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.
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.
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.
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.
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.
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.
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.
The Indian patent office is holding a stakeholders consultation meeting regarding issues relating to the annual statement of working of Patents under section 146 of the Indian Patents Act on 6th April 2018 at New Delhi.
Prior to the meeting the stakeholders were asked to provide their comments on the issues relating to working of patents. The comments received from various stakeholders (including Anand and Anand) have been published by the Indian Patent Office.
The Delhi High Court (DHC) is currently hearing a Writ petition related to working of patents in India and in an interim order has observed that there appears to be non-compliance issues with respect to this highly debated provision.
Section 146, Rule 131 of the Patent Act empowers the Controller General of Patents, Designs, Trademarks and Geographical Indications (CGPTM office) to call for information in a format set out in Form-27 prescribed under the Patents Rules, 2003 regarding the working of Patents in India. Failure to comply with the statutory requirement invites penalties and criminal action under Section 122 of the Patent Act which includes imposition of fine as well as initiation of criminal proceedings.
Some major Court observations are as follows:-
PATENTEE NON COMPLIANCE: The Annual Report 2012-13 of the CGPTM Office indicates failure of several patentees to conform to the requirements of even submission of statements of working and also that very few patents are actually worked.
“(i) Working of Patents (under Section 146): The Patent Office received 27946 Form 27 during the reporting year, of which 6201 were shown to be working.
Patents in force
Reported as working
LICENSEE NON COMPLIANCE: The Patent Act makes it mandatory not just for patentees but also licensees to submit statements of working, however no such information with regard to the licensees are published in the Annual report of the CGPTM office. A glaring observation is that there is non-compliance of the requirement even is case of patents where a compulsory licence has been granted. The vital case of Bayer vs NATCO which led to the first CL being granted in India to M/s NATCO Pharma also does not have any submission by the Licensee which has further repercussions such as withdrawal of the CL.
CG OFFICE IN ACTION: The DH Court also observed that CGPTM office are not taking any action for notional or incomplete compliance with the provisions related to this Section 146 of the Act.
The court clearly stated that- “The license holders are also required to file the information in Form-27 as a patentee.” Further, the details of the licenses and sublicenses certainly cannot be termed “confidential” and therefore, the Patents Office has to treat such suppression as failure to comply with the requirements under the Patent Act, 1970 and to take action against those who have thus failed. There can be no exemption from statutory compliance and that in case any query in the prescribed Form could not be complied with, the person submitting the Form need to state so.
The Court also directed the CGPTM office to submit the status of the amendment of the rules and the action which was earlier proposed with respect to the statement of working.
With the 31st March annual due date for submitting the working statement for the last financial year is approaching, the Patentees and License holders should be careful in preparing and submitting information regarding working amidst the above developments.
A Compulsory License (CL) application was filed by Lee Pharma with respect to AstraZeneca’s patent covering the anti-diabetes drug Saxagliptin. The Controller General of Patents issued a notice stating the Applicant’s failure to establish a prima facie case. The Controller General after hearing the Applicant on establishment of a prima facie case has rejected the CL application for failure to establish the grounds for obtaining a CL u/s 84 of the Patents Act.
The following findings emerge from the rejection:
On the issue of reasonable requirements of the public being met, the Controller held that currently there are four key gliptins available in the market to treat type 2 diabetes, namely, Linagliptin, Sitagliptin, Saxagliptin and Vidalagliptin. In absence of data/ statistics, there is no way to understand the requirement of saxagliptin in the market or to decide whether its reasonable requirement is being met. The Applicant has therefore failed on this ground.
Regarding availability to the public at a reasonably affordable price, the Controller held that the Applicant failed to establish the number of people being denied access due to pricing of the patented drug. The Controller further observed that other drugs in the same category are being sold at similar prices and if the price of said drugs is affordable, it is difficult to fathom how the price of AstraZeneca’s saxagliptin is unaffordable. Further, since the information regarding number/ type of patients in the market is not available, availability and affordability cannot be predicted. The Applicant has therefore not been able to establish that the drug is not available to the public at a reasonably affordable price.
On the issue of working of the patented invention in the territory of India the Controller held that manufacturing in India is not a pre-requisite to establish the working of the Patent in India. The need for manufacture in India has to be determined on a case-to-case basis. Since the Applicant has failed to show the exact requirement of saxagliptin or whether it is in short supply, it is very difficult to conclude whether manufacturing in India is necessary or not. Further, the patented drug, inspite of importation, is being made available in the same price range as other DPP-4 inhibitors. Therefore, pricing also does not justify the need to manufacture in India. The Controller further held that the Applicant led no evidence to establish any shortage of supply due to importation alone. The Applicant has therefore failed to establish that the patented invention has not been worked in the territory of India.