department in the State Council may grant compulsory licenses for the manufacture and export of patented drugs to countries or regions that meet the requirements of relevant international treaties to which People's Republic of China (PRC) is a party.
Article 51 Where the invention or utility model for which a patent right has been granted is a significant technological progress with great economic significance compared with the invention or utility model previously granted with a patent right, and its implementation depends on the implementation of the previous invention or utility model, the patent administration department of the State Council may, upon the application of the latter patentee, grant a compulsory license to exploit the previous invention or utility model.
Where a compulsory license is granted in accordance with the provisions of the preceding paragraph, the administrative department for patent in the State Council may also grant a compulsory license to exploit the latter invention or utility model upon the application of the former patentee.
Article 52 The invention-creation involved in compulsory license is semiconductor technology, and its implementation is limited to the purpose of public interest and the circumstances specified in Item (2) of Article 48 of this Law.
Article 53 Unless compulsory license is granted in accordance with the provisions of paragraph 2 of Article 48 and Article 50 of this Law, the main purpose of compulsory license shall be to supply the domestic market.
Article 54 A unit or individual applying for compulsory license in accordance with the provisions of Article 48, paragraph 1 and Article 51 of this Law shall provide evidence to prove that it requested the patentee to license it to exploit the patent under reasonable conditions, but failed to obtain the license within a reasonable time.
Article 55 The decision made by the patent administration department in the State Council to grant a compulsory license for exploitation shall be notified to the patentee in time, and shall be registered and announced.
The decision to grant compulsory license shall stipulate the scope and time of implementation according to the reasons for compulsory license. When the reasons for compulsory license are eliminated and no longer exist, the administrative department for patent in the State Council shall, at the request of the patentee, make a decision to terminate the compulsory license after examination.
Article 56 A unit or individual that has obtained a compulsory license for exploitation shall not enjoy the exclusive right to exploit it, nor shall it have the right to allow others to exploit it.
Article 57 A unit or individual that has obtained a compulsory license for exploitation shall pay a reasonable royalty to the patentee, or handle it in accordance with the provisions of relevant international treaties to which People's Republic of China (PRC) is a party. If the user fee is paid, the amount shall be negotiated by both parties; If both parties fail to reach an agreement, it shall be decided by the patent administration department of the State Council.
Article 58 If the patentee refuses to accept the decision of the patent administrative department of the State Council on compulsory license, and if the patentee and the unit or individual that obtained the compulsory license refuse to accept the decision of the patent administrative department of the State Council on compulsory license fee, they may bring a lawsuit to the people's court within three months from the date of receiving the notice.