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CHAPTER 16 – WORKING OF PATENTS, COMPULSORY LICENCES AND REVOCATION

BananaIP Counsels > THE PATENTS ACT > CHAPTER 16 – WORKING OF PATENTS, COMPULSORY LICENCES AND REVOCATION

CHAPTER 16 – WORKING OF PATENTS, COMPULSORY LICENCES AND REVOCATION

 

82. Definition of “patented articles” and “patentee”.

 

In this Chapter, unless the context otherwise requires,—

 

(a)  “patented article” includes any article made by a patented process; and

 

(b)  “patentee” includes an exclusive licensee.

 

83. General principles applicable to working of patented inventions.

 

Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely;—

 

(a)  that 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)  that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article;

 

(c)  that 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)  that patents granted do not impede protection of public health and nutrition and should act as instrument to promote public interest specially in sectors of vital importance for socio-economic and technological development of India;

 

(e)  that patents granted do not in any way prohibit Central Government in taking measures to protect public health;

 

(f)  that the patent right is not 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; and

 

(g)  that patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.

 

84. Compulsory licences.—

 

(1)  At any time after the expiration of three years from the date of the grant of a patent, any person interested may make an application to the Controller for grant of compulsory licence on patent on any of the following grounds, namely:—

 

(a)  that the reasonable requirements of the public with respect to the patented invention have not been satisfied,or

 

(b)  that the patented invention is not available to the public at a reasonably affordable price, or

 

(c)  that the patented invention is not worked in the territory of India.

 

(2)  An application under this section may be made by any person notwithstanding that he is already the holder of a licence under the patent and no person shall be estopped from alleging that the reasonable requirements of the public with respect to the patented invention are not satisfied or that the patented invention is not worked in the territory of India or that the patented invention is not available to the public at a reasonably affordable price by reason of any admission made by him, whether in such a licence or otherwise or by reason of his having accepted such a licence.

 

(3)  Every application under sub-section (1) shall contain a statement setting out the nature of the applicant’s interest together with such particulars as may be prescribed and the facts upon which the application is based.

 

(4)  The Controller, if satisfied that the reasonable requirements of the public with respect to the patented invention have not been satisfied or that the patented invention is not worked in the territory of India or that the patented invention is not available to the public at a reasonably affordable price, may grant a licence upon such terms as he may deem fit.

 

(5)  Where the Controller directs the patentee to grant a licence he may, as incidental thereto, exercise the powers set out in section 88.

 

(6)  In considering the application field under this section, 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:

 

Provided that this clause 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 anticompetitive practices adopted by the patentee, but shall not be required to take into account matters subsequent to the making of the application.

 

Explanation.—For the purposes of clause (iv), “reasonable period” shall be construed as a period not ordinarily exceeding a period of six months.

 

(7)  For the purposes of this Chapter, the reasonable requirements of the public shall be deemed not to have been satisfied—

 

(a)  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 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

 

(b)  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

 

(c)  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

 

(d)  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

 

(e)  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.

 

85. Revocation of patents by the Controller for non-working.

 

(1)  Where, in respect of a patent, a compulsory licence has been granted, the Central Government or any person interested may, after the expiration of two years from the date of the order granting the first compulsory licence, apply to the Controller for an order revoking the patent on the ground that the patented invention has not been worked in the territory of India or that reasonable requirements of the public with respect to the patented invention has not been satisfied or that the patented invention is not available to the public at a reasonably affordable price.

 

(2)  Every application under sub-section (1) shall contain such particulars as may be prescribed, the facts upon which the application is based, and, in the case of an application other than by the Central Government, shall also set out the nature of the applicant’s interest.

 

(3)  The Controller, if satisfied that the reasonable requirements of the public with respect to the patented invention have not been satisfied or that patented invention has not been worked in the territory of India or that the patented invention is not available to the public at a reasonably affordable price, may make an order revoking the patent.

 

(4)  Every application under sub-section (1) shall ordinarily be decided within one year of its being presented to the Controller.

 

86Power of Controller to adjourn applications for compulsory licences, etc., in certain cases.-

 

(1)  Where an application under section 84 or section 85, as the case may be, is made on the grounds that the patented invention has not been worked in the territory of India or on the ground mentioned in clause (d) of sub-section (7) of section 84 and the Controller is satisfied that the time which has elapsed since the sealing of the patent has for any reason been insufficient to enable the invention to be worked on a commercial scale to an adequate extent or to enable the invention to be so worked to the fullest extent that is reasonably practicable, he may, by order, adjourn the further hearing of the application for such period not exceeding twelve months in the aggregate as appears to him to be sufficient for the invention to be so worked:

 

Provided that in any case where the patentee establishes that the reason why a patented invention could not be worked as aforesaid before the date of the application was due to any State or Central Act or any rule or regulation made thereunder or any order of the Government imposed otherwise than by way of a condition for the working of the invention in the territory of India or for the disposal of the patented articles or of the articles made by the process or by the use of the patented plant, machinery, or apparatus, then, the period of adjournment ordered under this sub-section shall be reckoned from the date on which the period during which the working of the invention was prevented by such Act, rule or regulation or order of Government as computed from the date of the application, expires.

 

(2)  No adjournment under sub-section (1) shall be ordered unless the Controller is satisfied that the patentee has taken with promptitude adequate or reasonable steps to start the working of the invention in the territory of India on a commercial scale and to an adequate extent.

 

87. Procedure for dealing with applications under sections 84 and 85.

 

(1)  Where the Controller is satisfied, upon consideration of an application under section 84, Or section 85, that a prima facie case has been made out for the making of an order, 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.

 

(2)  The patentee or any other person desiring to oppose the application may, within such time as may be prescribed 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.

 

(3)  Any such notice of opposition shall contain a statement setting out the grounds on which the application is opposed.

 

(4)  Where any such notice of opposition is duly given, the Controller shall notify the applicant, and shall give to the applicant and the opponent an opportunity to be heard before deciding the case,

 

88. Powers of Controller in granting compulsory licences.

 

(1)  Where the Controller is satisfied on an application made under section 84 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 that section, order the grant of licences under the patent to such customers of the applicant as he thinks fit as well as to the applicant.

 

(2)  Where an application under section 84 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 he thinks fit, instead of making an order for the grant of a licence to the applicant, order the existing licence to be amended.

 

(3)  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 of 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.

 

(4)  Where the terms and conditions of a licence have been settled by the Controller, the licensee may, at any time after he has worked the invention on a commercial scale for a period of not less than twelve months, make an application to the Controller for the revision of the terms and conditions 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:

 

Provided that no such application shall be entertained a second time.

 

89. General purposes for granting compulsory licences.—

 

The powers of the Controller upon an application made under section 84 shall be exercised with a view to securing the following general purposes, that is to say,—

 

(a)  that 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;

 

(b)  that 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.

 

90. Terms and conditions of compulsory licences.—

 

(1)  In settling the terms and conditions of a licence under section 84, the Controller shall endeavour to secure—

 

(i)  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;

 

(ii)  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;

 

(iii)  that the patented articles are made available to the public at reasonably affordable prices;

 

(iv)  that the licence granted is a non-exclusive licence;

 

(v)  that the right of the licensee is non-assignable;

 

(vi)  that the licence is for the balance term of the patent unless a shorter term is consistent with public interest;

 

(vii)  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;

 

(viii)  that in the case of semi-conductor technology, the licence granted is to work the invention for public non-commercial use;

 

(ix)  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.

 

(2)  No licence granted by the Controller shall authorise the licensee to import the patented article or an article or substance made by a patented process from abroad where such importation would, but for such authorisation, constitute an infringement of the rights of the patentee.

 

(3)  Notwithstanding anything contained in sub-section (2), the Central Government may, if in its opinion it is necessary so to do, in the public interest,direct the Controller at any time to authorise any licensee in respect of a patent to import the patented article or an article or substance made by a patented process from abroad (subject to such conditions as it considers necessary to impose relating among other matters to the royalty and other remuneration, if any, payable to the patentee, the quantum of import, the sale price of the imported article and the period of importation), and thereupon the Controller shall give effect to the directions.

 

91. Licensing of related patents.

 

(1)  Notwithstanding anything contained in the other provisions of this Chapter, at any time after the sealing 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.

 

(2)  No order under sub-section (1) shall be made unless the Controller is satisfied—

 

(i)  that the applicant is able and willing to grant, or procure the grant to the patentee and his licensees if they so desire, of a licence in respect of the other invention on reasonable terms; and

 

(ii)  that the other invention has made a substantial contribution to the establishment or development of commercial or industrial activities in the territory of India.

 

(3)  When the Controller is satisfied that the conditions mentioned in sub-section (1) 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:

 

Provided that the licence granted by the Controller shall be non-assignable except with the assignment of the respective patents.

 

(4)  The provisions of sections 87, 88, 89 and 90 shall apply to licences granted under this section as they apply to licences granted under section 84.

 

92. Special provision for compulsory licences on notifications by Central Government.

 

(1)  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)  the Controller shall on application made at any time after the notification by any person interested, grant to the applicant a licence under the patent on such terms and conditions as he thinks fit;

 

(ii)  in settling the terms and conditions of a licence granted under this section, the Controller shall endeavour to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.

 

(2)  The provisions of sections 83, 87, 88, 89 and 90 shall apply in relation to the grant of licences under this section as they apply in relation to the grant of licences under section 84.

 

(3)  Notwithstanding anything contained in sub-section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub-section (1) that it is necessary in—

 

(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 crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 in relation to that application for grant of licence under this section:

 

Provided that 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.

 

92A. Compulsory licence for export of patented pharmaceutical products in certain exceptional

 

circumstances.—(1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products 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.

 

(2)  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.

 

(3)  The provisions of sub-sections (1) and (2) shall be without prejudice to the extent to which pharmaceutical products produced under a compulsory license can be exported under any other provision of this Act.

 

Explanation.—For the purposes of this section, ‘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.

 

93. Order for licence to operate as a deed between parties concerned.

 

Any order for the grant of a licence under this Chapter shall operate as if it were a deed granting a licence executed by the patentee and all other necessary parties embodying the terms and conditions, if any, settled by the Controller.

 

94. Termination of compulsory licence.—

 

(1)  On an application made by the patentee or any other person deriving title or interest in the patent, a compulsory licence granted under section 84 may be terminated by the controller, if and when the circumstances that gave rise to the grant thereof no longer exist and such circumstances are unlikely to recur:

Provided that the holder of the compulsory licence shall have the right to object to such termination.

 

(2)  While considering an application under section (1), the Controller shall take into account that the interest of the person who had previously been granted the licence is not unduly prejudiced.

 

95-98. 

 

[Omitted by the Patents (Amendment) Act, 2002]

 

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