In addition, Section 48 of India`s Patent Act 1970 prevents third parties from manufacturing, using or selling the product without the consent of the patent holder. No specific status defines the difference between licensing and franchising. However, the two words differ for all practical purposes. The franchisor gives the franchisee everything it needs to manage the franchise (brand, dress, appearance and feel, products, etc.) whereas the licensee generally concedes only its brand or technology, or both, to be used by the licensee in the manufacture of its goods or the provision of services. The licence may include a prohibition for the licensee and the licensee to compete in the jurisdictions in which they operate; the same depends on the terms of the contract. While the Software Patentability Act in India has not yet been reviewed by Indian courts, the Intellectual Property Appellate Board (IPAB) and the Patent Office have issued orders outlining Section 3, letter k. In the Allani/Controller of Patents case (27 March 2013), IPAB confirmed that the person in charge of the processing ordered the rejection of a request for proceedings and a device to access Internet information sources and services. The applicant submitted that the invention shortens the time it takes to access the information sought. While copyright provides adequate protection against software piracy, the protection it offers against non-literal copying of software is too short for the functional aspect of the software to be protected. In accordance with the Indian Patent Office`s guidelines for the draft patent practice and procedures manual, claims on computer programs per se, computer-readable media with programs recorded on them, methods implemented by software without technical effect and technical effect methods, but the absence of hardware support in the specification are not patentable. For example, a person obtains a patent on a specific drug that cures a disease, and no other drug is able to do so. But it does not have enough money and infrastructure to produce, distribute and sell the drug on a mass scale. The patent holder therefore grants an exclusive license to a pharmaceutical company that will manufacture, distribute and sell the drug.
With the exception of patent law, all rights are vested in the licensee. This will result in high revenues and high royalties. It is mandatory to register with the Indian authorities the granting of international licensing rights for patents. Section 69 of the Patent Act 1970 states that if a person is authorized to obtain a patent or participation in a patent by assignment, transmission or application of the law, or is entitled to a patent as a mortgage, licensee or other interest, he must inform the person responsible for the processing of the registration of his property or, if necessary, his interest in the registry. There is no legal provision for the disclosure of international licences in India. However, the licensee has an obligation to the licensee to give him a clear title and not to provide false information. A misrepresentation by the contracting parties renders the contract non-applicable under the Indian Contract Act of 1872 and is punishable by the Indian Penal Code of 1860. The other license name is technology transfer. The licensing agreement must contain all the conditions of licence that benefit the interests of both parties. The fundamental benefits of the patent license are that this clause must help prevent or compensate for a loss mentioned in the agreement.
This approach to licensing is appropriate where the potential licensee does not have the patented invention in practice and is not subject to the requirement to acquire a licence.