Intellectual
Property Rights
Patents
Act, 1970
CHAPTER XVI: WORKING OF PATENTS, COMPULSORY LICENCES, LICENCES OF RIGHT
AND REVOCATION
82. Definitions 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; and
(b) that
they are not granted merely to enable patentees to enjoy a monopoly for
the importation of the patented article.
84. Compulsory licences
(1) At
any time after the expiration of three years from the date of the sealing
of a patent, any person interested may make an application to the Controller
alleging at the reasonable requirements of the public with respect to
the patented invention have not been satisfied or that the patented invention
is not available to the public at a reasonable price and praying for the
grant of a compulsory licence to work the patented invention.
(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 available to the public at a reasonable
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) In
considering the application filed under this section the Controller shall
take into account the matters set out in section 85.
(5) 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 available to the public at a reasonable
price, may order the patentee to grant a licence upon such terms as he
may deem fit.
(6) Where
the Controller directs the patentee to grant a licencee he may as incidental
thereto exercise the powers set out in section 93.
85. Matters to be taken into account in granting compulsory licences
In determining
whether or not to make an order in pursuance of an application filed under
section 84, 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,
but shall
not be required to take into account matters subsequent to the making
of the application.
86. Endorsement of patent with the words "licences of right"
(1) At
any time after the expiration of three years from the date of the sealing
of a patent, the Central Government may make an application to the Controller
for an order that the patent may be endorsed with the words "licences
of right" on the ground that the reasonable requirements of the public
with respect to the patented invention have not been satisfied or that
the patented invention is not available to the public at a reasonable
price.
(2) 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 available to the public at a reasonable
price, may make an order that the patent be endorsed with the words "licences
of right".
(3) Where
a patent of addition is in force, any application made under this section
for an endorsement either of the original patent or of the patent of addition
shall be treated as an application for the endorsement of both patents,
and where a patent of addition is granted in respect of a patent which
is already endorsed under this section, the patent of addition shall also
be so endorsed.
(4) All
endorsements of patents made under this section shall be entered in the
register and published in the Official Gazette and in such other manner
as the Controller thinks desirable for bringing the endorsement to the
notice of manufacturers.
87. Certain patents deemed to be endorsed with the words "licences
of right"
(1) Notwithstanding
anything contained in this Act-
(a) every
patent in force at the commencement of this Act in respect of invention
relating to-
(i) substances
used or capable of being used as food or as medicine or drug;
(ii) the
methods of processes for the manufacture or production of any such substances
as is referred to in sub-clause (i);
(iii)
the methods of processes for the manufacture or production of chemical
substances (including alloys, optical glass, semi-conductors and inter-metallic
compounds),
shall be
deemed to be endorsed with the words "licences of right" from
the commencement of this Act or from the expiration of three years from
the date of sealing of the patent under the Indian Patents and Designs
Act, 1911, (2 of 1911), whichever is later; and
(b) every
patent granted after the commencement of this Act in respect of any such
invention as is referred to in section 5 shall be deemed to be endorsed
with the words "licences of right" from the date of expiration
of three years from the date of sealing of the patent.
(2) In
respect of every patent which is deemed to be enforced with the words
"licences of right" under this section, the provisions of section
88 shall apply.
88. Effect of endorsement of patent with the words "licences
of right"
(1) Where
a patent had been endorsed with the words "licences of right",
any person who is interested in working the patented invention in India
may require the patentee to grant him a licence for the purpose on such
terms as may be mutually agreed upon, notwithstanding that he is already
the holder of a licence under the patent.
(2) If
the parties are unable to agree on the terms of the licence, either of
them may apply in the prescribed manner to the Controller to settle the
terms thereof.
(3) The
Controller shall, after giving notice to the parties and hearing them
and after making such enquiry as he may deem fit, decide the terms on
which the licence shall be granted by the patentee.
(4) The
Controller may at any time before the terms of the licence are mutually
agreed upon or decided by the Controller, on application made to him in
this behalf by any person who has made any such requisition as is referred
to in sub-section (1), permit him to work the patented invention on such
terms as the Controller may, pending agreement between the parties or
decision by the Controller, think fit to impose.
(5) In
the case of every patent in respect of an invention referred to in sub-clause
(i), sub-clause (ii), or clause (a) of sub-section (1) of section 87 and
deemed to be endorsed with the words "licences of right" under
clause (a) or clause (b) of that sub-section, the royalty and other remuneration
reserved to the patentee under a licence granted to any person after such
commencement shall in no case exceed four per cent of the net ex-factory
sale price in bulk of the patented article (exclusive of taxes levied
under any law for the time being in force and any commission payable)
determined in such manner as may be prescribed.
(6) Save
as otherwise provided in sub-section (5), the provisions of sub-sections
(1), (2), (4) and (5) of section 93 (regarding the powers of the Controller)
and of sections 94 and 95 shall apply to licences granted under this section
as they apply to licences granted under section 84.
89. Revocation of patents by the Controller for non-working
(1) Where
in respect of a patent, a compulsory licence has been granted or the endorsement
"licences of right" has been made or is deemed to have been
made, 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 or, as the case may be, the date of the grant of the
first licence under section 88, apply to the Controller for an order revoking
the patent on the ground that the reasonable requirements of the public
with respect to the patented invention have not been satisfied or that
the patented invention is not available to the public at a reasonable
price.
(2) Every
application under sub-section (1) shall contain such particulars as may
be prescribed and 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
the patented invention is not available to the public at a reasonable
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.
90. When reasonable requirements of the public deemed not satisfied
For the
purposes of sections 84,86 and 89, the reasonable requirements of the
public shall be deemed not to have been satisfied-
(a) if,
by reason of the default of the patentee to manufacture in India to an
adequate extent and supply on reasonable terms the patented article or
a part of the patented article which is necessary for its efficient working,
or 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 classes of persons trading or manufacturing in India is prejudiced;
or
(ii) the
demand for the patented article is not being met to an adequate extent
or on reasonable terms from manufacture in India; or
(iii)
a market for the 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 (whether before or after
the commencement of this Act) 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 of any trade or industry in India, is prejudiced;
or
(c) if
the patented invention is not being worked in India on a commercial scale
to an adequate extent or is not being so worked to the fullest extent
that is reasonably practicable; or
(d) if
the demand for the patented article in India is being met to a substantial
extent by importation from abroad 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; or
(e) if
the working of the patented invention in India on a commercial scale is
being prevented or hindered by the importation from abroad of the patented
article by the patentee or the other persons referred to in the preceding
clause.
91. Power of Controller to adjourn applications for compulsory
licences, etc. in certain cases
(1) Where
an application under section 84, section 86 or section 89, as the case
may be, is made on the ground mentioned in clause (c) of section 90 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 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 India on a commercial
scale and to an adequate extent.
92. Procedure for dealing with applications under sections 84,
86 and 89
(1) Where
the Controller is satisfied, upon consideration of an application under
section 84, section 86 or section 89 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 advertise the application
in the Official Gazette.
(2) The
patentee or any other person desiring to oppose the application may, within
such time as may by 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.
93. Powers of Controller in granting compulsory licences
(1) Where
the Controller is satisfied on 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
on an application made under section 84, the Controller orders the grant
of a licence, he may, for reasons to be recorded in writing, direct that
the licence shall operate-
(a) to
deprive the patentee of any right which he may have as patentee to make,
use, exercise or vend the invention or to grant licences under the patent;
(b) to
revoke all existing licences in respect of the invention.
(4) 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, 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.
(5) 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.
94. 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) the
patented inventions are worked on a commercial scale in India without
undue delay and to the fullest extent that is reasonably practicable,
(b) that
the interests of any persons for the time being working or developing
an invention in India under the protection of a patent are not unfairly
prejudiced.
95. 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 reasonable
prices.
(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.
96. 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 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.
(4) The
provisions of sections 92 and 110 shall apply to licences granted under
this section as they apply to licences granted under section 84.
97. Special provision for compulsory licences on notification
by Central Government
(1) If
the Central Government is satisfied in respect of any patent or class
of patents in force that it is necessary or expedient in the public interest
that compulsory licences should be granted at any time after the sealing
thereof to work the invention or inventions, it may make a declaration
to that effect 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 license under the patent
on such terms as he thinks fit;
(ii) in
setting the terms 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 92, 93, 94 and 95 shall apply in relation to the
grant of licences under section 84.
98. Order for licence to operate as a deed between parties concerned
Any order
for the granting of a licence executed by the patentee and all other necessary
parties embodying the terms and conditions, if any, settled by the Controller.
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