Section 84 under the Patents Act, 1970, introduces the idea of compulsory licenses as where it states that any person may apply to the controller for grant of license under sub-section in relation to a patented invention. This section aims at finding that balance between the rights of patent holders and the need for public access to innovation, especially when the reasonable requirements of the public are not met, or the patented invention is not being used effectively in India. It offers a means of ensuring that patents are not used for gaining monopoly control over the public, in particular situations where the patented invention becomes urgently necessary for public health, safety, and the economy.

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Section 84 of the Patents Act

Section 84 of the Patents Act, 1970 serves as an essential mechanism to ensure that the patent system does not hinder public access to critical inventions. The following are  the detailed breakdown of the section.

Sub-section 1: Reasons for Seeking Compulsory Licenses

Any person, after three years from the date of patent grant, may make an application for a compulsory license on any of the following grounds:

• (a) Unsatisfied Public Demands: When the patented invention fails to fulfill the reasonable demands of the public. This means that the patent owner is not providing the invention in adequate quantities or in a form which is accessible to the public.

• (b) Unavailability of the Invention: If the invention is not made available to the public at a reasonably affordable price. For instance, if the patented product or process is too expensive for wide usage, a compulsory license may allow others to produce and distribute it at a more reasonable price.

• (c) Non-working of the Patent in India: In case the patented invention is not being worked or manufactured within the territory of India. The Act ensures that patents should not merely exist for the benefit of the patent holder, but that the invention should be used for industrial and economic progress within India.

Sub-section 2: Application for Compulsory License

• Eligibility: An application for a compulsory license can come from anyone, even a holder who may have already received a license for the same invention. There is no restriction on applying for a compulsory license due to prior agreements or prior possession of a license.

• No Estoppel: It provides that no person shall be estopped from urging that the public's reasonable requirements are not fulfilled or the invention is not worked in India, even if such a person had previously accepted a license under the patent. This provision satisfies applicants to plead their case on facts of non-fulfilment of reasonable requirements of the public or non-working of the patent freely.

Sub-section 3: Content of the Application

Every application for a compulsory license should contain:

• Nature of Applicant's Interest: He must indicate with clarity the interest he wishes to be attributed over the invention and how it addresses the public need.

• Particulars of the Application: In this, the application should indicate the grounds for the compulsory license with all particulars that support the claim.

Also, get to know Section 64 of Patents Act, 1970 - Grounds & Procedure for Patent Revocation

Sub-section 4: Issuance of a Compulsory License

If the controller is satisfied that the grounds for a compulsory license exist, it may grant the license on such terms as it thinks fit. This license shall enable the applicant to work on the patented invention in India without the licensor's permission.

Sub-section 5: Controller's Powers

If the controller instructs the patent holder to issue a compulsory license, it may also avail itself of the powers under Section 88. Such powers may include giving directions regarding the terms of the license as it shall be carried out, the terms of payment, and other terms and conditions for public benefit.

Sub-section 6: Compulsory License

When considering an application for a compulsory license, the Controller shall consider the following criteria:

(i) Nature of the Invention and Time Elapsed: The Controller shall assess the nature of the invention, the time elapsed since the patent was granted, and all steps the patentee or licensee have taken to make the invention available to the public.

(ii) The Applicant's Capacity to Commercialize the Invention: A critical factor is the applicant's capacity to utilize the patented invention to enhance life and benefit the public effectively. The applicant shall demonstrate capability to manufacture and distribute the product.

(iii) Applicant's Capacity to Accept Risk: The applicant must demonstrate his ability to commit capital and other resources required to commercialize the invention successfully.

(iv) Application for License: The Controller shall consider whether the applicant made reasonable efforts to obtain a license directly from the patentee and that these efforts were unsuccessful. The term reasonable period refers to a period not exceeding six months except in circumstances of national emergency or public urgency.

Also, Read about What is Section 10 of The Indian Patents Act - Contents of Specifications

Sub-section 7: Reasonable Requirements of the Public

This sub-clause specifies when the reasonable requirements of the public are held not to have been satisfied:

(a) Refusal of License on Reasonable Terms: Where the patentee refuses a license on reasonable terms, it would be prejudicial to existing industries in India or the development of new industries in that country. It may also result in an inadequate supply to India of the patented product or the restriction of exports of the patented article from India.

(b) Conditions laid down by Patentee: When the patentee imposes severe conditions (for instance, grant-back which is exclusive or through compulsory license), it defeats the public's entitlement to exploit the invention, thereby failing to satisfy their reasonable needs.

(c) Non-commercial Working of the Patent: If the patented invention is not being worked in India on a commercial scale, or its working is restricted owing to importation practices of the patentee or its licensees, the needs of the public are not being met, and this justifies the grant of a compulsory license.

(d) if the patented invention is not being worked in the territory of India on a commercial scale to an adequate extent or is not being so worked to the fullest extent that is reasonably practicable; or 

(e) if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by— 

(i) the patentee or persons claiming under him or 

(ii) persons directly or indirectly purchasing from him; or 

(iii) other persons against whom the patentee is not taking or has not taken proceedings for infringement.

Get to Know What are Intellectual Property Rights

In Summary,

Section 84 of the Patents Act, 1970, introduces compulsory licenses, which ensures that patents cannot be used to deny public access to important inventions. The provision of this section maintains a balance between the rights of patent holders and the needs of the public, especially in cases where patents could become a major obstruction to the availability of life-saving medicines or even some other needed and important inventions or technologies. This section provides grounds on which compulsory licenses are granted in order to allow for fair use of patented inventions to ensure that patents lead to public welfare, not to monopoly, which gives rise to access obstruction to innovation. Clear and detailed criteria and conditions set within this section facilitate unbiased and transparent judgments regarding the grant of a compulsory license while creating a healthy patent ecosystem in India.

FAQs on Section 84: Compulsory Licenses under the Patents Act, 1970

Q1. What is a compulsory license under the Patents Act, 1970?

A compulsory license is a license that allows a person to use a patented invention not under the patent holder's consent, but only under specific conditions. The Controller may grant this license if the reasonable requirements of the public are not met or if the patented invention is sold at an unaffordable price.

Q2. When can an individual file an application for compulsory license?

An individual can file a compulsory license three years after the date of grant of the patent. The application can be made if the reasonable requirements of the public are not being met, the invention is not available at an affordable price or if it is not worked in India.

Q3. What factors would the Controller consider in granting a compulsory license?

The Controller considers various considerations, such as the character of the invention, the interval since the grant of the patent, whether the applicant has been able to work the invention for public advantage, and whether he or she has made efforts to obtain a license from the patent holder.

Q4. Can the patentee refuse to issue a compulsory license?

Yes, a patent holder can refuse to grant a license. However, if the reasonable requirements of the public are not being met, or if the invention is not being worked on in India, the Controller may grant a compulsory license despite the refusal.

Q5. How long does a compulsory license last?

The Controller decides the term of a compulsory license. In general, the license is issued for such period as the public's needs are not being satisfied and unless the patent holder makes the invention available to the public on reasonable terms.