India: Commercial Working Statement Proposed To Be Overhauled In Proposed Amendments

Last Updated: 10 June 2019
Article by Essenese Obhan and Aparna Kareer

In its latest proposed amendments to the Patent Rules, 2003, the government of India has proposed to overhaul the antiquated Form 27 (which seeks details of the commercial working of patents), among other procedural clarifications.

The proposed amendments (See), issued by the Department of  Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry come within six months of the last round of proposed amendments, and additionally clarify the timelines for filing Form 27 as well as revised provisions for providing verified English-language translations of priority documents.

  1. New Form 27 proposed 

Form 27 (See) is aunique requirement in Indian Patent law, where patentees must periodically submit details of the commercial working of their granted patents in India. The Form has remained unchanged since 1970 and has been in desperate need of updation for decades. The lack of clarity in its design, that has led to much confusion and ambiguity during filing even led to the filing of a public interest litigation by Shamnad Basheer (W.P.(C) 5590/2015, CM No. 10090/2018). Following the litigation, and on directions from the court, the Office of the Controller General of Patents, Designs & Trademark invited comments from stakeholders to amend Form 27 and conducted stakeholder meeting in March 2018. It has taken more than a year for DIPP to put out the revised new Form 27, based on all these inputs and discussion.

The current Form 27 asks for the "quantum and value of patented product" in cases where the patent is worked. The draft Form 27 removes the requirement of providing the "quantum of patented product", and focuses on value only. It also introduces a distinction between product and process patents.

The draft Form 27 asks for the value (in Indian rupees) accrued from both manufacturing and importing into India. The valuation must focus on the patented products themselves (for product patents), and products obtained directly by patented processes (for process patents).

The draft clarifies that the value is that accrued by the person submitting the Form. The current form has no clarity in respect to this aspect and patentees tend to provide the information suited to them. Moreover, this information, in some cases is not readily available, especially where the patent is licensed or sub-licensed.

In addition, the draft Form 27 also takes away the tedious requirement of submitting details of the countries from where the product is imported from or the process carried out. Currently, the patentee is required to provide a list of all countries from where the "patented product" is imported.

Another welcome change in Form 27 is in respect of products that are covered by multiple patents. In such cases, it is often very difficult to calculate the value of the patented product. The proposed Form 27 allows the patentee to provide a value accrued from all related patents in cases where the value accrued from a particular patented invention cannot be derived separately. In such cases, details of all such related patents are required to be filled in. Thus, the patentee is no longer required to ascertain what value a particular patent will contribute to the product.

Another requirement that has now been dropped is the need to indicate if licenses and sub-licenses have been given for the patent and to provide the list of licensees.

Moreover, in cases where the patent is not worked, the steps being taken for working the invention are no longer required to be provided under the draft Form 27.

Further, the current Form 27 requires the patentee to "state whether public requirement has been met partly/ adequately/ to the fullest extent at reasonable price." The patentee is no longer required to provide any statement with respect of public requirement, which is best judged in a judicial proceeding and not by the patentee.

The Table below gives a comparison of the current Form 27 and the draft Form 27 now proposed:

Current Form 27 Draft Form 27
If worked, quantum and value (in Rupees), of the patented product:

(i)   Manufactured in India

(ii) Imported from other countries (give county wise details)

If worked, details:

(a) where the subject matter of the patent is a product, approximate value accrued in India tothe patentee(s)/ licensee furnishing the statement from that product through:

(a1) Manufacturing in India(in INR)

(a2) Importing into India (in INR)

  (b) where the subject matter of the patent is a process, approximate value accrued in India tothe patentee(s)/ licensee furnishing the statement from the product(s) obtained directly bythat process through:

(b1) Manufacturing in India (in INR)

(b2) Importing into India (in INR) 

Where the value accrued from a particular patented invention cannot be derived separately from the value  accrued from related patents, and all such patents are granted to the same patentee(s), the details of all such patents, including the patent numbers, shall be provided in part (c) below, and value accrued from all such patents will be provided in (a) and/ or (b) above.

  (c) Provide details in respect of (a) and/or (b) above

The licences and sub-licences granted during the year:
If not worked; reasons for not working and steps being taken for working of the invention: If not worked, details with justification for not working
State whether public requirement has been met partly/ adequately / to the fullest extent at reasonable price:

 

  1. Timeline for filing Form 27 clarified:

Currently, a patentee or a licensee must furnish information regarding commercial working of their patent in Form 27 every calendar year, within three months of the end of each year i.e., on or before March 31st of the following year. The present rules are silent as to when the first Form 27 is required to be filed after grant of a patent.

The proposed rules clarify this aspect. According to the proposed rules, Form 27 must be submitted, in respect of every calendar year, starting from the calendar year commencing immediately after the calendar year in which the patent was granted. Thus, the patentee is not required to submit a Form 27 for the year in which the patent was granted and should start submitting Form 27s from the subsequent year. March 31st, however, remains the due date for filing.

  1. Verified English Translation of Priority Document 

Currently, as per Rule 21(2) of the Patent Rules, 2003, an English translation of a priority document must be submitted within 31 months from the priority date, for national phase applications where the priority document is not in English. If this document is not filed within this time, the Controller will invite the Applicant to submit the document. The Applicant must file the English translation within three months from such invitation.

However, a conflict is present between Rule 21(2) of the Patent Rules, 2003 and the Regulation under the PCT. Rule 51bis.1 (e) of regulations under the PCT, which states that Patent Offices may only require an applicant to submit a translation of the priority document in limited scenarios. The first scenario is where the validity of the priority claim is necessary to determine if the invention concerned is patentable, and the second is the rare case where the international application filed was incomplete and the applicant claims that the missing information was fully contained in the priority document. In such cases, the patent office may not only insist that the Applicant furnish the translation of the priority document but also indicate as to where that part is contained in the translation of the priority document.

Amendment to Rule 21(2) has now been proposed to make this rule consistent with Rule 51bis.1 (e) of Regulations under the PCT and clarifies that English translation of the priority application is only required in cases specified under the PCT, and not in all cases. This is a welcome amendment for applicants who will no longer be burdened with the extra translation costs towards priority documents. Applicants must however bear in mind that a translation of the PCT application must be filed within 31 months from the priority date.

Comments invited:

These amendments to the rules were published on May 31st, 2019, and members of the public are invited to submit their comments to these amendments within a period of 30 days from their publication, to be taken up for consideration before they are finalised.

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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