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Ranjan Narula Associates


"Working Statement" - A peculiar requirement under the Indian Patents Act
The Indian Patent Act obligates each patentee/licensee to furnish details of the "extent of working" of the patented Invention in accordance to provisions under Section146 (1) read with Rule 131 (2). The appropriate Format for furnishing Information about working of Patent is prescribed in Form 27.

The basis of filing 'working statement' is to ensure that patents are granted to encourage inventions and to ensure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. The provision in effect ensures that if a patent is not worked in India for 3 years from the date of its grant or if the reasonable requirement of the public with regard to the patented invention is not met, then a third party may be given an opportunity to work the Invention. The article analyses the common queries that are raised by the Patent holder when submitting statement of working that is required to be filed every year on or before 31st March at the patent office.
  • Whether Importation of the patented product amounts to "Working"?
The decision of Court in Bayer Corporation v Union of India has relevance in the context where The Bombay High Court held that manufacture of a product in India is not a necessary pre-condition for demonstrating the working of Patent in India. However, the patentee must establish why it has been impossible to manufacture the patented product in India.

Section 83 (b) provides that Inventions are not granted merely to enable patentees to enjoy monopoly for the importation of the patented article. Interpretation of this provision is construed to mean that Importing is not entirely denied rather importation without exploring the possibility of manufacturing in India is an important factor to be considered in this situation. Thus, under special circumstances, while acknowledging importation also as working the Patented Invention, undoubtedly the efforts made by patentee to set up manufacturing unit or in any way trying to work the Invention is given higher significance when dealing with application for compulsory license.
  • What are the details to be provided if a patent is not worked in India?
There are no guidelines from Patent Office for submitting details in Form 27. Thus, reason for not working of an Invention can vary from case to case. One could simply state that Patent is not worked in India and/or provide reasons for not working the Invention. The following are some of the reasons that can be mentioned depending upon the factual background.
  1. Patentee is exploring Indian market for determining need/demand of the product, exploring Business Partners/ Business Channel for commercialising the patent;

  2. working further on the product to make it economical for the Indian market conditions;

  3. due to the nature of the invention, working of the product cannot be accurately determined;

  4. In case of pharmaceutical drugs, the pendency of regulatory approval/ongoing clinical trials can also be the reason to be stated; or

  5. Currently no demand for the product while efforts have been made to find a suitable licensee
  • How to complete working requirement for a patent which is bundled with other patents and used in a variety of products
In such cases it is generally difficult and practically not possible to estimate the revenue of the product

Strategy 1: If there is no data or any other information available to the Patentee, a Non-working statement can be filed elaborating specific reason after selecting 'Non-working' from drop down menu.

Strategy 2: If patentee is aware about an approximate data/value, a working statement can be filed. The details can also be submitted as Annexure to the prescribed form.
  • How to complete working requirement when a patentee is not sure or has no information whether patent has been worked in India?
In such case it is advisable to file the working statement as "not worked" and optionally specify the reasons on the lines below:
  1. that due to the nature of the invention, working of the product cannot be accurately determined; or

  2. at this stage patentee is unable to ascertain the specific details. It has a subsidiary company in India which has been granted license to use several of its patents.
  • Are there penalties or ramifications if working statement is not submitted?
  1. It can be a ground for seeking compulsory license for the patent by a person Interested.

  2. Failure to furnish information is also a punishable offence.

  3. A Patent can also be revoked on the ground of non-working (Section 85 of the Indian Patent Act)

  4. Working or non-working of a patent is also an important factor considered in patent infringement suits.
To Sum up:

Submitting details in relation to working of patented Invention is a peculiar requirement under the Indian Patent Act. The patent holders find it challenging to provide the information considering the confidential nature of the data or it being commercially sensitive. In cases where the patents are bundled, it is difficult to track revenue of each single patent in the bundle patent. It does appear that the relevant form needs to be streamlined to make them pragmatic taking into account business realities.
 
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