RIGHTS OF PATENTEE, PATENT INFRINGEMENT, AND DEFENCES

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This article is written by Harpreet Kaur of 7^th Semester of University Institute of Legal Studies, Panjab University, Chandigarh

Abstract

Civilisation is at an age today where incorporeal property has taken a front step in the field of valuation, as compared to its traditional counterpart, i.e., corporeal property. Incorporeal property, with its many facets, is important not only in the market field but also in the legal realm, as with the rise in the importance and the contemporary emergence of the concepts of intellectual property such as copyright, trademark, and patent, there is also a consequential increase in the importance of copyright law, trademark law, and patent law. The Patents Act, of 1970 covers the realm of patent law in India. It lays down the Rights of a Patentee, the circumstances of patent infringement, its consequences, along with defences to such infringement.

Objectives

This article aims to look into the concept of patents and related matters. It also explains the definitions of various terms related to patents, describes the rights of the patentee, and gives a brief introduction to patent infringement and what it entails. Further, it explains the defences which may be employed in a suit for patent infringement. Finally, it explains some landmark cases which define the precedential journey of patents in India.

Keywords

Patent, The Indian Patents Act, 1970, Patentee, Infringement, Rights, Defences, Intellectual Property, TRIPs, WIPOs

Introduction

A patent, as it is generally understood, is a legally-sanctioned and state-backed claim of an inventor over their invention. It is a form of incorporeal property which is possessed by an inventor for a limited amount of time. A large number of inventions and innovations take place worldwide, on a day-to-day basis. However, a considerable portion of these entrepreneurs, inventors, and innovators do not clearly understand their rights over their creations. Thus, they regularly fall prey to miscreants intending to violate their intellectual property rights. Statistics still show a steep rise in patent violations, whereby inventions of rightful individuals and groups are illegally and wrongfully used, copied, manufacturers, and sold. It is for this principal reason that awareness in the arena of intellectual property, and especially patent rights is necessary in a country like India where innovations occur on a daily basis. India was ranked first in the Lower-middle income group category, and also in Central and South Asia, in Patent application numbers, according to The Global Innovation Index of the United Nations Intellectual Property Organisation for the year 2022.[1] Since 2015, these numbers have seen a steep increase-as much as 50%, seem to still be only climbing upward. In order to accommodate such an Intellectual Property Scenario in the country, a stringent and comprehensive legal framework is necessary to be set in place. Such a framework is provided by The Patents Act, of 1970.

‘Patent’ Meaning

The dictionary definition of the term ‘Patent’ is as follows,

‘A patent is an exclusive, legal, and government-backed right of an inventor over their invention, preventing others, from violating their ownership over that intellectual property’

The World Intellectual Property Organisation (WIPO) defines it as,

‘A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent application.’[2]

The Patents Act, of 1970 does not, however, give a comprehensive definition of the term. Concerning patents, it says in Clause (m) of Section 2,

“patent” means a patent for any invention granted under this Act

The concept of ‘patent’ was comprehensively explained in the case of Herman v. Youngstown Car Mfg. Co.[3] by the United States Court of Appeals (6^th Circuit). The court said that a patent is a form of Intellectual Property that gives the holder of the patent, an exclusive right over the patented entity, thereby preventing others from manufacturing, using, or selling the patented thing.

In addition to this, the court said that the patent does not represent the right to sell or manufacture, and should not be taken to mean that. It merely represents the right to exclude others from such selling of manufacturing.

-Thus, cumulatively, a patent can be understood as a legal right granted by the state, for a limited period of time, to a particular individual or a group, giving such individual or group, a privilege to exclude others from the use, manufacture, and sale of the thing thereby patented.

‘Patentee’ Meaning

A patentee, simply, is the holder of a patent i.e., the person having the privilege to exclude others from the use, manufacture, and/or sale would be called the ‘patentee.’

The Patents Act, of 1970 defines ‘patentee’ under Clause (p) of Section 2 as follows,

“patentee” means the person for the time being entered on the register as the grantee or proprietor of the patent

Rights of the Patentee

A holder of the patent, by virtue of such a patent, possesses certain rights with respect to the patented entity and also in relation to others who intend to violate such patent. These rights are further explained below.

Right to exclude others

The first and foremost right which is conferred upon the patentee is the right to exclude other persons, groups, companies, etc., from selling and manufacturing the entity for which he holds the patent. Thus, any person intending to use, manufacture and/or sell the product, cannot legally do so, without the prior approval of the patentee. Typically, a patent is issued for a period of 20 years after the filing of the Indian Patent Application.

This right is the major backing principle of the concept of patent which empowers and encourages inventors to share their inventions with the world, without any fear of their creations being stolen and counterfeited. As a result, the innovative element of society is given further security by providing some level of monopoly to the creator, over his creation.

Article 28, TRIPs Agreement:

The aforementioned article of the Agreement on Trade-Related Aspects of Intellectual Properties (TRIPs) lays down facets of the ‘Right to exclude others.’ These are,

Where the patent is for a ‘product,’ any third party is barred from making, using, offering for sale, selling, or importing for these purposes that product, without the consent of the patentee, and
Where the patent is for a ‘process,’ any third party is barred from the act of using the process, and from the acts of using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process without the prior consent of the patentee.

Right to Assign and License

The patentee is also entitled to confer upon another party, the right to utilise, manufacture or sell the patented product, process, or intellectual property, thereby assigning him such patent or giving him a legal license to do so. Assigning or licensing is a form of delegation from the original patentee to another party, conferring upon the licensee, some of the powers of the patentee, for a limited period of time.

This right of the patentee constitutes an essential element of the concept of patent. The proprietor of the patent cannot, in most cases, by himself tackle the tasks of utilising, manufacturing, selling, and marketing the patented entity. Therefore, some degree of delegation becomes necessary. For instance, in the software industry, the proprietors of certain applications may assign the patent or grant a license to IT Companies, allowing them to use and market these applications.

Right to sue for infringement

‘Patent Infringement,’ as the name suggests refers to a situation where the patent rights of the patentee have been violated. As The Patent Act, of 1970 grants these rights to the holder of the patent, in parallel to these, it also provides for remedies where such rights are hampered. Under Chapter XVIII of the Act titled ‘Suits concerning infringement of Patents,’ legal pathways are given to an aggrieved party to file a suit against such infringement.

The aggrieved party, here, the patentee would have to show the patent he holds and the product, process, or intellectual property in respect to which, he holds such patent. An injunction and/or damages can be obtained from either the District Court or the High Court, if the alleged infringement is proved and the aggressor is found guilty.

Right to Exploit the Patent

The patentee also has a right to manufacture, sell and use the patented entity. This right can also be delegated to another person by the patentee himself. If the entity in question is a product, such a product can be manufactured, either by the patentee himself or any person labouring with his consent.

Right to Surrender the Patent

The patent holder also has an inherent right to surrender the patent, with the permission of the controller. The controller, according to the process laid down in the act, then advertises that such patent has been put up for surrender. Applications are invited by the controller, from persons interested in the patent. After consideration of these applications, the patent is surrendered in favour of the selected applicant.

Right to Apply for Patent of Addition

By virtue of this right, the patentee is allowed to make modifications to his invention, even after getting the primary patent. However, such modifications are only considered a part of the original patent, if the patent holder applies for the patent of addition. The modification gets patented after such change is notified to the patentee.

Patent Infringement

As the name clearly suggests, patent infringement refers to the violation of the rights and privileges provided by the patent to the patentee. These may include, but are not limited to,

Using a patented intellectual property without prior permission of the proprietor,
Manufacturing of patented equipment without the consent of the inventor who holds the patent, or
Selling a product by one company whose patent has been assigned for sale to another company.

As The Patent Act, of 1970 grants these rights to the holder of the patent, in parallel to these, it also provides for remedies where such rights are hampered. Under Chapter XVIII of the Act titled ‘Suits concerning infringement of Patents,’ legal measures are given to an aggrieved party to file a suit against such infringement.

Remedies for patent infringement:

Monetary Relief:

Compensation in the form of damages is made available to the aggrieved party to prevent third parties from infringing on another person’s patent rights – thereby limiting the cases of patent infringement. Three types of compensation under monetary relief are listed below:

Indemnity Compensation:

Indemnity Compensation is the compensation that is given to the aggrieved party to account for the losses incurred to it as a result of the infringement.

Increased Damage:

In more serious cases of wilful misconduct with the intention of violating consent, compensation, increased to as much as three times the standard amount of compensation may be provided to the aggrieved party.

Equitable Relief:

This includes injunctions and declarations provided to the aggrieved party to prevent further infringement of the patentee’s rights.

Preliminary Injunction:

This type of injunction is given at the initial stages of a suit, in order to prevent acts that may further the dispute such as filing of multiple patent applications.

Permanent Injunction:

Permanent injunction refers to the complete and permanent stoppage of certain acts such as completely putting a stop to the improper sale of a patented product. These orders are passes typically, in the final stages of the suit.

Defences

In cases of patent infringements, certain exceptions have been provided that work as defences for the defendants or the aggressor party. These defences are explained as follows.

Prior Use Defence

The prior use defence entails the argument by the defendant’s side that they had been using the patented entity before it was patented i.e., before the patent was filed, the defendant was familiar with the entity and has been putting it to use since a point in time before the patentee acquired a patent right over it. This defence is used regularly in patent infringement suits. However, it is a tricky one and the onus of proof falls upon the defendant to prove the substance of his argument.

Independent Creation Defence

The independent creation defence constitutes the defendant stating that they had created the entity in question by themselves and also, that they had no prior knowledge of the patent that existed over that thing. For this defence to be applicable, the defendant must prove that they had created the creation without any reference to the patented entity in question. The onus of proof, in this case, is also on the defendant himself.

Obviousness Defence

Herein, the defendant seeks to prove that the entity in question is obvious and lacks any novelty. The defendant may resort to this defence if he believes that the invention is obvious, not different from the existing technology, or a non-innovative combination of existing elements. It only applies if the defendant can prove that the invention fails to add anything new to the pool of inventions and thus, the rights of the patentee are virtually non-existent. The burden of proof falls upon the defendant.

Non-Infringement Defence

This defence entails the complete refusal to accept any infringement on the part of the defendant. The defendant herein, completely denies that any act on their part may have constituted a violation of the rights that the patentee had over his invention. Again, the onus of proof is upon the defendant himself, and proving this defence can be a tricky ordeal as it is difficult to prove that no violation at all has been committed whatsoever.

Experimental Use Defence

This defence, as the name suggests, constitutes the defendant arguing that the use of the patented entity was made, not for some commercial use, but was only limited to use for experimental and research purposes. The underlying principle is that there is no substantial infringement of a patent if no improper benefit has accrued to the defendant. The burden to prove that the entity was used only for research and experimental purposes falls upon the defendant.

Invalidity Defence

The invalidity defence relies upon the establishment of the fact that, in truth, there exists no valid patent for the disputed entity. Herein, the defendant may resort to proving that the thing in question i.e., the product, process or intellectual property does not meet the conditions prerequisite for a valid patent to be issued for it. The defendant may establish that the patented thing is obvious, lacks novelty, or that it is not possible for the invention to be industrially applied. The defence entails a lengthy process of delving into the particulars of the patent application and the invention itself and is a difficult one to successfully establish.

Landmark Judgements:

Symed Labs v. Glenmark Pharmaceuticals[4]

Symed Labs had instituted a suit against two patent infringements by Glenmark Pharmaceuticals. The court ordered an injunction against Glenmark Pharmaceuticals in order to deter them from further infringing upon Symed’s rights. Thus, it was considered appropriate by the court to not only provide compensation for the losses that Symed had incurred but also to provide legal protection in the form of an injunction.

Vringo Infrastructures v. ZTE[5]

In this case, the defendant had taken the invalidity defence and had argued that the patent itself was not valid on account of lack of innovation. The court called in a committee to look into the substance of this argument and it was found that the claims of the defendants were correct, making the patent itself invalid. This case has set a precedent that the validity of the patent itself may be questioned in a suit for its infringement, thus giving legitimacy to the invalidity defence.

Bayer Corporation v. Union of India[6]

A compulsory license had been granted to Natco Pharma Ltd. to manufacture a pharmaceutical called ‘Nexavar,’ which had been earlier manufactured by the Bayer corporation. Certain conditions were attached to the license requiring the manufacture of the drug to take place only inside the premises of Natco Pharma Ltd. Aggrieved by this, the Bayer Corporation instituted a suit of patent infringement. However, the court held that the grant of license was necessary for the public interest, as the drug now being manufactured at Natco would be made available to the public at nominal prices.

Conclusion

It can be seen in our day-to-day lives that incorporeal intellectual property is taking precedence, in some areas, even over traditional corporeal property. Its value in society is on a rapid rise. Terms like patent, copyright, and trademark have been practically inducted into the colloquial language. Thus, in order to support and accommodate these changes, a comprehensive legal framework is necessary. The Patents Act, of 1970, for this purpose, lays down provisions dealing with patents and all related and incidental matters.

References