Patents Act, 1970
(1) Notwithstanding anything contained in this Act, 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 authorized in writing by it may use the invention for the purposes of government in accordance with the provisions of this chapter.
(2) Where an invention has, before the priority date of the relevant claim of the complete specification, been duly recorded in a document, or tested or tried, by or on behalf of the government or a government undertaking, otherwise than in consequence of the communication of the invention directly or indirectly, by the patentee or by a person from whom he derives title, any use of the invention by the Central Government or any person authorized in writing by it for the purposes of government may be made free of any royalty or other remuneration to the patentee.
(3) If and so far as the invention has not been so recorded or tried or tested as aforesaid, any use of the invention made by the Central Government of any person authorized by it under sub-section (1), at any time after the acceptance of the complete specification in respect of the patent or in consequence of any such communication as aforesaid, shall be made upon terms as may be agreed upon either before or after the use, between the Central Government or any person authorized under sub-section (1) and the patentee, or, as may in default of agreement be determined by the High Court on a reference under section 103:
PROVIDED that in the case of any such use of any patent in respect of any medicine or drug or article of food the royalty and other remuneration shall in no case exceed four per cent of the net ex-factory sale price in bulk of the patented article (exclusive of taxes levied under any law for the time being in force and any commissions payable) determined in such manner as may be prescribed.
(4) The authorization by the Central Government in respect of an invention may be given under this section, either before or after the patent is granted and either before or after the acts in respect of which such authorization is given or done, and may be given to any person, whether or not he is authorized directly or indirectly by the applicant or the patentee to make, use, exercise or vend the invention or import the machine, apparatus or other article or medicine or drug covered by such patent.
(5) Where an invention has been used by or with the authority of the Central Government for the purposes of government under this section, then unless it appears to the government that it would be contrary to the public interest so to do, the government shall notify the patentee as soon as practicable of the fact and furnish him with such information as to the extent of the use of the invention as he may, from time to time, reasonably require; and where the invention has been for the purposes of a government undertaking, the Central Government may call for such information as may be necessary for this purpose from such undertaking.
(6) The right to make, use, exercise and vend an invention for the purposes of government under sub-section (1) shall include the right to sell the goods which have been made in exercise of that right, and a purchaser of goods so sold, and a person claiming through him, shall have the power to deal with the goods as if the Central Government or the person authorized under sub-section (1) were the patentee of the invention.
(7) Where in respect of a patent which has been the subject of an authorization under this section, there is an exclusive licensee as is referred to in sub-section (3) of section (3) of section 101, or where such patent has been assigned to the patentee in consideration of royalties or other benefits determined by reference to the use of the invention (including payments by way of minimum royalty), the notice directed to be given under sub-section (5) shall also be given to such exclusive licensee or assignor, as the case may be, and the reference to the patentee in sub-section (3) shall be deemed to include a reference to such assignor or exclusive licensee.