Chapter 2 Patents and Compulsory Licenses
2.1 Current Situation of Renewable Energy Technology Patent in the World
A patent is an exclusive right granted for an invention，which is a product or a process that provides a new way of doing something，or offers a new technical solution to a problem.To get a patent，technical inform-ation about the invention must be disclosed to the public in patent application.A patent may be granted for an invention in any field of technology，if it is new，involves an inventive step，and is capable of industrial application.In the system of intellectual property law，patents are intended to encourage innovation and to promote developments，which build on that inventiveness.The aim is that the grant of a patent will act as an incentive to inventors，who will consider the rewards sufficient to make it worthwhile disclosing their invention.
Generally，when the situation of patent is evaluated，the two sides will be considered.The first is the number of patent applications.According to the Japan's Ministry of the Environment（MOE），Japan boasts the world's highest number of patent applications in the field of renewable energies，with 55 percent，followed by the United States with 21 percent，European Union with 7 percent，PCT Applications，[1] South Korea，and China.[2] Japan is leading the world in the patent applications of solar cells，because it accounts for approximately 33 percent of the total number all over the world.Its wind power and geothermal generation technologies have maintained equivalent positions to those in the US and European nations.[3]
The second side is the number of patents granted.According to“wind patents geographic distribution 2002 ～2012”，the U.S.remained ahead of the rest of the world in the number of U.S.patents granted since 2002 with 50％ in wind energy field.Germany held steady 17％ and Denmark 10％，while Japan had 7％.According to“solar patents geographic distribution 2002～2012”，the U.S.percentage of solar patents since 2002 rose to 55％，up two percent over last year.Japan's share dropped three points to 19 percent，after dropping eight over the last two years，while Germany held steady at 6％.[4]Patents play an increasingly important role in the development of technology transfer.Especially renewable energy patents play important roles in developing renewable energy technology，which are mostly held in developed countries.However，as we know，in order to solve the problems such as environmental pollution，the cooperation of developing countries is essential.
Before describing about what is compulsory license，let us see what rights patent holders have.Generally，patent holders have mostly three kinds of right.The first is a right to exclude others from making，using，selling，or importing the invention.Although patent laws differ from legal system to legal system，no one can make，use，offer to sell，sell or import the products without the patent owner's permission.The second is the right to sell or license the patent to another party.The patent owner may convey few or all of the rights afforded by the patent，including the right to receive royalties for use of the patent.The third right is to seek remedies.A patent owner is entitled to seek various remedies for patent infringement.Although these remedies vary from country to country，they commonly include damages，injunction against further sales，and additional penalties if the infringement is found to have been willful.
Compulsory license stands as an exception in the intellectual property right system，because the patent holder is forced to give up a large part of his property right for the benefit of the public.Obviously，the abandoned right of patent owner is to sell or license the patent to another party.Specifically speaking，compulsory license is a system whereby the government allows third parties（other than the patent holder）to produce and market a patented product or process without the consent of the patent owner.This mechanism makes timely intervention possible for the government to achieve equilibrium between two objectives，rewarding inventions and making them available to the public during the term of the patent.Through such an intervention mechanism，the governments balance the rights of the patent holder with its obligations to ensure the working of patents，the availability of the products at a reasonable price，the promotion and dissemination of technological invention and protection of public health.[5] In short，the purpose of compulsory license is to increase access to useful goods by providing a wider use of the invention than the patent holder intended.The reasons why a government may authorize a compulsory license include：（1）to allow a producer to practice an invention where the patentee does not work the patent；（2）to recognize that there is an important public interest at stake； and（3）to prevent a patentee's abuse of the patent，for example as a remedy for a patentee's antitrust violation（Halewood，1997）.In the first two of these situations，the third party must pay a license fee to the licensee at a rate set by the government（Adelman et al.，2011）.