Coercive Package Licensing When patent owner licenses a patent, there may be requirement of licensing more than one

patent in order to commercialize the invention. Such license for the multiple patents is called as package license. Such package license shall by volunteer and with consent of both parties. In fact, the licensee shall choose each of the patents it wishes to license. Such package licenses are absolutely legal. However, if the Licensor forces licensee to take license for patent (s) even if it is not required by licensee, such license is called as coercive package license. Coercive package license is not a good practice and paying roylty for such license is extra burden on the licensee. Under Section 84 (7) of the Indian Patent Act, 1970, reasonable requirements of the public are considered not to be fulfilled if the patentee imposes Coercive package license for the patents. Under Section 140 of the Act [Avoidance of certain restrictive conditions], Coercive package license is consdered as unlawful.

Sunday, November 15, 2009 Exclusive grant back License In patent law, a license under which a party grants another the right to use a patent under the condition that the licensee agrees to grant the licensor a license with respect to any improvements to that patent made by the licensee is called as exclusive grant back license. For example, Company A enters into a patent license agreement with Company B to develop and market its technology. The license agreement provides Company A with royalties based on products sold by Company B. Over the next few years, Company B files patent applications on improvements to Company A's technology. After being confronted about its improvement patents, Company B explains that the license agreement makes no mention of improvements in the licensed

technology. Company B believes the improvement patents were invented by its employees alone and Company B is the sole owner. Company B offers to license the improvement patents to Company A for a healthy royalty. Thus, not only does Company A lose the rights to the improvements, but Company A is also in the unenviable position of being blocked from commercializing an improved - and potentially more desirable - product or forced to pay royalties to Company B for the improvement patents. Grant back provisions are often used where the parties expect that the licensee will improve on the licensed technology to create a superior product or method. Grant back clauses allow the licensor to compete in the marketplace on the same footing as the licensee. Under Section 84 (7) of the Indian Patent Act, 1970, reasonable requirements of the public are considered not to be fulfilled if the if the patentee imposes a conditions of exclusive grant back on the licensee for the improvements on the licensed invention.

Abuse of IP
In history there is no connection between "abuse of intellectual property rights" or "intellectual property misuse" and the "abuse-of-right doctrine" in civil law. The first concept of "abuse" in IP law is "abuse of the monopoly" in the British Patent Law and it was adopted in article 5A (2) of the Paris Convention as a ground of compulsory license (for example, failure to work). The misuse doctrine in American patent, copyright and trademark law is an extension of the unclean-hand doctrine rooted in equity law. IP misuse is referred to the attempting to extend the term of intellectual property (for example, tying) and it can be a defense in IP infringement litigations. In European Law, intellectual

property rights may be abused because of the right-holders' breach of the free movement policy or the competition policy in the EU treaty while they exercise their property rights, for example unilateral refusal to license (abuse of the dominant position), or hardcore restrict in licensing agreement. TRIPS also allows the members to take appropriate measures to prevent the abuse of intellectual property rights by right-holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology, and to provide for safeguards against the abuse of IP enforcement procedures.

According to U.S. and EU practices and legislations, the abuse of intellectual property rights includes, but is not limited to, the following practices: failure to work and refusal to license, working insufficiently and refusal to license, unilateral refusal to license and restriction to competition, conditional refusal to license (vertical restriction), concerted refusal to license (horizontal restriction), unfaithful enforcement of the IP rights or abuse of the enforcement procedure. The right-holders exercise their rights through different kinds of refusal to license. As a result, competition is restricted, trade is restrained or technology transfer is adversely affected. Such kinds of "abuse" practices should be prohibited through legal measures.

The measures to prevent the abuse of intellectual property rights are also different in different countries according to different laws (IP law, competition law or procedure law and so on). Generally they are forfeiture of the patent, no enforcement of the IP rights until the misuse is purged (equitable defense), endorsement of license of right and compulsory license. Except forfeiture of the patent which is rarely used

now, the other three measures are different forms of non-voluntary licenses. The equitable defense is a temporary free non-voluntary license to the "infringer" who is a defendant in the litigation. The license of right is an unconditional compulsory license which is not decided case by case. The compulsory license is a usual non-voluntary license authorized by the government which shall be considered on its individual merits according to patent law or competition law. In summary, the non-voluntary license is a primary measure to prevent the abuse of intellectual property.