Commercialization of a patented invention means to effectuate a mere invention protected under the patent regime to a completed product and/or process for raking in maximum monetary gains out of it. A patent can be commercialized either by the patentee himself (having regards to sufficient production machinery and means available to him) and/or can be sold/licensed by the patentee in a number of ways.
Transforming mere inventions into actual assembly-line products and/or processes by way of licensing, patent enforcement, pooling, selling the patent are the most effective ways to obtain maximum benefit out of the patented invention. Thus, commercializing the patented invention is a crucial aspect to be considered by the patentee.
Section 83 of the Indian Patents Act, 1970 specifically provides that patents are granted to encourage inventions and to ensure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. Moreover, it is clarified that patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article. Furthermore, section 146 of the Act requires the patentee to furnish such details in the form of working statement to establish an extent to which the patented invention has been commercially worked in India during a financial year. Such a working statement has to be mandatorily submitted before 30th September every year.
The granted patent can be revoked by the Controller as per Section 85 of the Act, if the patented invention is not worked within the territory of India, or if the reasonable requirements of the common public from the granted patent are not being met, or the patented invention is not available to the common public at a reasonable and affordable price. Below is an overview on the different judicial precedents relating to commercializing patented inventions and patent licenses.
Fair, reasonable and non-discriminatory licensing
In case of Telefonaktiebolaget LM Ericsson v Intex Technologies, the Delhi HC clarified that the the IPR owner should be adequately and fairly rewarded for the use of their IPRs in the implementation of STANDARDS and TECHNICAL SPECIFICATIONS.
In another case of Telefonaktiebolaget LM Ericsson v M/s Best IT World (India) Pvt Ltd (iBall), the Delhi HC stated that the patent license agremments must be based on fair, reasonable and non-discriminatory terms.
Working of Patented Invention in India
In the case of Franz Xaver Huemer vs. New Yash Engineers, the Delhi HC stated that if a patent is registered in India by a foreigner but not used, then others cannot be restrained from using/ registering that patent as it would seriously affect the economy.
In case of Bayer Corporation v. Union of India, the Bombay HC established that public interest shall always be prioritised and the objective behind the incorporation of the Patent Act is to promote invention and safeguard the creator from infringement. It also held that the acceptance of generic drugs would not amount to patent infringement.
In the case of Telefonaktiebolaget LM Ericsson (PUBL) vs. Competition Commission of India and Ors, the Delhi HC clarified that a prospective licensee who applies for a compulsory licence is expected to have made, prior to his application, efforts to obtain a licence on reasonable terms. However, this consideration would not be relevant where the conduct of a patentee is found to be anti-competitive.
Jurisdiction for disputes regarding patent licenses
In case of InterDigital v Xiaomi, the Delhi High Court held that a court of one state (i.e. the Wuhan Court) cannot bar the parties from pursuing the dispute at a forum in another state (i.e. the Delhi court), when this foreign forum has the competent jurisdiction to hear the case. The court also clarified that exceptions can apply only when the foreign forum is ‘vexatious or oppressive’ to the state’s court. Moreover, the court ordered Xiaomi to remunerate InterDigital for the penalties imposed by the Wuhan court.