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Author
Kristina Mulina

Assistant to Patent Attorney

11 November 2020

Rights and Obligations of Patent Holder

A patent holder is a key figure in patent law, but not all patent holders, having received a document of title for this or that subject matter of patent rights, know their rights and obligations. In this regard, this article will explain the rights and obligations of the patent holder. First, let us define who the patent holder is.

A patent holder is a natural person or a legal entity, in whose name a state document of title is issued for a number of items of intellectual property, namely, an invention, a utility model or a design invention. Thus, the patent holder, or patentee is the owner of a patent having exclusive rights to the item of intellectual property. The rights of the patent holder are reflected in the Civil Code of the Russian Federation (hereinafter the Civil Code). Thus, in accordance with paragraph 1 of Article 1358 of the Civil Code, “The patent holder shall have the exclusive right to use the invention, utility model or design invention in accordance with Article 1229 of this Code by any means not contrary to law (exclusive right to an invention, utility model or design invention), including those provided for in paragraph 2 of this Article”.

The patent holder may exercise discretionary control over exclusive right to an invention, utility model or a design invention. Thus, the key right of the patent holder is the exclusive right to use the invention, utility model or design invention, i.e., only the patent holder may use the item, and all third parties are obliged to refrain from using this item without the permission of the right holder.

At the same time, the exclusive rights of the patent holder are not infinite. Thus, for example, the boundaries of the exclusive rights of a patent holder are defined by the notion of “use” and are clearly interpreted in subparagraphs 2 and 3, Article 1358 of the Civil Code of the Russian Federation: the use of an invention, utility model or design invention is considered, in particular: import into the territory of the Russian Federation, manufacture, application, offer to sell, sale, other commercialization or storage for these purposes of the product in which the invention or utility model is used or the product in which the design invention is used. As well as performing these actions with respect to a product obtained directly by a patented method; with respect to a device, the functioning (operation) of which, in accordance with its intended use, is automatically performed by a patented method; with respect to a product intended for its application in accordance with the intended use indicated in the claim; performing a method in which the invention is used, including by applying this method. An invention shall be deemed to have been used in a product or process if the product contains, and the process uses, each feature of the invention set forth in an independent claim of the patent claim or a feature equivalent to it and became known as such in the field of technology before the priority date of the invention. If at least one feature of a device or process is missing, the exclusive right shall not be deemed infringed.

Thus, the right holder has the right to use the patented intellectual property at his or her discretion, carry out all kinds of technological and commercial realization of the patented property: to produce, distribute, sell or use it for the production of other goods, as well as prohibit third parties to use the patented invention, utility model or design invention.

Another right granted to the patent holder is the right to grant exclusive and non-exclusive licenses to third parties. In the case of an exclusive license, licensee shall be granted the exclusive right to use the patent to the extent stipulated in the contract, with licensor retaining the right to use it to the extent not transferred to licensee, and in the case of a non-exclusive license, licensor granting licensee the right to use the patent, retains all the rights confirmed by this patent, including the right to grant licenses to third parties. If a patented invention is used by third parties without the permission of the patentee, the latter shall have the right to demand the cessation of infringement, and may file a lawsuit in court to prohibit the actions of a natural or legal person, guilty of patent infringement, and to compensate the patentee for the losses incurred.

The patent holder shall also have the right to assign or alienate the received patent to any person under a patent cession agreement, in full. This contract shall be registered with the Patent Office.

If the holders of a patent for an invention, utility model or a design invention are two or more persons, the relationship of use of the patented item shall be determined by an agreement between them. And in the absence of such agreement, each patent holder may use the protected item at its own discretion, but the patent holder may not grant a license or assign a patent to another person without the consent of the other owners.

In addition to the above rights, the patent holder must comply with a number of obligations, which primarily include payment of patent duties and use of the patents received. In accordance with the Regulation on Patent Taxes, the patent holder must pay annual maintenance fees, which are paid for the full year of the patent's validity. If these fees are not paid, the patent shall be terminated prematurely. The patent holder shall also be required to pay other fees, if necessary, such as, for example, fees for the extension of the term of validity of an exclusive right, for the restoration of the patent, for the entry of information on amendments to the state registers, for the registration of the license agreement, the contract on alienation of the exclusive right, etc.

It is also the responsibility of the patent holder to use the patent by the patent holder itself and/or by third parties under a license from the patent holder. In accordance with paragraph 1 of Article 1362 The Civil Code of the Russian Federation, if an invention or a design invention is not used or is insufficiently used by the patent owner within four years from the date of grant of the patent, and a utility model - within three years from the date of grant of the patent, which leads to an insufficient supply of the relevant goods, works or services on the market, any person wishing and willing to use such an invention, a utility model or a design invention, if the patent holder refuses to enter into a license agreement with this person on the terms and conditions corresponding to the established practice, shall have the right to file a lawsuit with the patent holder for granting a compulsory simple (non-exclusive) license to use the invention, utility model or design invention in the Russian Federation. Thus, the patent holder's failure to comply with the obligations to use the patent within the established time limits may lead to adverse consequences for the patent holder in the form of the granting of a compulsory license to such subject matter of patent rights to interested parties.

The exclusive right of the patentee is also restricted by the so-called right of premature use on the basis of paragraph 1, Article 1361 of the Civil Code of the Russian Federation. Any natural or legal person who, prior to the priority date, conscientiously used on the territory of the Russian Federation an identical solution or a solution created independently of the author and differing from the invention only by equivalent features, or made the preparations necessary for that, shall retain the right to further use the identical solution free of charge without expanding the scope of such use.

One more case, when the use of the items of patent law may be allowed without the consent of the patent holder is governed by Article 1360 of the Civil Code. If the said item affects the national security interests, then in this case the use of the items of patent law may be allowed by the Government of the Russian Federation without the consent of the patent holder. In this case, the patent holder shall be paid a reasonable compensation.

As we can see, the exclusive rights assigned to the patent holders, as well as cases of limitation of exclusive rights are clearly described in the Civil Code. In addition to the list of rights, patent holders have certain obligations, described above, to which they have to honor.

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