Irina Ozolina, Senior Partner of «A.Zalesov & Partners» Patent & Law Firm, commented to Kommersant publishing house on issues related to the payment of royalties for the use of inventions on patents owned by Novo Nordisk based on a decision of the Government of the Russian Federation (publication). The material published by Kommersant is devoted to the fact that due to differences in the interpretation of regulatory legal acts on the procedure for paying royalties for such compulsory licenses, some producers calculated compensation at a rate of 0.5% of revenue, and some at a rate of 0%. The Kommersant publishing house asked a number of experts to comment on which of the producers is right.
The Civil Code contains several legal situations that are commonly referred to as «compulsory license». The compulsory license itself is regulated by Article 1362 of the Civil Code: if the invention is not used or insufficiently used by the patent holder, or if someone has a dependent patent, then such a person has the right to file a lawsuit for granting such a compulsory license, and as a result of the dispute, a court decision determines the conditions under which such a license is issued. These are civil law issues, and despite the fact that the practice of applying this article 1362 is very limited, the general principles of legal regulation of these disputes are clear.
At the same time, article 1360 of the Civil Code, which is applied in the case under consideration, indicates that in certain cases, not the court, but the Government of the Russian Federation decides that certain manufacturers may use an invention without the consent of the patent owner, notifying him of this as soon as possible and paying him adequate compensation. The Government also approves the methodology for determining the amount of such compensation and the procedure for its payment (the methodology was approved by Decree of the Government of the Russian Federation No. 1767 of October 18, 2021). For certain, this is not a civil law relationship and the general principles of civil law regulation do not apply here: any interference by an administrative element in regulation must be clearly regulated. Initially, the Methodology indicated that compensation for such use is 0.5 percent of the actual revenue of the manufacturer to whom such right of use is granted. The amount of compensation is determined in the form of annual payments.
At the beginning of 2022, by the Decree of the Government of the Russian Federation No. 299 dated March 06, 2022, changes were introduced to the Methodology, according to which, in respect of foreign patent holders from so-called «unfriendly» jurisdictions, the amount of compensation amounted to 0 percent of actual revenue, while from April 04, 2024, this clause was canceled (which went almost unnoticed).
The first Government decree authorizing two Russian companies to use of a number of inventions, the rights to which belong to NOVO NORDISK A/S, was adopted on December 27, 2023 (during the period of the so-called «zero» rate) and was valid until December 31, 2024.
The Government has not provided any explanations on which rate of compensation should be applied to authorizations issued before April 04, 2024, but for the period up to the end of 2024 (taking into account that the payment is paid once a year), so the question of what rate should be applied is controversial.