Rule 100 of the Patents Rules, 2003
Application under section 88(4)
Explains how a compulsory licensee applies to the Controller to revise licence terms that have proved too onerous under section 88(4).
Official legal text
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What this rule requires, step by step
When the Controller grants a compulsory licence, he also fixes the terms on which the licensee may use the invention. Those terms include the royalty the licensee must pay the patentee, the scope of what may be made or sold, and how long the licence lasts. They are settled before the licensee has actually run the business, so they rest partly on estimates of cost, demand and price.
Section 88(4) recognises that estimates can go wrong. It allows a person holding a licence whose terms were fixed by the Controller to come back and ask for those terms to be revised. Two conditions guard the door. The licensee must have worked the invention on a commercial scale for at least twelve months, so the request is based on real trading experience rather than a forecast. And the ground is narrow: the settled terms must have turned out to be more onerous than originally expected, with the result that the licensee cannot work the invention except at a loss. The Act also says such an application will not be entertained a second time, so a licensee gets one attempt.
Rule 100 is the procedural half of that right. It requires the request to be made on the form prescribed in the Second Schedule to the Patents Rules, 2003, with the fee prescribed in the First Schedule. Simply writing a letter to the Controller does not start the proceeding.
The application has to be backed by a written statement setting out the facts the licensee relies on and the exact relief being sought. This is where the case is really won or lost. The statement should show what the Controller assumed when the terms were fixed, what actually happened, and why the gap makes loss-free working impossible. Costing sheets, audited accounts, purchase invoices, price lists and production records are the natural evidence. Vague complaints that the royalty feels high will not meet the standard, because the test is not fairness in the abstract but commercial impossibility.
Because the patentee's income is at stake, the matter does not end with filing. Rule 101 governs what the Controller does next, including serving the papers on the patentee and giving them a chance to oppose.
Why this rule matters
Compulsory licensees whose royalty or other terms were fixed by the Controller, and patentees who receive income under those terms.
After at least twelve months of working the invention commercially under the compulsory licence, when the numbers show the licence cannot be run without loss.
A one-time right for the licensee to ask for revision, and a matching procedural duty to file on the prescribed form with a supporting statement and fee.
A licensee who applies too early, files on the wrong form, or files without evidence risks having the request rejected, and cannot simply try again later.
How it works in practice
A royalty that stopped working
Kalyani Agro Tools Pvt Ltd received a compulsory licence to manufacture a patented solar crop dryer, on terms fixed by the Controller that included a running royalty on net sales and a minimum annual production commitment. Kalyani began manufacturing in April and sold steadily to cooperatives in Maharashtra. Fourteen months later, its accounts told an unhappy story. The price of the aluminium extrusion used in the dryer frame had risen sharply, and a state subsidy scheme had capped the retail price at which cooperatives would buy. Every unit was now sold below cost once the royalty was added. Kalyani's counsel filed an application under section 88(4) using the prescribed form and fee under Rule 100. With it went a statement of facts annexing audited accounts for the fourteen months, supplier invoices showing the input price rise, and a costing model comparing the position assumed at the time of the original order with the position now, and asking specifically for the running royalty to be reduced.
Simplified illustration only. Actual legal outcomes depend on the facts.
Key points to remember
- Section 88(4) lets a compulsory licensee ask the Controller to revise terms that have become commercially impossible.
- The licensee must first have worked the invention on a commercial scale for at least twelve months.
- The ground is narrow: the terms must have proved more onerous than expected, so that working is only possible at a loss.
- Rule 100 requires the prescribed form, the fee in the First Schedule, and a statement of the facts and the relief sought.
- Only one such application is allowed, so the evidence must be complete the first time.
- Financial records, not opinions, are the evidence that decides these cases.
Common mistakes and misunderstandings
- Thinking any licensee can use this route. It is for licences whose terms were fixed by the Controller, not for terms freely negotiated in a private agreement.
- Filing after a few months of poor sales. The Act expects at least twelve months of commercial working before the request can be made.
- Treating the application as a second bite at the original compulsory licence order. Revision of terms is not an appeal against the grant itself.
- Sending the request as correspondence instead of on the prescribed form with the fee, which does not put the matter properly before the Controller.
Connected provisions
The Patents Rules supply procedure and the Patents Act supplies power. This page covers the procedure, and the sections that give the Controller or the applicant the underlying right or duty are grouped separately so you can move between the two.
Forms, deadlines and fees
- An application under section 88(4) can be made only after the licensee has worked the invention on a commercial scale for at least twelve months.
- Only one application for revision is allowed; a second one will not be entertained.
Open the deadline calculator — and have every date confirmed against the current Rules before you rely on it.
Where a fee is payable under this provision, the figure comes from the First Schedule. Categories of applicant are charged at different rates, and electronic filing is treated differently from paper filing, so an accurate number can only come from the Schedule in force on the day you file. How Indian patent fees work.
Related judgments
Case law is added slowly and deliberately. A summary is drafted, checked against the reported judgment and then reviewed before publication, because a wrong case note can mislead a reader badly. No summary for this provision has reached publication yet. How case notes are prepared.
Questions people ask about Rule 100
What does 'more onerous than originally expected' mean in practice?
It means the burden of the settled terms turned out heavier than the picture on which the Controller fixed them, and the difference is serious enough that the licensee cannot work the invention without losing money. Typical causes are a sharp rise in input costs, a collapse in the achievable selling price, or a volume assumption that never materialised. The comparison is between what was assumed when the terms were fixed and what actually happened, proved by accounts, not by argument.
Can the patentee also ask for the terms to be revised upwards?
Section 88(4) is written for the licensee who is unable to work except at a loss, so it is not a general reopening clause that either side may use whenever the market moves. A patentee who believes the licensee is breaching the licence, or that the circumstances that justified the compulsory licence have ceased, has different routes, including an application under section 94 to terminate the licence. Which route fits depends on the facts, and professional advice is worth taking before filing.
Does filing this application suspend the royalty in the meantime?
No. The existing terms fixed by the Controller continue to bind the licensee while the application is pending. A licensee who stops paying royalty because it has applied for revision is in breach of the licence and weakens its own case. The safer course is to keep performing the licence, keep clean records of every payment and every cost, and let those records do the work of proving that the terms have become unworkable.
Which form and fee apply to a section 88(4) application?
The application must be made on the form prescribed for this purpose in the Second Schedule to the Patents Rules, 2003, and must carry the fee prescribed in the First Schedule. Both the schedules are amended from time to time, so confirm the current form number and the current fee on the Indian Patent Office website or with a patent agent before filing. Filing on an outdated form or with a short fee can cost you time you may not have.
Is your compulsory licence running at a loss?
MYCrave Consultancy builds the costing evidence and drafts the statement of facts needed for a section 88(4) revision request.
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