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Understanding The Concept Of Licensing Under Indian Copyright Law

Transfer of interest in copyright is known as a license in copyright. Whenever a license is given it implies that another person can use the copyright involved, this is a right given to another person to use it with certain restrictions. It can be granted both for the present and future copyrighted work.

In India, copyright act licensing can be classified into two types, Voluntary Licensing and Compulsory licensing and sections 30 and 31 of the Indian Copyright Act respectively talk about it. Voluntary Licensing is the license that is granted by the copyright owner to any person, which gives him the right to use the work exclusively. Voluntary licensing can be exclusive, non-exclusive, co-exclusive, sole license, and implied license.

Compulsory license is a statutory license that gives the liberty to use the copyrighted work without permission from the owner of the copyright. It is an exclusive right to do an activity related to the copyrighted work. This is practiced whenever a copyrighted work is withheld from the public domain.
This article specifically deals with the procedure and types of licensing under copyright law.

Licensing Under Copyright Law

Granting of a license doesn't mean transfer of ownership, it only grants the right to use the property. After the completion of the period of the license any act done thereafter shall come under the infringement. The licensee shall use the other rights that shall come under it only to an extent which is mentioned in the agreement. “Section 30-32B of the Copyright Act, are concerned with provisions related to licensing. Section 30 of the Copyright Act, 1957 empowers the owner of copyright to grant an interest in the right by a license in writing.” It can also be granted in the future work and will start existing once it comes into existence. A license shall be granted by the right holder to any person who is mentioned in the contract. The contract of the license comes with the duration and all the other details of the license.

Transfer of interest in copyright is known as license in copyright. Whenever a license is given it implies that the copyright involved can be used by another person, this is a right given to another person to use it with certain restrictions. It can be granted both for the present and future copyrighted work. “A licensee can use the copyrighted work without any claim of infringement or unauthorized use being brought by the owner of the copyright against the licensee.”

In India, copyright act licensing can be classified into two types, Voluntary Licensing and Compulsory licensing and section 30 and 31 of the Indian Copyright Act respectively talk about it. Voluntary Licensing is the license that is granted by the copyright owner to any person which gives him right to use the work in an exclusive manner. Voluntary licensing can be exclusive, non-exclusive, co-exclusive, sole license and implied license.

Compulsory license is an statutory license which gives the liberty to use the copyrighted work without the permission from the owner of the copyright. It is an exclusive right to do an act related to the copyrighted work. This is practiced whenever a copyrighted work is withheld from the public domain.

The main motive of copyright is to create balance between the society and the copyright industry. It also take care that the in order to bring the work in public no one gets involved in malpractices and this is where law comes into action to create a perfect balance so that neither the entrepreneurs nor the legitimate returns on investment gets affected. Because of this reason licensing under Indian Copyright law is classified into two parts which is compulsory and voluntary licensing.

A license agreement should contain some specific details such as identification of the work of the author and the license that has been granted for that work, secondly, the time period mentioned in the license agreement for the duration of the license, thirdly, the royalty amount that the copyright owner shall get and lastly the terms and conditions related to the revision and the grounds for termination of the license.

“Details about the present or future copyright work where the licensee of a future work dies before such work comes into existence then his legal representatives will be entitled to the benefit of the license, provided there is nothing contrary to it.”

There are two important things that needs to keep in mind, one is that the license should be in a written form and it should be signed by the copyright owner or any other agent authorized by him.

Licenses Can Be Exclusive And Non-Exclusive

License can be of two types i.e. exclusive and non-exclusive. In the exclusive license, the licensee shall get exclusive rights and it will exclude all the other people involved. It will also involve the exclusion of the copyright owner.

In the non-exclusive license, the copyright owner doesn't need to surrender his rights and keeps including his rights even after granting of the license to the other person. It depends on the copyright owner to decide the time period of the owner , it can be either for a limited or indefinite period. There is also a rule that the publisher is allowed to sell the unsold copies to sell after the expiry of the license period if the works were published in the license period.

This is also subject to the license agreement between the licensor and the licensee. The other form of license is the implied licenses which depend on the circumstances or by the course of conduct for instance, a person sends a letter to the editor of any newspaper, magazine or ant news channel then they have the right to use and publish it in return of some kind of royalties.

Growth And Development Of Compulsory Licensing

Compulsory Licensing is when a state authority and not the actual holder of the patent allows a third party to use a patent or patent-protected innovation without the consent of the patent holder but for a remuneration. This exists in the Trade-Related Aspects of Intellectual Property (TRIPs) as well since 1995 however the origin of this concept can be seen as early as the Congress of Vienna for Patent Reform 1873, internationally.

The concept began much before that and the earliest mention of the compulsory licensing can be seen in The English Statutes of Monopolies 1623 from there on it has been a matter of deliberation and even debate over many conventions. The problem that can arise is that the whole agenda of patent law is to protect the work of the author from any form of abuse and give the patent holder the monopoly over the rights of the creation.

However, the way patent rights work can be difficult for sustainability and this is because with the patent rights the price of the product goes higher and the quantity of the production goes lower. Keeping this is mind, many times such products (patents) are created which are essential to human life. These kinds of patents are mostly in the field of medicine and pharmaceuticals where the government licenses the patent to other competitors in the field in order to level the pricing and make purchasing more flexible.

This is looked as a necessary evil by many analysts of Intellectual Property law and Patent law in specific because in compulsory licensing the exclusive right of the patent holder to transfer any sort of licensee rights onto third parties is diluted. However, in my personal opinion the fact that the patent holder gets a remuneration from the government is a fair measure to honour his/her rights.

History Of Compulsory Licensing In India

India is a signatory to the TRIPs agreement 1994 however the development of the compulsory licensing is relatively new to India jurisprudence as such. The first case pertaining to the concept came up in India only in 2012 which was the Bayer v. Natco case.

The concept of compulsory licensing is addressed both at the national and international level for India. The national scope is elucidated under the Indian Patents Act, 1970 (Patents Act) and international is abovementioned TRIPs agreement. In deciding cases the Patents Act will be the deciding statute and under that section 84-92 in Chapter XVI govern compulsory licensing.

From this the Controller General of India can permit a compulsory licensing suo motu if he/she is satisfied that there is sufficient public cause for an action like this. These provisions are very much online with the international standard of compulsory licensing and this can be observed in the two further discussed.

International (TRIPs):

All World Trade Organization members negotiated and brought the TRIPs Agreement to life and under Article 31 of that Agreement the member states can issue a “non-voluntary” right to third parties in cases of national emergency and extreme urgency without the consent of the patent holder, essentially a compulsory license as has come to be known popularly known. The tenets of Article 31 initially were applicable only to the domestic sphere of each country but the Doha Declaration, 2001 erased that in order for a more pro-help and pro-cure approach to come into force.

A huge debate spurred during the South Africa HIV/AIDS epidemic. It was the battle between corporation and patent rights on the one hand versus humans and human rights on the other hand. Close to 12 percent of the population of South Africa was hit by this epidemic the scale of this problem was absolutely unprecedented and without a speck of doubt this was a national emergency, it very well could have been treated as a international emergency and in many ways eventually it was.

The big Pharma company on the other side was GloaxoSmithKline (GSK) and they were pushing their patent rights and the scale of the expenditure was not something that South Africa could afford. In fact the medication was costing $ 10,000 per person and if only 700.000 people were to be attempted to be treated as was done in Brazil, the whole operation would cost $ 7 billion which at that time was 27 times the medicine budget of the country.
In the end it was observed that by using the measures stated in the TRIPs agreement the country was completely entitled to do all things necessary to prevent this public health emergency.

The European Trade Commissioner, Pascal Lamy, in September 2000 noted that:
the TRIPS Agreement provides the necessary flexibility to protect public health concerns, including through recourse, under certain conditions, to compulsory licensing. While the Commission attaches great importance to all WTO members adopting intellectual property legislation which is fully compatible with their international obligations, it does not push countries to adopt legislation that is more stringent than the TRIPs Agreement requires.

When assignment is given to another person there is full transfer of ownership rights to the other person. Once the assignment is given the owner of the copyright has no control over the uses of that copyrighted work. At the same time in the licensing the copyright owner gives access to another person to use his/her work and at the same time other people be it one or the public can benefit from his work.

The owner of the copyright while giving license can maintain his rights while allowing other people to use the same. Usually, license is more preferred over the assignment because it allows to maintain his/her rights and the extend to which the copyrighted work can be used.

The main significance is that it allows the work that has been withheld from the public to come under its domain where public can benefit from this work in various ways. It is also efficient when it comes to the cases related to the unpublished and orphan works. Compulsory licensing is a way to create balance between the rights of the creator and the right of the public to benefit from that work by fair means.

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