Patent Licensing in India: A Global Hub for Fair and Efficient Technology Transfer

Executive Summary

India has emerged as an increasingly important jurisdictionfor intellectual property (IP) licensing, driven by a robust telecommunications sector and a sophisticated judicial framework. This article provides a comprehensive analysis of the current state of patent licensing in India, with a specific focus on Fair, Reasonable, and Non-Discriminatory (FRAND) licensing, recent judicial trends from the Delhi High Court (2025-2026), and significant regulatory shifts introduced by the Patents (Amendment) Rules, 2025.

The Indian landscape is characterized by a shift toward fact-specific, economics-driven royalty determination and a commitment to balancing the rights of patent holders with public interest. The Delhi High Court has emerged as the primary forum for Standard Essential Patent (SEP) disputes, favouring comparable licenses and rigorous apportionment methodologies over mechanical rules.Recent judicial decisions and regulatory reforms, including the Patents (Amendment) Rules, 2025 notified by the Government of India and published in the Official Gazette, reflect India’s evolving patent enforcement and regulatory framework.

India currently addresses SEP disputes through a combination of patent law, contract law, and competition law, without a dedicated statutory framework specifically governing standard essential patents. Despite continuing challenges such as the absence of a formal essentiality verification mechanism and the need for pre-litigation essentiality checks, India’s evolving IP ecosystem signals an optimistic future for global technology transfer and fair licensing. This writeup examines the evolution of the Indian patent regime, the nuanced judicial approaches to royalty base and rates, and the impact of recent legislative changes on the broader innovation environment.

Introduction

Patent licensing in India is a critical mechanism for technology transfer, allowing patent holders to monetize their inventions while enabling third parties to utilize, manufacture, and distribute patented technologies [1], [9]. As the world’s second-largest telecommunication network, India has become a central arena for disputes and licensing arrangements involving Standard Essential Patents (SEPs)—patents that are essential to global technical standards [1]. The rapid adoption of 5G, 6G, and Internet of Things (IoT) technologies has further elevated India’s importance in the global intellectual property (IP) ecosystem.

In recent years, the Indian IP landscape has undergone significant evolution. The judiciary, led by the Delhi High Court, has moved away from formulaic approaches to royalty determination in favour of sophisticated economic analyses [4], [9]. Furthermore, the government has introduced regulatory reforms aimed at decriminalizing minor patent offenses and streamlining administrative procedures [7], [8]. These developments reflect India’s transition toward a more transparent, efficient, and fair licensing environment, positioning the country as an attractive destination for global innovators and implementers. This report aims to delve into these changes, providing a detailed roadmap of the current licensing environment and its implications for future technological growth.

The Regulatory Framework for Patent Licensing

The primary legislation governing patent licensing in India is the Patents Act, 1970, and its subsequent amendments [1], [9]. The Act provides for various types of licenses, each serving different commercial and public policy objectives.

Types of Licenses

• Exclusive License: This grants the licensee the sole right to exploit the patent, excluding all others, including the patent holder themselves, from utilizing the technology during the license term [9]. In practice, this type of license is common in high-stakes industries like pharmaceuticals and core telecommunications.
• Non-exclusive License: This allows the patent holder to grant licenses to multiple parties simultaneously, fostering broader dissemination of the technology [9]. This is the standard model for SEPs where multiple implementers need access to the same technology to comply with industry standards.
• Compulsory License: A unique feature of the Indian patent regime, compulsory licenses can be granted by the government after three years from the patent grant under specific conditions, such as the patent not being worked in India, public requirements being unmet, or the technology not being available at an affordable price [9]. This provision serves as a critical safeguard against patent abuse and ensures that essential technologies remain accessible to the public.

Licensing Agreements and Registration

Under Indian patent law, assignments and licences must be in writing and typically define the scope of rights, duration, territory, royalty terms, and sublicensing permissions [9]. While registration with the Indian Patent Office is not mandatory for the validity of the agreement, it is strongly recommended to ensure enforceability against third parties and to maintain a transparent public record [9]. Licensing arrangements involving foreign entities must also comply with the Foreign Exchange Management Act (FEMA) and may require Reserve Bank of India (RBI) approval for royalty remittances [9]. The inclusion of effective dispute resolution and termination provisions is essential to mitigate risks associated with international licensing.

FRAND Licensing in the Indian Context

FRAND (Fair, Reasonable, and Non-Discriminatory) licensing is central to the enforcement of Standard Essential Patents(SEPs). Standard-setting organizations (SSOs) typically require patent holders to commit to licensing their SEPs on FRAND terms to prevent “patent hold-up,” where a patentee demands excessive royalties after a standard has been widely adopted [1], [5].

Core Elements of FRAND in India

The Indian judiciary has recognized FRAND as a balancing act between the patent holder’s monopoly rights and the need for competitive market access [1].

• Fair and Reasonable: These terms relate to the economic value of the technology. Recent scholarship highlights that “reasonable” royalties should reflect the value the SEP contributes to the standard, rather than the value of the end product [5], [6]. This involves isolating the technical contribution of the patent from other features of the device.
• Non-Discriminatory: This ensures that similarly situated licensees are treated equally, preventing the patent holder from distorting competition among implementers [1], [5]. In the Indian context, this has been particularly relevant in disputes involving multi-tier licensing and differing royalty rates for domestic and international manufacturers.

Judicial Application and Challenges

In cases such as Ericsson v. CCI and Intex v. Ericsson, the Delhi High Court has grappled with the intersection of patent law and competition (antitrust) law [2], [3]. The Intex v. Ericsson case, for instance, illustrated how the court handles claims of discriminatory practices in royalty determination [5]. While the Patents Act provides for compulsory licensing, it does not specifically define or govern the enforcement of SEPs [1]. This has led to judicial reliance on international standards and case law to fill regulatory gaps [1]. One significant challenge remains the over-declaration of patents—where patentees claim more patents as essential than actually are—which necessitates rigorous essentiality checks to avoid “royalty stacking” where the cumulative royalty burden becomes unsustainable [5], [6].

Delhi High Court Judicial Trends (2025-2026)

The Delhi High Court has established itself as the primary forum for SEP and FRAND litigation in India, with its dedicated commercial bench leading the development of substantive and procedural norms [8], [9]. Recent decisions of the Delhi High Court indicate an increasing engagement with economic approaches to FRAND analysis.

Fact-Specific, Economics-Driven Analysis

During 2025-2026, the court’s approach has shifted toward a fact-specific, economically grounded analysis for royalty determination [4], [9].

• Rejection of Mechanical Rules: Courts have moved away from formulaic heuristics like the “25 percent rule” or “Nash Bargaining,” which have been criticized for lacking economic rigor [4]. In a landmark 2025 decision, the court explicitly rejected these methods, noting that they fail to account for the unique value of the technology in the specific market context.
• Reasonable Profit Approach: Instead, there is a focus on the “Reasonable Profit Approach” and fact-specific profit apportionment [4]. This method involves determining the incremental profit attributable to the patented technology and sharing that profit between the licensor and licensee.
• Comparable Licenses: The court frequently uses comparable licenses—agreements between the patentee and other implementers for the same technology—as a primary benchmark for determining FRAND rates [2], [9]. This “Market Approach” is favored because it reflects real-world commercial valuations.
• Top-Down and Bottom-Up Assessment: Judges are increasingly utilizing both top-down (calculating the total royalty for a standard and apportioning it to the specific patent) and bottom-up (valuing the individual patent’s contribution) methodologies depending on the available evidence [2], [9]. The top-down approach is particularly useful in preventing royalty stacking in complex standards like 5G.

Remedies and Injunctions

In a significant departure from automatic injunctive relief, the Delhi High Court has shown a preference for steering parties toward securing FRAND licenses [9]. Injunctions are typically considered a remedy of last resort, particularly when the implementer is willing to negotiate in good faith [9]. The court has emphasized that the primary goal of SEP litigation should be to achieve a fair licensing outcome rather than to exclude competitors from the market. This posture helps avoid the disruptive effects of patent hold-out, where implementers delay licensing to avoid royalty payments, while also protecting implementers from patent hold-up.

Regulatory Shifts: Patents (Amendment) Rules, 2025 notified by the Government of India

The year 2025 marked a significant turning point in Indian patent regulation with the notification of the Patents (Amendment) Rules, 2025. These rules provide the procedural mechanism for implementing the decriminalization of minor offenses under the Patents Act, as mandated by the Jan Vishwas (Amendment of Provisions) Act 2023 [7], [8]. These reforms reflect an evolving regulatory approach aimed at strengthening compliance and enforcement within the patent system.

Administrative Adjudication Mechanism

The Patents (Amendment) Rules, 2025 establish procedural mechanisms for adjudication of penalties relating to specified contraventions under the Patents Act following the decriminalization reforms introduced by the Jan Vishwas (Amendment of Provisions) Act, 2023.[7].

• Adjudicating Officers:The Controller General of Patents, Designs and Trademarks may designate officers for the purpose of conducting adjudication proceedings relating to specified contraventions [7]. This shifts the burden of handling minor offenses from the criminal courts to a more specialized administrative framework.
• Procedural Steps: The adjudication procedure begins with a show-cause notice, followed by a written reply and an opportunity for a hearing. The Adjudicating Officer must pass a reasoned order within a specified timeframe, ensuring swift resolution of disputes [7].
• Appellate Review: Appeals against the orders of Adjudicating Officers can be filed before an Appellate Authority using Form 33 within 60 days of the order [7]. The Appellate Authority is expected to dispose of appeals within six months.

Modernization and Transparency

The 2025 Rules mandate the use of electronic means for all stages of the process, including the filing of complaints, issuance of notices, and uploading of orders [7]. This digital-first approach is intended to enhance transparency, reduce delays, and make the Indian patent system more efficient and accessible [7], [8]. Penalties imposed under the adjudication mechanism  are credited to the Consolidated Fund of India, ensuring a clear and accountable financial structure.

India as a Global Hub for Fair Licensing

India’s emergence as a global hub for fair licensing is supported by its massive market size and a proactive legal environment. The country’s telecommunications network is a primary driver for SEP-intensive technologies like 5G and the Internet of Things (IoT) [1].

Integration with Competition Law

The Indian judiciary has increasingly integrated competition law principles into SEP enforcement, ensuring that patent rights are not used to engage in anti-competitive practices [3], [9]. The interaction between the Competition Commission of India (CCI) and the patent courts has created a multi-layered oversight mechanism. In 2025, the Delhi High Court reiterated that the CCI has jurisdiction to investigate potential abuses of dominant position by SEP holders, provided that such investigations do not conflict with the patent court’s role in determining patent validity and infringement [2], [3].

Strategic Policy Directions

The National IPR Policy and emerging scholarship emphasize the importance of India becoming a “hot destination” for IP litigation and licensing [8]. Proposals currently under discussion include:

• Codification of FRAND Principles: There is a growing call to explicitly include FRAND principles within the Patents Act to provide greater statutory clarity [6]. This would involve defining the parameters of “fair” and “reasonable” rates.
• Mandatory Royalty Transparency: Scholars recommend requiring patentees to disclose royalty rates and licensing terms in a public registry to reduce information asymmetry between licensors and implementers [6], [7].
• Pre-litigation Essentiality Checks: Introducing mechanisms to verify the essentiality of patents before litigation could significantly reduce the burden on courts and lower costs for parties [5], [6]. Some experts suggest a model where a third-party technical body verifies essentiality claims.

Challenges and Research Gaps

Despite the positive trajectory, several challenges and gaps in the existing framework persist that could hinder the realization of India’s full potential as a licensing hub.

Limitations of the Evidence

• Lack of Dedicated SEP Legislation: India currently lacks specific legislation or rules that define and govern SEPs and FRAND licensing, leading to a heavy reliance on judicial interpretation [1], [6]. While judicial trends are positive, they can be subject to change depending on individual bench compositions.
• Information Asymmetry: Implementers, especially small and medium enterprises (SMEs), often struggle with a lack of transparency regarding the total number of essential patents in a standard and the cumulative royalty rates [5].
• Essentiality Verification: There is no established administrative mechanism for the independent verification of SEP essentiality, which remains a source of significant litigation [5]. This leads to disputes where hundreds of patents are asserted, many of which may not be technically essential to the standard.

Future Research Directions

Further research is needed in the following areas:

• Apportionment in the IoT Era: How royalty apportionment should be calculated for multi-component IoT devices where connectivity is only one of many features [4], [19].
• Impact of 2025 Amendments: Long-term studies on how the administrative adjudication of penalties under the Patents (Amendment) Rules, 2025 affects patent compliance and the overall IP ecosystem [7].
• Comparative Jurisprudence: Continuous monitoring of how Indian courts align or diverge from emerging global standards in jurisdictions like the EU and China, particularly regarding global licensing rates and jurisdictional priority [20].

Conclusion

India’s patent licensing landscape has entered a new era of sophistication and transparency. The Delhi High Court’s adoption of economics-driven royalty determination and the government’s introduction of the Patents (Amendment) Rules, 2025 demonstrate a firm commitment to establishing a fair and efficient technology transfer environment. By balancing the incentives for innovation with the necessity of fair access, India is successfully positioning itself as a premier global hub for fair licensing. The shift from criminal penalties to administrative adjudication marks a modern approach to IP enforcement, while the judiciary’s rejection of mechanical royalty rules ensures that licensing rates remain grounded in economic reality. While challenges regarding statutory clarity and essentiality verification remain, the overall direction is one of optimism, promising a more predictable, robust, and globally integrated IP regime for the years to come.

 

References

[1] “India: SEPs and FRAND – litigation, policy and latest developments,” IAM, Oct. 2025. [Online]. Available: https://www.iam-media.com/hub/sepfrand-hub/2025/article/india-seps-and-frand-litigation-policy-and-latest-developments

[2] A. Aggarwal and A. Sircar, “Jurisdictional Changes in Indian Patent Enforcement – Comment on the Ericsson v. CCI Decision,” in Cases in Context-Leading FRAND Cases around the World, J. Contreras, Ed., Elgar, 2025.

[3] Bonadio et al., “Intex v Ericsson: the intersection of FRAND and competition law in India,” 2025.

[4] McDuff et al., “Fact-specific profit apportionment in reasonable royalty analysis,” Journal of Intellectual Property Law & Practice, vol. 20, no. 1, 2025. DOI: 10.1093/jiplp/jpaf055

[5] A. et al., “Comparative Analysis of FRAND Commitments and Standard Essential Patent enforcement in India and the European Union,” 2025. DOI: 10.64618/vq9epm63

[6] Monisha, “Standard-Essential Patents and the Internet of Things: Analysing Licensing Challenges,” International Journal For Multidisciplinary Research, vol. 7, no. 2, 2025. DOI: 10.36948/ijfmr.2025.v07i02.38360

[7] “Patents (Amendment) Rules, 2025”, Official Gazette Notification. Available:
https://egazette.gov.in/WriteReadData/2025/267955.pdf

[8] P. Anand, V. Mittal, and G. S. Narula, “Life Sciences & Pharma IP Litigation 2026 – India,” Chambers and Partners, Jan. 2026. [Online]. Available: https://practiceguides.chambers.com/practice-guides/life-sciences-pharma-ip-litigation-2026/india/trends-and-developments

[9] “frand_india_insights.md,” Internal Research Summary, 2026.