Key Takeaways: - Use of invention for Government purpose - Reference of disputes to High court - Supreme court's order and Central Government's response

1. Can COVID vaccines be used /
acquired by Government?
CS Meenakshi Jayaraman

2. Research Credits
Iswariya BS
Hari Saanthosi R

3. Legends Used
Act The Patents Act, 1970
CG Central Government
CS Complete Specification
Govt. Government
HC High Court
Info. Information
SG State Government
u/s Under section
WHO World Health Organization

4. Presentation Schema
Use of invention for
Govt. purpose by CG
Rights of third parties
Acquisition of
inventions / patents
by the CG
Reference of disputes
to HC
Supreme Court’s
Order
CG’s response
Delhi High Court’s
Order

5. Use of invention for
Govt. purpose by CG

6. Use of invention for Govt. purpose by CG
An invention is said to be used for Govt. purpose if it is made, used, exercised or vended for CG / SG
/ Govt. undertaking
This chapter XVII shall not apply to grant of patent under certain conditions as stated in section 47
CG and any authorized person may use the invention for the purpose of Govt. once after the
application or grant of patent is made
Any use of invention by CG / any person authorized in writing before the priority date of relevant
claim of CS by way of recording / testing / trying by or on behalf of Govt. / Govt. undertaking,
otherwise than in consequence of communication of invention directly / indirectly by the patentee,
may be made free of royalty / other remuneration to the Patentee
If an invention is not recorded / tested / tried as aforesaid, use of patent after grant, by CG or
authorized person / as per the communication with the party interested in the invention may be
made on agreed terms between CG/authorized person and the patentee or as decided by HC
• For use of such patent, the patentee shall not be paid more than adequate remuneration
decided as per the economic value of the Patent use
• Patentee includes assignor / exclusive licensee
Section 99
Section 100

7. Flow Chart
Sec. 100 (2 and 3) described:
Use of patent /
invention for
Govt. Purpose
Before the
priority date
After the grant of
patent
Otherwise than in consequence
of communication by patentee /
a person from whom he derives
title
On any
communication
with the
interested party
and or
Use of invention may
be made free of royalty
/ other remuneration
Adequate remuneration
as per agreed terms /
as determined by HC

8. Contd.
CG may authorize in respect of an invention either before or after grant of patent and either before
or after the acts to any person, whether or not such person is authorized directly or indirectly by the
patentee or applicant
When an invention is used for Govt. purpose, then such users of patent shall notify the patentee and
furnish such necessary info. and if it is for use of Govt. undertaking, CG may call for info. from such
undertaking
• Notification of info. to patentee is not required in case of national or extreme emergency/ for non
commercial use
• This notice shall also be given to the exclusive licensee / assignor, if any
Use of an invention for the purposes of Govt. shall include the right to sell on non-commercial basis.
And the goods made in exercise of that right, purchaser of goods and a person claiming through him
shall deal with such goods as if they were the Patentee of the Invention

9. Rights of third parties

10. Rights of third parties
In relation to the use of patented invention or an invention in respect of which
application is pending for the purpose of Govt -
• By CG or any person authorized by CG
• By patentee or applicant for the Patent to the order made by CG
- The provisions of any license / assignment / agreement between patentee / applicant
and any person other than CG shall be of no effect so far as those provisions are:
 in relation to any restriction and regulation of use or
 in relation to making payments
for enabling the use of invention for the purpose of Govt.
- reproduction / publication of any model / document in connection with the use for
the purposes of Govt. shall not be deemed to be an infringement of copyright
Section 101

11. If the patent has been assigned to the Patentee, any sum payable to the
patentee for the use of invention for Govt. purpose will be divided between the
assignor and the patentee in such proportion as decided by the parties or HC
Contd.
True owner of
the Invention
(Assignor)
assigns
Patent / right to apply
for / obtain patent is
assigned to the
Patentee (Assignee)
For Govt.
purpose
Use of
Patented
Invention
Sum payable by the Govt.
to the Patentee
Has to be divided
between the Assignor and
Patentee (Assignee)
1 2
3
4
1 2
4

12. If an exclusive licensee is authorized to use the invention for the purpose of the Govt.,
then payments that are required to be paid by the CG or authorized person, shall be
shared by the patentee and exclusive licensee in such proportion as decided by the
parties or HC having regard to expenditure incurred by licensee
• In developing the invention or
• In making payments to the patentees other than royalties or other benefits in
consideration of license
Contd.

13. Acquisition of inventions / patents
by the CG

14. Acquisition of inventions / patents by the CG
CG shall publish a notification in Official Gazette for acquisition of patent
from the patentee for public purpose and thereupon the rights of the
invention shall be transferred to and vested in the CG
Notice of acquisition shall be given to the applicant /
patentee or any interested person whose name appears in
the register of patent
Before grant of patent
Compensation to be
paid to the applicant
Having regard to the
expenditure incurred by
him
After grant of patent
Compensation to be
paid to the patentee or
other interested person
Having regard to the
term of patent (the
period and manner in
which it worked)
Section 102
Compensation for acquisition will be decided between the CG and
applicant / patentee or by HC

15. Reference of disputes to HC

16. Reference of disputes to HC
Dispute regarding exercise by CG or authorized person of the powers conferred u/s 100 /
rights or terms for use of invention for the purpose of Govt. / amount of compensation
payable for acquisition of an invention or patent under Sec.102, may be referred to HC
If CG is a party in any proceeding, CG may:
- If the patentee is a party to the proceeding, petition can be made by way of
counter claim on any ground on which of patent may be revoked u/s 64 and
- whether a patentee is a party to a proceeding or not, question as to the validity of a
patent can be raised without making a petition for revocation
If question arises whether an invention has been recorded / tested / tried and CG is of an
opinion that disclosure of such information would be prejudicial to the public interest,
disclosure shall be made confidentially to an advocate or independent expert
Section 103

17. For issue relating to the terms of use of invention for Govt. purpose, HC shall have regard
to benefit or compensation that would arise for use of invention
HC may order to refer the whole proceeding or any question or issue of fact to an
official referee / commissioner / arbitrator
When an invention claimed in the patent was made by a person who at the time was an
employee of CG / SG / Govt. undertaking and subject matter is certified by the Govt. as
work done in the course of normal duties, any dispute in relation to the same shall be
disposed off by the CG after giving the parties an opportunity of being heard
Contd.

18. Supreme Court’s Order

19. Order for use of COVID vaccine / drugs by CG for Govt.
purpose
Supreme Court had issued its Order on 30th April, 2021 while
considering suo moto case on COVID-19 regarding
“Distribution of essential supplies and services during
pandemic”. Order refers to grant of right to “use covid
vaccines for the purpose of Govt.”
Several drugs that are at the core of COVID treatment
protocol are under patents in India like Remdesivir,
Tociluzumab and Favipiravir.
Thus the Supreme Court has directed the CG to grant rights
to other companies to make, use, exercise or vend the
COVID vaccines for the purpose of Govt.

20. Contd.
Section 100 of the Act
enables the CG to
authorize certain
companies to use any
patent for the purpose of
Govt. use
By this, the CG can
authorize certain
companies to produce
covid vaccines to ramp up
the production
Indian companies can
start manufacturing after
negotiating on the terms
and conditions of royalty
payment with patentees
of such vaccines
If the CG or its authorized
company is unable to
enter into an agreement
with the patentee, the HC
can intervene and fix a
reasonable royalty
(Section 103 of the Act)

21. Contd.
CG has another alternative to acquire the patented vaccine from
the patentee under Section 102 of the Act
If the CG and the patentee are not able to reach a consensus on
the price of the patents, the HC shall intervene and fix the royalty
(Section 103 of the Act)
Under Section 66, the CG can revoke the patent in public interest
Further, it has directed to invoke Sections 100 / 102 of the Act to
increase the production of essential drugs

22. CG’s response

23. CG’s response
In response to the Supreme Court’s order dated 30th April, 2021, CG has submitted an affidavit on
9th May, 2021
In the current scenario, the main constraint is the availability of raw materials and essential
inputs
Additional permissions and licenses may not result in increased production immediately
Therefore, the matter of sending the proposal for invocation of the provisions under
Section 100 of the Act is being processed
WHO has declared this to be a pandemic and not epidemic. When there is a surge in cases
and in demand of medicine all over the world, the solution needs to be found out essentially
at an executive level engaging at diplomatic levels
Any exercise of statutory powers under the Act can only prove to be counter productive at this
stage. Exercise of powers for essential drugs having patent issues would have serious, severe and
unintended adverse consequences in the countries efforts being made on global platforms

24. Delhi High Court’s order

25. Delhi High Court’s Order
Delhi High Court in its order dated 20th April, 2021 has considered various matters
regarding COVID-19 outbreak
Looking to the emergent situations, CG is directed to invoke the powers under Section 100
for use of invention for the purpose of Govt.
Petitioner
Mr. Rakesh Malhotra
Respondent
Government of National
Capital Territory of India
and Others

26. Thank You!
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