The objective of the Patent system is not only to grant a monopoly right to the patentees but also to ensure that the granted patents are commercialized or worked in India without undue delay. The term The word “working of the patent” means that the patented invention shall be commercialized, in order to meet reasonable requirements of the public and patented products are available at reasonable price to the public. Patents are granted to enhance industrial development and, therefore, should be worked in its fullest extent within the territory of India.
Patentee or licensee shall inform Patent Office every year about working of his patent by submitting the statement of working. It a statutory obligation of the Patentee/licensee to provide the declaration regarding the patent commercialization status to the Patent Office. The onus is on the patentee or licensee to state the working status of the patent and to pay the renewal fee annually until the lifetime of the patent. Failure to submit the statement of working may create a presumption of non-working of the patent, which may be one of the grounds for third parties to apply for compulsory license.
Legal Perspective
Section 83 in The Patents Act, 1970 states
(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;
(b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article
To oblige to Section 83, Section 146 of the Indian Patents Act, 1970, states the “Power of Controller to call for information from patentees” which mandates that the Patentee/licensee shall furnish the details of the working status of the patented invention in India for the respective financial year.
The statement of working of patents is furnished through Form 27 as prescribed in the Second schedule of the Patents Act, 1970 read with Rule 131.
The information to be submitted includes:
- Information whether the patent was worked in India during the year
- If worked, the value generated
- If not worked, a brief reason for not working and steps being taken to work the invention
- If manufactured in India or imported from other countries
- Licences and sub-licences granted during the year
There is no fee to file Form 27 and from the year 2012, the working of Patents filed by Patentees are made available to public (E-Register) by the Indian Patent Office.
Initially, Form 27 to be filed within 3 months from the end of every calendar year i.e., March 31st of each year. However, the amendments to the Patent Rules, 2020, the Form 27 shall be furnished within 6 months from the end of the financial year. As per the amended rules, the due date to file the statement of working via Form 27 is September 30th of each year for the preceding financial year.
Implications
Any failure in furnishing of the working of patents des not invalidate the Patent but have the following consequences:
- Considered as a punishable offence that includes a fine that may extend up to 10 lakh rupees
- Furnishing wrong information is punishable offence with imprisonment up to six months, or with fine or both
- Patent can be revoked on the ground of non-working
To conclude, the statement of working of patents creates a transparency in providing the status of commercialization of the patented invention, provides an updated information of the patented inventions to the interested person, value of the patented inventions, the adequate steps taken by the Patentee/licensee to work on the patented invention, encourages the innovators and their interest in trade and business in the fields of science and technology.
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