Various statutory provisions in the Patents Act, 1970 (the Act) deal with governmental use of patented inventions. To comprehend these provisions better and appreciate different factual situations, it is important to understand the scope of the rights conferred on grant of a patent. Section 47 provides that the grant of patents is subject to certain conditions. This section inter alia, states that the government may import or make or have made on its behalf any patented product or product made by a patented process for purposes ‘merely of its own use’.
Section 100 provides that the Government, or any person authorized by it, is empowered to use the patented invention ‘for purposes of Government’. These statutory provisions it seems, render the otherwise guaranteed rights conferred by Section 48 of the Act, conditional in nature.
As provided in Section 47, the Government may import, make and use patented inventions for the purpose of its own use. The scope of this provision is narrow when compared with government use highlighted in Section 100, wherein it is stated that the government, or any person authorized by it, is empowered to use the patented invention for purposes of government.
Section 100 (1) of the Indian Patents Act states –
“Power of Central Government to use invention for purposes of Government.- (1) Notwithstanding anything contained in this Act, at any time after an application for a patent has been filed at the patent office or a patent has been granted, the Central Government and any person authorized in writing by it, may use the invention for the purposes of Government in accordance with the provisions of this Chapter.”
In a landmark case [Garware Wall Ropes Ltd. v. A.I. Chopra and Konkan Railway Corp. Ltd. - 2009 (111) Bom LR 479] the Bombay High Court examined matters particularly relating to use by the Government or its agencies, while bringing out subtle differences between the relevant statutory provisions (Sections 47 and 100).
Garware Wall Ropes (plaintiff-patentee-appellant), filed for injunction against the defendant-respondents to stop manufacturing, selling, and using their patented products. The patented products were being made and sold by the defendant A.I. Chopra to Konkan Railways under a contract. It was contended by the respondent that any such making and using of the patented product was done for the work of railways, which is a department of the Central Government and that the contract had been signed on behalf of the President of India.
The Bombay High Court opined that even third party agencies can use a patented invention on behalf of the Government, but only on the express authorization obtained under Section 100 (1) by the third party agency from the Government, and payment of an agreed royalty or remuneration to the patentee under Section 100 (3), based on a contract between the two parties. Section 47, the Court opined, is different from Section 100, in that Section 47 restricts the use of the patented invention by the Government merely for its own use, however, if the Government, or any person authorized by the Government wishes to use the invention under Section 100, it has to be under the terms of a contract, or by license between the patentee and the government agency. Furthermore, in this case, it was specifically pointed out that a contract between a third party agency and the Central Government, did not effectively serve as express authorization as required by Section 100 (1) to use the patented invention.
Therefore, it may be concluded that Section 47 requires no royalties to be paid to the patentee, wherein the patented invention is being used by the Government while exercising its sovereign function, whereas as per Section 100, royalties must be paid to the patentee based on an agreement between the stipulated parties.
On a different note, in the Chemtura Corporation case [Chemtura Corporation v. Union of India and Ors - CS (OS) No. 930 of 2009], the Delhi High Court was of the view that the Ministry of Railways (in this case one of the defendants using the patented invention) qualified as the ‘Government’ under Section 47, and therefore could freely use the patented invention without the risk of infringement thereof.
Thus, as per the Delhi High Court order the Ministry of Railways has not infringed any patented invention as it qualified ‘Government’ under Section 47, and in the Garware Wall Ropes case, the Bombay High Court has ruled that under Section 100 (1), the Konkan Railways must provide written authorization to the third party agency in order to use the patented invention, and furthermore, that under Section 100 (3), adequate remuneration must be provided to the patentee based on contract.
While it may be discouraging for patentees, especially those holding patents in the field of railways, to know that their patents may be infringed to no remedy, it is encouraging to see the interpretation relating to Sections 47 and 100 by the Bombay High Court, wherein a patentee’s rights are not completely extinguished by taking the defence of ‘Government use’. Looking forward, it will be interesting to see further cases on such issues.
[The author is an Associate, IPR Division, Lakshmikumaran & Sridharan, New Delhi]