India: Working Statement Compliance For Patents In India

• Introduction:

  • Statement of commercial working is a Declaration required from the patentee or the licensee stating if the patent has been commercially exploited / implemented / worked in India to meet the reasonable requirements of the public at a reasonable cost in the last calendar year, along with other details and reasons, as applicable.

• Governing statute:

  • The Working Statement as per Section 146(2) and Rule 131 can be submitted on Form 27, Schedule II of the Patents Act, each year within 3 months from the end of the calendar year, i.e., by 31 March of the subsequent year.
  • In addition to the above, the Controller is empowered under Section 146(1) to ask the patentee/licensee to provide details as to what extent a patent has been commercially worked in India.

• Forms and Details to be furnished in the statement

  • ∙ Following details are required on Form 27:

    The patented invention: {} Worked {} Not worked

    1. If not worked: reasons for not working and steps being taken for working of the invention.
    2. If worked: quantum and value (in Rupees), of the patented product:

      1. Manufactured in India
      2. Imported from other countries (give country wise details)
      1. licenses and sub-licenses granted during the year;
      2. State whether public requirement has been met partly/ adequately/ to the fullest extent at reasonable price.

• Procedure for submission of Working Statement:

  • Before preparing Form 27, it is prudent to check and confirm that patent details such as patentee/licensee on records, subsistence of patent, pending assignments, if any, etc. from the Patent Register records of the IPO.
  • The Form 27 can be prepared and filed over the e-Filing portal of the Patent Office and a .pdf copy of the Form shall be appropriately uploaded against each patent.
  • There is no official fee for submission of Form 27.
  • Upon successful submission an official receipt is generated at the e-Filing portal. There is no requirement of filing the Form 27 in original or over the counter at the Patent Office.

• Consequence of the Filing and Non-Filing of Working Statements

  • Filing of working statement discloses details inter alia patent being worked/ not worked, manufactured/ imported, licensed/ non license and/or, public requirement met by the Patent in India or not.
  • Upon filing Working Statement in India:

    1. Information provided in the statement is used while deciding on applications for compulsory license on patents. For example, in the case of first compulsory license in India where Natco was allowed a compulsory licensee to a patent over Nexavar drug, which was held by Bayer, the Intellectual Property Appellate Board -IPAB relied substantially on the working statement information submitted by Bayer, while granting the compulsory license over the said patent.
    2. In case of infringement, the patent owner, as relief, can seek injunction and damages or an account of profit under Section 108. The information submitted in statement of working can be used by the court to estimate the damages that may be awarded.
    3. In case of commercial valuation of a patent and to help a potential licensee to negotiate the fee for obtaining a license based on the value disclosed in working statements for a particular patent are of importance in such dealings.
    4. Working statements may also prove to be of significant relevance from a business merger or a business takeover perspective. Patents can form a significant part of the intangible assets of a company, and a good patent portfolio along with the information about its commercial working in a country may help interested parties/companies in negotiations. Also, small and medium scale industries (SMEs) may customize resources spent in research and development according to the prospering technology pertaining to their field, based on information gathered from working statements filed in patents in the same technology domain. Thus, data about working of inventions provides a fair idea on the effectiveness and commercial demand hence variability of inventions in a certain field of science/technology, and the same are also helpful for valuation of patent portfolios and compulsory licensing.
  • Non filing of working statement impose "penalty" on the licensee/ patentee. In case a patentee refuses or fails to furnish information required under Section 146, the patentee may be punished with fine of up to Ten lakh rupees. Further, providing wrongful information or statement may lead to imprisonment up to six months or fine or both under Section 122(2).

• Our Working Statement / patent portfolio management services include:

  • Monitoring patent renewal deadlines and working statement deadlines and consequent reminders facilitating timely compliance of the statutory requirements.
  • Actions relating to the patent portfolio management including the advisory and assistance inter alia in working statements- official recordals, change of proprietor, licensing, due-diligence, etc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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