The Patent Bargain: Disclosure as Consideration

1As a patent is granted by the state to an inventor, it is often debated that there ought to be some consideration for the grant of a patent. The consideration for the grant could be the establishment of a new industry, the disclosure of technology pertaining to the invention, training of apprentices, working of the invention for the benefit of the public or the development of science and technology caused by the invention. Let us consider them in detail. The invention being instrumental in establishing a new industry cannot normally be the consideration for a grant as it happens only in exceptional cases.

2Some have compared the grant of a patent in return for the disclosure of technical information to a Faustian pact. (Lionel Bently and Brad Sherman, Intellectual Property Law, p 309.) Patents have also been viewed as incomplete contracts. (Jay P Kesan and Marc Banik, 'Patents as Incomplete Contracts: Aligning Incentives for R&D Investment with Incentives to disclose Prior Art', Washington University Journal of Law and Policy, 2002, vol 2, no 23.) A patent has been defined as an agreement between the inventor and the state (representing the general public) where the consideration for the grant is the full public disclosure of the invention. Whether such disclosure would qualify for consideration is a debatable matter as in some cases the technology, especially for pharmaceutical substances, can be ascertained when the invention is published or commercialised, without any reference to the disclosure. It is an accepted fact that the obligation to fully describe an invention is with the ultimate object of allowing the public to enjoy the benefit of the invention after the patent has expired. (American Cyanamid Company (Dann's) Patent (1971) RPC 425, p 441.) The difficulty in regarding the working of an invention as the consideration for grant of a patent, as it used to be in the early days of the patent system, is that in many cases inventions lapse as not being workable. (Terrell on the Law of Patents, fifteenth edn, 2000, p 93.)

3It could also be argued that the consideration for the grant of patent is the development of science and technology caused by the invention. It is granted as a means to encourage persons to devote their effort for the development of science and technology which would ultimately benefit the state that grants the patent. What, then, could be consideration for the grant? The British Patents Act 1949 throws some light, albeit inconclusively, on this issue. Before the British Patents Act 1949 came into force, the lack of consideration was a separate ground for the revocation of a grant under the common law. This was, however, omitted by the 1949 Act. The inference must be that such grounds no longer exist as objections to the validity of a patent. (American Cyanamid Company (Dann's) Patent (1971) RPC 425, p 445.)

4Of the above mentioned views, the one which aligns well with Indian law is the view which regards the disclosure of the invention as the consideration for the grant. (Patents Act 1970, s 10(4) requires the complete specification to describe the invention and to disclose the best method of performing the invention. Non-compliance with the above requirement can be a ground for opposition [s 25(1)(g)] and revocation [s 64(1)(h)] under the Act.) The disclosure made in the patent is characterised as the quid pro quo of patent monopoly. 'Quid' is the knowledge disclosed to the public and 'quo' is the monopoly granted for the term of the patent. (Raj Prakash v Mangat Ram Choudhury AIR 1978 Del 1, (1977) Raj LR 440 (DB).) The element of disclosure plays a key role for the inventor would not disclose his invention and would have kept it as a trade secret in the absence of the promise of a grant.