After recent development

Indian Patent Office has recently made available in its website (http://www.ipindia.nic.in/) all the statements of working (Form 27) filed by the patentees for the year 2012. In light of such a development, the article discusses briefly on the provisions mentioned in the Indian Patents Act, 1970 regarding the working of patented inventions on a commercial scale as well as the significance of the same for the grant of compulsory licenses.

Working Requirement for Patents

As per Section 83 of the Indian Patents Act, 1970, that patents are not granted ‘merely to enable patentees to enjoy a monopoly on a patented article’,1 but ‘to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay2. Consistent with the goal of technology transfer, ‘the protection and enforcement of patent rights contribute to ... technological innovation, ... the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge, and in a manner conducive to social and economic welfare, and to a balance of rights and obligations3

The mandatory requirement to furnish details of working of Patents

Section 146(2) of the Patent’s Act, 1970 requires patentees and licensees to submit a statement of commercial working of the invention (Form 27) to the Controller every year. Such statements can be published by the Controller General for public viewing. Failure to submit information on statement of working is punishable and attracts a hefty fine which may extend up to Rs.10 lakh. Further according to Section 122, providing false information regarding working of an invention is considered as an offence and is punishable with imprisonment up to six months and a fine, or both.

Details required in Form 27

The relevant information is to be submitted by patentees and licensees in a Statement Regarding the Working of the Patented Invention, as per Form 27 are as follows,

  1. Whether the patented invention has been worked or not worked;
    1. if not worked, the reasons for not working and the steps being taken for the working of the invention.
    2. if worked, the quantum and value (in rupees) of the patented product;
      1. manufactured in India;
      2. Imported from other countries along with the details of each country;
  2. The licenses and sub-licenses granted during the year;
  3. Whether the public requirement has been met, at a reasonable price either partly, adequately or to the fullest extent.

Notification by Patent Office

The Patent Office issued a public notice on February 12, 2013 directing all patentees and licensees to submit Form-27 applications for the year 2012 by the end of March 2013.

The older issues of Gazette of India contained information relating to the commercial working of the patented invention. Such information published were

the patent number, date of patent, name and address of the patentee as well as the title of the invention. This practice was discontinued in the past few years. On 24th June, 2013 this practice was revived as the Patent office made available all of the "Statements of Working" filed by all patentees for the year 2012.

It is evident from the aforesaid, that the requirement of furnishing a statement regarding working of the patented inventions on a commercial scale in India is mandated under the Indian Patents Act, 1970 mainly in the context of Compulsory Licenses (CLs). According to Section 84 (1), at any time after three years after the grant of a patent, any person interested may apply to the Controller for a compulsory license on the patent on grounds that, inter alia, the reasonable requirements of the public with respect to the patented invention have not been satisfied or the patented invention is not available to the public at reasonably affordable price or the patented invention is not worked in the territory of India.

There are two provisions which mention the ‘local working’ and importation of the patented invention. Section 83(b) clearly states that patents are not granted merely to enable the patentees or patent licensees to enjoy the monopoly for the importation of patented article. Section 84 (7) (e) states that the reasonable requirement of the public are deemed to have not been met when the working of the patented invention in the territory of India on a commercial scale is being hindered by the importation from abroad of the patented article by the patentees or the licensees. Therefore, it is observed that such a provision does not bar the importation of patented article to India. However, if such an act results in preventing or hindering the working of the product in India, then it would be deemed that the reasonable requirement of the public is not met, and would be considered as a ground for the grant of CLs.

Local working of Patents

In terms of local working of the patented invention with regard to compulsory licensing it is observed that most of the leading pharma companies have their manufacturing unit in India. Therefore the patents of foreign manufacturers who import the patented invention to India are liable for compulsory licensing. Also, as India is a signatory of TRIPS agreement, it is pertinent to assess the TRIPS compatibility of local working requirement of the patented invention. According to Article 27(1) 4 which is titled as ‘Patentable Subject matter’ it is stated that patent rights will be enjoyed without discrimination as to whether a product is imported or produced locally.

From the aforesaid, the suitability of local working of a patented invention with regard to the transfer of technology as far as India is concerned depends on variety of factors and not simply the statutory requirements mentioned in the Patents Act.

Benefits of Publishing working details of Pat ents by Patent Office

In all, the publication of ‘Statement of working’ of the patented inventions filed by the patentees as well as the license holders creates a new dimension on assessing how the patent system is being used in the country. Such information provided by the patent office shall aid the generic pharmaceutical companies in determining the patents which are ripe for compulsory licensing. Also, the actual technology transfer happens with the working of patents rather than the number of patents granted in a country.