Private Liability Rule Regimes

According to Section 23(1), first sentence, Patent Act, the patent owner or applicant is allowed to declare the willingness to license, but only as long as “no entry concerning the grant of an exclusive license [Section 30(4)] is recorded in the register or a request for the recording of such entry has been filed with the patent office”⁵ [Section 23(2)]. It is concluded from this stipulation that the formal allowance that normally becomes apparent with the entry in the patent register is sufficient for being allowed to declare the willingness to license; the real entitlement is not important.⁶ Some commentators claim that the declaration is valid only if the real and registered patentee issues it, which may be justified by the non-legal force of the German Patent Register.⁷ However, this last opinion would be irrelevant in practice because it is contrary to the wording of Section 23 Patent Act and because the users of an invention may already have had expenses. In general, it is also of no relevance whether a non-exclusive licence or, based on the above considerations, an exclusive licence exists for which no request for recording in the register is pending or which is not recorded in the register.⁸

When the patent owner or applicant can declare his willingness to license depends on the circumstance of where the application was filed. For German patent applications, a declaration is possible from the day of the application [Section 23(1), first sentence, Patent Act], for PCT applications from the day Germany is a designated state and for EPO patent applications from the day of publication of the mention of the grant [Arts. 2(2) and 97(3) EPC]. The patent owner must declare his willingness to license in writing [Section 23(1), first sentence, Patent Act], which means that it becomes effective at the point in time when it reaches the DPMA [Section 130(1) Civil Code], and the paperwork must contain an original signature of the patent owner or an agent who is entitled to act for the patent owner [Section 126(1) Civil Code]; pursuant to the jurisdiction of the Federal Patent Court, a facsimile is not allowed.⁹ According to Section 23(7), first and second sentences, Patent Act, the willingness to license can be withdrawn, which takes effect upon filing a written communication to the DPMA as long as no intent to use the invention has been notified to the patent owner.¹⁰

The declaration of willingness to license has the effect that the patent owner’s entitlement is no longer protected by a property rule, but by a liability rule.¹¹ In other words, the patent owner abandons his rights as the sole user of the patented invention [Section 23(3), fourth sentence, Patent Act], as well as of granting exclusive licences [Section 30(4), second sentence] and forbidding use even by someone willing to pay reasonable compensation [Section 23(3), sixth sentence, e contrario].¹² The declaration is published in the Patent Register and the Patent Gazette [Section 23(1), third sentence] and—very importantly—the future annual patent fees are reduced by half [Section 23(1), first sentence]. This reduction can only take effect from the third year following the date of filing because every owner of a German patent, or every patent applicant if the patent office has not yet decided about the grant, has to pay annual fees from that point in time onward to keep the patent (application) alive [Section 17(1)].¹³ The amount of fees is determined in the German Patent Costs Act (PatKostG) and its appendix [Section 2(1)]. Figure 3.2 illustrates the German (but not the European!) patent fees for patents and supplementary certificates of protection (Section 16a Patent Act) according to the Patent Costs Act.¹⁴

If the patentee withdraws his declaration of willingness to license, protection of the entitlement changes again from a liability rule to a property rule. Additionally, the patent owner is obliged to pay the amount by which the annual fees have been reduced to the DPMA [Section 23(7), third sentence, Patent Act] and the withdrawal is published in the Patent Register and Patent Gazette.¹⁵

Anyone who wishes to exploit the invention must notify the patentee of his intention via registered mail; the notification must contain a statement of how the invention will be exploited [Section 23(3), first to third sentences, Patent Act]. After notification, the notifying party is allowed to use the invention [Article 23(3), fourth sentence].¹⁶ Normally the user can produce and sell the products in Germany, but this could also take place in the following way: the notifying party produces the products abroad which contain the patented invention, then imports and sells them to German customers; since exhaustion takes place with the importation, the customers are allowed to resell them.¹⁷ The user is also obliged to report the details of use at the end of every calendar quarter and pay remuneration [Article 23(3), fifth and sixth sentences]. Only if the user does not fulfil his obligations is the patent owner allowed to apply for an injunction [Act. 23(3), seventh sentence].¹⁸ The parties may agree upon the amount of remuneration; alternatively, as will be explained in detail in the next section, remuneration can be assessed by the patent division of the DPMA at the written request of a party [Article 23(4), first sentence].

Legally, the declaration of willingness to license may be categorised as an offer and the notification by the user as an acceptance of a contract.¹⁹ Alternatively, the declaration may be considered as a disposal of the patent owner over his right and the indication as allowing use of the patented invention. The disposal and allowance constitutes a kind of licensing relationship but, at least in the first instance, it is not a contractual relationship.²⁰ The second alternative seems to be the prevailing opinion, although (according to German law) the parties need not necessarily agree on the amount of remuneration when concluding a licensing agreement.²¹ This also seems to be the consequence when entitlement theory is taken as a basis. The reason is that the willingness to license or licence of right is protected by a private liability rule and such mechanisms do not necessarily lead to contractual relationships between the patent owner and user.

There are two first instances that can determine compensation or make an alteration [Section 23(4–5) Patent Act] if the parties do not reach an agreement themselves. First, the patent division of the DPMA is explicitly mentioned in Section 23(4), first sentence, Patent Act. It decides if one party files a written request and the parties already agree that an obligation for paying remuneration exists.²² The fee must be paid by the applicant to the patent office and may be reimbursed by the opponent [Section 23(4), fourth sentence]. The amount is currently €60 [Section 3(1), Patent Costs Act, Fee No. 313 200 in the table of costs]. The second first instance may be a Lower Regional Court (LG) [Section 142(1), Patent Act]. The court seems to be generally accepted although it is not explicitly mentioned in the law.²³ The court may also be allowed to decide about other issues that are in dispute. The amount of court fees is not fixed and depends on the value of the claim. Therefore, the fee is certainly higher than €60. Consequently, parties normally file a request to the patent division if the amount of remuneration is the only point of contention.

Section 23 Patent Act does not contain any information regarding the meaning of the term reasonable compensation. Indications can be found in the literature²⁴ and, more important in practice, in published administrative and court decisions. Since the (re)foundation of the German Patent Office in 1949, the patent office has only decided three times about a reasonable amount of remuneration. In each of these cases an appeal was filed to the Federal Patent Court, and once a further appeal to the Federal Supreme Court.²⁵ According to the decisions and the literature, the amount of remuneration should depend on the circumstances of each individual case.²⁶ The aim should be to strike a balance between the interests of the patent owner and users. The patent owner should be compensated for having made and disclosed the invention, but users should not be burdened unreasonably, certainly if the amount of compensation has the effect that (potential) users decide not to use the invention.²⁷ Other commonly known and accepted principles to determine remuneration or compensation are also applicable. These include principles developed for compulsory licensing provisions,²⁸ for contractual licences, and for the calculation of damages according to the licence analogy.²⁹ So far, normally as a first step, the courts have made comparisons with licence agreements that were concluded before the willingness to license was declared.³⁰ Additionally, courts consider as relevant, inter alia, the following: the importance of the invention for the user and the value derived from the current state of the art³¹; doubts regarding the validity of the patent³²; the volume of the user’s sales³³; and what is reasonably agreed under comparable conditions.³⁴ However, the declaration of willingness to license itself should not, in principle, have relevance for the amount of remuneration, especially if there are already a significant number of licensees³⁵ and if non-exclusive licensing contracts were used as an indication before.³⁶

Section 23 Patent Act³⁷ came into force on 1 October 1936 after a decision by the German government of the Reich.³⁸ Although Section 23³⁹ was introduced by the German government of the Reich and not a parliament, an explanatory memorandum exists for the act. It is important to keep in mind that the idea for such a provision originated not primarily from the Nazis, since introducing such a mechanism was not their idea. Licence of right provisions were first introduced in 1903 in Canada, which was at that time a British Crown Colony, and in 1919 in England.⁴⁰ However, according to the introductory remarks of the memorandum, the main purpose of the act was to exert the ideas of National Socialism in the field of patent and utility model law.⁴¹ On the one hand, the evolution of the creative personality was to be promoted and protected against exploitation by, inter alia, facilitating access to patent protection for inventors who were short of funds. On the other hand, the inventor was not to be aided in reaching selfish goals; instead he was to make the value of his invention available to the public because he owed his achievements to society.⁴²

In concrete terms, the reasons for introducing Section 23 were to serve the interests of inventors and the general public by promoting technology transfer, as well as the use and commercialisation of inventions, i.e., innovations. Technology transfer and use of the invention should take place due to the possibility that third parties can easily become aware of the declaration of willingness to licence, since the patent owner can no longer prevent the use of his invention, and since every declaration is published in the German Patent Register and the Patent Gazette.⁴³ Section 23 serves the interest of the general public because an invention can be used by third parties before the patent expires; the interests of patent owners are served in that they receive remuneration (potentially even more than would normally be the case).⁴⁴ This mechanism leads to more innovations because individual inventors who lack the necessary assets for commercialisation are then able to pay the annual fees for a longer time and receive remuneration if the invention is useful.⁴⁵ The introduction of Section 23 and a coincidental increase in patent fees should also have hampered the maintenance of—economically often not desirable—blocking patents.⁴⁶

Section 23 Patent Act was slightly amended several times.⁴⁷ However, there was one important amendment that went into force on 1 June 1992, when the possibility was added to withdraw the willingness to license as long as no one had indicated an intention to use the patented invention [Section 23(7)].⁴⁸ According to the act’s explanatory memorandum on the amendment in 1992, the aim of the legislature was to improve the focus on the goal of promoting innovation.⁴⁹ The disadvantage of not being able to grant exclusive licences was the main reason the declaration of willingness to license did not have, as was reported by specialists, the desired effects of disseminating inventions and encouraging more licensing activity.⁵⁰ The amendment was intended to alleviate this disadvantage. Additionally, the legislature considered the interests of society to be less important than those of the patent owner, as long as no third party indicated his intention to make use of the patented invention.⁵¹

Section 23 Patent Act and its explanatory memoranda have been criticised in many ways; in most cases, however, without referring to any empirical evidence. Only one empirical study, which was published by the Institute for Economic Research in 1974 and in which the effects of the patent system on the innovation process were investigated based on a survey, came, inter alia, to the result that the declaration of willingness to license was irrelevant for the conclusion of licensing agreements.⁵² The disadvantages of Section 23 are analysed below.

One critic, Eggert, argued that the aim of the legislature cannot be achieved because costs can only be partially reduced and remuneration under a willingness to license regime is supposedly lower than under “normal” conditions and cannot be compensated by a saving in fees.⁵³ The reasons for lower compensation are inter alia—which may also be a general argument against the current provision—that the patent owner who has declared the willingness to license is no longer allowed to limit the use of his invention and is obliged to accept every user.⁵⁴ Moreover, the provision is not suited to serving the interests of an individual inventor who is short of funds, as the annual fees in the first 6–10 years are only a small part of the high overall costs. Small and medium-sized enterprises do not profit because they need an exclusive right or the possibility of exclusive licensing to be able to shoulder the investment risks for further development, production and marketing.⁵⁵ Additionally, the system under Section 23 does not lead to more licensing activity since no one who is seeking a licence searches the Patent Register or Gazette for patents for which the owner has declared the willingness to license.⁵⁶ A further disadvantage is the situation that was partially improved by the amendment in 1992, that the patent owner loses his right to grant exclusive licences.⁵⁷ As a consequence of all these arguments, the declaration may be perceived, contrary to the intention of the legislature, as a devaluation of the patent and may only be used if the patent owner does not want to decide whether he wants to keep the patent alive or let it expire.⁵⁸

Complementary assets are assets or capabilities that are always needed for the successful commercialisation of an innovation. These assets include competitive manufacturing facilities, distribution channels, different services and complementary technologies.⁷² According to an article by Teece, these assets can usually be classified in three different categories, depending on the relationship between the asset and the innovation. In the first group are generic assets that need not be tailored to the innovation. In the second category are specialised assets in which a unilateral dependence between the innovation and the complementary asset exists. Co-specialised assets, which comprise the third group, are those with a bilateral dependence.⁷³ The latter two are assets that need to be tailored to the innovation; as a consequence, there is a strong dependence of the asset on the innovation and the other way round.⁷⁴ If the innovation and the complementary assets are not owned by the same person—especially the case for individual inventors and small and medium-sized enterprises—both parties must commit capital to certain irreversible investments that will be valueless if their relationship breaks down. Thus, an agreement, which is a licensing agreement in the case of technology transfer, between these two parties will tend to be an exclusive one to overcome the problem of possible opportunism by one party. Of course, a cross-licensing agreement in some constellations, especially in the case of complementary technologies, might also be an option, but will not be debated here. A patent owner who lacks generic complementary assets may simply license his technology non-exclusively to firms that own them, mainly for the following two reasons: Firstly, the licensees need not invest in their assets and are not dependent on the relationship with the patentee. Secondly, the patent owner may be interested in licensing his technology to several parties because if one relationship breaks down, e.g., due to insolvency, he would not face big disadvantages.

Assuming that the patent owner does not care who the licensees are, this is a constellation in which the declaration of willingness to license would make sense, even at an early stage in the patent term, because the inventor would be interested in finding several licensees and would profit additionally from the reduction in the annual patent fees. As a consequence, patent owners who lack complementary assets, particularly generic assets, and who are probably individual inventors and small or medium-sized enterprises, but possibly also inventors engaged in the field of research, like universities, would be most likely to declare their willingness to license.

There may be constellations in which innovators have sufficient incentive to freely reveal an innovation by letting a patent expire or not keeping the invention secret. By doing so, the innovator would increase diffusion of the innovation and could benefit from several positive externalities, such as network effects, reputational gains and related innovations induced and revealed by other users. Additionally, an innovation that is freely revealed and adopted by others could become an informal standard that would pre-empt the development and/or commercialisation of other versions of the innovation.⁷⁵ As a consequence, a free innovation would reduce research and development expenditures in the whole industry, but might also be advantageous for the innovator if the innovation is designed in a way that is especially appropriate to conditions unique to the innovator.⁷⁶ Of course, it could also lead to competitive disadvantages and losses; therefore this strategy might not always be advantageous. But in some constellations, for example in industries where standards play a crucial role, the patent owner might weigh the advantages and disadvantages against each other. The patent owner might decide to license non-exclusively and/or declare his willingness to license. In this case he has basically revealed his invention, but could still profit from payment of licensing fees or compensation.

The situation here is also comparable with what was described as a specific open-innovation process,⁷⁷ or what from the patent owner’s viewpoint is more precisely described as an “inside-out process”. This is used to reduce fixed costs for research and development and share with other companies the risks involved in establishing a standard and for spillovers into other industries.⁷⁸ The term open innovation (in contrast to closed innovation if understood in a narrow sense) describes the strategy in which the innovation process is opened to other participants and their participation is used to increase the innovation potential by reducing costs and risks, as well as by shortening innovation cycles.⁷⁹ The processes may be differentiated in the event that external knowledge is internalised in the innovation process (“outside-in process”), internal knowledge is externalised (“inside-out process”) and cooperation in innovation and commercialisation results.⁸⁰

As a consequence of the above situations, willingness to license should be observed more often in sectors in which technology is more frequently revealed than in those industries in which secrecy and exclusivity are the prevailing strategies.

As the willingness to license can only be withdrawn as long as no one has indicated use of the innovation [Section 23(7), first sentence, Patent Act], this mechanism can also be used as a credible commitment device to allow competition. If the setup costs to use a product are high in a market, buyers of a new product may be reluctant to incur these costs if they fear that the patent owner will raise the price later. As a consequence, this might reduce demand and therefore the profits of a monopolist. But if the seller declares his willingness to license and invites competitors into the market, he commits to competitive instead of monopoly prices in the future. Additionally, he ensures a higher demand and earns royalties or compensation from his competitors. Farrell and Gallini present a theoretical model which shows that the described strategy should be profitable as long as the product-specific setup costs that technology users would incur are high enough.⁸¹

Assuming that a patent does not confer monopoly power, it can even be argued that, if there are no product-specific setup costs, committing to non-exclusive licensing can be a profitable strategy.⁸² Especially in complex fields of technology, in which one product consists of several patented inventions and substitutes are frequently available, this assumption might often be correct. In such a constellation, the revenue effect from licensing might be higher than the rent dissipation effect, i.e., losses from increased competition in an already competitive market.⁸³ Presumably, the incentives to license non-exclusively and therefore to declare the willingness to license will increase with the degree of technological homogeneity. Additionally, a firm with a small market share is often also a small firm that might profit more from revenue than from the rent-dissipation effect.

To summarise, even at an early stage in the patent term, a declaration of willingness to license should occur more frequently the higher the competition is in the technology market, and the higher the degree of substitution is between them. But this hypothesis will not hold if the patent owner has a weak position; rather, it might be the case, inter alia, when the market for technology is extremely competitive or the number of potential licensees is limited.

Larger firms in the field of complex technologies are reported to own large patent portfolios and frequently set up patent thickets, therefore facing enormous costs for the annual maintenance of the patents. These firms have to decide repeatedly between paying the next annual fee and letting a patent expire. The willingness to license regime offers such firms a compromise.

There are mainly two constellations in which the declaration of willingness to license may become interesting if a firm has a large patent portfolio and wishes to cut costs. Firstly, if a firm developed a technology and made a later improvement for which it has several patents for both stages, it may decide to keep all patents but declare the willingness to license for the patents for the first stage to save costs. These patents may no longer be of value for internal use, but may be to others, e.g., low-quality producers from which the patent owner could earn licensing fees. Secondly, a firm may have several for patents for a certain technology, but only consider some to be essential, i.e., using the technology or producing a certain product may only make sense or, in the case of blocking patents, may only be possible with access to the essential patents. In this case, the firm could decide to save costs by declaring the willingness to license for the non-essential patents. Contrarily, firms will almost never declare the willingness to license for patents that are used internally and are essential; otherwise they would risk losing a competitive advantage.

Another constellation in which the declaration of willingness to license may be motivated due to cost constraints is in connection with cross-licensing agreements. Such contracts are typically concluded between two or more patent owners and consist of several licences. In the PatVal-EU survey, around 3 % of the interviewees indicated that their patents are cross-licensed.⁸⁶ In another study, companies in the electronic industry were reported to have the highest share of cross-licensing agreements.⁸⁷ A declaration of willingness to license would not normally be made before the conclusion of a cross-licensing agreement because a patent owner would not be in a strong bargaining position if everyone is already allowed to use his patented invention for a reasonable remuneration. But after the conclusion of such an agreement, especially when several competitors are involved, the patent owner may decide to declare his willingness to license to save costs. The patent owner may even conclude some type of cross-license by deciding to agree to declare his willingness to license for all relevant patents.

Large firms that operate in fields in which products and processes are complex and involve multiple technologies may own patents that do not cover their core business. These patents are spin-offs from innovation processes and are considered as having some value, but which cannot or will not be applied and exploited internally by the firm, e.g., because of the lack of complementary assets.⁸⁸ The situation can also be defined as an open-innovation, inside-out process, as described above.⁸⁹ Declaring the willingness to license for these patents to save costs and to find someone who is willing to pay a reasonable remuneration is a viable option, but basically only if these patents are not of value to direct competitors. The declaration would normally be made in the advanced term of a patent, since the annual fees are low in the first years and the patent owner might not be aware of the full strategic value of the patent at that stage.

In Fig. 3.5 the distribution of the fraction of declarations (Fig. 3.4) is split into the following six technological classes: electric engineering; instruments; chemicals and pharmaceuticals; process engineering; mechanical engineering; and consumer goods and construction.⁹⁸ A cursory glance already shows that the possibility to declare the willingness to license is used significantly more in the area of electrical, mechanical engineering and instruments than in the other three classes. For all granted patents from the years 1983 to 1991, which can be considered as complete, the willingness to license was declared for around 11 % in the area of electrical engineering, for 8 % in the area of mechanical engineering and 6 % in the area of instruments. One finds lower numbers in the area of consumer goods and construction (4 %) and process engineering (3 %). The lowest percentage is found in the area of chemistry and pharmaceuticals (2 %). The first two categories can be considered as especially complex technologies and the latter two as discrete, in which patents are very valuable and important to protect innovations.⁹⁹ This confirms the theory that declaring the willingness to license would be more likely in industries in which rather large patent portfolios exist and where not only non-exclusive licensing but also cross-licensing occurs.

Another question is what types of patentees declare the willingness to license. As mentioned above, the initial intention of the legislature was to promote innovation by small and medium-sized enterprises as well as by individual inventors. It is possible to distinguish five types: non-profit organisation or university, individual inventor, small company, medium company and large company. The latter three are defined by the number of granted patent applications by the same firm in 1 year: a company is called small if less than five applications are granted and large if there are more than 50. In Fig. 3.6 the distribution of the fraction of declarations (Fig. 3.4) is split up according to this categorisation. It can already be observed at first glance that individual inventors do not significantly use the possibility to declare the willingness to license and that the larger a company is, the more likely it is to declare the willingness to license. This confirms that owners of large patent portfolios more often declare the willingness to license. The number for large companies was 13.2 % in 1983 and reached the same figure in the years 1984–1988. For medium-sized companies the proportion was 7.3 % in 1983, decreasing to around 5 % in the following groups. The number for small companies as well as individual inventors was 2.25 % in 1983, decreasing slightly for the former type of owners and increasing to 3.5 % in 1997 for the latter. The importance of the possibility to declare the willingness to license appears to be increasing for individual inventors, albeit from a very low level. Moreover, individual inventors declare their willingness to license earlier than patent owners from the other categories. Judging by the groups, universities and other non-profit organisations are the least likely to declare the willingness to license. These data do not support the notion that patentees who usually lack complementary assets tend to declare the willingness to license, but this situation may change to a certain degree in the future, at least for individual inventors.

Since Article L613-10 French Patent Act was repealed in 2005, the following discussion refers to the former version of this provision. The mechanism provided by that provision could be viewed as being in the middle of compulsory and voluntary licensing.¹⁰⁸ It is similar to Section 23 Patent Act, but differs in the following essential points.

Firstly, the former Article L613-10 did not contain the formal allowance necessary to switch to a licence of right regime, but the Director of the French National Institute of Industrial Property (Institut National de la Propriété Intellectuel), who decided on the application of the licence of right system, was only allowed to accept it “if a documentary report has been drawn up not showing any anticipation manifestly affecting the patentability of the invention”.¹⁰⁹ Secondly, whereas in Germany only the granted patent is an exclusive right [Secs. 58(1), third sentence, and 9 German Patent Act], in France “the exclusive right of exploitation […] shall take […] effect as of the filing of the application” (Article L613-1 French Patent Act).¹¹⁰ Therefore, in France protection by a property rule changed to a liability rule but in Germany it only changes if the declaration takes place after the grant. Thirdly, according to the former Article L613-10(3), the annual fees were also reduced like in Section 23(1), first sentence; but the former did not contain the exact percentage of reduction to be determined “by Conseil d’Etat decree” [Article L612-19(1)],¹¹¹ which was 40 % in 2005.¹¹² It is also important to mention at this point that the annual fees for a French patent are significantly lower than for a German patent.¹¹³ Therefore, the percentage of savings was not only lower, but also the absolute amount. Fourthly, if the patent owner and the (potential) user did not reach agreement on the amount of compensation, the patent office was not allowed to determine it [Section 23(4), first sentence, German Patent Act], but rather a certain court [former Article L613-10(2), third sentence, French Patent Act]. Fifthly, it was explicitly determined that the licensee was allowed to surrender the licence at any time. Sixthly, contrary to the German provision, which only allowed a patent owner to switch back to protection by a property rule if there was no notification of use [Section 23(7), first sentence, German Patent Act], in France the patent owner was allowed at any time to withdraw from a licence of right regime which, however, had “no effect on the licences of right already obtained or requested” [former Article L613-10(4) French Patent Act].¹¹⁴ Seventhly, whereas the non-exclusive licensee in Germany cannot, in principle, institute infringement proceedings,¹¹⁵ the holder of a licence of right is allowed to do so if, “after a formal notice, the owner of the patent” does “not institute them” (former Article L615-2(2), second sentence, French Patent Act).¹¹⁶

In connection with the repeal of Article L613-10 French Patent Act, Article L612-20 was amended, according to which the amount of fees charged at the time of application, the examination and the delivery of the patent as well as its renewal could be reduced in certain cases: provided the applicant is a natural person, small or medium-sized business or non-profit institution in the teaching and research sector (para. 1) and makes a simple declaration regarding these requirements to the patent office (para. 2, first sentence).¹¹⁷ Similarly the former Article L612-20 only contained a fee reduction for natural persons whose resources were insufficient to be liable to income tax, on condition that non-patentability was not obvious. The political reason for the amendment was predominantly to support small and medium-sized enterprises, but also the other mentioned groups.¹¹⁸ The practical reason was that the former provisions caused several difficulties, especially in the examination of the requirement of patentability and the conditions under which a person may be entitled to receive a subsidy.¹¹⁹ As a consequence and with regard to the new direct subsidisation of several special groups, the French legislature regarded a licence of right regime as no longer necessary or justified.¹²⁰