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PDF Rights of Patentee and Compulsary Licensing
PDF Rights of Patentee and Compulsary Licensing
B.COM LLB(H)
A90821615022
9th SEMESTER
2
Introduction
A Patent holder enjoys a set of exclusive rights given as an incentive for the
investment in innovative activities and for the dissemination of knowledge to
public .However these rights are not perpetual and can be revoked in
exceptional circumstances o balance the interest of the patent holders with
those of the others; there are various exceptions and limitations to these rights
.Such exceptions are experimental or research use ; use on foreign vessels ;
obtaining regulatory approval from authorities ; exhaustion of patent rights
and parallel imports; compulsorylicencing and use or acquisition of inventions
by governments .even though there are exceptions and limitations ,yet the term
to hold a patent remain unaltered .
Thus aPatent is a set of exclusive rights granted by a state to an inventor
or his assignee for a fixed period of time in exchange for the disclosure of the
invention. It refers to a grant of some privilege, property, or authority made by
a government or the sovereign of the country to one or more individuals. The
instrument by which it made is known as Patent. An invention is the creation
of intellect applied to capital and labour to produce something new and useful.
Such creation becomes the exclusive property of the inventor on the grant of
patent.
RIGHTS OF PATENTEE
A patent is a statutory grant conferring certain monopoly rights on the grantee
for a defined period, subject to certain conditions. In some respect it may be
considered as a species of property. A patent grant gives the patentee the
exclusive right to make or usethe patented article or use the patented process.
As a consequence flowing from this hecan prevent all others from making or
using the patented article or using the patented process.
A patent monopoly not only entitles the holder to exploit the invention
withoutcompetition during the period of patent protection; it also enables him
to enter the market, on the expiry of the monopoly in a strong position. A
patentee has also the power to assign the patent, grant licences under, or
otherwise deal with it for any consideration. These rights created by statute are
circumscribed by various conditions and limitations.
The right of a patentee is considered as a chose in action. In Edwards v.
Picard , Vaughan Williams, L.J. observed: “Now what is the right of the
patentee? It is a chose in action created by the exercise of Royal
prerogative, and entirely distinct from the right ofproperty in a chattel created
under it.” Again, Buckley, L.J. observed: “T he legal qualities of a patent are,
not that it confers upon the patentee a right to manufacture, for that he could
do without a patent, but that it gives him monopoly in the manufacture. It
creates in him a right of action to prevent anyone else manufacturing. It
creates in him a
right to bring an action for infringement with resultant remedy by way of
injunction, or damages or both. This is a legal right. The right of a patentee to
the exclusive use of the patented invention for the period of its protection
under the Act is a right to property.
There is no exclusive right similar to that of a patent in a secret formula or
process not patented under the Act. When a person has discovered a valuable
invention and has not patented it, anyone who had discovered the ingredients
may, in the absence of any breach of trust or fraud, sell those ingredients. Any
person who has become acquainted with the process of manufacturing an
article which is in general secret is entitled to manufacture it.
A person can be prevented from using a secret process only on the basis of
breach of contract, breach of confidence or fraud. Thus in United Indigo
Chemical Co Ltd. v. Robinson it was held that an employer cannot prevent
his employee using, after termination of the employment, knowledge
honestly acquired during the course of his former employment.
Benefits conferred upon the patentee
The patent law recognizes the exclusive right of a patentee to gain commercial
advantage out of his invention. This is to encourage inventors to invest their
creative facilities, knowing that their inventions would be protected by law and
accordingly no one else would be able to copy their inventions for certain
period (generally 20 years) during which the inventor would have exclusive
rights.
Once a patent is granted, certain monopolistic rights are conferred upon the
patentee, as an incentive for disclosing his invention to the public. These
monopoly rights, generally for a period of 20 years, are thus
assignable
enabling the patentee to licence invention thereby maximizing his profit .
Article 28 of the TRIPS Agreement provides these exclusive rights as
follows: 1.
A patent shall confer on its owner the following exclusive rights:
(a)where the subject matter of a patent is a product, to prevent third parties
not having the owner’s consent from the acts of: making, using, offering for
billion are spent yearly on R&D. Moreover, average R&D expenditures per
company have grown at a rate of close to 300% per year. It is also submitted in
spite of huge investments incurred; very few drugs are actually commercially
produced. In the course of the R&D process, more than 8,000 compounds are
tested on average, of which only one is developed into a potent and safe drug.
Patents granted to pharmaceutical products encourage more extensive and
comprehensive research in that area. The monopoly rights conferred by the
patent system provide the necessary incentive for pharma companies to invest
their resources in R&D.
Benefits conferred upon the society
Through patents, monopoly rights are conferred upon inventors. Inventors
alone have the right to make, sell, licence the patented invention. Many
consider this as detrimental to the interests of society as patentees have the
discretion of charging their own prices for their products. Further, they might
refuse to sell their patented products in certain areas depriving people of the
benefits of their inventions. While these misgivings might to true to an extent,
it s seen that that society’s interests are protected rather than derided by
the patent system. Firstly, all inventions for which patents are granted are
accompanied by an enabling disclosure, i.e. all details required to reproduce
the invention are provided. As the details of the invention fall into the public
domain, competing inventors can use this information as a base and improve
upon the same, thus automatically providing for higher quality goods and
increasing the choice of the consumers in the market. Secondly, although the
grant of the patent confers the exclusive right to make, sell, licence the
patented right etc., it is clearly provided that the use of the invention for
research or teaching purposes shall not be considered as a violation of the
patentees rights.
‘M embers may provide limited exceptions to the exclusive rights conferred by a
patent, provided that such exceptions do not unreasonably conflict with a normal
exploitation of the patent and do not unreasonably prejudice the legitimate
interests of the patent owner, taking account of the legitimate interests of the
third parties.’
conditions
Grant of patents
The grant of a patent confers exclusive rights on the patentee to prevent
others from doing certain acts with respect to the patent for 20 years. In the
case of a productpatent, the patentee will have exclusive right to prevent
third parties
from making, using,offering for sale, selling or importing, for those purposes,
that product in India. In the case of a process patent, the patentee will have the
exclusive right to prevent third parties from using that process and from the
act of using, offering for sale, selling or importing for those purposes the
product obtained directly by that process in India. If any person does any of the
above acts without the consent of the patentee, it would amount to an
infringement of the patent. The right to institute infringement action accrues
on the patentee only after the grant.
When a patent application made before the Patent Office is found to be in order
for the grant, and it has neither been refused by the Controller, nor found to be
in contravention of any of the provisions of the Patents Act, a patent shall be
granted asexpeditiously as possible to the applicant. Upon the grant of the
patent, the Controller shall publish the fact that the patent has been granted
and the application, specification and other documents related thereto shall be
open for public inspection. Every patent shall be granted in the prescribed form
bearing the serial number accorded to the application. As a patent application
can be made for one invention only, it follows that a patent shall be granted for
one invention only.
Section 47 states that the grant of a patent under the Patents Act is subject to
certain conditions contained therein, the details of which are as follows:
(i) Government Use: Any process or product which is the subject matter of
a patent may be imported or made by the government for its own use.
(ii) Experiment and Research: Any person may make or use any patented
product or a product made by a patented process or use a patented process for
the purpose of experiment or research.
(iii) Import of Medicine or Drug: In the case of a patent in respect of any
medicine or drug, the patent is granted subject to the condition that the
government may import such medicine or drug for its own use or for
distribution in any dispensary, hospital or other medical institution maintained
by or on behalf of the government.
Thus it is clear that notwithstanding the fact that patents confer certain
exclusive privileges, the grant of patents itself is subrogated to the interests
of society. This is of special significance in the pharma industry, where
patents provide the fine balance between the incentives to innovate and
safeguarding the interests of society. In the absence of sufficient
safeguards to patentee’s rights, the pharmaceutical companies would not
produce, let alone disclose scientific formulations, which would not only
stem scientific progress but also deny the few who have access to patented
products their right to enjoy them From the above it is clear that it is
society’s best interest that genuine innovations should be protected and
rewarded without stifling further innovation. The best illustration of how a
patent benefits the public by encouraging disclosure in return for a period of
exclusivity is the plain-paper copier (the “Xerox machine”). Before the
invention of that copier, copies had to be made using expensive and messy
systems like photography, heat-sensitive paper, or mimeographs and ditto
machines. That changed when a patent attorney came up with an
electrostatic copying method. Because the patent
attorney was the first to invent the technique, he received a patent giving him
the exclusive right to practice the invention for 17 years (under the law at that
time).
By the time the patent expired, Xerox was an established company, and
companies like IBM and Canon joined Xerox in building and marketing plain-
paper copiers.
Benefits conferred upon the government:
Intellectual property is based on liberal, democratic principles. Any person,
exercising mental effort may claim it and no political system dare destroy it.
Shri Kamal Nath, the Union Minsiter for Commerce and Industry has
observed:
inventions in Britain and India is substantially the same. The history of the
Indian Patent system can be traced to 1859, when Act VI of 1859 on protection
of inventions based came to be enacted. The Act conferred certain exclusive
privileges to inventors of new manufacturers for a period of 14 years.
Subsequently, the British rulers enacted the Patents and Designs Protection
Act, 1888 which was repealed by the Indian Patent and Designs Act, 1911 with
the objective of ‘s aving the interests of inventors ’. However, on account
of substantial changes in political and economic conditions in the country, it
was found desirable to enact a comprehensive law on the subject, which would
‘e nsure that patent rights are not worked to the detriment of the consumer or
to the prejudice of trade or to the industrial development of the country. ’ It
was with this lofty ideal that the Indian Patent Act, 1970 came to be enacted.
However, with the rapid advancements in science and technology and the
development of a ‘global village’, the need was felt for gre ater international
cooperation for the protection of the rights of inventors as well as safeguarding
the interests of consumers. Consequently, in 1995, nations of the world ratified
the Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS Agreement) with the concomitant objective of ‘ taking into account the
need to
promote effective and adequate protection of intellectual property rights ’ and
for ensuring that ‘ measures and procedures to enforce intellectual property
rights do not themselves become barriers to legitimate trade ’. India became a
signatory to the TRIPS Agreement in 1995, by virtue of which it was bound to
bring its existing intellectual property laws in compliance with the TRIPS
Agreement within a period of ten years i.e. by 2005.
The first TRIPS compliant amendment to the Patent Act, 1970 came via the
Patent (Amendment) Act, 2002. The Amendment made several broad reaching
changes to the existing Act, in an endeavour to ‘ make the law TRIPS compliant,
but also to provide therein adequate and necessary safeguards for protection of
public interest, national security, bio-diversity, traditional knowledge etc.’ The
second Amendment, introduced in 2005, the Patent Amendment Act, 2005,
was enacted with nearly similar objectives.
Thus, it can be seen that the jurisprudentially, all patent enactments in the
country have sought to strike a balance between the competing interests of
consumers and those of inventors. The Acts have recognised internationally
accepted principles for granting rights to patentees and concurrently have
made suitable modifications in the Indian milieu to provide adequate protection
to society at large. Technological stagnation has been sought to be avoided and
at the same time measures have been introduced to ensure that monopolies
conferred by the grant of a patent are not used to the detriment of the society
as a whole.
COMPULSORY LICENSING
entering the market thereby reducing prices of the patented product. In reality
however, such a conflict of interest should not arise. As the application for a
patent is accompanied by the complete enabling disclosure of the invention,
competitors often use this information to produce improved products and
patent them. Their improved products being also accompanied by enabling
disclosure, provides the necessary base for further improvements. Thus
consumers benefit as the patent system automatically leads to an increased
choice in the market and companies benefit as they can focus their energies on
providing new and improved products rather than diverting their resources to
ascertain the nature of existing inventions.
Grounds of granting Compulsory License
The Patent Act provides for the grounds on and procedures by which, a
compulsory license can be granted. The grounds on which a compulsory
license can be granted are:
From the date of publication of the application until the date of the grant of a
patent, the applicant has the like privileges and rights as if a patent for the
invention has been granted on the date of publication of the application.
However, applicant is not entitled to institute any proceedings for infringement
until the patent has been granted.
S. 90(ii) of the Act states:
“…the Controller shall endeavor to secure--
(ii) “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
Similar provisions are seen when the government acquires the patent.It is clear
from the above that the Act not only recognizes the right of the patentee in
securing a “reasonable advantage ” from the patented product but
also
considers remuneration to the patentee in case compulsory licenses are
granted. Generally it is seen that it has been a practice of all nations that
whenever a compulsory license have been granted, some amount of
compensation has always been paid to the patentee.The Supreme Court of
Canada, for instance has held that the duty of the Commissioner to fix
reasonable compensation for the Government use of a patent vests in the
patentee a legal right and a petition lies in the Court to enforce this right.
Thus it can be seen that there is an equanimity maintained through the
patent system. Whenever the monopoly rights conferred upon the patentee
are usurped, care is taken to ensure that the rights of the patentee are not
‘ unfairly
prejudiced’ in addition compensation is paid to the patentee for such
‘ infringement’ of his rights.
The Act also contains general principles applicable to the working of all
patented inventions. It is provided that in exercising powers concerning grant
of compulsory licences, regard should inter alia be had to encourage
innovations and to secure that inventions are worked in India on a
commercial scale, and to the fullest extent reasonably practicable without
undue delay; and not to encourage a patentee to merely import the patented
article, but to see that patent rights contribute to technological innovation,
and to transfer and to disseminate technology for the mutual advantage of
producers and users of technological knowledge in a manner conducive to
social and economic welfare and to ensure that the benefit of the patented
invention is available at a reasonably affordable prices to the public and for
grant of compulsory licences in respect of patents for the reasonable
requirements of the public.
Obligation of a patentee
The possession of a patent confers on the patentee not merely certain valuable
monopoly rights and privileges, but also certain obligations and duties.
Patents are granted not only to encourage inventions but also 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. It is also essential
that the monopoly created by the patent should not unfairly prejudice the
interest of the public.
The Act therefore contains provisions forrevocation of patents in certain
circumstances, and granting of compulsory licences if the patent is not used or
the monopoly abused. It is an implied responsibility of the patentee to work the
patent in India in such a manner that the reasonable requirements of the
public with respect to the patented invention are satisfied and that the
patented invention is made available to the public at a reasonable price.
Failure to discharge this obligation may amount to abuse of the monopoly
granted. Further, provision is also made to restrain the patentee from
making unjustifiable threats of an action for infringement of thepatent.
Conclusion
The ultimate goal of any intellectual property system is the advancement of
science and technology as a means of securing overall social and economic
development. By conferring exclusive rights on inventors, the true goals of any
Books
Websites
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www.ip-watch.org
iv. www.nishithdesai.com
v. scholar.google.co.in
vi. www.ptlb.in
vii. papers.ssrn.com
viii. www.accu.or.jp
ix. www. nujslawreview.org
x. www.lawyersclubindia.com
xi. www.cis-india.org
xii. indiatoday.intoday.in
xiii. ir.inflibnet.ac.in