Government use / acquisition of patented inventions — Intellectual Property Rights I Notes

Government use / acquisition of patented inventions

When a government fights an epidemic, it cannot wait for licence negotiations. The Patents Act lets the State use — or even buy outright — any patent for a public purpose, paying the patentee afterwards. Necessity trumps monopoly.

Government use and acquisition

Two distinct powers must be kept apart:

A. Government use (ss.100–102)

Under s.100, the Central Government (or anyone authorised by it) may use a patented invention for the purposes of the Government. Key features:

it may be exercised even before the patent is granted;
“purposes of Government” includes supply to any government department and public health programmes;
the patentee is not stopped, but is paid — the terms are agreed or, failing agreement, settled by the High Court (s.103).

So government use is a statutory licence: the patentee keeps the patent but must tolerate the government’s use in return for compensation. It is not infringement.

B. Acquisition (s.102)

Under s.102, the Central Government may, by notification, acquire a patent outright for a public purpose — ownership itself passes to the Government, and compensation is paid to the (former) patentee. This is the stronger power: use borrows the patent, acquisition takes it.

Patents Act, 1970, s.100(1): “at any time after an application for a patent has been filed at the patent office or a patent has been granted, the Central Government and any person authorised in writing by it, may use the invention for the purposes of Government in accordance with the provisions of this Chapter.”

In Simple Terms: The Government can use your patent for public purposes and pay you (government use, s.100), or take over the patent completely by notification and pay you (acquisition, s.102). Either way it is lawful — the remedy is compensation, not an injunction.

🧩 WORKED EXAMPLE — the dispensary problem

Facts. The Central Government uses a company’s patented drug at its public dispensaries without the patentee’s permission. The patentee wants to sue for infringement.

Rule. s.100 — the Government may use a patented invention for the purposes of Government; the patentee’s remedy is compensation (s.103), not an injunction.

Apply. Supplying medicine at public dispensaries is a “purpose of Government”. The use is authorised by s.100, so it is not infringement. The patentee cannot stop it but can claim compensation.

Conclusion. The infringement suit fails; the patentee is entitled only to agreed or court-settled compensation.

flowchart TD
    G["Government and patents"]:::root
    G --> U["Use (s.100) — borrow the patent for public purpose"]:::leaf
    U --> UC["Patentee paid compensation (s.103)"]:::leaf
    G --> AC["Acquisition (s.102) — take over the patent"]:::leaf
    AC --> ACC["Ownership passes to Government; compensation paid"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;

Case Laws

Natco Pharma v Bayer Corporation (2012) — shows the public-interest philosophy that also animates ss.100–102; the acquisition and compensation mechanism itself is governed by ss.100–103 (with compensation under s.103).

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