37. Compulsory licence in case of abuse or insufficient use of patent rights (1) Subject to subsection (14), any person interested who can show that he has been unable to obtain a licence under a patent on reasonable terms may, after the expiration of a period of three years subsequent to the date on which that patent was sealed, or four years subsequent to the date on which the application in respect thereof was lodged whichever period last expires, apply to the Registrar in the prescribed manner for a compulsory licence on the ground that the reasonable requirements of the public with respect to the invention in question have not been or will not be satisfied. (2) Every application under this section shall set out fully the nature of the applicant’s interest, the facts on which he bases his case and the relief he seeks, and shall be accompanied by an affidavit verifying the facts set out in such application. (3) If, after consideration of any such application, the Registrar is satisfied that the applicant has a bona fide interest, and that a prima facie case for relief has been made out, he shall direct the applicant to serve copies of the application and of the relevant affidavit upon the patentee and upon any other person appearing from the register to be interested in the patent, and to advertise the application in the prescribed manner. (4) If the patentee or any other person wishes to oppose the grant of a licence under this section, he may within the prescribed period, or within such further period as the Registrar may on application allow, deliver to the Registrar a counter-statement, verified by affidavit, setting out fully the grounds on which the application is opposed, and shall at the same time serve upon the applicant copies of the counter-statement and of such affidavit. (5) When, in relation to an application or an opposition thereto, the foregoing provisions of this section have been complied with to the extent therein required, the Registrar shall hand all relevant papers to the registrar of the Patents Tribunal, who shall arrange for the matter to be heard by that Tribunal in the manner prescribed and, subject to this section, the Patents Tribunal may make such order therein as it deems just. (6) The reasonable requirements of the public referred to in subsection (1) shall be deemed not to have been satisfied in any of the following circumstances, namely— (a) if the patented invention, being an invention capable of being worked in Malawi, is not being worked therein on a commercial scale and there is no satisfactory reason for such non-working: Provided that, if an application for a compulsory licence is made on this ground and the Patents Tribunal is of the opinion that the time which has elapsed since the sealing of the patent has by reason of the nature of the invention or for any other reason been insufficient to enable the invention to be worked within Malawi on a commercial scale, the Patents Tribunal may make an order adjourning the hearing of the application for such period as will in its opinion be sufficient for that purpose; (b) if the working of the invention within Malawi on a commercial scale is being prevented or hindered by the importation of the patented article by the patentee or persons claiming under him, or by persons directly or indirectly purchasing from him or by persons against whom the patentee is not taking or has not taken proceedings for infringement; (c) if the demand for the patented article in Malawi is not being met to an adequate extent and on reasonable terms; (d) if by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry of Malawi or the trade of any person or class of persons trading in Malawi, or the establishment of any new trade or industry in Malawi, is being prejudiced, and it is in the public interest that a licence or licences should be granted; (e) if any trade or industry in Malawi, or any person or class of persons engaged therein, is being prejudiced by unfair conditions attached by the patentee, whether before or after the date of commencement of this Act, to the purchase, hire, licence or use of the patented article, or to the using or working of the patented process; (f) if any condition which under section 49 is null and void as being in restraint of trade and contrary to public policy, has been inserted in any contract made in relation to the sale or lease of or any licence to use or work any article or process protected by the patent: Provided that, for the purpose of determining whether there has been any abuse of the monopoly rights under a patent, due regard shall be had to the fact that patents are granted not only to encourage invention but also to secure that inventions shall so far as possible be worked on a commercial scale in Malawi without undue delay. (7) The Patents Tribunal may order the grant to the applicant of a licence on such terms as it may think expedient, including a term precluding the licensee from importing into Malawi any goods whereof the importation by persons other than the patentee or persons claiming under him, would be an infringement of the patent. (8) If in respect of an application under this section the Patents Tribunal is satisfied that the invention which is the subject of the application is not being worked on a commercial scale within Malawi, and is such that it cannot be so worked without the expenditure of capital for the raising of which it will be necessary to rely on the patent monopoly, it may, unless the patentee or those claiming under him will undertake to find such capital, order the grant to the applicant or any other person, or to the applicant jointly with one or more other persons, if able and willing to provide such capital, of an exclusive licence on such terms as the Patents Tribunal may think just, but subject as hereinafter provided. (9) The terms of any exclusive licence ordered to be granted under subsection (8) shall, with due regard to the risks to be undertaken by the licensee in providing the capital and working the invention, be so framed as— (a) to secure to the patentee the maximum royalty compatible with the successful working of the invention within Malawi on a commercial scale and at a reasonable profit; (b) to guarantee to the patentee a minimum yearly sum by way of royalty, if and so far as it is reasonable to do so; and in addition to any other terms of the licence or order, the licence and the order shall be made revocable at the discretion of the Patents Tribunal if the licensee fails to— (i) work the invention within the time specified in the order; (ii) expend the amount specified in the licence as being the amount which he is able and willing to provide for the purpose of working the invention on a commercial scale within Malawi; or (iii) pay to the patentee the royalties payable in terms of the licence. (10) In deciding to whom an exclusive licence is to be granted, the Patents Tribunal shall, unless good reason is shown to the contrary, prefer an existing licensee to a person who, according to the register, has no interest in the patent. (11) The order directing the grant of an exclusive licence under this section shall operate to divest the patentee of any right which he may have as patentee to work or use the invention, and to revoke all existing licences, unless otherwise provided in the order, and may, if considered fair and equitable by the Patents Tribunal, be made subject to the condition that the licensee shall give proper compensation to be fixed by the Patents Tribunal for any money or labour expended by the patentee or any existing licensee in developing or working the invention. (12) A licensee under this section shall be entitled to call upon the patentee concerned to institute any proceedings which may be necessary to prevent infringement of the patent in question and shall in all other respects have the same rights as any other licensee, and if the patentee fails within two months after being called upon by the licensee, or within such further period as the Patents Tribunal may allow, to institute any such proceedings, the licensee may himself institute such proceedings as if he were the patentee, making the patentee a defendant, but the patentee shall not be liable for any costs in connexion with such proceedings unless he enters an appearance and takes part in those proceedings. (13) The existence of a compulsory licence granted solely on the ground that an invention is not being worked in Malawi on a commercial scale shall not preclude the grant of further licences (including compulsory licences) in respect of that invention, but the holder of any compulsory licence shall not be entitled to transfer that licence or grant a sub-licence thereunder except to a person to whom the business or the part of the business in connexion with which the rights under the licence were exercised, has been transferred. (14) Except in the case of a licence to be granted under subsection (8), no licence shall be granted in terms of this section or of section 38 while the relevant patent remains endorsed “licences of right” under section 35 . (15) For the purposes of this section, the expression “patented article” includes any article made by a patented process.