When you plan to manufacture a product in India and discover that it may already be patented, it can seem like your idea has hit a wall. In reality, that’s rarely the case.
A patent does not automatically prevent you from proceeding — it simply defines certain legal boundaries that must be understood and navigated with care. With proper verification, legal guidance, and a clear understanding of the patent’s status, there are multiple routes available: from conducting a Freedom to Operate (FTO) search, to negotiating a license, filing an opposition, or even redesigning your product to avoid infringement.
This article explains each of these options in practical terms, helping you identify a legally sound and commercially viable path to move forward under India’s patent framework.
1. Introduction:
Let us assume a hypothetical situation wherein you want to manufacture a particular product; however, you have come to know that such a product may have already been patented.
In this situation, first and foremost, please don’t lose heart, and know that a patent on a particular product never creates a complete roadblock. Therefore, you may please follow the steps one by one.
2. Verification of Information:
First, please verify whether such a patent really exists and is enforced, and if so, in which jurisdiction. If you are conversant with patents, you may do it yourself; otherwise, please consult an Indian patent agent or an IPR firm for help. When you do so, please get a Non-Disclosure and Confidentiality Agreement with the agent or the firm, as you need to disclose the intricate details of your intended product to be manufactured, so that the agent can see whether any patent on such a product specification exists in India.
If such a patent exists, however, in some jurisdictions other than India, then you are free to manufacture and sell the product in India and countries where the patent is not enforced. A patent granted abroad does not automatically block your activities in India. Protection is territorial, which means a patent is enforceable only in the country where it is filed and granted.
However, in most cases, the matter is not black and white but grey; therefore, the next step to be followed is to run a Freedom To Operate (FTO) search.
3. Freedom To Operate (FTO) Search:
As earlier suggested, if such a patent is not enforced in India, the matter is settled here, and you may go ahead with your production. A freedom-to-operate (FTO) search covering only a particular jurisdiction, in this case, India, will categorically reveal whether a patent exists in India and is still in force, as well as whether or not any patent application has been filed for such a product, which is under prosecution.
Once you or your agent discovers a valid patent or a patent application with overlapping scope, please take the following actions.
4. Careful review of the Patent enforced or the Patent Application filed:
This review should be done in a “negative” way, i.e., just to find whether the claims of the patent are valid and enforceable. The result of such a negative review may be positive or affirmative, i.e., the claims seem valid, or negative, i.e., the claims seem invalid.
5. When Negative:
By studying the claims in tandem with the corresponding specification, you may discover weaknesses in terms of patent eligibility, including a lack of novelty, failing the test of inventive step, being too obvious, or not being industrially applicable; or even in terms of patentability, i.e., not a patentable subject matter under section 3 of the India Patent Act, or you may also question the enablement of the claimed invention. In such cases, you must challenge the patent or the patent application through your agent.
In case such a document of interest is a patent application still not granted, then you may direct your agent to file a pre-grant opposition under section 25(1) of the Indian Patent Act, based on the grounds listed above. In case the dossier is a patent, granted within a year, then you may consider filing a post-grant opposition u/s 25(2) of the Act, through your agent under the same grounds, or any specific ground, whichever is applicable.
In case the grant of the patent exceeds the limit of a year, you may please consider filing a Revocation Petition before the High Court, under similar ground(s).
A success in any of these procedures would clear the path for you to manufacture the product without any threat of infringement.
6. When Positive:
If the patent appears to you as strong and valid, the straightforward approach is to seek a license from the patent holder. This works much like a tenant-landlord relationship: the patent owner retains ownership, but you are allowed to use the invention in return for royalty or other agreed terms. Licensing may even offer commercial advantages, such as technology support or brand association.
Depending on your need, the nature of the underlying technology, as well as your depth of pocket, you may choose between an exclusive license or a non-exclusive one.
7. Non-exclusive License:
This is the commonest form of licensing, wherein you will be one of the licensees, i.e., there may be several licensees for using the technology underlying the patent, corresponding to your intended product. This mechanism comes cheaper; however, the success of your product in the market would perhaps depend on the marketing itself or the pricing of the end product you offer, as you may expect some competition with the other non-exclusive license holders.
8. Exclusive License:
This, if executed with the licensor, would exclude even the licensor from using the patented technology, thus making you the exclusive and sole owner of the technology for a definite period, as agreed between the licensor and the licensee vide the licensing agreement. Naturally, the licensing fee is on the higher side to dodge any possible competition in the market. This mechanism is ideal when you are sure about the potential of the product in the market, and when you have the affordability to be an exclusive licensee.
Further, in case you think that the technology of the patent is important for building a futuristic product portfolio, you may explore the possibility of executing a sale deed or an assignment deed.
9. Outright Sale/ Complete Assignment:
Executing an assignment or a sale deed with the patent holder would render you the owner of the underlying technology of the patent, without paying any heed to the date of expiry of such an arrangement. This is ideal when you have a long-term interest in the sector and are keen to build a portfolio of patents based on or related to the technology of the patent of interest. Needless to say, such a strategy would require a lot of investment in the R&D, let alone the consideration amount of such an assignment/ sale.
However, it may happen that the Patentee is not willing to grant a license for his patented technology, and is not interested in assigning or selling either. In that case, under certain conditions, the Indian Patent Act offers another way to obligate the patentee to put the patent to work through compulsory licensing.
10. Compulsory Licensing:
If a patented invention is not reasonably available to the public, or is overpriced, or not worked in India, you may apply for a compulsory license u/s 84 of the Act after three years from the date of the grant of the patent. If such a license is granted, this allows you to produce the product even without the patent holder’s consent, subject to payment of a fair royalty as decided by the government.
This route, however, is rare, and you need to show real-time evidence for such non-working before the authority or the court. Also, please note that such a compulsory license is always a non-exclusive one; therefore, you may expect a fair amount of competition in the market, although generally, against a very reasonable licensing fee. So far, only one such license has been granted for the generic production of Bayer’s anti-cancer drug Nexavar, back in 2012.
In case you have a dubious attitude about the overlap between your intended product with the granted patent, you may consider seeking legal clarity through your agent.
11. Suit for declaration of non-infringement:
U/s 105 of the Act, you may approach the court for a declaration of non-infringement. Basically, it is a request to the court to confirm that your product does not violate the claims of the existing patent. You, as a plaintiff, should first write to the patentee requesting an acknowledgement of non-infringement. When such a call is unanswered by the patentee, suit u/s 105 may be filed. This pre-emptive step is useful when you want certainty before investing heavily in production and marketing.
In case all such arrangements don’t bring the desired fruit, an able patent agent should explore another route by designing around the patent.
12. Designing around the patent:
A patent agent might also suggest designing around the granted patent by modifying or amending the product in such a way that it no longer falls within the scope of the existing patent claims. This path may offer advantages as it avoids infringement and, in many cases, the redesigned version may itself be eligible for a fresh patent, giving you exclusive rights to your improvement. However, the risk of such a design-around is the risk of falling into the pitfall of obviousness, something the patent agent must ponder upon. The prepared FTO report would be very vital for such a design.
13. Conclusion
Therefore, you do not hit a hard ground when you are told that your intended product has been patented. The patent may not even have been enforced in India, and even if it has, you have several avenues to explore, either to confront or to cooperate with the patent. You should be ready to negotiate for the terms and conditions, including the consideration amount for a licensing agreement. You should also be ready to explore the avenue of building around the patent. To remove any doubt, you may file a suit for a declaration of non-infringement.
In sum, the Indian Patent Act draws a fine balance between innovation incentives and public interest, and freedom to do business. With the right guidance, manufacturers can often find a safe and commercially viable path forward.
