Billion Dollar Trolls: Legality of Patent Trolls in India
Patents are the exclusive rights granted to an inventor by the respective governments as a reward for their invention. We all know how patented products will stimulate the economy of a country. The ultimate goal of an invention is the benefit of the public. In most jurisdiction’s patentability criteria are “Novelty, Inventive step, and Capable of industrial application”. If an invention satisfies these conditions the patent will be granted. Even though Industrial application is an essential feature for the grant, many patent offices do not mandate whether the inventor is manufacturing the invention or not? Here comes the possibility of “patent trolls”.
What are patent trolls?
In general, patent trolls are seen in Non-Practicing Entities (NPE’s) including educational institutions/research institutions, etc., which develop or file patents for their own inventions, or acquire patents from others, but do not manufacture the patented products, instead sue other parties who use the patents in violation of the patent which may or may not be similar to their patents. If the so-called infringers do not comply with the NPE’s terms and conditions, they will file a suit for infringement.
Laws in India
In India, there are no specific rules for preventing patent trolls. Section 25(2) of the Patents Act 1970 deals with post-grant opposition, which acts as a stumbling block against patent trolls. The section states that any interested party within one year can object to the grant of the patent. This is an effective step against patent trolls. Nevertheless, in many cases the trolls may acquire patents from the inventor after this bar of limitation. Under Section 84, the compulsory license may be granted if the patentee fails to make his innovation available to the public by manufacturing or by issuing licenses, the government or controller can issue a compulsory licensing, three years from the date of patent grant to work on his invention before any interested party can apply for a compulsory license.
Time and Cost
It is the only reason which backs off the opposite party from litigation. The time of the management will and the cost is higher than anything
Future of inventions and Strict Scrutiny
Patent trolls will kill inventions. The entire goal behind giving the patent right to an inventor is the potential benefit of the invention to the economy of a country. If people acquire patent and do not use it, what is the point of the grant? Granting low-standard patents is the main reason behind patent trolls. To reduce this, patent office can adopt certain strict measures to grant commercially valuable and manufacturing, patents.
Patent holders licensing obligation
The Standard Essential Patent (SEP) by the patent holder has a certain priority in negotiating FRAND agreements. The patents holder has certain obligations towards the licensee to stick to reasonable royalties.
Obviously enacting provisions to prevent misuse of patents is a much-needed fact. Compulsory licensing is a strong weapon for this. Many nations are reluctant to invoke compulsory licenses because they act against the will of multinational companies. So, there must be laws to prevent non-manufacturing patent holders from exploiting other companies for royalties.
Reduce the cost of filing litigation
In India, Delhi High Court, the minimum court fees in a patent infringement case are Rupees 2 lakhs to 3 lakhs. It may vary, if there are any fixed litigation fees regarding patent toll exploitation the companies would choose to fight their legal battle than pay off the royalties.
Section 2 (1) (ac) of the Patents Act 1970, deals with the definition of industrial application, an invention should be capable of being made or used in industry. After the grand patent offices should mandate the industrial manufacturing of the inventions rather than the industrial use and utility clause.
NPE’s and some universities are widely misusing their patent rights by suing others. Legally patent trolls are not recognised, the law needs evidence, if these patent trolls are producing their evidence before court the defendant’s contentions never survive. Another aspect, large companies can easily give damages and litigation fees, but the small startups are suffering due to the patent infringement accusation of patent trolls. The laws which prevent the misuse of patent rights are a need of the hour.
The views are that of author’s own and not necessarily the views of IPTSE Academy. This blog is a platform for academic discussions and hence authors have been given flexibility to convey their thought process.
Kerala Law Academy, Trivandrum