Under the Indian patent regime, patents are granted to encourage inventions and to secure the working of inventions in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. To further enhance the same, the Central Government on May 31, 2019, through the Department of Industrial Policy and Promotion u/s 159 of the Patent Act, 1970, has proposed changes in the Patent Rules, 2003, for submission of an annual working statement.
The aim of presenting the working statement is to inform the public about the working status of a patent. As per Section 84 of the Indian Patent Act, 1970, in case a patent is not worked for 3 years from the date of its grant, an interested third party can use that information to approach the patentee to seek voluntary license to work the patent in India and if the patentee refuses to license or exercises unreasonable conditions for issuing the license, then the interested third party can approach the Patent Office for issuance of compulsory license.
The statement is filed using Form 27 mentioned in the Second Schedule of Patents Rules, 2003, by stating whether the invention is worked or not worked.
- If worked, then indicate Quantum of Sales and Revenue generated by direct and indirect use (based on internal evaluation), details of import of the product (country specific details), provide a list of licensees if licenses have been granted. Further also furnish whether a reasonable requirement of the public was met partly, adequately or to the fullest extent.
- If not worked, the reasons for not working and the steps being taken for the working of the invention. Some common reasons for not working can be patented invention is not fully developed into a marketable product or the market is not mature for the patented invention or the patentee is on a lookout for right partner /licensee.
The Bombay High Court, in 1 Bayer Corporation v Union of India held that acknowledging importation of the patented product is also working of Patent. However, the patentee must establish why it has been impossible to manufacture the patented product in India and the efforts made by the patentee to set up manufacturing unit or in any way trying to work the invention must also be mentioned.
Timeline & Procedure
The patentee and every licensee shall furnish a statement as to the extent to which the patented invention has been worked on a commercial scale in India, in Form 27, in respect of every calendar year, within three months of the end of each year.
Further, the Controller has the power to call for information such as periodical statements as to the extent to which the patented invention has been commercially worked in India, as may be specified in the notice issued to that effect, at any time during the continuance of the patent. A patentee or a licensee shall furnish such information within two months from the date of such notice or within such further time as the Controller may allow.
In addition to the above, non-filing of Form-27 may necessitate a penalty which may extend up to ten lakh rupees under Section 122(1) of the Patent Act, 1970, and furnishing false information in the working statement knowingly or having reasons to believe it to be false or not true, he shall be punishable with imprisonment which may extend to six months as per Section 122(2) of the Patent Act, 1970.
Proposed recent amendments
To further boost the Annual Working Report on granted patents, the following features have been proposed:
- As per Rule 131 of the Patents Rules, 2003, for sub-rule (2), the following sub-rule shall be substituted, namely:
"(2) The statements referred to in sub-rule (1) shall be furnished once in respect of every calendar year, starting from the calendar year commencing immediately after the calendar year in which the patent was granted, and shall be furnished within 3 months from the expiry of each such calendar year."
The above stated amendment clearly demarcates the timeline to file the working statements from the calendar year commencing immediately after the calendar year in which the patent was granted and should be submitted before 31st March of next calendar year.
- An updated Form 27 providing a separate column for submission of information related to process patents is introduced. Further, the form requires the value of the patented product and/or product obtained by patented process manufactured in India and imported into India. In addition to the above, information related to quantum of product is no more required and where it is difficult to derive the value of the patent separately from the value accrued from related patents, such that all the related patents are granted to the same patentee(s), then the details of all such patents, including the patent numbers, shall be provided along with value accrued from all such patents.
The proposed amendments will ease the requirement of furnishing working details of Granted Patents and also help the Patentee to submit the information with Patent Office timely. Hence it will bring more transparency in the working detail submissions.
1. Bayer Corporation v Union of India, Writ Petition No. 1323 of 2013 decided by Bombay High court on 15 July 2014.
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