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Commercial Working Statement of Patent in India

COMMERCIAL WORKING STATEMENT OF PATENT IN INDIA

The basis of patent law lies in the protection and enforcement of patent rights of innovators which in turn contribute to the promotion of technological innovation in a manner conducive to social and economic welfare. Under the Indian patent Act, section 146(1) empowers the Controller of Patents to direct any patentee or licensee to furnish a statement on the extent of commercial working of their patent. An obligation is imposed on all patentees and licensees to submit a statement on commercial working of their patent at periodic intervals, as may be prescribed and the Controller can publish such information in the prescribed manner, as per Section 146(2) and Section 146(3) respectively.

Further, Rule 131 of Patents Rules obliges every patentee to disclose the true extent of commercial working of their patent, each year as per the format specified as ‘FORM-27’. The Form essentially contained details on whether the patented invention has been worked on a commercial scale within India for the year, the reasons for such non-working if applicable. If the patent is worked, the details with respect to quantum and value of sale of product covered by the patent in India, details of licences and sub-licences granted during the relevant year, details with respect to the patented invention is manufactured within the territory of India and details of public requirement of the patented invention has been met either partly or adequately or the fullest extent at a reasonable price for the relevant year are provided in the said form. Also, those patentees and licensees who fail to comply with the mandate provided under Section 146 of the Patents Act and Rules can be imposed a fine which may extend upto Rs. 10,00,000 (Ten Lakh Rupees) under Section 122(1)(b) of the Patents Act, 1970.

Amendments were introduced to commercial working statements through Patents (Amendment) Rules 2020, where the statement period was adjusted to correspond with the Financial year, i.e., from April 1 to March 31 of the subsequent year. The submission time period was increased from three months to six months, thus making the due date September. It also provided for filing of a single statement for multiple patents if the working of the invention is such that the commercial aspects are difficult to segregate and allowed patentee and licensee to file joint statements of commercialization.

According to the New Form 27, the patentee/ licensee is required to submit only the approximate revenue/ value accrued in India through manufacturing in India/import into India of the patented invention and the requirement to provide a statement on meeting public requirement is removed. It is essential to note that the working of the patent is different from the requirement of utility of a patent. The patent law requires that the complete specification shall fully and particularly describe the operation or use and method by which the invention is to be performed. The applicant is also bound to disclose the best method of performing the invention. Thus, the utility requirement is continuously maintained.

At any point of time during the term of the patent, an objection can be made with regard to the utility of a patent. In fact, a patent is granted for the promise of performance. Where the promise fails, the patent becomes susceptible to revocation on the ground that the invention is not useful. However the working of a patent is linked with the grant of compulsory licence on the patent under chapter XVI of the patent Act, 1970. Such information regarding commercial working of patents becomes essential to determine whether a patentee has satisfied the reasonable requirements of the public, assess their IP risks from competitors, whilst doing research and developing advanced technologies or products that are likely to be of great value to society.

 

 

 

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