Patent prologue

Vivek Ranjan at Singh & Singh Lall & Sethi outlines the perks and problems associated with patent licensing

One of the many things that we know about patent rights is that these rights incentivize the innovator. However, incentives are only half the purpose such rights serve in a modern economy. The economic purpose of intellectual property law today is not just to reward innovators, but also to allocate advantages of the commercial success of the licensed subject matter.

An innovator reaps the benefits of their patent either by working the patent itself or in other cases, through patent licensing. In my opinion, the former is a bit risky, particularly due to strong working requirements in jurisdictions such as India. The failure of a patentee to sufficiently work an invention could throw up compulsory licensing-like provisions, which are not only a contentious issue but also an involuntary process of licensing.

Voluntary patent licensing, on the other hand, is a smoother approach as it not only eliminates the hurdles of infrastructural requirements needed to sufficiently work an invention, but also generates cash flow for innovators without any substantial investment in the market. But beware of patent licensing, for while it may raise cash, it is also a risk which may lead to costly litigation.

Vivek Ranjan is a senior associate and a member of the litigation team at Singh & Singh Lall & Sethi. He focuses on pharmaceutical patents, drug regulations and competition law issues. He can be reached at vranjan@indiaip.com.