Section 68 of the Patents Act
states that the following classes of documents shall be compulsorily registered in the
register of patents:
1. Assignment
of a patent
2. Entitlement
to a patent by transmission or operation of law
3. Assignment
or transmission of a share in a patent
4. Entitlement
as a mortgagee
5. Entitlement
as a licensee
6. Any other interest in the patent
The first 4 categories are
relatively clearer compared to the 5th and the 6th
categories. What qualifies as a “license” to a patent? When is a person a “licensee”?
If one were to be guided by the spirit of the definition of a license under the
Indian Easements Act, 1882, a license means the consent to do something in whose
absence the action does not have the sanction of the right owner and would
amount to infringement of the right.
Therefore, any agreement between
a patentee and a third party which permits such third party to do something,
which he could not have in the absence of grant of rights/consent under the
agreement, may be treated as a “license” within the meaning of Section 68. In
the context of the Patents Act, the scope of exclusive rights of the patentee
is circumscribed by Section 48. Therefore, it could be said that any agreement
with the patentee that permits a third party to do anything which is covered by
Section 48 is a license.
Would every person in a product
value chain necessarily need a license to the patent to deal with the patented
product? For instance, if there is a patentee X who manufactures the patented
product A, and X contracts Y to design the packaging for the patented product A in
a certain fashion, does Y need a “license” to the patent as part of the
contract? In other words, does Y’s handling of the patented product to design
its packaging amount to “use” within the meaning of Section 48 of the Act, warranting the grant of a license?
The answer to this question would
decide whether or not the agreement between X and Y needs to be registered
under Section 68 of the Act. I’ll let readers think over the issue and write on
the meaning of “use” in the next post.
Dear Sai,
ReplyDeleteThe question you raised is indeed interesting.
However, question that remains is that whether this question could ever arise for practical purpose given that it brings an apparent contradiction between Section 48 and Section 69 wherein both "consent" and "license" tend to have same meaning!
If the question is on requirement of registration of the agreement-for obvious reasons under the facts, Y need not have to have a registered agreement to keep himself immune from the act infringements.
I remember the famous Monsanto Case from Canada much in the line of your hypothetical case. Here Supreme Court of Canada deliberated much on the term "USE" wherein the court accepted the arguments of the defendant farmer who said that since he had not exploited the advantage of the invention, he had not used it. Court also said that there is no "use" if the patentee has not been deprived of the full enjoyment of the monopoly conferred by the patent.
I hope to have your issue correctly
Cheers.
TS
Dear TS,
DeleteThanks for the comment. You have indeed understood the issue correctly. In fact, your example of the Monsanto case really helps. In my example too, Y is merely handling the patented product to design a package for it. There is no use of the patented product itself per se. Therefore, I don't think his arrangement needs to be registered.
Bests,
Sai.