PATENT LAW

Assignment on

Exceptions to Patent Rights

Submitted by

ANURAG SUSHANT
Enrollment No: 374817
Roll No: 15225BLT004
B.A. LL.B. (Hons.)
10th Semester
Batch: 2015-20
Session: 2019-20

Of Law School,
Banaras Hindu University, Varanasi.

Under the guidance of

Dr. Prabhat Saha

1|Page
 ACKNOWLEDGEMENT
I would like to take this opportunity to express my sincere and
profound gratitude to my guide and mentor for this subject Dr.
Prabhat Saha for his guidance and constant encouragement
throughout the course of my work. He gladly accepted all the
pains in going through my work, and participated in
enlightening and motivating discussions, which were
extremely helpful.

I humbly extend my words of gratitude to other faculty

members, teachers and administration of the department for
promising me the valuable help and time whenever it was
required.

I would like to express my deepest sense of appreciation to

my family members and mates for their constant
encouragement and support, and finally thanks to the almighty
strength which inspired and continues to inspire me greatly.
 INDEX

S.No. TOPIC Page No.

1 Introduction 04
2 Exceptions And Limitations To Patent 06
Rights Under Trips Agreement
3 Exceptions To Patent Rights In India Based 09
On Trips
4 Conclusion 12
5 Bibliography 13
 INTRODUCTION

In this knowledge based economy the understanding of Intellectual Property Rights (IPRs) is
crucial to promote innovation and growth of the country. The various forms of IPRs are
frequently talked about in debates and general conversations on such diverse topics as
industrial policy, traditional knowledge, agriculture, biotechnology, medical devices,
education, food security, entertainment and mass media. Despite of such popularity of IPRs,
some people still regard it as an impediment in the growth of innovation & technology.

The omnipresence of IPRs in the areas of human development has made it critical to access
the benefits and encumbrances it carries. For this purpose countries adopted exceptions to
patent rights and other related rights to use IPRs as a tool for their sustainable development.
However, after signing of the World Trade Organization's Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS), which allows Member Countries to provide
more extensive protection of intellectual property, the exceptions and limitations to patent
rights in India underwent something of an evolution. The 'Exceptions to Rights Conferred'
has been incorporated as Article 30 of TRIPS. It provides that 'Member Countries 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 third parties.'1

Exceptions to patents concept draw its root from an old concept,2 which would render a
patent void on the ground that it is prejudicial or inconvenient to King’s subjects and a
ground to revoke the patent if the patentee neglected to work the patent.3 The TRIPS
Agreement is focused on global standards for protecting and enforcing intellectual property
rights, is to date the most exhaustive multilateral agreement on intellectual property and its
trade.4 Many significant changes have taken place for instance post TRIPS, as earlier over 40
countries in the world did not grant patent protection for pharmaceutical products.5 But once
they become the member of TRIPS, to comply with the provisions the countries have to make
changes in their respective legislations.

1
http://www.wto.org/english/docs_e / legal_e /27-trips_04c_e.htm
2
Statute of Monopolies, the first statutory expression of English Patent Law
3
Wyndham H, On the Consideration of Patent Grant, Past and Present, 13 LQR 313 p. 316
4
Overview: The TRIPS Agreement, https://www.wto.org/english/ tratop_e/trips_e/intel2_e.htm
5
WHO and The Trips Agreement, http://www.who.int/medicines/ areas/policy/wto_trips/en/
The basic purpose of TRIPS is to introduce the protection of intellectual property in trade and
granting of exclusive patent rights6 as an incentive for investment in production of
knowledge.7 However, allowing the enforcement of the full scope of the exclusive rights in
all circumstances may not always meet the ultimate goal of the patent system to enhance the
public welfare. Therefore, in order to maintain the correct balance between the interests of the
patent holders, third parties and the public, the exclusive rights for patents may be set to
certain exceptions and limitations to patent rights.8

Since the socio-economic conditions and priorities of a country differ from one country to
another, hence provisions in patent laws on exceptions and limitations vary as well. As India
is a signatory to TRIPS, the Patent Act, 1970 has been amended from time to time to include
the limitations and exceptions as per the norms of the agreement.

6
Article 28 of the TRIPS Agreement establishes basic rights of the patent holder, which is to preclude others
without consent from the acts of making, using, selling, offering for sale or importing the patented product, or
using the patented process (including importing products made with the process).
7
Report on the International Patent System, WIPO, Geneva, Standing Committee on the Law of Patents,
Twelfth Session, June, 2008
8
Article 30 of TRIPS allows Members to provide for limited exceptions to the exclusive rights conferred by a
patent, that is, to define acts that would not be deemed as infringing when made without the authorization of
the patent owner. Such exceptions may include, for instance, acts of experimentation and the request for
marketing approval of a pharmaceutical product before the expiration of the patent (known as the “Bolar
Exception”).
 EXCEPTIONS AND LIMITATIONS TO PATENT RIGHTS UNDER
TRIPS AGREEMENT

Article 30 of TRIPS allows for limited exceptions to the exclusive rights conferred by a
patent. The exceptions must not unfairly prejudice the legitimate interests of the patent
owner.

Private and Non-commercial Use Exception

The exclusive rights conferred by a patent do not allow private use or monopoly over
commercial activity. If a patentee is neither using nor vending the invention for profit, the
Government has the power to grant a license, known as Compulsory License (CL), to a third
party to use the patented invention so as to restrict the rights of the patentee for the purpose of
preventing the abuse/ misuse of the rights by the property holder and to prevent the negative
effect of such action on the public. The concept of CL comes into play when the patented
invention is not commercialized in India or the invention is not available to the public at
reasonable prices or the invention is not manufactured in requisite amount. The provisions of
private and non-commercial use exception have been provided under Section 84
(Compulsory licenses), Section 85 (Revocation of patents by the Controller for non-working)
and Section 92 (Special provision for compulsory licences on notifications by Central
Government) of Patents Act, 1970 (herein after "the Act"). Currently, the provision of CL is
seen as the only optimum solution of improving access to costly patented drugs in India while
creating an atmosphere that harnesses R&D.

Experimental / Scientific Use Exception

The experimental use exemption is incorporated under Section 47 of the Act. Under sub
section 3 of the said section, the grant of a patent is subject to the condition that any product
or process, in respect of which the patent is granted, may be made or used by any person for
the purpose merely of experiment or research including the imparting of instructions to
pupils.

This is one of the most widely known exceptions to patent rights and it grew up out of the
concern that patent rights should not hamper the "bona fide" experiments and scientific
processes. This form of experimental use exception permits third parties to carry out
experimental or scientific activities relating to the subject matter of the patent without
infringing the patent holder's rights.

Regulatory-use/ Prior-use Exemption

The patent rights, on the one hand, provide economic incentives to innovate, but on the other
hand, the exclusive rights they confer result into monopoly and unaffordable pharmaceutical
products. Consequently, the Indian Patents (Amendment) Act, 2005 incorporated the
regulatory-use or prior-use exemption under section 107A to offer a trade-off between
incentives to the innovators, and limited access and costs to consumers.

This exemption is also referred as Bolar Provision and is a statutorily created exemption to
patent rights that allows the manufacturers of generic drugs to undertake steps reasonably
related to the development and submission of information required for obtaining marketing
approval anywhere in the world in respect of a patented product without the consent of the
patentee. Some countries permit the generic drug manufacturers to use the technology of a
patented drug to generate data and to demonstrate bioequivalence that would assist in the
regulatory or marketing approval of the generic product, while the patent is still in force.

This provision allows the generic producers to market and manufacture their goods as soon as
the patent term expires. Bolar Provision has been upheld as conforming to the TRIPS
agreement and is used in several countries to advance science and technology. However,
exemption under Section 107A of the Act does not allow for the use of patented drug to
obtain the license to manufacture and distribute the generic drug before the expiry of the term
of patent.

Foreign Vessels, Aircraft or Land Vehicles Exception

As per Article 5 of the Paris Convention, rights conferred by a patent shall not extend to the
use of the patented invention on board of vessels when such vessels temporarily or
accidentally enter the waters, provided that the invention is used exclusively for the needs of
the vessel.

As this exception is not optional for countries party to the Paris Convention, Indian Patents
Act, in order to comply, incorporated the said exception under Section 49. According to the
said section, the patent rights are not infringed when the patented invention is used
exclusively for the needs of foreign vessels, aircraft, or land vehicles and other accessories
thereof, when such foreign vessels, aircraft, or land vehicles temporarily or accidentally
comes into India.

The term "Temporarily" not only includes the accidental and unintentional entry but also the
intentional and regular going into a port, provided that the vessels, aircraft, or land vehicles
does not remain permanently in the territorial waters or the territory of the country. This
exception is beneficial in facilitating uninterrupted international travel and reducing tensions
between countries over the treatment of vessels flying their flag.

Exhaustion of Patent Rights

The Doctrine of Exhaustion or First Sale Doctrine refers to the exhaustion of the exclusive
rights of the patent holder once the patented invention is sold without any restriction. As per
this Doctrine, the first unrestricted sale of a patented item exhausts the patentee's further
control over that particular item.

The rationale behind the patent holder exhausting their rights once they have sold the
patented product is that, by first sale of the patent invention the Patent holder has already
used the exclusive rights to prevent others from making, using, selling, offering for sale in the
territory of patent grant or importing an invention into the territory of patent grant and
therefore has already reaped the benefits conferred by a patent.
 EXCEPTIONS TO PATENT RIGHTS IN INDIA BASED ON TRIPS

In India, The Patent Act, 1970 has been amended from time to time to include the
limitations and exceptions as per the norms of the TRIPS Agreement. Some of the following
exceptions and limitations to the patent rights provided in the Act are:

Compulsory Licenses

In India, the provisions of compulsory licensing were introduced into the Patents Act
pursuant to the recommendation made by the Ayangar Committee, considering the fact that
the abuse of patent rights, which had become the matter of concern.8 Compulsory licensing
is governed by Sections 82 to Section 94 of the Act. The predominant purpose for this
exception is to ensure the supply of patented invention in the Indian market.

Exhaustion of Patent Rights and Parallel Importation

Exhaustion refers to one of the limits of patent rights. It is an unrestricted sale of a patented
item exhausts the patentee's control over that particular item. The flow of goods and services
across borders is significantly affected by the exhaustion doctrine. Doctrine of exhaustion
addresses the point at which the patent holder’s control over the good or service ceases. Once
a product protected by patent rights is marketed either by the patent holder or by others with
his consent, the patent rights of commercial exploitation over this given product can no
longer be exercised by patent holder, as they are exhausted.9

Experimental or Research Use

Research exemption permits use of a patented invention for experimental purposes without
infringing the rights of the holder.10 The objective is to promote research and development in
the country as well as to ensure that patent rights must not impede or hinder higher education
and research. The exception as provided is for the purposes of experiment or research which

9
Christopher H, Parallel Imports and International Trade, Max Planck Institute for Foreign and International
Patent, Copyright and Competition Law, Munich, Rep. Annual Meeting of the International Association for the
Advancement of Teaching and Research in Intellectual Property (ATRIP), July 1999.
10
Section 47(3) of the Patents Act, 1970 provides exemption to experimental use and/or scientific research.
Any machine or apparatus or other article in respect of which the patent is granted or any article made by the
use of the process in respect of which the patent is granted, may be made or used, and any process in respect
of which the patent is granted may be used, by any person, for the purpose merely of experiment or research
including the imparting of instructions to pupils.
includes imparting instructions to pupils. There is no limitation to the scope and extent of
research and experimentation.

Use of Inventions for purposes of Government and Acquisition of Inventions by Central

Government Chapter

XVII of the Indian Patents Act is related to the use of inventions for the purpose of
Government and acquisition of inventions by Central Government.11 Section 99 defines what
constitutes “use of an invention for the purposes of government” according to which, an
invention is said to be used for the purposes of government if it is made, used, exercised or
sold for the purposes of the Central Government, State Government or a Government
undertaking.12

Use of Patented Invention on Foreign Vessels

The Patents Act, 1970, provides that patent rights are not infringed when used on foreign
vessels, etc., temporarily or accidentally in India.13 This exception is allowed to enable the
entry of the foreign vessels, aircrafts and land-vehicles in the Indian territory so that patent
rights do not inhibit movements of such transports.14 The exception applies in relation to
vessels; aircrafts and land vehicles. Where there is no reciprocity, then use of invention on
foreign vessels shall be treated as infringement. The words “temporarily” or “accidentally” in
relation to the entry of foreign transportation means into the national territory only are used in
the statute. No definitions for the said words are provided in the Act.

Acts for Obtaining Regulatory Approval from Authorities

Exception for obtaining regulatory approval is embedded in Section 107A(a).15 Act of

making; constructing; using; selling; or importing a patented invention are allowed in acts for
obtaining regulatory approval from authorities. The policy objective is that the manufacturing
of such products should not be delayed due to time taken for obtaining marketing approval
and to enable the submission of reports to a regulatory authority.

11
It comprises 5 Sections starting from 99 and ending with 103.
12
Sub-Section 2 of Section 99 states that no provision of chapter XVII would be applicable to any act which falls
under the conditions specified under Section 47 of the Patents Act.
13
Section 49 of the Patents Act, 1970: Patent rights not infringed when used on foreign vessels etc.,
temporarily or accidentally in India.
14
Section 107A (a) of the Patent Act, 1970: Certain acts not to be considered as infringement.
15
Section 29 of the Patents Act 1970.
Anticipation Due to Prior Use

Prior secret trial or secret use by third parties is not considered for the purposes of
anticipation or obviousness under Sections 25(5) and Sections 64 of the Act in proceedings
for revocations. Similarly prior use by the patentee or applicant for patent, or any person with
or without his consent shall not be deemed to be falling within anticipation subject to certain
conditions.

Other Exceptions and Limitations

Apart from the exceptions as discussed above, there are additional exceptions which are
worth mentioning. Revocation of patent can be done by the Central Government in the
public interest if the patent or the mode in which it is used is found to be mischievous to the
state and also revocation of patent or amendment of complete specification can be made on
directions from Government in cases relating to atomic energy.16 Central Government also
has wide power to revoke a patent in the interest of security of India.17

16
Section 64 & 65 of the Patents Act.
17
Section 157A of the Patents Act
 CONCLUSION

In the end, it can be concluded that a Patent on an invention confers right on the patentee to
exclude others from making, using, selling, offering for sale in the territory of patent grant or
importing an invention into the territory of patent grant for a limited time, in return for the
public disclosure of the invention. This might have led to monopoly and uncompetitive
practices. Therefore, the TRIPS agreement introduced substantive provisions on exceptions
under Article 30 for the sustainable growth and development of the developing countries.

Article 30 of TRIPS, provides that: "Members 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 third
parties2."

However, if a policy maker of any of the member countries wishes to include a new
exception, in order for it to be valid, it must meet the criterion laid under Article 30 of
TRIPS.

Also, the same principles for the exceptions and limitations under the TRIPS Agreement have
been followed in The Patents Act, 1970. There are many exceptions to patentee’s rights,
however these exceptions are limited to only specific situations and are not exhaustive, the
motive to inculcate these exceptions is to mend a balance between the rights of the inventor
and the user so as an undue monopoly is not created in the market. However an undue
implementation of these exceptions may hamper the very objective of granting a patent hence
should be exceptionally and judiciously used.
 BIBLIOGRAPHY

DOCUMENTS AND WEBSITES REFERRED:

 Exceptions and Limitation of Patent Rights and its Enforcement in India, (Biplab
Kumar Lenin and Harsha Rohatgi), Journal of Intellectual Property Rights Vol 20,
September 2015, pp 297-304
 https://www.mondaq.com/india/patent/325620/exceptions-limitations-to-patent-
rights-in-india
 https://www.ip-watch.org/2014/11/04/limitations-and-exceptions-to-patent-rights-
discussed-in-wipo-committee/
 https://www.wipo.int/patents/en/topics/exceptions_limitations.html#:~:text=Neverthel
ess%2C%20the%20SCP%20has%20identified,prior%20use%3B%20(v)%20use