Working of patents - General principles
a. Patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay.
b. Patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article.
c. The protection and enforcement of Patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
d. Patents granted do not impede protection of public health and nutrition and should act as instrument to promote public interest especially in sectors of vital importance for socio-economic and technological development of India.
e. Patents granted do not in any way prohibit Central Government in taking measures to protect public health.
f. The Patent right shall not be abused by the patentee or person deriving title or interest on Patent from the patentee, and the patentee or a person deriving title or interest on Patent from the patentee does not resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.
g. Patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
h. Patented inventions are worked on a commercial scale in the territory of India without undue delay and to the fullest extent that is reasonably practicable;
i. The interests of any person for the time being working or developing an invention in the territory of India under the protection of a patent are not unfairly prejudiced.
An application for grant of a compulsory license may be made under the following provisions:
a. Section 84.
b. Section 91.
c. Section 92.
d. Section 92A.
Compulsory License under Section 84
a. Any person interested may make an application to the Controller for grant of Compulsory License for a patent after the expiry of three years from the “date of grant” of the patent on the following grounds:
i. that the reasonable requirements of public with respect to the patented invention have not been satisfied, or
ii. that the patented invention is not available to the public at reasonably affordable price, or
iii. that the patented invention is not worked in the territory of India.
Such an application may also be made by the licensee.
b. No person shall be stopped from alleging the grounds i-iii above by reason of any admission made by him in the licence or otherwise or by reason of his having accepted such a licence.
c. In considering such an application, the Controller shall take into account-
i. the nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patentee or any licensee to make full use of the invention;
ii. the ability of the applicant to work the invention to the public advantage;
iii. the capacity of the applicant to undertake the risk in providing capital and working the invention, if the application were granted;
iv. as to whether the applicant has made efforts to obtain a licence from the patentee on reasonable terms and conditions and such efforts have not been successful within a reasonable period as the Controller may deem fit. Reasonable period shall be construed as a period not ordinarily exceeding a period of six months. However, these circumstances shall not be applicable in case of national emergency or other circumstances of extreme urgency or in case of public non-commercial use or on establishment of a ground of anti-competitive practices adopted by the patentee.
Reasonable requirements of the public
The reasonable requirements of the public shall be deemed not to have been satisfied—
I. if, by reason of the refusal of the patentee to grant a licence or licences on reasonable terms,—
i. an existing trade or industry or the development thereof or the establishment of any new trade or industry in India or the trade or industry in India or the trade or industry of any person or class of persons trading or manufacturing in India is prejudiced; or
ii. the demand for the patented article has not been met to an adequate extent or on reasonable terms; or
iii. a market for export of the patented article manufactured in India is not being supplied or developed; or
iv. the establishment or development of commercial activities in India is prejudiced; or
II. if, by reason of conditions imposed by the patentee upon the grant of licences under the patent or upon the purchase, hire or use of the patented article or process, the manufacture, use or sale of materials not protected by the patent, or the establishment or development of any trade or industry in India, is prejudiced; or
III. if the patentee imposes a condition upon the grant of licences under the patent to provide exclusive grant back, prevention to challenges to the validity of patent or coercive package licensing; or
IV. if the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent or is not being so worked to the fullest extent that is reasonably practicable; or
V. if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by—
i. the patentee or persons claiming under him; or
ii. persons directly or indirectly purchasing from him; or
iii. other persons against whom the patentee is not taking or has not taken proceedings for infringement.
Contents of application
Such an application shall contain a statement setting out the nature of the applicant's interest, the facts upon which the application is based and the terms and conditions of the licence the applicant is willing to accept.
a. Where the Controller is satisfied, upon consideration of an application for compulsory licence, that a prima facie case has been made out, he shall direct the applicant to serve copies of the application upon the patentee and any other person appearing from the register to be interested in the patent in respect of which the application is made, and shall publish the application in the official journal.
b. The patentee or any other person desiring to oppose the application may, within two months from the date of publication of the application or within such further time as the Controller may on application (made either before or after the expiration of the prescribed time) allow, give to the Controller notice of opposition.
c. The notice of opposition shall include grounds on which the application is opposed and the terms and conditions of the licence, if any, the opponent is prepared to grant to the applicant and shall be accompanied by evidence in support of the opposition.
d. The opponent shall serve a copy of his notice of opposition and evidence on the applicant and notify the Controller when such service has been effected.
e. No further statement or evidence shall be delivered by either party except with the leave of or on requisition by the Controller.
f. The Controller shall forthwith fix a date and time for the hearing of the case and shall give the parties not less than ten days notice of such hearing.
g. The procedure specified in sub-rules (2) to (5) of rule 62, shall, so far as may be, apply to the procedure for hearing under this rule as they apply to the hearing in opposition proceedings.
h. If, upon consideration of the evidence, the Controller is satisfied that a prima facie case has not been made out, he shall notify the applicant accordingly, and unless the applicant requests to be heard in the matter, the Controller shall refuse the application. The applicant shall make such a request within one month from the date of such notification.
i. If the applicant requests for a hearing within the time allowed, the Controller shall, after giving the applicant an opportunity of being heard, determine whether the application may be proceeded with or whether it shall be refused and issue a speaking order on the matter as expeditiously as possible.
Terms and conditions
In settling the terms and conditions of a licence, the Controller endeavours to secure -
a. that the royalty and other remuneration, if any, reserved to the patentee or other person beneficially entitled to the patent, is reasonable, having regard to the nature of the invention, the expenditure incurred by the patentee in making the invention or in developing it and obtaining a patent and keeping it in force and other relevant factors;
b. that the patented invention is worked to the fullest extent by the person to whom the licence is granted and with reasonable profit to him;
c. that the patented articles are made available to the public at reasonably affordable prices;
d. that the licence granted is a non-exclusive licence;
e. that the right of the licensee is non-assignable;
f. that the licence is for the balance term of the patent unless a shorter term is consistent with public interest;
g. that the licence is granted with a predominant purpose of supply in the Indian market and that the licensee may also export the patented product, if need be in accordance with the provisions of sub-clause (iii) of clause (a) of sub-section (7) of section 84;
h. that in the case of semi-conductor technology, the licence granted is to work the invention for public non-commercial use;
i. that in case the licence is granted to remedy a practice determined after judicial or administrative process to be anti-competitive, the licensee shall be permitted to export the patented product, if need be.
The terms and conditions of a licence settled by the Controller, may be revised upon Application by the licensee after he has worked the invention on a commercial scale for at least twelve months, on the ground that the terms and conditions settled have proved to be more onerous than originally expected and that in consequence thereof the licensee is unable to work the invention except at a loss. However, no such application shall be entertained a second time.
Application by licencee
a. Where the Controller is satisfied on an application for compulsory license that the manufacture, use or sale of materials not protected by the patent is prejudiced by reason of conditions imposed by the patentee upon the grant of licences under the patent, or upon the purchase, hire or use of the patented article or process, he may, subject to the provisions of Section 84, order the grant of licences under the patent to such customers of the applicant as he thinks fit as well as to the applicant.
b. Where an application for compulsory license is made by a person being the holder of a licence under the patent, the Controller may, if he makes an order for the grant of a licence to the applicant, order the existing licence to be cancelled, or may, if the thinks fit, instead of making an order for the grant of a licence to the applicant, order the existing licence to be amended.
Compulsory license in case of two or more patents held by the same patentee
Where two or more patents are held by the same patentee and an applicant for a compulsory licence establishes that the reasonable requirements of the public have not been satisfied with respect to some only of the said patents, then, if the Controller is satisfied that the applicant cannot efficiently or satisfactorily work the licence granted to him under those patents without infringing the other patents held by the patentee and if those patents involve important technical advancement or considerable economic significance in relation to the other patents, he may, by order, direct the grant of a licence in respect of the other patents also to enable the licensee to work the patent or patents in regard to which a licence is granted under section 84.
License for related patents
a. At any time after the grant of a patent, any person who has the right to work any other patented invention, either as patentee or as licensee thereof, exclusive or otherwise, may apply to the Controller for the grant of a licence of the first mentioned patent on the ground that he is prevented or hindered without such licence from working the other invention efficiently or to the best advantage possible.
b. No order under such an application shall be made unless the Controller is satisfied –
c. Controller, if satisfied, that the grounds alleged have been established by the applicant, he may make an order on such terms as he thinks fit granting a licence under the first mentioned patent and a similar order under the other patent if so requested by the proprietor of the first mentioned patent or his licensee.
However, such a licence granted by the Controller shall be non-assignable except with the assignment of the respective patents.
d. The procedure as mentioned in Sections 87, 88, 89 and 90 shall apply to licences a licence granted under this provision.
Compulsory licence on notification by Central Government
a. If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have effect, that is to say -
I. a circumstance of national emergency; or
II. a circumstance of extreme urgency; or
III. a case of public non-commercial use,
which may arise or is required, as the case may be, including public health crisis relating to Acquired Immuno Deficiency Syndrome, Human Immune Deficiency Virus, Tuberculosis, Malaria or other epidemics, the procedure as mentioned in Section 87 shall not apply. However, the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of Section 87.
Compulsory licence for export of patented pharmaceutical products in certain exceptional circumstances
a. Compulsory licence shall be available for manufacture and export of patented pharmaceutical product to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India.
b. The Controller shall, on receipt of an application in the prescribed manner, grant a compulsory licence solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him.
c. The provisions of (a) and (b) shall be without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under any other provision of this Act.
d. 'Pharmaceutical products' means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.
Termination of Compulsory License
a. Patentee or any other person deriving title or interest in the patent, may make an application for termination of compulsory licence granted under Section 84 on the ground that the circumstances that gave rise to the grant thereof no longer exist and such circumstances are unlikely to recur.
b. The holder of the compulsory licence shall have the right to object to such termination.
c. While considering such an application, the Controller shall take into account that the interest of the person, who had previously been granted the licence, is not unduly prejudiced.