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It is needless to say that one core mandate of protecting one’s intellectual property is to promote the progress of science for the benefit of humankind. At the same time, it is also important to ensure that a patentee’s right of excluding others from making, selling, using, offering to sell, and importing the protected subject matter is not misused and does not lead to non-practicing or non-commercialization of the IP by anyone, which would defeat the abovementioned purpose in entirety.
One such tool for the Indian Patent Office, to prevent misuse or rather non-use of patented inventions is to seek periodic information from the patentees as to the extent of commercialization done (also interchangeably referred to as working of the invention), wherein the extent includes informing the Patent Office of the number of licenses granted (if any), revenues/sales generated from the sale/license/commercialization of the patent, parties/stakeholders involved in or responsible for actual commercialization of the patent. Working of a Patent can include but not limited to manufacturing the products in India (either by the patentee or the license) for use in India or for export, importing the patented product in India, and licensing the patent rights.
The above information is covered under Section 146(2) of the Indian Patent Act, 1970, which states that “Every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India” read with rule 131(1) of the Indian Patent Act 1970 which requires that this “information should be filed every calendar year, within three months of the end of each year.” The deadline for filing this information therefore is 31’st March of each year and is applicable only to Patented inventions. The statute specifies a provision for submission of information in Form 27 regarding the details of ‘working of a patent’ granted in India, which is a statutory requirement.
The information sought by the IPO in Form 27 can be summarized as follows:
A. For not ‘working of patent’: the reasons for not working and steps being taken for ‘working of the invention’ to be provided by the patentee.
B. In case of establishing ‘working of a patent’, the following yearly information needs to be provided:
i) The quantity and value of the invention worked; which includes both local manufacturing and importation.
ii) The details to be provided if any licenses and/or sub-licenses have been granted for the products during the year.
iii) A statement as to whether the public requirements have been met partly/adequately to the fullest extent at a reasonable price.
It would be noted herein that even if the patent is commercially not worked in India, the patentee or the licensee needs to explain the reasons for not working and steps being taken for working of the invention. Such information on commercialization of patented products/method, along with other provisions such as Compulsory Licensing, at least in principle, would make the Patentee prompted to work the invention at the earliest rather than merely having a negative mindset of waiting for third parties to use/work the patented subject matter and then subsequently sue them for infringement actions and claiming their accounts of profits.
The Patent Act has also provides that if any person refuses or fails to furnish information as required under Sections 100(5) and 146, he shall be punishable with imprisonment that may extend to 6 months or fine which may go up to rupees ten lakh (one million).
Gopanjali Singh, Patent Associate, IIPRD, Gopanjali@iiprd.com