Exhaustion of Patent Rightsin India

ByDr. Kalyan C. Kankanala,

BananaIPkalyan@bananaip.com

©BananaIP

Patent Rights

Make Use Sell Offer for Sale Import Process – Use

Patent Exhaustion

Concept Philosophy

Example

Neo holds a patent over a car that can travel on land and air. Trinity purchases the car from him and sells it to Neo's competitor Smith. Neo files a suit against Smith for patent infringement.

Is Smith Liable?

Classification

National Regional International

Scope of Exhaustion

Direct SaleUnconditionalConditional

Sale by Licensee Sale or License of components

Example

Neo sells his patented car that can travel on land and water to Trinity with a condition that the car cannot be re-sold. Trinity re-sells the car to Smith. Neo files a patent infringement case against Smith.

Is Smith liable?

Example

Neo grants a license to manufacture and use his licensed car to Trinity for a lumpsum and running royalty. Trinity uses the car for some time and sells it to Smith. Neo sues Smith for patent infringement.

Is Smith liable?

Example

Neo grants a license to make and sell his patent over the electronic sensor used in breaking systems of cars to Trinity. He holds a patent over the breaking system with electronic sensor also. Trinity makes and sells such electronic sensors to Smith, who makes breaking systems incorporating them. Neo sues Smith for infringement of both his patents.

Is Smith liable?

Exception

Repair and Reconstruction

Example

Neo sells a car that can travel on land and water to Trinity. The car has a patented convertible top. While driving in Bangalore a tree falls on the car and the convertible top breaks. Trinity approaches Smith, who replaces the broken parts of the convertible top. Neo sues Smith for infringement

Is Smith liable?

Exhaustion in India

Implied License Parallel Imports

Sec. 107A "For the purposes of this Act,-

….(b) importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product, shall not be considered as an infringement of patent rights."

Interpretation

Patented Products Duly authorized under the law Produce and sell or distribute

Contractual Circumvention License Grant Limitations Use limitations

Field limitations Territory

Term restrictions Notice to buyers Restrictions beyond patent rights

Non-patented articles - Use or Purchase

Exclusive grant backCovenants not to sue and so on.

References

Sections 48, 107A(b) and 140, The Patent Act, 1970 as last amended in 2005.

John Wiley and Sons Inc. and Ors. Vs. Prabhat Chander Kumar Jain and Ors., MANU/DE/1442/2010

United States v Univis Lens Co, 316 U.S. 241, 250 (1942) Quanta v. LG, 553 U.S. 617, 128 s. Ct 2109 (2008) Betts v Wilmott, (1870-71) LR 6 Ch App 239 Société Anonyme des Manufactures de Glaces v .

Tilghman’s Patent Sand Blast Company,(1884) LR 25 Ch D1.

Thomas v. Hunt, (1864) 17 CB (NS) 183 Sterling Drug v CH Beck, [1972] FSR 162 Minnesota Mining & Manufacturing v Geerpres Europe,

[1973] FSR 133. Dunlop Pneumatic Tyre v Neal, [1899] 1 ch 807, (1899)

16 RPC 247.  

Thank You

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