Filing of working statement by a patentee and licensees thereof for a granted patent in India is a peculiar legal requirement under the Indian Patent Laws. The current legal provisions related to the filing of Working Statements under Indian Patent Act are:
- Section 146(2) of the Patent Act demands every patentee and every licensee (whether exclusive or otherwise) to furnish a working statement each year as to the extent to which the patented invention has been worked on a commercial scale in India.
- Rule 131(1) of the Patent Rule prescribes a specific format i.e Form 27 for submission of the working statements which need to be filed at the Indian Patent Office within 3 months from the end of every year i.e. by or before 31st March of the next calendar year. The patentee or licensee can opt either of two tabs provided in Form 27 i.e. "worked" or "not-worked".
- If worked, the patentee needs to provide quantum and sale of the patented product manufactured in India and/or imported into India. In case any license is issued by the patentee to work the patent in India, then the patentee needs to provide the details of licensee such as name and other particulars. In case the patentee believes that other particulars such as commercial information associated with such license are confidential in nature and ought not to be made public, the patentee can make a request to the Patent Office to keep such information confidential and the Patent Office is required to take a considered view on such request. In case of importation, the patentee needs to provide country wise details from which such product was imported into India.
- Last but not the least, the current format of Form 27 requires the patentee to make a statement whether the reasonable requirement of the public in India in respect of the patent has been met partly, adequately, or to the fullest extent. This is a tricky statement for a patentee to furnish unless the patentee is fully aware of the market requirements in India.
- If "not worked", no other information need to be given except the reasons for not working, which could be - the patented invention is not fully developed into a marketable product, invention is under regulatory approval, the market is not mature for the patented invention, the patentee is on a lookout for right partner/licensee, etc.
- Non-filing of working statement or filing of "not worked" statement do not affect the legal status of the patent and it is not deemed as abandoned or cancelled. However, non-filing of working statement or knowingly furnishing incorrect statement may lead to criminal penalties including a fine or imprisonment, respectively under the Indian Patent laws.
Debate on filing working statement requirements
The filing of the working statement by the patentee and licensees is highly debated because one, this requirement substantially increases the workload and costs for the patentees and two, for certain industries including some hi-tech industries, it is impractical and in some cases almost impossible to collect relevant and correct information that needs to be furnished in the working statements. The format prescribed for submitting the statement (Form 27) presumes that each granted patent results in the production of one or more products and therefore, it is easy for the patentee to keep track the quantum of production and sale of such products in India. The reality is far from this position, particularly in case of patents which form part of a portfolio or pool program.
Further, the debate is also over the definition of "working", a term which is not defined anywhere in the Indian Patents Act, 1970 (the Act) or rules made thereunder. Section 83 of the Act describes general principles applicable to the working of the patented invention, suggesting that patents are not granted merely to enable patentees to enjoy a monopoly for the importation of patented article in India. This principle, however, is far from changing industry dynamics since local manufacturing in all the cases is not only impractical from a cost perspective but in certain cases impossible due to unavailability of capacities and skills. The courts in India have in the recent past recognized such dynamics and held importation of patented product in India as "working" of the patent.
The purpose and objective of asking the working information from the patentee and licensee and then making it public, is to inform a person interested in the patent to check if the patent can be worked or not to meet the reasonable requirement of the public in India. If not, then the person interested in the patent can approach the patentee to obtain license to work the patent in India. And if the patentee refuses to grant such license on reasonable terms or ignores such request, then the said person can approach the government for issuance of a compulsory license under Section 84 of the Indian Patent Act.
The requirement of filing working statements is now under the judicial scrutiny of the Delhi High Court in a public interest litigation which highlights how lightly the patentees have taken this legal requirement despite penal consequences and how the Patent Office, which is mandated to initiate such penal consequences, has overlooked its duty so far. The counsel representing the government agreed to this position and the government was directed by the court to submit a timeline on the manner in which it would be taking steps required for effecting the necessary modification to the prescribed forms. The court also recognized the absence of adequate procedures in patent laws to enforce compliance with this requirement, and the government is likely to soon bring an amendment to the Patent Rules to lay down such procedures.
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