Interdependent Patents. If a combination of two patented technologies, infringing upon one another, owned by two right holders, and would seem to be a profitable product or process, the parties have two choices apart from an invalidity process. One can buy or license the patented technology from the other or they can join their efforts and launch a combination of the two together. As for the last option the joint venture negotiations might fail. In theory, the risk of bargaining breakdown is especially high when an agreement is most 279 Bodenhausen p. 71, note (h). 280 PC Article 5 Section A.4. 281 Examples given on such legitimate reasons are if the patented subject matter is illegal, unrealisable or a losing transaction. Xxxxxxxxxxx, p. 73, note (o). 282 Xxxxxx X. Xxxxxx: The GATT agreement on trade-related aspects of intellectual property rights: new standards for patent protection, [1994] 8 EIPR 331. 283 Xxxxxx Xxxxxxx: The TRIPS agreement: drafting history and analysis, London 1998, p. 148. desirable from a social perspective. That is when a radical improvement has been made and patented from an existing patented solution. The difference between a radical improvement and an ordinary one is measured in economic terms. The market value of radical improvement is much higher than that of an ordinary improvement or of the first invention.284 The bargaining failure is thought to be due to three main reasons. First, the difficulty in validating the separate contributions of the first inventor on the one hand and the improver on the other. Second, the difficulty in estimating how the technology will develop and how profitable it will be.285 Third, the bargaining breakdown is most acute if the agreement to be reached is a one- time transaction. If the parties frequently need to exchange rights it is likely that that the parties will invest in administrative structures or institutions in order to render the transactions more efficient and governmental intervention is unnecessary.286 The purpose of Article 31.l is to prevent the situation where the parties cannot reach an agreement when it is socially valuable. It stipulates that a compulsory license can be granted in order to break the first inventors hold up position when the second patent involves an “important technical advance of considerable economic significance in relation to the invention claimed in the first patent”287. But the above is only valid if the pioneer inventor is given a cross license to the second patent.288 The...
Interdependent Patents. The amendment of Law (2004:159)354 meant only minor changes in the right to a compulsory license due to overlapping and blocking patent rights.355 Today, 46 § patentlagen (1967:837) has the exact same meaning as Article
