The Indian Ministry of Commerce and Industry, through the
Department of Industrial Policy and Promotion (DIPP), has published
a discussion paper on Standard Essential Patents (SEP) and their
availability on fair, reasonable and non-discriminatory (FRAND)
terms. The discussion paper can be accessed here.
An essential or standard essential patent (SEP) is any patent
claiming an invention that must be used to comply with a standard,
that is, a patent that protects a technology that is important to
comply with a standard. All SEP owners are under an obligation to
license their patented technology, setting a standard for the
industry, and such a license must be granted on the FRAND terms. At
present, Indian jurisprudence on the concept of FRAND licensing
practices for SEPs is just starting to gain momentum. The rationale
behind the FRAND terms is that it benefits the inclusion of
patented technology in technical standards along with ensuring that
the SEP holders do not abuse the dominant market position that they
gain from the widespread adoption of a voluntary technical
The objective of the discussion paper is primarily to invite the
views, comments and suggestions from the stakeholders and public in
order to develop a suitable policy framework to define the
obligations of the essential patent holders and their licensees.
The last date to respond to the paper is March 31, 2016. This paper
tries to sensitize stakeholders, organizations and citizens
regarding the need and significance of regulating SEPs and
facilitates their availability on the FRAND terms. It aims at
discussing issues like whether the existing provisions of IPR
legislations, especially the Patents Act, 1970, and anti-trust
legislations are sufficient to address various issues related to
SEPs and their availability on FRAND terms and if this is not
possible, then whether these issues need to be addressed through
appropriate amendments to the IPR related legislations. The paper
contemplates the changes that need to be affected thereon. The
other questions which the paper has dealt with for the
stakeholders' views include what the IPR policy should be of an
Indian standard setting organizations in the developing of
standards for telecommunication sector and other sectors in India
where the SEPs are used. Views are specifically invited for Section
XI of the paper, titled 'Issues for Resolution', apart from
other issues of concern relating to SEPs.
Suggestions are invited on the whether there is a need to
prescribe guidelines on the working and operation of the standard
setting organizations by the Government of India and what all areas
of working should be covered. The paper aims to find out if there
is a need to prescribe guidelines on the fixing of royalties for
the SEPs and defining FRAND terms by the Government, and if not so,
which would be the appropriate authority to issue the guidelines
and what could be the possible FRAND terms. It also questions the
basis on which the royalty rates should be fixed for SEPs, whether
the total payment of royalty for numerous SEPs used in one product
should be capped and if this limit should be fixed by the
Government or a statutory body or left to the discretion of the
parties. The paper then looks into the issue of the practice of
non-disclosure agreements leading to the misuse of the dominant
position and being against the FRAND terms.
Another point of discussion was what the appropriate mode and
remedy for settlement of disputes in SEP matters should be and how
it should be determined whether a patent declared as an SEP
actually is an essential patent, particularly when bouquets of
patents are used in one device. Lastly, it questions whether there
is a need for setting up an independent expert body to determine
the FRAND terms for SEPs and devising a methodology for this
An increasing pervasiveness of standardized technology in
virtually all sectors, especially telecommunications, whether in
India or worldwide, has led to issues associated with SEPs becoming
increasingly disturbed. The 28-page discussion paper deliberates
upon such issues, particularly in the telecom sector, and seeks the
views and comments of all the stakeholders on all such issues. By
initiating deliberations on this issue, DIPP aims at moving forward
to achieve national development and technological goals by
protecting the private intellectual property rights and securing
the public interest along the way.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This article enunciates the recent, much awaited, and landmark judgment delivered on September 16, 2016 by Hon'ble Delhi High Court throwing light on the important provisions of the Copyright Act, 1962.
The Patents Act 1970, along with the Patents Rules 1972, came into force on 20th April 1972, replacing the Indian Patents and Designs Act 1911. The Patents Act was largely based on the recommendations of the Ayyangar Committee Report headed by Justice N. Rajagopala Ayyangar. One of the recommendations was the allowance of only process patents with regard to inventions relating to drugs, medicines, food and chemicals.
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).