Patents Act, 1964

Compulsory endorsement or licence.

39.—(1) At any time after the expiration of four years from the date of application for a patent or three years from the date of sealing the patent, whichever is the later, any person interested may apply to the Controller for a licence under the patent or for the endorsement of the patent with the words “licences of right” on the ground that there has been an abuse of the monopoly rights under the patent.

(2) The grounds, deemed to constitute an abuse of monopoly rights, upon which application may be made for an order under this section are as follows, that is to say:

(a) that the patented invention, being capable of being commercially worked in the State, is not being commercially worked therein or is not being so worked to the fullest extent that is reasonably practicable;

(b) that a demand for the patented article in the State is not being met on reasonable terms, or is being met to a substantial extent by importation;

(c) that the commercial working of the invention in the State is being prevented or hindered by the importation of the patented article;

(d) that by reason of the refusal of the patentee to grant a licence or licences on reasonable terms—

(i) a market for the export of the patented article manufactured in the State is not being supplied; or

(ii) the working or efficient working in the State of any other patented invention which makes a substantial contribution to the art is prevented or hindered; or

(iii) the establishment or development of commercial or industrial activities in the State is unfairly prejudiced;

(e) that by reason of conditions imposed by the patentee upon the grant of licences under the patent, or upon the purchase, hire or use of the patented article or process, the manufacture, use or sale of materials not protected by the patent, or the establishment or development of commercial or industrial activities in the State is unfairly prejudiced;

(f) that a condition which by virtue of section 54 of this Act is null and void has been inserted in a contract made after the commencement of this Act in relation to the sale or lease of, or licence to use or work, any article or process protected by the patent:

Provided that, for the purpose of determining whether there has been any abuse of the monopoly rights under a patent, it shall be taken that patents for new inventions are granted not only to encourage invention but to secure that new inventions shall so far as possible be commercially worked in the State without undue delay.

(3) Subject as hereinafter provided, the Controller may, if satisfied that any of the grounds aforesaid are established, make an order in accordance with the application; and where the order is for the grant of a licence, it may require the licence to be granted upon such terms as the Controller thinks fit:

Provided that—

(a) where the application is made on the ground that the patented invention is not being commercially worked in the State or is not being worked to the fullest extent that is reasonably practicable and it appears to the Controller that the time which has elapsed since the sealing of the patent has for any reason been insufficient to enable it to be so worked, he may by order adjourn the application for such period as will in his opinion give sufficient time for the invention to be so worked;

(b) an order shall not be made under this section for the endorsement of a patent on the ground that a market for the export of the patented article is not being supplied, and any licence granted under this section on that ground shall contain such provisions as appear to the Controller to be expedient for restricting the countries in which the patented article may be sold or used by the licensee;

(c) no order shall be made under this section in respect of a patent on the ground that the working or efficient working in the State of another patented invention is prevented or hindered unless the Controller is satisfied that the patentee in respect of that other invention is able and willing to grant to the patentee and his licensees a licence in respect of that other invention on reasonable terms;

(d) any licence granted shall be non-exclusive and non-transferable;

(e) the terms of any licence granted may be so framed as to preclude the licensee from importing into the State any goods the importation of which, if effected by persons other than the patentee or those claiming under him, would be an infringement of the patent, and in such case the patentee and all licensees under the patent shall be deemed to have mutually covenanted against such importation.

(4) The Controller shall, in determining whether to make an order in pursuance of any such application, take account of the following matters, that is to say:—

(a) the nature of the invention, the time which has elapsed since the sealing of the patent and the measures already taken by the patentee or any licensee to make full use of the invention;

(b) the ability of any person to whom a licence would be granted under the order to work the invention to the public advantage; and

(c) the risks to be undertaken by that person in providing capital and working the invention if the application is granted;

but shall not be required to take account of matters subsequent to the making of the application.

(5) An application under this section may be made by any person notwithstanding that he is already the holder of a licence under the patent; and no person shall be estopped from alleging any of the matters specified in subsection (2) of this section by reason of any admission made by him, whether in such a licence or otherwise, or by reason of his having accepted such a licence.

(6) In this section “patented article” includes any article made by a patented process.