Patent Licensing in India: Agreement and Recordal
Patent licensing lets the owner of an Indian patent permit another business to make, use or sell the invention, usually for a royalty. The Patents Act requires the deal to be in writing, and the licence can be recorded at the Patent Office. A clear agreement keeps both sides out of dispute.
What it is
Patent licensing is a contract in which the patentee, called the licensor, lets another party, the licensee, use the patented invention on agreed terms. The patent stays with the owner. The licensee gets only the permissions written into the licence: which products, which territory, how long and for what payment.
Section 68 of the Patents Act 1970 says an assignment, licence or similar document is not valid unless it is in writing and the agreement is reduced to a document embodying all its terms. Section 69 provides for registering the title or interest at the Patent Office, which is done on Form 16. We draft the agreement for your review, coordinate with your advocate and file the recordal.
Who it applies to
Patent owners who want royalty income
You hold an Indian patent but have no factory. A licence lets another company manufacture while you earn a royalty.
Manufacturers who need a patented technology
Say a Faridabad engineering firm wants a patented casting process instead of spending a year designing around it. A licence gives lawful access, on set terms, from day one.
Startups and research bodies
A university lab or a founder-led startup with a granted patent can license it out to move the technology to market faster.
Why it matters
The deal is enforceable
Section 68 makes a written document essential. Vague emails or handshake promises are exactly what the section is meant to rule out.
The record is public
Recording the interest under section 69 puts it on the patent register, so a later buyer can see that the licence exists.
Exclusive licensees can sue
Under section 109, an exclusive licensee has the right to take proceedings against infringement. The agreement should say who bears the cost and who controls the case.
Documents required
About the patent
- Patent number and granted specification
- Proof of ownership and any earlier assignment
- Renewal fee receipts
About the parties
- Company or LLP incorporation papers, or ID for individuals
- Authorised signatory details and board approval
- Existing licences or encumbrances on the patent
About the deal
- Term sheet: territory, field, exclusivity and royalty
- Quality, sub-licence and improvement terms
- Draft or executed agreement for recordal
How it works
Confirm what you can license
We check the patent is alive, who owns it and whether any earlier licence or assignment is on record. A licence cannot grant more than the owner holds.
Agree the commercial terms
We turn the term sheet into clear clauses: field of use, territory, exclusivity, royalty, minimum payment, audit, term and termination.
Draft the agreement and get it signed
We prepare the licence for both parties to review. Where legal advice on enforceability is needed, a practising advocate gives and signs it.
Record the licence on the register
We prepare Form 16 with the signed agreement and file it under section 69, then track the entry on the register.
Timelines
Drafting the agreement
A standard licence takes about one to two weeks once the terms are settled. Negotiation is the slow part.
Form 27 reporting
Patentees and licensees file Form 27 once for every block of three financial years, due by 30 September of the first year of the block.
Compulsory licence risk
After three years from the grant of the patent, any interested person can apply for a compulsory licence under section 84 if the invention is not worked in India.
Exclusive, sole and non-exclusive licences compared
The licence type decides who may use the invention.
| Type | Licensor can license others? | Licensor can use it? |
|---|---|---|
| Exclusive | No | Only if the agreement says so |
| Sole | No | Yes |
| Non-exclusive | Yes | Yes |
In practice, “exclusive” and “sole” get used loosely, so define both in the agreement. If you want the licensee to be able to sue, say so clearly and tie it to section 109.
What happens if the licence is not in writing
The deal may be invalid
Section 68 makes a licence invalid unless it is in writing and reduced to a document with all the terms.
No public record
Without recordal, third parties cannot see the licence on the register, which can create disputes with later buyers or other licensees.
Reporting duties missed
Failing to file a required Form 27 can attract a fine of up to ten lakh rupees or imprisonment up to six months, or both, under section 122.
Frequently asked questions
Does a patent licence have to be in writing?
Yes. Section 68 of the Patents Act says a licence is not valid unless it is in writing and the agreement is reduced to a document embodying all the terms and conditions. A signed agreement is therefore the starting point. We draft it for your review so each term, from royalty to termination, is clear and nothing relies on a verbal promise.
What is Form 16 and when is it used?
Form 16 is the application to register a title or interest in a patent, filed under section 69 and the rules made under it. A licence is one such interest. We prepare the form with the signed agreement and file it on the Patent Office portal. Recording it puts the deal on the register for third parties to see.
How much does recording a licence cost?
The Form 16 fee depends on who files. Under the fee schedule, e-filing is ₹1,600 for a natural person or startup and ₹8,000 for a large entity, with a slightly higher fee for paper filing. We confirm the exact figure for your case before filing. Our own fee is quoted separately and upfront.
Can I license my patent to more than one company?
Yes, if the licence is non-exclusive or you have kept that right in the agreement. An exclusive licence stops you licensing others, and you may be barred from using the patent yourself. Decide the model early, because it drives the royalty. We help you weigh the options and write the clause clearly.
What is a compulsory licence?
It is a licence granted without the patentee’s consent. Under section 84, after three years from the grant of the patent, any interested person can apply if the invention is not worked in India, among other grounds. A properly worked voluntary licence helps you show the invention is available. We can build that point into your plan.
Who files Form 27 when there is a licensee?
Both the patentee and every licensee in India are required to file Form 27, and one form can cover several patents. It is now filed once for every three financial years, by 30 September of the first year of the block. Default can attract a fine of up to ten lakh rupees. We track the date for you.
Can a licensee sue for infringement?
An exclusive licensee can, under section 109 of the Patents Act, take proceedings against infringement. The agreement should settle who pays and who directs the case. A practising advocate files and argues the suit. We prepare the paperwork and coordinate the evidence so your rights are ready to use.
Are cross-border patent licences different?
They add currency, tax and FEMA points on top of the Patents Act rules, so the agreement needs extra care on royalty payments and governing law. We coordinate with your tax and legal advisers on those points. Begin with an Indian patent that is alive and clearly owned.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
For orientation, the Patent Office e-filing fee for Form 16 is ₹1,600 for a natural person or startup and ₹8,000 for a large entity. Form 27 carries no fee.
Ready to begin?
Tell us about the patent and the other party, and we will draft the licence and file the recordal.