Although the grant of a patent confers on the patentee the privilege of using the invention for commercial purposes for a period of 20 years, the patentee is also burdened with several obligations. And, if these obligations are not observed, it may interdict such privileges seriously.
The first obligation of the patentee is that he should work his patent and put the articles produced to commercial use, and also make them available to the public in adequate numbers at fair and equitable prices.
The working of a patent means the production of the invented product. This may be done in India or abroad. In the case of the latter, the goods produced must be brought into Indian markets to be relevant under Indian laws.
If the patentee does not work his patent, the controller of patents may open it for grant of licence to anybody who applies for it.
It is different for medicines. When the invention relates to drugs and medicines, if the controller finds that such goods must have a wider market, he can endorse on the patent what is called a “licence of right”. Here, too, the controller can grant a licence to whoever wants to produce the patented drugs.
In the first case, what makes the controller take action is the inability of the patentee to produce articles in adequate numbers to meet the public demand. In the latter case, the controller acts if he finds the patented drug must be made available to larger sections of the people.
There are two more situations in which the controller interferes with the monopoly of the patentee. When there is demand in the market for the patented good and the patentee is not making them available in sufficient quantities, the controller may compel the patentee to grant licences to whosoever applies to the patentee for licence, and if the patentee refuses to grant licences, the controller of patents may himself grant the licence to the applicant. This is called the “compulsory licensing system”.
Another case where the controller may breach the monopoly right of the patentee is when the government believes that a particular patented drug or medicine is required for its own use. In such a case, the government can, by itself, manufacture the drugs and medicines or get them manufactured through some other agency. This is similar to the case where the controller of patents grants a licence to another party to produce patented drugs; however, where it differs is that in this case, the government takes up the production on its own or sublets it to another party.
In all these cases, the patentee shall be paid the royalty as may be agreed upon between the parties or as may be fixed by the high court or the appellate board as and when it is constituted.
Before exercising any of the rights, the controller shall give notice to the patentee and all other parties interested. The controller is also bound to hear all of them. The main consideration that should weigh with the controller before the monopoly granted under the Patents Act to the patentee is breached should be public interest—it should not be viewed as any action against the patentee and the patent granted to him.
In case of defaults committed by the patentee, can the controller of patents cancel the patent?
The controller has no disciplinary jurisdiction over the patentee. The consequences that follow the defaults of the patentee may open the patent for free grant of licence, grant of compuslory licence or use of the patent by the government. There is no question of cancelling the patent.
If the patentee, under the guise of the patent, produces some other similar article, can the controller take any action against him?
If the patent holder produces a different article than for which he was granted the patent, he will be committing a breach of his obligation to use the patent. This means the patent will be open for free grant of licence. The patent holder will also not have monopoly protection for the similar article.
If the patented articles are produced in India, but are entirely exported, will it be construed as working the patent in India?
Since the main activity of the manufacturing took place in India, it should be held that the patent is worked in India only. The fact that they were all sent abroad without any use in India will not in any manner affect the fact that the patentee has already worked his patent.
N.K. Acharya is an intellectual property rights attorney specializing in patents, trademarks, copyrights and design.
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