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EU in Patent Dispute with Taiwan over Illegal Exports

The European Union has said that a patent licence dispute with Taiwan may need to be passed to the World Trade Organisation to be resolved.

The argument is that Taiwan issued a compulsory licence allowing Gigastorage, a Taiwanese CD manufacturer, to produce and export CDR discs, a technology that was developed and is owned by Philips.

A compulsory licence is issued by the government and allows the manufacturer to produce a product without having to negotiate with the patent owner to use their design or technology. However the products, under regulations by the World Trade Organisation, state that they must not be made available for export.

Philips filed a complaint with the EU Trade Regulators in 2007 stating that Gigastorage, by exporting their CDR discs, was violating their exclusive patent rights.

Taiwan were blasted by a European Commission report, which argued that Taiwan were "inconsistent with WTO rules on intellectual property", giving it two months to reverse the compulsory licence.

Peter Mandelson, the EU Trade Commissioner, commented "I hope that the Taiwanese authorities will move quickly to bring their law and practice into line with WTO rules, … I cannot rule out seeking WTO dispute settlement if they do not."

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