Article 21 of the Saudi Patents Law
المادة 21 من نظام براءات الاختراع · الفصل الأول: أحكام عامة
The article lets the owner of a protection document license others contractually to exploit it, not effective against third parties until the fee is paid and the license recorded, and not preventing the owner from exploiting it or licensing another.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز لمالك وثيقة الحماية أن يرخص ترخيصًا تعاقديًّا لغيره في القيام بكل أو بعض أعمال الاستغلال، المنصوص عليها في الأحكام الخاصة، لكل موضوع من موضوعات الحماية. ولا يعتد بعقد الترخيص في مواجهة الغير، ما لم يسدد المقابل المالي المقرر عليه ويسجل في سجلات الإدارة ولا يترتب على هذا الترخيص حرمان مالك الوثيقة من استغلال موضوع الحماية بنفسه، أو منح ترخيص آخر عن موضوع الحماية نفسه، ما لم ينص عقد الترخيص الأول على خلاف ذلك.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 21 explained in plain English
This article regulates the contractual license, which Article 2 defines as a contract by which the owner of a protection document authorizes another party to some or all of the owner's rights in exploiting the document, for a certain period in return for a specified fee.
1. Permissibility of licensing: the owner of the document may license another to carry out all or some acts of exploitation set out in the special provisions for each subject of protection.
2. Effect against third parties: the license contract is not recognized against third parties until:
- the prescribed fee on it is paid,
- and it is recorded in the Administration's records.
3. The owner's rights after licensing: a license does not deprive the owner of:
- exploiting the subject of protection personally,
- or granting another license for the same subject,
unless the first license contract provides otherwise. If the licensee wants to be the only one to exploit the document, the licensee must say so expressly in the contract.
Article 22 follows, allowing the Administration to ask for a license contract to be amended if it involves abuse of the right or a negative effect on competition or on the acquisition and dissemination of technology. A license also differs from the prior user's right in Article 20, which does not need the owner's permission.
The wording of a license contract determines the rights of the parties, so it is advisable to review it with a lawyer specializing in intellectual property and patents.
Practical example
An inventor licensed a company in Jeddah to exploit her patent in manufacturing a sterilization device, without the contract providing for exclusivity. She remains free to make the device herself or to license another company, and for the company to assert the license against third parties its fee must be paid and it must be recorded in the Administration's records.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 21 of the Saudi Patents Law
Can a patent be licensed to another company?
Yes. The owner of the document may license another to carry out all or some acts of exploitation.
Must a patent license contract be recorded?
The license contract is not recognized against third parties unless the prescribed fee is paid and it is recorded in the Administration's records.
May the owner grant a second license for the same patent?
Yes, unless the first license contract provides otherwise.
More articles on Licensing Patent Exploitation
- Article 17
The article requires the owner of a protection document who disposes of it to another, or whose right to exploit it passes to another, to formally notify that person of any legal procedure concerning the document.
إذا تم التصرف في وثيقة الحماية للغير بأي نوع من أنواع التصرف، أو انتقل حق استغلالها للغير لأي سبب من الأسباب، فعلى مالك الوثيقة إبلاغ المتصرف إليه، أو من انتقل
- Article 22
The article allows the Administration to ask the parties to a license contract to amend it so that it is free of abuse of the right, any negative effect on competition, or on the acquisition and dissemination of technology.
يجوز للإدارة أن تطلب من أطراف عقد الترخيص تعديله، بما ينفي عنه إساءة استخدام الحق في وثيقة الحماية، أو أي أثر سلبي على المنافسة، أو حيازة التقنية ونشرها.
- Article 23
The article gives the licensee all the acts and privileges of the owner of the document across the Kingdom for the whole protection period unless the contract provides otherwise, and bars the licensee from assigning them unless the contract expressly allows.
يترتب على الترخيص أحقية المرخص له في القيام بجميع الأعمال والامتيازات المقررة لمالك وثيقة الحماية، والمتعلقة بموضوع الحماية في جميع أنحاء المملكة طوال مدة سريان
- Article 33
The article provides that a judgment invalidating the grant of a protection document makes the grant treated as if it never existed from its date of issue, with a special rule on license payments and publication of the judgment.
الحكم ببطلان قرار منح وثيقة الحماية كليا أو جزئيا يترتب عليه اعتبار هذا القرار كأن لم يكن من تاريخ صدوره، وذلك في نطاق ما قضي ببطلانه، على أنه ليس من شأن الحكم
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.