Writ seeking directions for UOI to enforce norms relating to “working” of patents disposed

A Public Interest Litigation (PIL) was filed at the Delhi High Court under Article 226 of Indian Constitution as a writ of mandamus (Shamnad Basheer Vs. Union of India (UOI) & Others) seeking directions for the Union of India (UOI) to perform their statutory duty to enforce norms relating to “working” of patents under Section 146 read with Rule 131 of the Patents Act.

The Court had, vide an order dated 15th March, 2018, directed the union of India to place before the Court a reasonable timeline within which amendments as may be deemed necessary for strict implementation of the working statement requirement be effected with the consultation of stakeholders.

A Stakeholder consultation meeting in this regard has already taken place at Delhi, on 6th of April 2018. The UOI has proposed approximately 11 months to have any proposed amendment notified in the Form (Form 27) and the rules.

The proposed timelines by the Union were accepted by the court and the writ Petition has been disposed off vide an order dated 23rd April 2018. The ministry was also directed to make every effort to ensure that there is no deviation in the same and the matter is treated in right earnest and given the seriousness which it deserves to be accorded to it.


A tilt observed towards simplifying Form 27

The Stakeholder Meeting in relation to the issue of working statements was held on April 6, 2018.  The meeting was presided by the Controller General, Mr. O.P. Gupta who was ably assisted by Dr. K.S. Kardam, Mr. B.P. Singh and Dr. Usha Rao. Anand and Anand was represented by Ms. Archana Shanker.

  1. The CG clarified the mandate of the stakeholder meeting which was “revision of Form 27” within the framework of Section 146(2) and Section 122. The meeting was well represented by IP law firms, SME, FICCI, FICPI, Academicians, NGO and industry.
  2. While there were suggestions with regard to having separate form 27 for pharma and non-Pharma patents, majority of the stakeholders were of the view that filing of form 27 is onerous and the consequences for non-compliance is a big deterrent for not filing patents in India.
  3. It was also discussed that From 27 moves on the assumption that every product can be mapped to a patent and the cost /quantum can easily be determined.
  4. Several members of the ICT / automobile industry indicated that it was hard and impossible to give this information requested in Form 27 for several reasons such as there is an assumption that every product can be mapped to a patent and the cost /quantum can easily be determined.
  5. Anand and Anand made the following recommendations and also submitted Revised Form-27:
    • That the discrepancies in Form 27 should be removed;
    • A simple format should be prescribed without compromising the requirements prescribed in the law;
    • Introduction of IPC classification so as to analyse the working statements (industry wise) and use is as a tool to clear bottlenecks if any and make recommendations to the government;
    • Confidential information should not be requested and there should be a provision to keep important business information confidential which can be produced on demand under the terms of confidentiality;
    • As there is a difficultly in accurately determining the value of a patented invention that is incorporated into a product or apportioning a value to a patent incorporated into a product that is covered by multiple patents, the requirement of providing the quantum and price be done away with;
    • Expressions such as “quantum and value”, “whether public requirement has been met partially, adequately or to the fullest extent” be deleted as these are all subjective test and the patentees are under no obligation to carry out such an analysis for the purpose of form 27;
    • ‘Reasonable price’ is an ambiguous term and therefore should be deleted. What might be reasonable for an innovator company might not be considered as being reasonable for another company.  Also over the years, as technology evolves, the value of products drop even though the said product might still be covered by said patent(s);
    • There should be an option of filing one form 27 for a cluster of patents;
    • Disclosure of name of licensees should not be mandatory as there are comprehensive/worldwide license agreements including cross license agreements and it may not be possible to provide detailed information as currently required under Form 27.

PIL on working disclosure requirements

It is given fact that every patentee and licensee is required to file a statement of commercial working of active granted Indian patent under Section 146(2) of the Indian Patents Act for the calendar year on or before March 31 of the next year in the format prescribed by the Act.

The patentee/licensee is required to furnish information pertaining to whether the patented invention has been worked or not worked. In an event the patent is not worked, the patentee/licensee is required to provide reasons for not working and steps being taken for working of the invention. If the patented invention is worked, the quantum and value of the patented product manufactured in India and those imported from other countries needs to be submitted.

The licenses and sub-licensees granted during the year as well as a statement whether public requirement has been met, the degree to which it is met (partly or adequately or to the fullest extent) and the reasonable price at which it is met is also required to be recorded.

Defaulting in meeting with this requirement at the Indian patent office may attract a penalty extending up to rupees ten lakh. Further, any false information on working may lead to a penalty of fine or imprisonment which may extend to six months or both. It is also worth noting that non-working of the patented invention for three years in India is a ground for the grant of compulsory license.

A Public Interest Litigation (PIL) was filed at the Delhi High Court and the same was accepted on 21st August 2015 under Article 226 of Indian Constitution as a writ of mandamus in Shamnad Basheer vs Union of India & Others seeking directions for the Union of India (UOI) to:

  1. Perform their statutory duty to enforce norms relating to disclosure of “commercial working” of patents under Section 146 read with Rule 131 of the Patents Act, 1970 and Rules by every patentee and licensee;
  2. Constitute an expert committee to improve the current format for patent “working” disclosure, as the present format is irrational and grossly insufficient to fulfill the objectives of the Patents Act.

The PIL is based on the survey conducted by the petitioner in April 2011 analyzing some working statements filed by Indian patentees. The survey is stated to reveal that nearly 35% of the patentees failed to disclose their patent working status during 2009 to 2012 and the data so disclosed were highly defective, incomplete, negligent or incomprehensible.

The PIL also alleges that there is massive discrepancies with Patent working disclosure by way of either non-compliance of working requirements or compliance with defects such as:

  1. Refusal to declare
  2. Incomplete information regarding quantum and value
  3. Not providing reasons for not working and steps taken for working by patentee or licensee
  4. Indeterminate quantity of the product
  5. Non-disclosure place of manufacture /importation
  6. Non-compliance by Licensee
  7. Statement on reasonable requirements of the public
  8. Defects in E-filing facility

The PIL prays for the Respondent authorities to be directed:

  1. To strictly enforce compliance with Section 146 with Rule 131of the Patents Act, 1970
  2. To initiate proceedings under Section 122(1) of the Patents Act, 1970 against errant patentees and licensees who have failed to comply with the mandatory requirement of Section 146.
  3. To issue notices under Section 146(1) of the Patents Act, 1970 to patentees and licensees to furnish true and complete information of commercial working of the patent;
  4. To immediately rectify the ‘comprehensive online filing services for patents’ to enable patentees and licensees to submit full and complete working information;
  5. To publish and upload the entire information relating to commercial working of all patents for all years of operation of the patent on their website as per Section 146(3) of the Patents Act, 1970 and Rules thereunder;
  6. To declare that the present format of FORM-27 (the format as prescribed in Schedule II of the Patents Rules, 2003 is insufficient to sub-serve the purpose of the Patents Act, 1970;
  7. To constitute a committee of experts to suggest reforms to improve the public disclosure norms around the commercial working of patents.

The respondent UOI has been provided four week time to file its reply statement. It would be interesting to follow the PIL and the stance taken by the UOI in the matter. Further, one may also be curious to know whether the major patent filers would join the PIL as amicus curiae. In all fairness, appointment of an advisory/committee by the Court seems to be a likely outcome for such a high stake question. The next date of hearing is 17th November 2015.