Patents can be transferred or shared with others through:

o Assignment (permanent transfer of rights)

o Licensing (temporary sharing of rights)

Relevant Sections: 68, 69, 70, 71 of the Patents Act, 1970

What is Assignment?

• A legal transfer of ownership of a patent or patent application.

• It can be full or partial, and once executed, the assignee becomes the new owner of the
assigned rights.

• Though the Act doesn't define it, assignment is widely recognized and enforced under
statutory provisions.

Types of Patent Assignments:

1. Legal Assignment

• A formal transfer through a deed.

• The assignee is entered into the Register of Patents as the new owner.

• Grants full rights, including suing for infringement.

2. Equitable Assignment

• A partial or informal agreement, e.g., a letter of intent.

• The assignee does not get ownership entry in the Register.

• May share profits or rights but has limited legal standing.

3. Mortgage

• A patent is pledged to another party in return for money (loan or royalty).

• The assignor can regain rights after repayment.

• The assignee (mortgagee) is recorded as holding a financial interest, not ownership.

Sections 68, 69, 70, and 71 of the Indian Patents Act, 1970 deal with assignment

Section 68 – Assignments, etc., to be in writing and duly executed

• Written Requirement

o Any assignment, mortgage, licence, or creation of interest in a patent must be in

writing.
 o Verbal or oral agreements are not valid or enforceable under Indian patent law.

• Execution by Parties

o The document must be duly executed (i.e., signed by both parties involved).

• Clarity of Terms

o The document must clearly state the terms and conditions of the transfer or
agreement.

Purpose: Ensures legal clarity, prevents fraud or ambiguity, and protects the interests of the
patentee and third parties.

Section 69 – Registration of assignments, transmissions, etc.

• Mandatory Registration with Controller

o Any assignment, transmission, licence, or interest must be registered with the

Controller of Patents.

• Form & Time Limit

o Application is made using Form 16 along with the original agreement.

o Must be submitted within the prescribed time (currently within 6 months from
the date of execution).

• Register of Patents

o On acceptance, the Controller will record the name of the new proprietor or
licensee in the Register of Patents.

• Legal Validity

o Until it is registered, the document shall not be admitted as evidence in any

proceeding relating to patent rights unless the Controller directs otherwise.

Purpose: Maintains transparency in ownership, gives legal standing to the transferee, and
avoids disputes.

Section 70 – Power of registered grantee or assignee to deal with patent

• Legal Rights of Assignee

o A registered assignee or grantee (after recording under Section 69) can exercise
all the rights of the patentee.

• Right to Sue & Enforce

o The registered assignee has the right to sue for infringement, license the patent,
or further assign it.

• Same Rights as Original Patentee

 o Once registered, the assignee is treated as the owner for all legal purposes.

Purpose: Recognizes the assignee's legal status and empowers them to act on the patent as if
they were the original owner.

Section 71 – Rectification of Register by Appellate Board

• Application for Rectification

o Any person aggrieved by an entry in the Register of Patents (e.g., error, omission,
fraud) may apply to the Appellate Board for rectification.

• Who Can Apply?

o The application can be made by:

▪ A person whose name was wrongly entered or omitted

▪ A person with interest in the patent

▪ The Controller in certain cases

• Grounds for Rectification

o Examples include:

▪ Fraudulent or incorrect assignment records

▪ Wrongly entered names or details

▪ Omission of a party with rightful interest

• Controller's Role

o The Controller must rectify the Register as per the Appellate Board’s decision.

Purpose: Ensures the accuracy and legitimacy of records in the Register of Patents,
safeguarding third-party rights and public interest.
LICENSIOng-

A patent license is a legal permission granted by a patent holder (licensor) to another party
(licensee) to use, make, sell, or distribute a patented invention under defined terms.

Ownership of the patent remains with the licensor.

The Patents Act, 1970 governs the legal framework of patent licensing in India.

It is highly recommended to enter a written agreement (mandatory under Section 68) and get it
registered with the Controller under Section 69.

Clauses under a Patent Licensing Agreement

1. Identification of the Parties

2. Recital Clause

3. Definition Clause

4. License Clause

5. Payment Clause

6. Indemnification Clause

7. Termination Clause

8. Representations and Warranties of Licensor

9. Representations and Warranties of Licensee

10. Relationship of Parties

11. Assignment

12. Dispute Resolution Clause

13. Other Common Clauses

Why Patent Licensing?

• Allows commercial exploitation without relinquishing ownership.

• Enables inventors to monetize their patents.

• Facilitates technology transfer and market expansion.

• Helps in public access to essential innovations, especially in the pharmaceutical sector.

Types of Patent Licences in India:

1. Exclusive License

[Defined under Section 2(f)]

• Grants exclusive rights to the licensee to use the invention to the exclusion of all others,
including the patent holder.
 • Title remains with the licensor, but the licensee gets complete operational control.

• Cannot be sub-licensed by the licensee unless allowed in the agreement.

“A license from the patentee which confers on the licensee... to the exclusion of all other
persons (including the patentee), any right in respect of the patented invention.” – Section 2(f)

2. Non-Exclusive License

• Patent holder can license the same invention to multiple parties.

• Title remains with the licensor; each licensee can use the invention independently.

• Suitable for mass distribution or non-conflicting use.

3. Sub-License

• A license granted by a licensee to a third party, subject to the original license terms.

• Depends on whether the primary agreement allows sub-licensing.

• Must also be recorded and ideally approved by the licensor.

4. Voluntary License

• Issued voluntarily by the patent holder, without any external compulsion.

• Common in industries like pharmaceuticals, especially for broader access or partnership.

• Often tailored with royalty clauses and usage conditions.

5. Compulsory License

[Sections 84 and 92]

• Granted without the consent of the patent holder in public interest.

Under Section 84:

• Can be requested after 3 years of patent grant, if:

o Public requirements are not met

o Price is unaffordable

o Patent is not worked in India

Under Section 92:

• For national emergency or public health crisis

• Government can issue notification to initiate compulsory licensing.

Case Law: Bayer Corporation v. Natco Pharma Ltd. (2019)

 • Bayer’s patented drug Nexavar was sold at high prices, unaffordable in India.

• Natco applied for a compulsory license under Section 84.

• It was granted with conditions (e.g., free supply to poor patients, reasonable royalty).

According to the 84 Section of IPA 1970, after three years from the grant of the patent, any
interested person can write an application to the Controller for grant of Compulsory License on the
following grounds:

• the reasonable requirements of the public for the patented invention have not been
satisfied

• Patented invention is not available to the public in affordable price

• Patented invention is not worked within the territory of India.

After receiving the application, the Controller can grant a Compulsory License to that
party/person.

However, before granting the Compulsory License, the Controller has to consider several factors
such as:

1. Royalty/remuneration for the patentee are reasonable

2. Licensee will use patented invention properly

3. Patented invention will be available to the public at reasonable prices

4. The license is non-exclusive and non-assignable

5. The license will not be longer than the term of the patent

6. Licensing the patented invention is for the better supply in Indian market

7. If patented invention is for semiconductor technology, the license granted is for non-
commercial public use.

1. Drafting the License Agreement

[As per Section 68]

• Must be in writing, duly executed, and contain all terms:

o Scope and territory of license

o Duration and termination

o Exclusive or non-exclusive

o Royalty/payment terms

o Rights to sub-license (if any)

o Limitations and responsibilities

 Case Law: PVR Pictures Ltd. v. Studio 18 (2009)
A term sheet does not amount to a valid license agreement unless it contains all necessary
contractual elements.

2. Registering the License

[Section 69]

• The licensee must apply to the Controller to register the license.

• Submit:

o License Agreement

o Proof of execution

o Relevant forms (Form 16)

• Upon satisfaction, the license is recorded in the Register of Patents.

• Only a registered licensee can enforce rights or claim interest legally.