India: Patent Pool


Patent pool is an association of two or more companies to cross license their patents in respect to a particular technology. In other words this is an agreement between companies to license or permit one another or any third party to use the patents owned by them.

"The aggregation of intellectual property rights which are the subject of cross-licensing, whether they are transferred directly by patentee to licensee or through some medium, such as a joint venture, set up specifically to administer the patent pool1"

Patent pools are basically originated as most of the technologies involve various patents and owners and it is impossible to adopt such technology without infringing any ones technology or without an effective means to obtain necessary license to use the various patents. Other reason for origination of patent pools was to avoid the competitors suing each other in order to keep out each other from the technology.

Patent pools are generally created to use the technology of others without incurring any cost related to research and development. Patent pools also helps in reducing the cost of licensing patents, risk of infringing patents and saves time in research.

The interest in the patent pool can be seen in the emerging industrial or electronic technologies, examples including airplanes, radios, MPEG-2 audio and video, etc.

Patent pools recently have begun to be the subject of interest in the genomics or biotechnology community also.


Patent pools are contributing an important role in shaping the face of the industry, over the last hundred years. Looking back the first patent pool was formed by Grover, Baker, Singer, and Wheeler & Wilson in 1856 for sewing machine. All of them were fighting with each other in respect of patent infringement. In Albany, during one of the Court proceeding, Orlando B. Potter, a lawyer and president of the Grover and Baker Company, proposed all of them to settle the dispute by allowing each other to use the technology by pooling rather than to run out of profits.

At the beginning of the twentieth century one of the patent pools was formed with the intervention of the US Government. The two major airplane manufacturers at that time the Wright Company and the Curtiss Company indulged in patent wars with each other resulting in non production of airplanes. The US Govt. which was in need of airplanes as the World War I is approaching pressurized both the companies to form a Patent Pool in order to use technology of each other to manufacture airplanes.

In 1924, an organization first-named the Associated Radio Manufacturers, and later the Radio Corporation of America, merged the radio interests of American Marconi, General Electric, American Telephone and Telegraph (AT&T) and Westinghouse, leading to the establishment of standardization of radio parts, airway's frequency locations and television transmission standards2.

Other examples of patent pools formed in the industry are as below. A more recent patent pool was formed in 1997, by the Trustees of Columbia University, Fujitsu Limited, General Instrument Corp., Lucent Technologies Inc., Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corp., Philips Electronics N.V. (Philips), Scientific Atlanta, Inc., and Sony Corp. (Sony) to jointly share royalties from patents that are essential to compliance with the MPEG-2 compression technology standards3.

In 1998, Sony, Philips and Pioneer formed a patent pool for inventions that are essential to comply with certain DVD-Video and DVD-ROM standard specifications yet in another patent pool was formed in 1999, this time by Toshiba Corporation, Hitachi Ltd., Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corporation, Time Warner Inc., and Victor Company of Japan, Ltd. For products manufactured in compliance with the DVDROM and DVD-Video formats4.


Basically patent pool are classified on the fact that how the patents are exploited and by whom. It can be done by cross-license agreement in which common licensing is done by the two partners to third party or which can be done by providing the separate legal entity which becomes the owner of the patents to be licensed.

Moreover patent pool can be divided into two basic parts namely an open pool and a closed pool. There are several patent owners in the closed pool, out of these members one of the member is selected to license the pooled patents on behalf of the all the members to the third party.

While in the open patent pools are usually outsourced to professional management companies, such as a joint venture, set up particularly to manage the patent pool. These management companies handle the upholding of the patent pool by adding new patent owners who meet the criteria, coordinate among the patent owners, and consult license fees with third-party licensees.


As Patent pools impart several benefits to third parties which includes in improvement and establishment of new technologies, reduction in the transaction costs to prepare these new technologies, clearing blocking positions of the patents, and escaping the costly infringement litigation. Particularly, patent pools allows interested third parties "one-stop shopping," for patent licensees to assemble all the necessary patents for using a certain technology from one place rather than procuring licenses from all patent owners individually. On the other hand, sometimes patent pools are considered as a barrier for third parties who are not part of the pool, more particularly in the export manufacturing company, where a domestic player who is not member of a patent pool and cannot enter foreign market without paying royalties. Normally the patent pool controls all the patents at an internationally adopted standard and always asks for huge royalty. As the patent pool is the only source for the license rights, the manufacturing third parties are left with no choice other than to negotiate for higher royalties. For example where the licensee is lowest cost producer but has to pay the same royalties as a higher cost companies in another countries.

Patent pool is indeed a double edged sword for third parties who acquire the technology from the pool. On one side, it facilitates third parties to acquire and use the technology without incurring any significant negotiation costs while dealing with the individual patent owners. While on the other side, sometimes third parties are left with no choice to implement the technology wherein he may have little or no power to negotiate for the royalty due to lack of alternatives than to use that technology.


Major corporations have announced their participation in patent pool. There is a formation of new pools. Patent pools have gained attention recently because of their prominent use in several industries, whether is it for the electronics, or wireless or biotechnology.

In modern wireless systems, there are literally tens of thousands of patents involved in what the consumer experiences as a 'communication system.' Many of these patents make claims on very particular aspects of the overall communications system that are useless without the technology claimed in other patents. As a result, we see heavy use of patent pools in the wireless industry.5

They are, however, receiving greater attention from telecom and high tech industry leaders. Moreover companies related to the biotechnology field are also forming the patent pools which helps in eradicating the problem related to blocking of patents or stacking of licenses.


In India, the concept of patent pools is fairly new and has been always linked to the proposed solution to the affordable health care. The patent pool is being viewed as one of the ways to accumulate number of patents held by different companies, so as to promote development and access to medicines affecting the poor people in the developing countries.

According to the survey conducted by TERI, that after the amendment of Patents Act, 1970, survival for most of the companies with only biogenerics will be difficult. Moreover many are doubtful about good and useful new patents will be part of pool. Indian Patent Act, 1970 does not provides for any provisions for formation or patent pools or any guidelines for the same however the same neither restrain for creation of the same. Many people are interpreting section 102 of the Patents Act as facilitative provision for setting up patent pool which is administered and managed by Government in public interest. One barrier could be anticipated in the way of patent pools i.e. anti competitive policies governed by Competition Act, 2002. It prohibits any kind of license or agreements which are anti-competitive. Patent pools can be anti competitive when the members of the pool agrees for not to grant license to third parties and the same time by fixing pricing and quota.

Recently one Indian generic drug manufacture Aurobindo Pharma Limited and MedChem, joined the Medicines Patent Pool (MPP) for manufacturing of several anti-retroviral medicines. This will facilitate Aurobindo Pharma to have access the patented drugs of that Gilead recently introduced into the pool. Now Aurobindo can manufacture and sell tenofovir in larger number of countries without paying any royalty.


In view of the above, patent pool definitely helps in attaining the great advantages in the development of the new technologies and new products. This in addition helps in saving money and time and moreover helps in providing the greater access to the information for its pool members. Patent pools will be going to help in accessing life saving drugs to the poor people of developing and least developed countries.

In India for the development of commerce industry access to the patented knowledge have become most important. Henceforth the knowledge regarding the concept of patent pooling should be known to every inventor so as to get good progress in the field of technology or pharmaceuticals. Nonetheless it is to be seen that how will these patent pools operate in the context of Indian patent regime or any other legal barrier will come in their way.


1. JOEL I. KLEIN, "CROSS-LICENSING AND ANTITRUST LAW", American Intellectual Property Law Association, May 2, 1997, , last accessed on 07/06/2014

2. Clark, Jeanne, PATENT POOLS: A SOLUTION TO THE PROBLEM OF ACCESS IN BIOTECHNOLOGY PATENTS?, December 5, 2000 , last accessed on 07/06/2014

3. Ibid

4. Ibid

5. Closson Kevin, SPIE Professional October 2009 | Bonus, Webonly content, Patent Pools: Are they right for your business? A Nerac analyst discusses the pros and cons, accessed on 10/06/2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions