The Effect of Patent Invalidation in Cases of Lack of Novelty and Inventive Step on Paid Royalties in License Contract

A problem that could be posed regarding patent license contract is the effect of patent invalidation in case of lack of novelty and inventive step. Under article 18 of Patents, Industrial Designs and Trademarks Act, the effect of patent invalidation on the basis of lack of novelty and inventive step is from registration, that is, there was no patent. It can be said that since the use of voided invention was free for all, the contract is invalid for the lack of consideration and hence, licensee can be restituted the paid royalties although he benefited from license advantages. However, it should be noted that licensee that calculated license cost in final price and benefited from real monopoly, by restitution of paid royalties, enriches in non- agreed trade which is an example of akle-bel-batel. Also, it can reduce inventors motive to register their inventions and also delay the challenge of the invalidity of improper patent in a court and its invalidation. From comparative law perspective, licensee who had benefited from license advantages, cannot ask restitution of paid royalties and it is recommended to be considered in the said Act amendment.