Topic - Grants of patent and transfer of patent

rights: Indian Patents Act 1970

Submitted By
Abhinav Singh Rautela
19FLICDDD02240
BA LLB (hons.) IV Year

Submitted To
Mr. Saurabh Siddharth
(Faculty Associate)

SCHOOL OF LAW
FACULTY OF LAW
ICFAI UNIVERSITY, DEHRADUN
Introduction

The patent owners enjoy various legal rights as well as simultaneously enjoying monetary
benefits as well. Like the right to prohibit another from selling, importing, making or using the
patented product and the right to sue the infringer in case of any infringement. Grants of patent is
given under Chapter VIII of Indian Patents Act 1970 and Chapter XVI deals with provisions
related with compulsory licenses and working of patents.

And once a patent is granted there are certain essential conditions which must be kept in
consideration which is that firstly, if the said proprietor/patentee would manufacture, sell or
distribute the invention. Secondly, whether the proprietor/patentee would sell all of his/her rights
for a monetary sum or Lastly, the proprietor/patentee would provide a license to another person
who would introduce the said invention into the market as per the conditions prescribed by the
proprietor which were agreed upon by mutual agreement.

Essential Requirements

As per the Indian Patent Law there are certain requirements which are to be met in order to grant
a license for an invention. Section 68 of Indian Patents Act 1970 provides for the license,
mortgage or a creation of an interest in the patent.

“An assignment of a patent or of a share in a patent, a mortgage, license or the creation of any
other interest in a patent shall not be valid unless the same were in writing and the agreement
between the parties concerned is reduced to the form of a document embodying all the terms and
conditions governing their rights and obligations”

Requirements
 ● The assignment, license or mortgage shall be reduced into a written document comprising
of all the terms and conditions as per which the rights and obligations of the parties must
be determined.
● An application for the registration of said document shall be filed as prescribed under
Form-16 and within a specific time as prescribed under section 68. The said document
will come into force from the date of execution.

Nature Or Kind of Transfer of Patent Rights

The following are the ways or kinds of transfer by which a proprietor/patentee can transfer the
patent rights to another person:

1. Assignment
2. Licenses
3. Transmission of patent by operation of law

1 . Assignment

The term ‘Assignment’ is not per se defined in the statute of Indian Patent Acts 1970. It is
basically the act of the proprietor by which he assigns his patent rights either wholly or partly to
another person who acquires it and then enjoys the privileges same as if he is the proprietor of
the patent.

There are three kinds of Assignment:-

● Legal Assignment- An assignment of an earlier or existing patent is in the form of a

legal agreement where the said assignee would enter his name as the owner of the patent.
The said legal assignee acquires all the rights as that of the proprietor.
 ● Equitable Assignment- An form of agreement in which a proprietor/patentee agrees to
transfer a certain sum of shares to another person would amount to an Equitable
Assignment and this also includes any letter. Although in this case the assignee would not
be entitled to have his name in the register as ‘the proprietor’ But have his say in the
interest of the patent.

● Mortgages- Mortgage basically is a procedure by which transfer of patent rights takes

place in return of a monetary sum, as per the mutually agreed terms and conditions by
means of an agreement and once the said sum is paid by the assignor the rights are
restored and once again be vested upon him. Although the assignee can not have his
name entered in the register but he can be entered as mortgagee.

2. Licenses

The statutory provision dealing with transfer of patent rights by means of a license is given under
section 70 of The Indian Patents Act 1970. And by granting of such license, a patentee basically
grants or permits the manufacture, use or exercise of the said invention. The essential condition
for a license to be valid is to be reduced in writing. The royalties are to be paid by the assignee to
the assignor (proprietor) as per the terms and conditions of the agreement. The following are the
types of licenses :

● Voluntary Licenses - The license being a voluntary one restricts the Controller and the
Central Government from interfering into it as it would only be dealt as per the terms and
conditions mutually agreed by the parties and in case of any disagreement the assignor of
license can cancel the license provided to the assignee.

● Statutory Licenses - These are the licenses granted by the Central Government by
vesting in power in a third party to manufacture or use the patented article without the
consent of the patent owner. The cult classic example of Statutory Licenses is
Compulsory Licenses.
 ● Compulsory Licenses- Compulsory Licenses clearly works against the interests
of the patent owner as it violates the rights and privileges of the patent owners.
However it is granted under exceptional circumstances and upon fulfillment of
certain conditions laid down by The Indian Patents Act 1970 which is basically
that any person can file for acquiring a compulsory license for a patent only after
three years from the date of grant of that patent upon fulfillment of following
grounds:

● 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 the reasonably
afforded price, or
● That the patented invention is not worked in the territory of India.

Section 92A of the Act also provides for the grant of compulsory licenses in cases involving
exporting of pharmaceutical products for basically the benefit of the people in that country and
under section 88 the Controller on the notification of the Central Government can grant the
license to any interested person. The Central or State Government can also use such inventions
or its process either with or without paying royalty.

● Exclusive Licenses and Limited Licenses-

An exclusive license basically restricts all other persons including the patentee from using the
invention. Any one or more rights from all the rights vested in the patent owner can be granted
under exclusive license. These rights may be restrained either wholly or partly. In case of a
limited license, the limitation may be imposed with respect to time, place, person, manufacture,
use or sale.

● Express and Implied Licenses

These are the licenses which are expressly granted by means of a document consisting of all the
terms and conditions which should be mutually agreed upon by the parties by means of an
agreement. In case of Implied licenses there is a lack of grant of permission on express terms but
it is implied from the facts and circumstances of the situation.

3. Transmission of Patent by operation of law

This particular situation occurs when a patentee dies and his interest in the patent passes on to his
legal representative and in case of winding up of a company or bankruptcy this transmission by
operation of law takes place.

Conclusion

After going through the meaning and understanding of the concept of Assignment and License
with respect to the Indian Patent Law it is reasonable to come to a conclusion that an Assignment
is basically a transfer of all the rights vested upon the proprietor/patentee to the assignee whereas
license is basically granted just so to work upon the invention and at the same time vesting all the
rights with the proprietor/patentee. Both of these methods are for the proprietor or patent owner
just so to decide which is the best possible means for maximum commercialisation of the
patented product which is the ultimate motive of granting any Intellectual Property Right in
general.