The Patents Act, 1970 :
The Patents Act, 1970 under Section 140 and 141 deals with avoidance of certain restrictive conditions and determination of certain contracts, respectively. Section 140 makes it unlawful to insert in any contract for or in relation to the sale or lease of a patented article or an article made by a patented process; or in licence to manufacture or use a patented article; or in a licence to work any process protected by a patent, a condition the effect of which may be –
(a) to require the purchaser, lessee, or licensee to acquire from the vendor, lessor, or licensor or his nominees, or to prohibit him from acquiring or to restrict in any manner or to any extent his right to acquire from any person or to prohibit him from acquiring except from the vendor, lessor, or licensor or his nominees any article other than the patented article or an article other than that made by the patented process; or
(b) to prohibit the purchaser, lessee or licensee from using or to restrict in any manner or to any extent the right of the purchaser, lessee or licensee, to use an article other than the patented article or an article other than that made by the patented process, which is not supplied by the vendor, lessor or licensor or his nominee; or
(c) to prohibit the purchaser, lessee or licensee from using or to restrict in any manner or to any extent the right of the purchaser, lessee or licensee to use any process other than the patented process; or
(d) to provide exclusive grant back, prevention to challenges to validity of patent and coercive package licensing.
Section 140(2) provides that a condition of the nature referred to in clause (a) or (b) or (c) above shall not cease to be a condition merely because the agreement containing it has been entered into separately, whether before or after the contract relating to the sale, lease or licence of the patented article or process. In proceedings against any person for the infringement of a patent, it shall be a defence to prove that at the time of the infringement there was in force a contract relating to the patent and containing a condition declared unlawful by section 140. However, it will not be applicable to the plaintiff who is not a party to the contract and proves to the satisfaction of the court that the restrictive condition was inserted in the contract without his knowledge and consent, express or implied.
The provisions of Section 140 shall not affect a condition in a contract by which a person is prohibited from selling goods other than those of a particular person; validate a contract which, but for this section would be invalid; and affect a condition in a contract for the lease of, or license to use, a patented article, by which the lessor or licensor reserves to himself or his nominee the right to supply such new parts of the patented article as may be required or to put or keep it in repair.
Section 141 provides that any contract for the sale or lease of a patented article or for licence to manufacture, use or work a patented article or process, or relating to any such sale, lease or license, may at any time after the patent or all the patents by which the article or process was protected at the time of the making of the contract has or have ceased to be in force, and notwithstanding anything to the contrary in the contract or in any other contract, be determined by the purchaser, lessee, or licensee as the case may be, of the patent on giving three months notice in writing to the other party.