What Are Patent Working Requirements?

A functioning requirement is a clause in a national patent law that mandates that the holder of a patent must use the invention they have been granted in the nation that issued the patent. Many national patent systems have many different variations of the requirements. The requirements under the Indian Patents Act will be explained in this article.

General Principle

The rationale or legislative framework underlying the awarding of patents is outlined in Section 83 of the Patents Act, 1970, which also states that patents are awarded to secure the functioning of the patented item in the nation and to stimulate inventions while maintaining the quid pro quo. It outlines the fundamental ideas behind how patented inventions function. The major goal is to maintain monopoly over creative knowledge while balancing economic and public interests.

Legal Overview

A patentee or licensee of a granted patent, whether exclusive or not, is required to provide a statement regarding the functioning of the patented invention on a commercial scale in India in the prescribed manner using Form 27. According to Section 146 of the Indian Patents Act, 1970, read with Rule 131 of the Indian Patents Rules, 2003, every patentee and every licensee is required by law to perform an annual statement of an invention’s working in the Indian Patent Office.

Additionally, the Controller of Patents may issue a written notice under Section 146(1) requiring the furnishing of such information within two months of the date of such notice.

The following information is provided by the patentee or licensee on Form 27:

Regardless of whether the innovation has been used or not, the quantity and price (in rupees) of the patented product used in production and import must be stated.
Details on licenses and sub licenses issued throughout the year
The patentee is required to disclose information regarding whether the public requirement has been satisfied, whether partially, sufficiently, or completely, at a reasonable price.

According to Rule 131, this information must be submitted no later than March 31st of the following year, three months after each year’s conclusion.

An inducement is the NO FEE form. It should be noted that there is no official cost associated with submitting the statement of working on form 27. This encourages licensees and patentees to provide the information more than once without having to pay a formal fee.

Recent Amendments i.e. by way of Patent (Amendment) Rules 2020 to FORM 27 are as follows:

Only rough estimate of the revenue or value that was accrued from patented invention
Submit a single form for numerous patents as long as they are all linked patents a
The updated Rules mandate that the statement of working be filed within six months of the fiscal year’s conclusion.
No need to provide information related to manufacturing and imports of the patented invention.
The requirement to disclose licenses and sub licenses granted in relation to the patented invention during the year is also not needed
A declaration of whether the patented product’s public requirement has been met is not required

Public Record

The Indian Patent Office has used the power granted to the Controller by Section 146(3) to publish the information it has received under Sections 146(1) and (2) by making data from 2012 publicly accessible. The publication of such a large number of working statements inherently offers a wealth of useful information regarding the efficacy of the Indian patenting system. Also, it makes it easier for academics, applicants for licenses, and lawmakers to do research, analyse it, and subsequently modify or alter the law.

Compulsory Licensing

The legal rules governing compulsory licenses and the rules governing how patents operate are intricately entwined. Any interested party may apply to the Controller for a compulsory license after three years have passed after the issuance of a patent on the grounds that the patented innovation is not being used in India, according to Section 84(1)(a).

Also, under Section 85 of the Patents Act, anyone may appeal to the Controller for the revocation of the patent by claiming that the innovation has not been used in India two years after the issue of the first obligatory license. It is the applicant’s responsibility to provide information about the grounds for the requested revocation as well as the type of applicant’s interest.

Penalties

Failure to provide such information results in the establishment of a presumption of non-operation, which ultimately aids in the process of granting compulsory licences. Additionally, because of the significant market bearishness, the issue is transformed into a penal offense with a fine that can reach Rs. 10 lakh. Additionally, under Section 122, the deliberate provision of false information is a crime punishable by up to six months in prison, a fine, or both.

Author: Mahima Agarwal, Legal Intern at PA Legal.

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