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Patent holders caught by surprise-Licenses / Sub-licenses must be disclosed!!

As per the Indian Patent Act and Rules (Section 146 and Rule 131) every year Patentee/licensee is required to furnish details of the “extent of working” of the patented Invention. This has been subject of intense debate considering the patent holders have reservation in providing such ‘business/commercially’ sensitive information which is accessible publically through patent office portal. The issue on filing of working statement, the details required and the structure of the form has been raised at different forums with suggestions made by the practitioners and patent holders. Some of those issues have been captured in our post “Working statement a peculiar requirement under the Indian Patents Act“.

Recently, the Patent holders were taken by surprise when Delhi High Court considering a long pending writ petition (W.P. (C) 5590/2015) clarified few important issues on the working statement:

  • Whether a Licensee is required to file a ‘working statement’:

Referring to the compulsory license issued to M/s NATCO Pharma (in relation to patent no.215758) where it failed to submit the working statement, the order clarifies that it is mandatory upon licensees to submit working statement information on commercial working of the patented invention. Section 146 of the Patents Act, 1970 draws no distinction between the patentees and license holders.

  • Whether the ‘working statement’ submitted to Patent Office is Confidential:

Referring to the information provided by M/s Telefonaktiebolaget LM Ericsson on working statement, the order directed that all that the patentees are required to submit, details of the licenses and sublicenses. This information cannot be withheld by terming it “confidential”. The court further directed the Patent Office to treat such suppression as failure to comply with the requirements of Section 146 of the Patents Act, 1970 and to take action against the patentees who do not furnish the required information.

The clarifying order comes very closer to the time when most of the patentees/licensees would be submitting working statements since the details are required to be furnished within three months of the end of each year (i.e. 31st March of every year).

The cause of concern for patentees is not just only the confidentiality of Information sought by Patent Office, but also the challenge in providing information regarding ‘bundle patents’ or the cases where it is practically not possible to assign or determine the specific quantum and value of the patented product sold. Further, there is no guideline about how patentees/licensees would track about public requirements being met or not (partly/adequately/fully). For full compliance of the provision, we understand a further clarification is needed and guidelines from Patent Office are recommended to address all the challenges that are faced by the patentees.

In the present scenario, as the provisions stand, it is suggested that all patentees and licensees should file working statement for the patent/s and the details must be provided as far as available and not withheld on ground of being ‘confidential’.