Economic evaluation of the policy of compulsory licensing

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Question: A third means of reducing the social costs of granting a patent life that is too long is a policy of compulsory licensing. This policy, which forms part of the patent systems of most Western European countries, allows frustrated licensees to ask courts to compel patentees to license to them if they can show that patent-holders have failed to use their patents in the domestic market within a specified time period, have failed to license when that is essential to bringing a complementary invention into use, or have abused their positions by, for example, excessively restricting the supply of their inventions. If the court is persuaded by the prospective licensee to compel licensing, then it also determines a reasonable royalty. Give an economic evaluation of the policy of compulsory licensing.

Reference no: EM131908252

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