Article 26 of the Saudi Patents Law
المادة 26 من نظام براءات الاختراع · الفصل الأول: أحكام عامة
The article prevents the compulsory licensee from assigning the license to others except together with the enterprise, part of it or its goodwill, and with the City's approval, otherwise the assignment is void.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا منح ترخيص إجباري لموضوع من موضوعات الحماية، فإنه لا يجوز للمستفيد من الترخيص الإجباري أن يتنازل عنه للغير، إلا إذا كان التنازل شاملًا للمنشأة المستفيدة من الترخيص، أو جزء منها، أو سمعتها التجارية، ويشترط موافقة المدينة على التنازل، وإلا كان باطلًا، وإذا وافقت المدينة على التنازل المذكور فإن المتنازل له يصبح مسؤولًا عن التزامات المستفيد الأول المترتبة عليه قبل الموافقة على التنازل.
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 26 explained in plain English
This article places strict limits on assigning a compulsory license, because the license is granted to a specific person based on their circumstances and for specific purposes, not as a freely tradable right.
The rule: the beneficiary of a compulsory license may not assign it to others.
The exception: assignment is permitted if both of the following conditions are met:
- The assignment includes the enterprise that benefits from the license, or part of it, or its goodwill. In other words, the license moves together with the business, not separately from it.
- The City approves the assignment, otherwise it is void.
Effect of approval: if the City approves the assignment, the assignee becomes responsible for the obligations of the first beneficiary that arose before the approval. Whoever buys an enterprise that holds a compulsory license therefore bears its earlier obligations relating to the license, such as the compensation owed to the owner.
The rule applies to a compulsory license over any protected subject matter, including the compulsory license for plant varieties regulated by Article 25. The City may also amend a compulsory license decision if grounds for doing so arise, under Article 27.
When buying an enterprise or part of one that includes a compulsory license, it is important to check its earlier obligations and obtain the City's approval; consider consulting a lawyer specializing in intellectual property and patents.
Practical example
An establishment in Dammam sold its factory, which exploits an invention under a compulsory license, to another company. The license cannot pass without the City's approval, and once approved, the buying company becomes responsible for the establishment's earlier obligations relating to the license.
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 26 of the Saudi Patents Law
Can a compulsory license be sold to another person?
No, unless the assignment includes the benefiting enterprise, part of it or its goodwill, and the City approves.
What is the effect of assigning a compulsory license without the City's approval?
The assignment is void.
Who bears the license obligations after the assignment?
The assignee becomes responsible for the obligations of the first beneficiary that arose before the assignment was approved.
More articles on Compulsory Licensing
- Article 24
The article allows the City to grant a third party a compulsory license to exploit a patented invention or an integrated circuit layout design, on set conditions and with fair compensation to the owner.
أ - يجوز للمدينة أن تمنح ترخيصًا إجباريًّا للغير باستغلال الاختراع المشمول بالبراءة، أو التصميم التخطيطي للدارة المتكاملة المشمول بشهادة التصميم بناء على طلب يق
- Article 25
The article allows the City to grant a compulsory license for a plant variety covered by a plant patent on set conditions, including public interest, three years from grant and fair compensation, for two to four years.
أ - يجوز للمدينة أن تمنح ترخيصًا إجباريا للغير باستغلال الصنف النباتي المشمول ببراءة نباتية، وذلك بناء على طلب يقدمه إليها وفقًا لما يأتي : 1- أن يكون الترخيص ا
- Article 27
The article allows the City to amend a compulsory license decision if grounds require it; the owner or the beneficiary may request amendment, and the decision to amend or refuse must state its reasons.
يجوز للمدينة تعديل قرار منح الترخيص الإجباري إذا قامت أسباب تقتضي ذلك. ولمالك وثيقة الحماية أو المستفيد من الترخيص الإجباري أن يطلب من المدينة إجراء هذا التعديل
- Article 28
The article requires the City to cancel a compulsory license if the beneficiary has not exploited it sufficiently within two years, has not paid amounts due within 90 days, or has breached its conditions.
تقوم المدينة بإلغاء الترخيص الإجباري في الحالات الآتية: أ - إذا لم يقم المستفيد من هذا الترخيص باستغلاله على نحو كاف يفي باحتياجات المملكة خلال سنتين من منح الت
- Article 29
The article allows the beneficiary of a compulsory license to relinquish it by a written request to the City; relinquishment takes effect from the date of the City's approval.
يجوز للمستفيد من الترخيص الإجباري التخلي عن الترخيص، بناء على طلب كتابي يقدمه إلى المدينة، على أن يسري أثر التخلي من تاريخ موافقة المدينة عليه.
- Article 30
The article requires decisions granting, amending, withdrawing, transferring or relinquishing compulsory licenses to be recorded in the Administration's records, announced in the Bulletin and notified to the owner of the protection document.
تسجل في سجلات الإدارة قرارات الترخيص الإجباري وتعديلها، وسحبها، ونقلها للغير، والتخلي عنها، وتعلن في النشرة، ويبلغ مالك وثيقة الحماية بها.
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.