Patent law is traditionally viewed as a balanced exchange: inventors disclose their inventions to the public, thereby enriching public technical knowledge, in return for a temporary monopoly granted by the State. This model, while elegantly simple, obscures a complex issue: the secret first inventor problem. This arises when someone has already invented and commercially used the same subject matter, keeping it confidential, before another person files a patent application. This scenario is not merely theoretical; it frequently occurs across various industries such as chemical processes, engineering, pharmaceuticals, and software development. Many businesses innovate quietly, improving processes over time without immediately filing patents, thereby guarding their innovations through confidentiality while building commercial value.
In such cases, if a later applicant successfully patents the same invention, should the earlier user be considered an infringer? Several established patent systems approach this question with nuance, but India does not.
International Approaches to Prior User Rights
In the United States, 35 U.S.C. § 273 provides a statutory defense for prior commercial use. This defense does not invalidate the patent but rather protects the individual who can demonstrate, with clear and convincing evidence, that the subject matter was used commercially before the statutory date. This defense is personal and non-transferable, ensuring that it does not convert the prior user into a patent invalidator. The patent remains enforceable against others, just not against the genuine earlier commercial user.
Additionally, the U.S. legal system acknowledges that trade secret protection and patent policy can coexist. In Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974), the Supreme Court ruled that Ohio trade secret law was not overridden by federal patent law. Though not directly addressing prior user rights, the case underscores that protecting trade secrets does not necessarily conflict with the patent system’s goal of promoting invention and disclosure.
The United Kingdom offers a more direct approach through Section 64 of the Patents Act 1977, which allows a person who, in good faith, engaged in an act that would infringe a patent, or made serious preparations to do so, to continue those actions despite the patent grant. This right is tied to the business context in which the act was done, ensuring continuity without unrestricted expansion.
In Europe, Article 28 of the Unified Patent Court Agreement upholds rights based on prior use or personal possession according to the national law of the relevant Contracting Member State. This indicates that even a unified patent system recognizes the importance of protecting earlier confidential users.
India’s Stance on Patent Infringement
Contrastingly, India’s patent laws are more stringent. Section 48 of the Patents Act, 1970, grants patentees exclusive rights to prevent unauthorized usage of their inventions. While Section 107 allows for patent revocation defenses, these focus on invalidating the patent rather than providing a personal defense for prior users. Indian law lacks a statutory provision equivalent to the U.S. or UK systems that would allow a prior user to continue their activities without infringing on a new patent.
The landmark case Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries, AIR 1982 SC 1444, remains pivotal in Indian patent law, emphasizing the importance of novelty and inventive steps. However, it does not establish a personal defense for prior users.
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Notably, Indian trademark law, under Section 34 of the Trade Marks Act, 1999, allows a prior user to prevail over a registered proprietor, recognizing honest adoption and business continuity. This contrast highlights the lack of similar protection in patent law, where prior users do not benefit from a statutory defense.
The typical argument against such a defense is that patent law rewards disclosure, whereas secrecy is a user’s choice. However, a prior user defense does not undermine disclosure but rather prevents unfair retrospective penalties. The patentee retains monopoly rights against others, and the public still gains from the disclosure. The defense simply protects those who can prove independent, prior commercial use.
This matter is crucial for India, a manufacturing hub where innovation often occurs discreetly in various settings. Many innovators lack resources or choose confidentiality to protect commercial advantages. Treating all such innovators as potential infringers is both harsh and unrealistic.
India doesn’t need weaker patents, but smarter ones. A limited prior user defense could require proof of independent development, good faith, commercial use, or serious preparation before the priority date, alongside other conditions to ensure continuity without promoting piracy.
In essence, a prior user defense is not anti-patent but a necessary fairness correction. It acknowledges that not all innovation is immediately patentable and that honest, independent commercial use should not be penalized.
About the author: Sidhartha Das is a Partner at Vera Lex. Disclaimer: Opinions in this article are those of the author(s) and do not necessarily reflect the views of Bar & Bench.
