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US Fights Other Countries’ Forced Licensing

April 22, 1987

WASHINGTON (AP) _ The Reagan administration would rather not have a law to protect U.S. processes against pirating in other countries than accept one that would weaken its stand in negotiating with their governments, a spokesman told Congress Wednesday.

″Regrettably ... we would prefer to have no protection for products made by patented processes than accept such protection together with the limitations imposed,″ said Donald J. Quigg, the U.S. commissioner of patents.

Dieter Hoinkes, an attorney in Quigg’s office, said in an interview that the governments concerned are largely in the new industrializing countries of the Far East, such as Taiwan and South Korea, as well as some in Latin America.

Quigg said a bill introduced by Sen. Orrin G. Hatch, R-Utah, would establish ″compulsory licensing″ in the United States.

The Reagan administration has been trying to convince other governments to give up the practice, and it might have little success if it adopts something similar itself.

Compulsory licensing means requiring that a process patented in one country be used in another country, even against the will of the patent’s holder.

Quigg was testifying before the subcommittee on patents of the Senate Judiciary Committee.

He argued that the bill would bring compulsory licensing into the United States by allowing products, made in another country by illicit use of a U.S. process, to be sold here for 18 months before the owner of the patent could take action.

″For 18 months, the patent would be unenforceable - which is the same as though the patentee had been forced to consent to the sale or use of his patented invention by others,″ Quigg said.

Advocates of the bill say it provides the 18 months so that distributors who bought the product from abroad, without knowing that it was made by a process that infringed a U.S. patent, would have time to sell their stock. Sen. Dennis DeConcini, D-Ariz., who co-sponsored the bill, suggested a compromise on 10, 12 or 16 months and said that a royalty - a fee for use of the patent - could be paid to the patent-holder.

Quigg said his own proposals were not ″hewn in stone″ and that a royalty would be better than nothing.

The Reagan administration has been trying to close a loophole in U.S. law. As it now stands, the law protects a product from foreign pirating if it has been patented here, but does not protect the process by which it is made.

Gerald J. Mossinghoff, president of the Pharamaceutical Manufacturers Association, said U.S. law needs to be brought into line with the laws of Japan, West Germany, France and Britain.

″We can’t make a product in this country with a German patent and then ship it to Germany,″ Hoinkes said. ″But they can turn around and do it to us.″

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