Section 140 of the Patents Act, 1970
Avoidance of certain restrictive conditions
Makes certain restrictive conditions in patent sale, lease and licence contracts void and unenforceable in India.
Official legal text
The verbatim statutory text of this provision is reproduced from the official source and checked by our legal reviewer before it is published here. Until that check is complete for this page, read the exact wording directly from the official source linked below — it is the only version that governs.
Nothing here replaces the statute. The official wording of the provision, together with any Gazette notification that applies to it, governs. This page only explains that material in ordinary language.
What this section says, in plain language
A patent gives its owner a strong bargaining position, and section 140 limits how far that position may be pushed in a contract. It declares void certain conditions in a contract for the sale or lease of a patented article, or in a licence to make, use or work a patented article or process. The conditions struck down are the ones that use the patent to control markets beyond the patent itself.
The main targets are familiar. A condition requiring the buyer, lessee or licensee to acquire from the seller, lessor or licensor, or from their nominee, any article other than the patented article is void. So is a condition prohibiting the buyer or licensee from using articles supplied by anyone else, or from using any process or article not protected by the patent. Conditions restricting the right to use an article other than the patented article are also caught. The 2002 amendment made clear that exclusive grant back of improvements, prevention of challenges to the validity of the patent, and coercive package licensing fall on the wrong side of the line.
Two carve outs keep the section commercially sensible. A condition may survive where the seller or lessor proves that, at the time of the contract, the other party had the option of buying or leasing the article on reasonable terms without that condition, and was entitled to be relieved of the condition on giving notice and paying compensation. Separately, a condition reserving to the lessor or licensor the right to supply new parts of the patented article needed for repair is not struck down, because that is about keeping the article working rather than about tying up a separate market.
The section has teeth in litigation as well. In proceedings for infringement of a patent, it is a defence to prove that at the time of the infringement a contract relating to the patent contained a condition declared void by this section. The same commercial behaviour can also feed into other parts of the Act, for example when the working of a patented invention and the terms imposed by a patentee are examined in a compulsory licence application under section 84.
For Indian licensees, especially startups and MSMEs negotiating with larger technology owners, this is one of the few places where the Act intervenes directly in private bargaining. Clauses of this kind are common in draft agreements, and the fact that they are unenforceable in India does not stop them from being proposed.
Why this section matters
Licensees, distributors, buyers of patented equipment, and patentees drafting Indian licence and supply agreements.
At the negotiation and drafting stage, and again when a dispute arises about supply, tying or a challenge to validity.
Statutory invalidity of listed restrictive conditions and a defence in infringement proceedings where such a condition was in force.
A licensor may rely on a clause that cannot be enforced in India, and a licensee may accept restrictions it never had to accept.
How it works in practice
A tying clause in a packaging machine licence falls apart
Deccan Foods Pvt Ltd of Hyderabad licenses a patented sealing head for its packaging line from an equipment maker. The licence says Deccan must buy all sealing film, cleaning solvent and spare rollers exclusively from the licensor, none of which is covered by the patent, and adds that Deccan will never question the validity of the patent. Two years later a Coimbatore supplier offers equivalent film at a much lower price. Deccan switches, and the licensor threatens to terminate and sue. On advice, Deccan points out that a condition requiring it to buy unpatented articles from the licensor is void under section 140, as is the clause barring it from challenging validity. The licensor argues that it also supplies replacement cutting blades for repair, and that this part of the arrangement is protected. The parties renegotiate: repair parts supply stays, exclusive purchase of film and solvent goes, and the no challenge clause is dropped. Deccan saves a substantial recurring cost without losing the licence.
Simplified illustration only. Actual legal outcomes depend on the facts.
Key points to remember
- Conditions tying the purchase of unpatented articles to a patent licence or sale are void.
- Conditions barring use of articles or processes supplied by third parties are void.
- Exclusive grant back of improvements, no challenge clauses and coercive package licensing are within the prohibition.
- A condition may survive if the buyer genuinely had the option of contracting without it on reasonable terms and could be relieved of it on notice.
- A reservation of the right to supply new parts needed for repair of the patented article is not struck down.
- It is a defence in an infringement suit that a contract containing a void condition was in force at the time of infringement.
Common mistakes and misunderstandings
- Assuming a clause is enforceable because both sides signed it. This section makes the listed conditions void regardless of consent.
- Reading the section as banning all restrictions in patent licences. Field of use, territory and quality terms are not what it targets.
- Forgetting the repair parts carve out, which is often the licensor's legitimate interest in the same contract.
- Overlooking the infringement defence, which can change the balance of a dispute where the patentee's own contract contained a void condition.
- Treating the issue as purely contractual. Restrictive behaviour can also surface in compulsory licence proceedings under section 84.
Connected provisions
Indian patent law works in two layers. The Act carries the substance and the Rules carry the machinery. Because the layers are amended by different processes and at different times, they are presented in separate blocks instead of being merged into one description.
Forms, deadlines and fees
This site does not carry a fee table. The First Schedule to the Patents Rules is the source, the rates vary with the applicant's category and with the mode of filing, and a figure quoted second-hand goes out of date quietly. How Indian patent fees work.
Related judgments
No judgment summaries appear here yet. Our process requires a legal review of each case note before publication, covering the citation, the court and the point actually decided. Until a note for this provision has passed that check, the section stays empty rather than carrying unverified material. How case notes are prepared.
Questions people ask about Section 140
Which patent licence clauses are void under Indian law?
Section 140 strikes at conditions that use the patent to control other markets: requiring the buyer or licensee to purchase unpatented articles from the patentee or a nominee, prohibiting use of articles or processes obtained from anyone else, and restricting the right to use articles other than the patented one. The 2002 amendment also covers exclusive grant back of improvements, clauses preventing a challenge to the validity of the patent, and coercive package licensing. These conditions are void even if the contract was freely negotiated.
Can a patent licence stop me from challenging the patent?
A clause preventing the licensee from challenging the validity of the patent falls within what section 140 makes void, so it cannot be enforced in India. That does not mean challenging your licensor is a costless step commercially, since the relationship may not survive it. But the legal position is that the right to test whether a monopoly should exist at all is not something a patentee can contract away from the party best placed to test it.
Are all restrictions in a patent licence illegal in India?
No, and it is important not to over read the section. Ordinary commercial terms such as field of use limits, territorial scope, quantity, quality standards, royalty structure and confidentiality are not targeted. What the section attacks is the use of a patent to force the acquisition of unpatented goods, to shut out third party supply, or to insulate the patent from challenge. A properly drafted Indian licence can be both protective of the patentee and compliant.
What is the repair parts exception under section 140?
A condition reserving to the lessor or licensor the right to supply new parts of the patented article that are needed to put or keep it in repair is not struck down. The reasoning is practical. Supplying genuine components so a patented machine keeps working properly is different from forcing a customer to buy unrelated consumables. Where a contract mixes both, the legitimate repair supply term can stand while the tying terms fall away.
Does a void clause help me if I am sued for infringement?
It can. Section 140 provides that in proceedings for infringement of a patent it is a defence to prove that at the time of the infringement there was in force a contract relating to the patent that contained a condition declared void by the section. This is a substantial point in disputes between a patentee and a former licensee or distributor, and it is one reason careful patentees clean up their Indian agreements before starting enforcement.
Is your patent licence full of unenforceable clauses?
MYCrave Consultancy reviews Indian patent licences and supply contracts against section 140 before you sign or enforce them.
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