CONTENTS

1. INTRODUCTION…………………………………….. 2
2. RIGHTS OF A PATENT OWNER…………………….. 2
3. PATENTABILITY……………………………………. 3
4. THE SPECIFICATION AND THE CLAIMS……………. 3
5. THE GROUNDS ON WHICH A PATENT MAY BE
DECLARED INVALID……………………………….. 4
6. LICENSING…………………………………………. 5
7. “IMPROVEMENT” PATENTS……………………….. 6
8. TAXATION AND PATENTS………………………….. 7
9. REQUIREMENTS FOR FILING A PATENT IN INDIA.... 9
10. PATENTS (AMENDMENT) ACT 2005………………. 9
11. CONCLUSION………………………………………. 11
12. BIBLIOGRAPHY……………………………………. 12
 INTRODUCTION

A patent is granted to protect an article that is essentially better in some way than what was made
before, or for a better way of making it. The monopoly a patent gives can extend to any other
improved article or process that is better for the same reasons as that on which the patent is based.
In an extreme case, a patent can be wide enough and represent a big enough advance over earlier
ideas to give its owner a complete monopoly of an industry. For Instance, there have been patents
giving for a time monopoly of transistors. Very few patents are as important as that, but the
existence of almost any patent will make it necessary for a competitor to do a design work or even a
major research work of his own rather than copy the actual product he wishes to imitate.

A patent is a set of exclusive rights granted by a state (national government) to an inventor or their
assignee for a limited period of time in exchange for a public disclosure of an invention. The term
‘exclusive right’ is a de facto, non-tangible prerogative existing in law (that is, the power or, in a
wider sense, right) to perform an action or acquire a benefit and to permit or deny others the right to
perform the same action or to acquire the same benefit. The term or time period of a patent is the
maximum period during which it can be maintained into force. It is usually expressed in number of
years either starting from the filing date of the patent application or from the date of grant of the
patent. In most patent laws, renewal annuities or maintenance fees have to be regularly paid in order
to keep the patent in force. Otherwise the patent lapses before its term.

An invention is a new composition, device, or process. It may be derived from a pre-existing model
or idea, or it could be independently conceived in which case it may be a radical breakthrough.
Inventions often extend the boundaries of human knowledge or experience. An invention that is
novel and not obvious to others skilled in the same field may be able to take the shape of a legal
patent.

RIGHTS OF A PATENT OWNER

A patent owner has the right to decide who may or may not use the patented invention for the
period in which the patent is protected. The patent owner may give permission to, or license other
parties to use the invention on mutually agreed terms. The owner may also sell the right or patent to
another person who then becomes the new owner of the patent. Once the protection expires.

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A patent lasts, so long as renewal fees are paid for it, 20 years from the date when the full
specification of the invention is filed at the Patent Office (this need not be the date of first
application for a patent). Patent protection however, does not become fully effective until the patent
office grants it, although once ranted, damages can be held for the period between the period of
publication of the specification to 18 months from the date from when the patent is applied for). In
order for a patent to be granted, the owner needs to respond to the Patent Office with their queries,
and the more quickly he responds, the faster will his patent be granted.

PATENTABILITY

Not every bright idea is patentable. The patentable invention has to be “ capable of industrial
application” including exploitation in agriculture, but excluding plant or animal varieties and “
essentially biological processes for the production of animals or plants”. Medical and veterinary
treatments are not patentable: but drugs are.

There is also a list of matters excluded from patentability as being essentially intellectual, scientific
theories, mathematical methods, computer programs, and aesthetic creation of all sorts.

The right to apply for a patent belongs to the owner of the invention, the inventor himself, or
anyone who can claim the invention from him. Other people can join in the application. Employees,
as part of their jobs, make most inventions. In such cases the employer owns the invention and can
apply to patent it, although he needs the inventors signature (unless the invention is a foreign one,
and he is patenting it under the International Convention) or the inventor can make the application
in which case he will be a sort of trustee of it, for his employer, or they may both apply together
(when the inventor will still be a sort of trustee of his half share).

THE SPECIFICATION AND THE CLAIMS

The applicant must file at the patent office, document called a specification. This must contain a
description of the apparatus or the process or the article, or what ever is to be the subject of the
patent. It must contain instructions that will enable a skilled person to work the process or make the
apparatus or the article as the case may be. Often patents will contain a series of drawings as well.
Most important of all, it must contain what are called ‘claims’ i.e. statements defining the precise
scope of the rights of monopoly that the patent will give. There is only one way of finding out
whether the owner of a patent can prevent the manufacture or sale of a particular imitation of his

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patented product, and that is by looking up his specification and seeing whether the words of the
‘claims’ describes that imitation.

THE GROUNDS ON WHICH A PATENT MAY BE DECLARED INVALID

These are of great practical importance. It should be noted that while it is not too difficult to decide
whether a patent is infringed upon, it is often less easy to decide whether a patent is valid. For
example, something, which looks very complex on first sight, may turn out to be obvious to the
skilled workers in the particular field. Thus whenever there is a question of enforcing a patent by
court proceedings, the question of validity may be the most important one in that case. It will be
seen that while some of the grounds set out below may affect the patent as a whole, others affect
only certain claims. Where this is so, it is possible for some of the claims to be valid although some
are invalid. Such a position gives rise to procedural problems, but for most purposes, the important
question then is: is there any claim that has been infringed a valid claim? Other claims matter less.
The grounds are:

1. Lack of novelty – Lack of Novelty means that a claim of the specification includes
something that has been “made available to the public.” This means that somehow the
public has been able to learn what the invention is before the priority date. Most often that is
by reading a openly published document that clearly describes something in a claim. But
there are other ways for instance blurting it out in a public lecture or even to a single
individual (provided it is not in confidence). Selling a product that can, without “undue
difficulty” be analysed or dismantled to find out how it works will do. What is not enough is
selling a product of the invention but not he invention idea itself.
2. Obviousness – Obviousness means that the claim includes something that was obvious, at
its priority date, in view of what had already been made available to the public. This ground
is also called lack of inventive step. It is one of the most important yet one of the most
uncertain grounds. In principle, it is only common sense that any variant of an old idea that
is more or less self-evident does not deserve a patent. The trouble is that in practice it is
often very difficult to decide after the event what would have been obvious to the “skilled
worker” and an ordinary worker in that field. A lot depends on the courts feelings as to
whether the invention was a good idea.
3. Insufficiency – Insufficiency means that the specification does not disclose the invention
clearly enough for it to be performed by a skilled person in the art. It is possible for there to

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 be insufficient instructions to carry some claims into effect, but sufficient for others; but
generally, a specification tends to be sufficient for all claims or insufficient for all.
4. Obtaining – Obtaining means that the patent was granted to someone not entitled to it. This
objection is seldom raised, not least because if an invention is stolen and patented the victim
usually brings a claim for the patent. Only the person who is really entitled to the invention
can run this ground.
5. Not an invention – The “not an invention” ground means that the alleged invention is not
the sort of thing that can be patented at all. This covers things like medical treatment and
computer programs as such. In practice it is usually possible to get some sort of a patent
covering a computer program some way or the other.
6. Wrongful amendment – There are two sorts of wrongful amendment: that the specification
has been altered by amendment so as to disclose something not disclosed in the specification
when it was first filed, or has been altered since the patent was granted to make the claims
cover something the did not before.

LICENSING

If a patent is valid, the manufacture, importation, sale or use of a patented article is each only lawful
of the patentee gives the permission for them. Such permission is what he is what is known as
“license”. Subject to the exceptions below, a patentee can charge what he likes for the exercise. For
those who do not wish to manufacture for themselves, this is the normal way of making money
from a patent.

Limits on what can be done by way of licensing and exploitation

Not every sort of limitation or condition though is allowed. First, there are rules about free
circulation: once a patented article has been put on the market by the owner of the patent or with his
license, he cannot stop its subsequent sale anywhere in that country. This means that in particular,
that although it may be allowed to restrict a license to manufacturing under the patent only in that
country, the patent cannot be used to stop things he makes being sold throughout the country. Even
a license to manufacture in a single country only has to comply with some complex and not very
comprehensible regulations in order to satisfy the country’s regulations.

Next, there are the limits that competition law imposes what can be done with patents (and other IP
rights).

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 “IMPROVEMENT” PATENTS

If the invention covered by patent proves really profitable, its owner will want to go on profiting
from it after his patent expires. There is a way in which a monopoly in an important invention may
be kept alive after the patent has come to an end, and that is by patenting a large number of minor
improvements to the original invention. Provided that the patent improvements represent genuine
development over the period during which the original patent is in force, and provided that they are
patented with determination and persistence, by the time the original patent expires a would be
imitator should be faced with this situation: that the article described in the original specification is
too inferior to contemporary designs to be commercially saleable, while he cannot equal the newer
models without risking an action for infringement of so many of the improvement patents, that he
would almost certainly lose in respect of some patent or the other. Even if he were to win the action
on enough of the patents to let him go on manufacturing without any fundamental change in his
design, the cost of fighting and losing the action would still take much of the profit out of his
venture.

For this reason, the existence of a mass improvement patent s is often sufficient detterent to would
be imitators. The original manufacturers position need not deteriorate with further lapse of time: he
should always be some years ahead in design so far as patentable improvements are concerned ,
while the longer he keeps the filed to himself the greater the advantage he has in manufacturing
experience. His monopoly will last until some competitor comes along with the skill needed to
“design round” the more dangerous patents and the courage to fight a patent action if necessary;
how long this will be, will depend as usual on the importance if the market covered by monopoly,
as well as on the rate at which he continues to devise new patentable improvements. In the past such
monopolies have lasted for a long time.

Where the owner of the original patent himself is the manufacturer, the patenting of improvements
presents no particular difficulty. Where, however, the main patent is exploited by licensing someone
else to manufacture in return for a payment of royalty on production, the patentee will find it
difficult not to lose control as soon as the original patent expires. For the manufacturer, who will
also have the practical experience; will make the developments on which improvement patents can
be based the new patents will naturally belong to him, too. Sometimes the manufacturer can be

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persuaded to agree that the original patentee shall become the owner of the improvement patents,
but such arrangements are mostly illegal under competition law.

It is in general very difficult for an inventor who is not actively engaged in an industry to keep any
substantial control over it by means of patents. Cases still do occur from time to time of inventors
making large fortunes by using their inventions to build up large manufacturing businesses, while
other inventors do well enough by selling their patents to existing firms and at the same time getting
important posts those firms as consultants or designers. The inventor who makes any large sum
simply by the sale or licensing of his patents seems to be very rare.

TAXATION AND PATENTS

Patents are subject to special tax rules. The costs of inventing and patenting an invention are
normally deductable expenses when computing profits. Royalties are not allowable as business
expenses of a manufacturer who pays them; instead, who ever pays royalty out of taxed income
should deduct tax before paying and may then keep it. Furthermore, capital sums paid for patents
and patent licenses are treated as income of the seller spread over a six year period; this being
balanced by allowing the purchaser annual allowances on what he has paid. The position of foreign
patentees needs watching here: they naturally tend to demand that a British licensee agree to pay
royalties free of tax. These are agreements in force with most foreign countries under which
foreigner can get payment in full; but the foreign patentee had to make the request, and license
agreements ought to be specifically framed accordingly. VAT is payable on most patent related
transactions e.g. royalties.

According to the Patents Act 2005:

A Patentable1 Invention is:
A new product or process, involving an inventive step and capable of being made or used in an
industry. It means the invention to be patentable should be technical in nature and should meet the
following criteria -
2i) Novelty: The matter disclosed in the specification is not published in India or elsewhere
before the date of filing of the patent application in India.
ii) Inventive Step: The invention is not obvious to a person skilled in the art in the light of the
prior publication/knowledge/ document.

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The Patents Act 2005
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iii) Industrially applicable: Invention should possess utility, so that it can be made or used in an
industry.
The following are Non-Patentable1 inventions within the meaning of the Act: -
(a) An invention which is frivolous or which claims anything obviously contrary to well
established natural laws;
(b) An invention the primary or intended use or commercial exploitation of which could be
contrary to public order or morality or which causes serious prejudice to human, animal or plant life
or health or to the environment;
(c) The mere discovery of a scientific principle or the formulation of an abstract theory (or
discovery of any living thing or non-living substances occurring in nature);
(d) The mere discovery of a new form of a known substance which does not result in the
enhancement of the known efficacy of that substance or the mere discovery of any new property or
mere new use for a known substance or of the mere use of a known process, machine or apparatus
unless such known process results in a new product or employs at least one new reactant;
Explanation- For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure
form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of
known substance shall be considered to be the same substance, unless they differ significantly in
properties with regard to efficacy.
(e) A substance obtained by a mere admixture resulting only in the aggregation of the properties of
the components thereof or a process for producing such substance;
(f) The mere arrangement or re-arrangement or duplication of known devices each functioning
independently of one another in a known way;
(g) A method of agriculture or horticulture;
(h) Any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other
treatment of human beings or any process for a similar treatment of animals to render them free of
disease or to increase their economic value or that of their products.
(i) Plants and animals in whole or any part thereof other than micro-organisms but including seeds,
varieties and species and essentially biological processes for production or propagation of plants
and animals;
(j) A mathematical or business method or a computer programme per se or algorithms;
(k) A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever
including cinematographic works and television productions;
(I) A mere scheme or rule or method of performing mental act or method of playing game;
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(m) A presentation of information;
(n) Topography of integrated circuits;
(o) An invention which in effect, is traditional knowledge or which is an aggregation or duplication
of known properties of traditionally known component or components.
(p) Inventions relating to atomic energy and the inventions prejudicial to the interest of security of
India.

REQUIREMENTS FOR FILING A PATENT IN INDIA

1. Full name, address & nationality of applicant (s) and inventor (s).
2. Specification, provisional / complete drawings , claims and abstract.
3. List of countries to claim priority , if any, where the application / applications for the grant of
patent has / have been filed , alongwith date and application number
4. Power of attorney.

PATENTS AMENDMENT ACT 2005

The Patent Amendment Act 2005 passed by the parliament in its budget session of 2005 brings The
Indian Patent Act in conformity with the intellectual property system in all respects. This replaced
an ordinance promulgated on December 2004 to meet WTO obligations. Some of the major
amendments have been introduced in sections 2 and 3, which are as follows:
Section 2 of the Patents Act is the definition clause:
According to section 2(j) invention means a new product or process involving an inventive step and
capable of industrial applications.
Inventive step means a feature of an invention that involves technical advancement as compared to
existing knowledge or having economic significance or both and that makes the invention not
obvious to a person skilled in art. Thus an invention in order to be patentable, should:
(i) Involve an inventive step capable of industrial application;
(ii) Which should involve technical advances as compared to the existing knowledge or having
economic significance or both; and
(iii) Be not obvious to a person skilled in art.
Section 3 outlines various situations where an invention (properly so called) can yet be not
patentable. Section 3(d) of the Patents Act 1970 has been amended under the new Act to prescribe a
class of discovery which cannot be subject matter of patent; it reads as follows: (d) mere discovery
of a new form of known substance which does not result in the enhancement of the known efficacy
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of that substance or the mere discovery of any new property or new use for a known substance or
the mere use of a known process, machine or apparatus unless such known process results in a new
product or employs at least employs one new reactant.
Product Patents have been extended to fields of technology such as drugs, food and chemicals but
granting of patents are subject to restrisection prevents frivolous inventions from being patented.
The amendments introduced in the Patents Act exhibit the essence of patentability in the
pharmaceuticals and chemicals is inventive ingenuity, novelty and existence of industrial
application or economic significance of the new product or process.

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 CONCLUSION
A Patent is a set of exclusive rights granted by a state to an inventor or his assignee for a fixed
period of time in exchange for a disclosure of an invention. The procedure for granting patents, the
requirements placed on the patentee and the extent of the exclusive rights vary widely between
countries according to national laws and international agreements. Typically, however, a patent
application must include one or more claims defining the invention, which must be new, inventive,
and useful or industrially applicable. In many countries, certain subject areas are excluded from
patents, such as business methods and mental acts. The exclusive right granted to a patentee in most
countries is the right to prevent or exclude others from making, using, selling, offering to sell or
importing the invention. Patent usually refers to a right granted to anyone who invents or discovers
any new and useful process, machine, article of manufacture, or composition of matter, or any new
and useful improvement thereof. The additional qualification utility patents is used in countries such
as the United States to distinguish them from other types of patents but should not be confused with
utility models granted by other countries.

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 BIBLIOGRAPHY

 A Guidebook to Intellectual Property by The Rt. Hon. Sir Robin Jacob

 Indiapatents.com

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