Patent

Importation and Local Working of Patents


In one of our last posts, we had blogged on the public notice issued by the Patent Office on working of patents (For those who want a crisp and clear picture on working of patents, please read this article by Sumathi and Aparna Kareer). A couple of days back, a dear friend of mine asked me something which piqued my interest. He drew my attention to Section 83 of the Act whose title reads “General Principles Applicable to Working of Patented Inventions” and then it states:
Without prejudice to the other provisions contained in this Act, in exercising the powers conferred by this Chapter, regard shall be had to the following general considerations, namely:
(a) That patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;
(b) That they are not granted to enable patentees to enjoy a monopoly for the importation of the patented article
;….”
And as we proceed to clause (g) of the Section, it further states that “patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public”.
My friend asked if it was right to conclude, based on the “soft” and normative wording of this Section, that a patented invention need not be deemed as not worked in India if it was merely imported, and not manufactured. Simply put, his question was if mere importation of the patented invention too could constitute local working of the patented invention under the Act.
Since the Section speaks of general principles and considerations, can they be termed as mandatory condition precedents? I would think that since these are general principles which form the underpinnings of Indian legislative intent on grant of patents, they may not be as normative as they sound or look.
But why is the answer to this question important? I think the answer to this has practical implications because the arguments supporting mandatory local manufacture for working seem to revolve around the assumptions that local manufacture would help make the product available at cheaper prices and would also lead to technology transfer.
However, atleast in a theoretical realm, there could be situations where the local manufacture of the patented invention could prove to be more expensive and financially unviable an option as opposed to importation of the product from another country by the patentee.
If clause (g) of the Section requires the patented invention to be made available to the Indian public at reasonable prices, can it not be said that availability of the patented invention at reasonable prices could prevail over the requirement of local manufacture of the invention? Is it necessary that the patented invention must satisfy both local manufacture and affordability? If yes, where does it say so in TRIPS?
The concluding portions of Article 27.1 of TRIPS state thus:
“Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced

The Article does not allow for discrimination based on local manufacture of the invention or importation. So how is Section 83 of the Act to be interpreted to ensure that we are not at loggerheads with TRIPS? From the literature, that is available on the topic, it becomes evident that this is not the first time this question is being raised.
The Brazilian patent law too seems to have a mandatory local manufacture requirement, the non-compliance of which could set the compulsory licensing mechanism in motion. This was challenged by the US in a WTO dispute in 2000, but the issue was never addressed conclusively since the US withdrew the complaint with Brazil assuring the US that it would consult the latter in case it chose to invoke compulsory licensing on such grounds.
Proponents of local manufacture requirement point out that Article 27.1 bars discrimination, but not differentiation for a bonafide purpose such as kick starting a particular sector of vital interest to a nation, such as public health and nutrition. If no such sectors are identified, does a broad-based local manufacture requirement derogate from Article 27.1? (UK and Ireland too have local manufacture requirements for working of the invention)
We welcome the opinion of readers on this issue.
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10 comments.

  1. AvatarAnonymous

    Well, the availability of patents is not in question under section 83.

    83 applies after the patent is available and to compulsory licenses and such. I don’t think Article 27.1 of Trips applies here.

    Reply
  2. Avatarnish154

    Hi Sai,
    refer to Telemecanique
    and Controls (I) Limited v. Schneider Electric Industries, 2002 (24) PTC
    632(Del). I think importation is considered as working!

    Nishant

    Reply
  3. AvatarJ. Sai Deepak

    Thanks Nishant, the post wasn’t exactly about precedents on the issue. It was about the possibility of a different way of looking at Section 83, but thanks for the judgment.

    Bests,
    Sai.

    Reply
  4. AvatarAnonymous

    Heyie,

    I’d like to know which provisions in the UK and Irish law speak of local working requirements. I am currently researching on the issue and a prompt response would be of immense value.

    Thanks
    Swati

    Reply
  5. AvatarAnonymous

    Hi, I would like to know when a compulsory licence is granted under a patent does the patentee or licencee have to file form 27, and if so what are the details to be mentioned in the form.
    Please reply

    Reply
  6. Avatarpravin

    HI!!
    I would like to know if A is subsidiary company in India transfers some digital data(images) to B principal company which is in UK and after some alteration UK’s company again transmits those digital data modules to Indian company where the those images are manufactured in physical form. Whether this is importation under Patent Act ,1970 ?

    Reply

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