Generally speaking, “Patent Laws” are enacted to encourage innovation and invention, which eventually leads to the benefit of the public at large. Intrinsically, they are the rights which are granted not only for the personal benefits of the patentee but also for the public interest, which also happens to be the underlying spirit of the Indian Patent Act, 1970.
As far as “Patent Trolls” are concerned, it is a company or business function whose primary business activity is to acquire patents for the purpose of asserting them against other companies.
The chief purpose of patent trolling is to enforce patent rights for the sake of licensing revenues and to engage manufacturers in infringement suits to mostly seek damages or to force third parties to purchase licenses.
Old problem
Patent Trolling is not a new phenomenon. The term “patent trolling” was first used in the 1990s to describe entities that aggressively filed patent lawsuits. An argument that may be made in favor of patent trolls is that they are entitled to exercise their rights against product developers because in order to obtain their patents, they are required to disclose an innovative technology that they have developed for the general public.
Patent trolling in India
If we compare with other countries, we find that patent trolling was quite prevalent in India in the information technology and communications sector prior to the enactment of the amendment in 2005, and then sharply declined after the amendment.
As far as India is concerned, the country’s patent laws do not expressly prohibit the existence of patent trolls. Nonetheless, provisions such as section 146 require that a granted patent must be worked or used in India. It follows that if a patent is not worked or used in the territory of India, compulsory licensing may be invoked.
Furthermore, the Act also requires the mandatory filing of a statement of working of a patent at the end of each financial year. And, patent holders who fail to file such a statement may be liable for a fine and/or imprisonment.
The practice of abuse of patent rights through patent trolls is discussed under section 83(b), which states that patents are not granted merely to enable patentees to enjoy a monopoly. Clause (f) speaks about the promotion of technology innovation, technology transfer and prevention of abuse of patent rights to unreasonably restrain international transfer of technology.
Disadvantage
The main ill-effect of patent trolls is that they are in a position to bargain licensing fees that are grossly out of alignment with their contribution to the alleged infringer’s product or service, and not their non-practicing status or the possible weakness of their patent claims. The peril of paying high prices for after-the-fact licensing of patents they were not aware of, and the costs for extra vigilance for competing patents that might have been issued, in turn increases the costs and risks of manufacturing.
Conclusion
The justifications that the patent troll strategy has developed in the present patent system appear to result from judicial procedure and its adjudication in infringement cases. And as things stand today, practices such as the domestic working and reasonable period requirements, the compulsory licensing and pre-grant opposition regime, and finally the patentable subject matter, have made the Indian system somewhat immune to the problem of patent trolls that have been plaguing many other countries.