White Space as an Asset: Using Competitor Patent Gaps to Build Licensing Leverage

Introduction

Patent strategy is conventionally described in the language of defence: a portfolio exists to ward off infringement suits, to deter copying, and to signal technological credibility to investors. This framing, while accurate, captures only half of what a well-constructed portfolio can do. The more deliberate and increasingly common use of patent strategy is offensive in a quiet, structural sense: companies study the patent filings of their competitors, identify the technical territory those filings leave unclaimed, and file precisely within that gap. This unclaimed territory is commonly described in patent-intelligence practice as "white space" - areas of a technology landscape with little or no patenting activity relative to the surrounding field.

White space is not merely empty space; it is often surrounded on all sides by dense patent thickets belonging to incumbents, which makes the gap both valuable and strategically delicate. A company that secures patent protection within such a gap acquires something more durable than a defensive shield. It acquires a chokepoint - a piece of legal exclusivity sitting inside or adjacent to a competitor's product roadmap, which the competitor may eventually need to design around, license, or litigate. This blog examines the legal and commercial mechanics of white space identification, situates the practice within the statutory architecture of the Patents Act, 1970, and analyses how Indian and comparative case law has shaped the leverage that white-space patents can generate in licensing negotiations. It also considers the practical and policy tensions - particularly around compulsory licensing and FRAND obligations - that limit how far this leverage can be pushed.

Legal Provisions Governing Patent Filing and Licensing Strategy

The statutory foundation for white-space filing in India rests on ordinary principles of patentability under the Patents Act, 1970. Section 2(1)(j) defines an “invention” as a new product or process involving an inventive step and capable of industrial application, while Section 2(1)(ja) defines “inventive step” as a feature that is not obvious to a person skilled in the art. A white-space filing must clear precisely this threshold: the unclaimed territory must be technically non-obvious, not merely commercially unexploited. Section 3 carves out exclusions - including frivolous claims, mere discoveries, and business methods - that frequently trip up companies attempting to patent thin variations within a gap rather than genuine technical advances.

Once granted, the patentee's rights under Section 48 include the exclusive right to prevent third parties from making, using, selling, or importing the patented product or process without consent - the precise leverage that licensing negotiations are built around. However, this exclusivity is qualified. Sections 84 to 92 establish the compulsory licensing regime, under which a patent that is not “worked” in India, or that fails to meet the reasonable requirements of the public at an affordable price, can be opened up to third-party use after three years from grant. Any white-space strategy aimed at long-term licensing leverage must account for this ceiling, since the same Act that grants exclusivity also limits how that exclusivity may be withheld from the market.

In sectors built on interoperability standards - telecommunications being the clearest example - the relevant legal framework also includes the voluntary FRAND (fair, reasonable, and non-discriminatory) commitments that patentees make to standard-setting organisations. These commitments do not arise from the Patents Act itself but have been read into Indian jurisprudence through the conduct of the parties and principles of contract and competition law, as the Delhi High Court's SEP decisions discussed below illustrate.

Legal Analysis: From Technical Gap to Legal Leverage

The Inventive Step Threshold as a Filtering Mechanism

The Supreme Court's judgment in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries remains the foundational authority on what separates a patentable advance from an obvious variation. The Court held that a mere workshop improvement, or a combination of known elements producing a predictable result, does not meet the inventive step threshold; patentability requires that the combination produce a new and unexpected result, or that arriving at it demand genuine inventive skill. This principle has direct bearing on white-space strategy. A company that identifies an unclaimed region within a competitor's patent group of patents, cannot file defensively thin claims merely because the specific combination has not been claimed before. The white space must be filled with something that would not have been obvious to a skilled person reviewing the surrounding patents - otherwise the resulting patent is vulnerable to revocation on the very grounds that doomed the patentee in Bishwanath Prasad. This creates a built-in quality filter, durable licensing leverage can only be built on white-space patents that would survive a validity challenge, not on opportunistic filings designed merely to occupy territory.

Standard-Essential Patents and the Conversion of Gaps into Royalties

The clearest illustration of white-space filing translating into licensing leverage comes from the telecommunications sector, where companies that secured patents covering features later adopted into 2G, 3G, and 4G standards transformed what were once narrow technical gaps into mandatory royalty streams. The Delhi High Court's long-running engagement with Ericsson's SEP portfolio demonstrates this conversion in practice. In Telefonaktiebolaget LM Ericsson v. Intex Technologies, the Court found that Ericsson had established a prima facie case of infringement and FRAND compliance across the same set of standard-essential patents asserted in earlier suits, and directed Intex to pay royalties pending final adjudication. The Division Bench's 2023 appellate ruling in the cross-appeals between Ericsson and Intex went further, examining in detail the determination of the royalty base, the requirement of non-disclosure agreements, and the distinction between a willing and an unwilling licensee, issues that arise precisely because the underlying patents occupy technical territory that implementers cannot avoid once it is embedded in a standard.

This dynamic reached its most concrete expression in Ericsson v. Lava International, decided in April 2024, where the Delhi High Court awarded Ericsson approximately ₹2.44 billion in damages - the largest patent damages award in Indian litigation history - after finding that Lava had engaged in protracted negotiations without genuine intention to conclude a FRAND licence. The Court's reasoning rested heavily on the correspondence between the parties: Ericsson had offered licensing terms broadly consistent with rates extended to comparable Indian licensees and a confidential global portfolio agreement, while Lava's conduct during negotiations indicated an unwilling licensee rather than a party genuinely contesting the royalty rate. The case underscores a structural point about white-space strategy i.e. leverage is not generated merely by holding a patent in unclaimed territory, but by the credibility of the patentee's licensing conduct once that territory becomes commercially indispensable to others.

Constitutional and Statutory Limits on Withholding Licences

White-space leverage is not unbounded, and Indian law has been explicit about where it ends. The Bombay High Court's decision in Bayer Corporation v. Natco Pharma Ltd. arose from India's first-ever compulsory licence, granted to Natco Pharma in 2012 over Bayer's patented anti-cancer drug Sorafenib Tosylate. The Controller, and subsequently the Intellectual Property Appellate Board, found that Bayer had failed to satisfy the reasonable requirements of the public, had not made the drug available at a reasonably affordable price, and had not worked the patent within India — each an independent ground under Section 84(1) of the Patents Act. The Bombay High Court upheld the compulsory licence, rejecting Bayer's argument that the limited supply offered by alleged infringers satisfied public demand, and clarified that Section 90(1)(iii) requires authorities to strive toward reasonably affordable pricing rather than fix a specific figure. The case stands as a clear judicial signal that white-space exclusivity, however strategically secured, cannot be deployed to withhold access from the public indefinitely once the statutory conditions for compulsory licensing are met.

This tension between exclusivity and access is conceptually distinct from, but practically connected to, the dignitary and constitutional considerations that inform Indian IP jurisprudence more broadly. Just as the Supreme Court's recognition of privacy as a fundamental right in K.S. Puttaswamy v. Union of India signalled that some interests cannot be reduced entirely to a property-and-exclusion framework, the compulsory licensing regime signals that patent exclusivity in essential technical domains is conditional on the patentee's willingness to make the invention available on reasonable terms. A white-space strategy built around a drug, a vaccine component, or any technology bearing on public health or safety must therefore be designed with the three-year compulsory licensing trigger in mind, since aggressive non-working or pricing decisions can convert what was meant to be durable leverage into a forced licence on terms set by the Controller rather than the patentee.

Practical Implications for Businesses and Industry

The commercial logic of white-space filing has become more pronounced as India's patent filing volumes have grown. The Office of the Controller General of Patents, Designs and Trade Marks recorded 110,375 patent applications in FY 2024 - 25, a year-on-year increase of nearly 20 per cent, with domestic filings rising to 68,201 applications and accounting for 61.79 per cent of the total, up from 55.96 per cent the previous year. More recent figures shared by the Ministry of Commerce and Industry indicate that filings rose further still, to 1,43,729 applications in FY 2025–26, a 30.2 per cent increase over the prior year. As filing density increases across sectors such as telecommunications, pharmaceuticals, semiconductors, and clean energy, genuinely unclaimed technical territory becomes scarcer and correspondingly more valuable, sharpening the incentive for companies to conduct systematic white-space analysis rather than filing reactively.

For technology companies, white-space analysis typically follows competitor portfolio mapping: reviewing the patent filings of rivals across patent classification codes, identifying clusters of dense activity, and locating adjacent or intersecting technical areas where filing activity thins out. Companies then evaluate whether a genuine inventive step exists within that gap before committing research and prosecution resources to it, since a successful white-space filing must satisfy the same Section 2(1)(ja) threshold tested in Bishwanath Prasad. The reward for doing this well is twofold: first, freedom to operate without overlapping a competitor's claims; second, and more strategically significant, the prospect that competitors will eventually need to design around, license, or cross-licence the gap-filling patent as their own product roadmaps evolve toward that territory.

For standards-dependent industries, the implications are still severe. A patent covering a feature that becomes embedded in an industry standard converts an ordinary exclusivity right into something closer to a toll on market entry, since implementers cannot avoid the standard without exiting the market altogether. This is precisely the dynamic visible in the Ericsson litigation, where royalty obligations followed not from market dominance in a conventional antitrust sense but from the structural fact that compliance with 2G, 3G, and 4G standards required practising patents that Ericsson held in narrow technical corners of the standard. Companies pursuing this strategy must, however, weigh the corresponding FRAND obligations that attach to standard-essential patents, since the same leverage that supports licensing revenue also invites antitrust scrutiny and good-faith negotiation duties that the Delhi High Court has shown itself willing to enforce in detail.

For sectors touching public health, white-space strategy carries the additional discipline imposed by the compulsory licensing regime. Natco v. Bayer demonstrates that a patent occupying genuinely unclaimed therapeutic territory can be neutralised by a compulsory licence within three years of grant if the patentee does not work the invention in India or price it affordably. Pharmaceutical and biotechnology companies building white-space portfolios in India must therefore plan not only for filing and prosecution but for a credible India-specific commercialisation strategy, since the absence of one can convert a carefully secured exclusivity right into a government-mandated licence on terms the patentee did not choose.

Conclusion

White space in a patent landscape is not an accident of incomplete filing; it is, increasingly, a deliberately cultivated asset. Companies that map competitor portfolios, identify genuinely unclaimed and non-obvious technical territory, and file within it position themselves to convert what begins as a narrow technical gap into durable licensing leverage - a dynamic borne out vividly in the Ericsson line of SEP litigation before the Delhi High Court. Yet Indian law tempers this strategy at two points. The inventive step threshold articulated in Bishwanath Prasad ensures that white-space patents must represent genuine technical advances rather than opportunistic filings, preserving the integrity of the leverage such patents can generate. And the compulsory licensing regime, illustrated starkly by Natco v. Bayer, ensures that exclusivity secured within a gap cannot be withheld from the public indefinitely once statutory conditions for access are triggered.

As India's patent filing volumes continue their sustained double-digit growth, the technical territory available for genuine white-space filing will only narrow, making early and rigorous landscaping more valuable, not less. Companies and counsel advising them would do well to treat white-space identification as a continuous discipline rather than a one-time exercise, while remaining alert to the statutory and constitutional limits - inventive step, compulsory licensing, and FRAND good faith - that determine whether leverage secured today can be sustained tomorrow. A modest legal reform worth considering is greater procedural clarity from the Patent Office on timelines for FRAND-related disputes, given the multi-year pendency that characterised the Ericsson litigation; faster resolution would benefit both patentees seeking to realise licensing value and implementers seeking certainty about their obligations.

Author: Lavanya Bhatt, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

References

1. Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511.

2. Telefonaktiebolaget LM Ericsson (Publ) v. Intex Technologies (India) Ltd., 2023 SCC OnLine Del 2245.

3. 5. Telefonaktiebolaget LM Ericsson (Publ) v. Lava International Ltd., CS(COMM) 65/2016.

4. 7. Bayer Corporation v. Natco Pharma Ltd., 2014 (60) PTC 277 (Bom).

5. 8. The Patents Act, 1970

6. 9. Bayer Corporation v. Natco Pharma Ltd., supra note 7.

7. 10. Justice K.S. Puttaswamy (Retd.) v. Union of India, (2017) 10 SCC 1.

8. 12. “India's patent filings surge 30% to record 1,43,729 in FY 2025–26,” The Hindu BusinessLine (2026), citing data shared by the Union Ministry of Commerce and Industry.