Friday, September 27, 2013

Section 68 of the Patents Act: Registration of “Interest Creation” and the meaning of “Use”

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.


  1. Dear Sai,
    The 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



    1. Dear TS,
      Thanks 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.