February 26, 2013

Form 27 of Indian Patent Rules, 2003: “Working” or “non-working”

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As per notification no: CG/Public notice/2013/77*, dated 12th February 2013, which is available here. All patentees and licenses (whether exclusive or otherwise) are required to furnish information regarding the working of patented invention on commercial scale in India in form 27, within three months of end of each year. The Indian Patent Office has recently taken a serious note of the fact that compliance with this provision has been overlooked by a majority of patentees since long time.

Section 146 (1) of patent Act provides power to controller to ask for information from a patentee at anytime during the continuance of patent by notice in writing. This section casts a duty on patentee or a licensee (exclusive or otherwise) to provide information related to working of an invention on a commercial basis to controller in the form 27. As the wording of this section uses “and” Both patentee and license holders have to submit the form 27 duly filed. It is also required by the section that duly filled form should be submitted to patent office within two months of such notice by controller. Section 146 (2) of patent Act, mandates patentee & license holders to furnish information to controller, not less than six months from previous submission to controller. However, Section 146 (2) of patent Act provides controller an authority to publish the information regarding statements by patentees & license holder in the manner deemed fit. 

Section 122(1) (b) of patent Act states that if any person refuses or fails to furnish information under section 146 of patents Act shall be punishable with fine whish may extend up to ten lakh of rupees. Punishment here provided is compoundable.  Section 122(2) of patent Act states that if any person provides false information or statement which is false, shall be punishable with imprisonment which may extend to six months or with fine or with both. Punishment here provided is non-compoundable.  

Options available to Patentees & License holders: 

First option which is available to patentee & license holders is to provide the information as sought by controller within stipulated time(31st March in this case). If the invention has not been worked upon, it’s high time that patentees & license holders should start working on the invention & state in the form 27 that invention is being worked upon and currently do not posses sales data, manufacturing data, import data & choose option of partly met public requirement. 
Consequences of providing false information to controller:
If Patentee & License holder chooses to submit the form by providing wrong information, then they shall be punishable with imprisonment which may extend to six months or with fine or with both. The very act of the Patentee & License holder will draw the attention of criminal procedure code. 
Consequence of providing information regarding “Non-working” of an invention:If 

Patentee & License holder chooses to submit the form by providing the option of patented invention ‘not worked”, then Patentee & License holder must state the reasons for not working and steps being taken for ‘working of the invention’.   
  • The non-working of a patented invention on a commercial scale in India makes the patent vulnerable to compulsory licensing provisions under the Act, especially to the inventions which are recently granted. Applying & getting compulsory licenses are still at its nascent stage in India; however we also need to consider the growth & development of various aspects of technology as well as Intellectual property scenario. Practically speaking for compulsory licensing, it requires expiration of three years from date of grant, but non-working of invention will give an added advantage to the person applying for compulsory licensing. Any interested party who has been unsuccessful in procuring a voluntary license from the patentee can file an application with the Controller requesting for a compulsory license after expiry of three years from grant of the patent. Such person needs to establish the occurrence of any of the three conditions mentioned in Section 84 of the Act. One such condition is that the patent should have ‘not worked in the territory of India’. If the Controller is satisfied, he may grant the applicant a non-exclusive compulsory license for the balance term of the patent, unless a shorter term is consistent with public interest. The patent can subsequently be revoked after the expiration of two years from the grant of the compulsory license on application by any third party or the Government if it is established that the compulsorily licensed patent has not satisfied the purpose for which it was granted. 
  • It is a well established fact that a patent is granted in order to encourage innovation and to ultimately serve the public interest, however, Controller cannot suo motu revoke the patent. Neither is ‘non-working’ a ground for revocation of a patent by a person interested under Section 64 of the Act. Therefore, non-working would not directly lead to revocation of patent. 

    "It is advised to Patenees & License holders to file form 27 duly filed for working of invention & in case, invention has not been worked upon, it is high time to look upon"

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