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“Fate of Patent Working Requirements (Form 27) in the New Year”

The patent law grants the patentee monopoly right over the patent while keeping in mind importance of public benefit. Underscoring the core importance of public benefit, the Indian Patent System provides for a unique provision by way of section 146 of the Indian Patent Act, 1970 which puts an obligation on the patentee or licensee to furnish the statement related to commercial working of the patented invention in India. This section also empowers the Controller to publish the information so obtained in public domain clearly. The legislative intent behind this section is that the public needs to be informed about the working and nonworking of the invention protected by the patent filled in India meaning that the public demand is of the utmost importance. The importance of this provision can be further understood by the fact that Indian Patent law and rules made there under subscribes punishment in the form of fine or imprisonment or both for non-compliance of the provision.

There is a buzz in the industry related to the extent of information related to the working of patent that is required to be disclosed. The discussions related to patent working statement have taken center stage in the Indian patent space followed by the Public Interest Litigation filled before the Hon’ble Delhi High Court. In compliance of the orders passed by the Hon’ble Delhi High Court, the Indian Patent Office asked for the suggestions from stakeholders for making Section 146 and Form 27 (Form prescribed for filling the statement of working) more effective. These responses from the stakeholders presented viewpoints of the leaders from multiple technology sectors, patent offices from various jurisdiction and other related organizations. For instance, the United States Patent and Trademarks Office (USPTO) and U.S.-India Business Council (USIBC) urges on the elimination of the regular filling requirement. Since they are of the view that the current requirement is burdensome, costly, uncertainty over the information required and ill-suited to the reality of patented technology. Further Chartered Institute of Patent Attorneys (CIPA), London importantly raises the question on the amount of information received which is actually used by the public and the possibility of the data to be requested by a competitor while applying for compulsory license. The Japan Intellectual Property Association (JIPA) like USPTO focusses on the scrapping of the system of submitting the statement of working of the patented invention. The Global Academia however believes that the local working requirement under Form 27 is justified, in compliance of the Doha Declaration and inherently quid-pro-quo for the patentees in exchange for the conferred benefits to disclose the local working of the patented invention. Moreover, the Pharmaceutical sector suggests for the modification in the Form 27 by amending the period of filing of the working statement prior to the patent grant because the term of the patent is 20 years from the date of application and a certificate from Company Secretary / Chartered Accountant / Cost Accountant as a supportive document for Form-27 to substantiate the quantity and value of the patented product. The common concern among the corporates thriving on innovation is that any change in the Form 27 that adduce more information on confidentiality terms of Patent License Agreements (PLAs) will have an irreversible impact on the bargaining power of the parties. The other common view by such corporates is related to understanding the complexities involved in the technology area where it might be possible that patented invention is not directly implemented in a single product or receiving information from bundle of patent licenses poses further challenges in submission of patent working statement and therefore the requirement must be done away with. Again, Electronics, ICT and the telecom sector seem to resonate similar view i.e. on the reduction of burden on patentee by removing questions particularly relating to quantum and value, extent to which the public demand is met etc. The most common concern among all the stakeholders also appears to be related to the security of the submitted information from the third parties that can be accessed through Indian Patent Office (IPO) website and reduction in the frequency of submitting the form 27.

Therefore, while one section of the stakeholders, demand for the complete removal of this provision and other believed it to be justified in Indian Socio-Economic conditions. Other than these extremes, there is a section of stakeholders which believes that requirements may be amended for promoting innovation and accessibility of the invention to the public at large. Nonetheless, it would be very interesting to see what stand government will take in the New Year. Whatever stand the government takes, the requirement of filling statement of working shall stand amended in all probabilities.

Author: Dr. Sourabh Khemani, Director, L. S. Davar & Co., India

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