By Vidisha Garg.
On October 19, 2020, Patents (Amendment) Rules, 2020 came into force. These amendment were much awaited as they relate to a very notorious provision of the patent laws and there has been a long history of stakeholders lobbying to abolish this provision. More importantly, the draft rules in this respect were released almost 17 months ago and the stakeholders were expecting a relief for the year 2020. The amended rules have great significance as they provide huge relief to the stakeholders with many glitches being removed and creases being ironed out thereby easing the requirements to a great extent.
Working requirements or statements of commercial working before amended Rule:
The objective of granting a patent as perceived by the Indian Law is to encourage inventions and also to ensure that the industry is able to benefit out of the patent. In order to accomplish the latter, it is mandatory for a patentee or his licensee to work the patent in India.
Section 146(2) of the Patents (Amendment) Act 2005 requires every patentee and every licensee (whether exclusive or otherwise) to furnish a statement about the extent to which the patented invention has been worked on a commercial scale in India. Said information is published on the official website of the patent office.
The information under said section is provided in accordance with Rule 131(2) of the Patent Rules, 2003. Prior to Patents (Amendment) Rules, 2020 coming into force, the statement of working had to be furnished in respect of every calendar year and had to be submitted within three months from the end of each year.
Such statement of commercial working has to be filed on Form 27. The previous statement of commercial working required the patentee/licensee reveal the details such as;
- The manner and extent to which the patent has been worked;
- The licenses and sub-licenses granted during that year;
- Details regarding the undertaking through which the invention has been worked;
- Difficulties faced in working of the invention;
- Whether the public requirement has been met at partly/adequately/to the fullest extent reasonable price; and
- If not worked, the reason of not working the invention.
Failure to furnish such information or providing a false statement is punishable with imprisonment or with fine or both. Although till date, the Patent Office has not taken any action, but the provision has been considered as a necessary evil and perceived as a handicap to industrial progress and does not serve national interests.
The Patents (Amendment) Rules, 2020, brought in the amended Rule 131 which is very much simplified as compared to the earlier version. The amended rule has relaxed the form and manner of filing the statements of commercial working.
As per the current amended rule, the working statements shall now be furnished once in respect of every financial year, starting from the financial year commencing immediately after the financial year in which the patent was granted, and shall be furnished within six months from the expiry of each such financial year. Financial year in India starts from 1st April of a year and ends on 31st March of the subsequent year.
Now the statements of commercial workings have to be filed within six months from the expiry of each financial year as opposed to previous timeline where the patentee got only three months’ time to file the statements. Therefore, the amended rule, provides more time to the patent holders to file such statements, which is a welcome step for the purpose of convenience.
The most important and awaited amendment is simplification of form 27, which is required to be filed in order to comply the working requirements. Now a single form 27 can be filed in respect of multiple patents, provided all of them are related patents, wherein the approximate revenue / value accrued from a particular patented invention cannot be derived separately from the approximate revenue/value accrued from related patents, and all such patents are granted to the same patentee(s)).
The form has been profoundly simplified and ambiguities removed. If the patented invention has been worked in India, the patentee/licensee(s) is now required to provide the details of the approximate revenue/value that had accrued in India to the patentee/licensee. Said revenue/value may be provided under the two heads namely manufacturing in India and importing into India. If the patented invention has not been worked the patentee/licensee is merely required to provide the reason and steps being taken for working of the invention.
The present amendment is a welcome development in the Indian IP circuit. The amendment in the working requirements are like a fresh breeze of air as they address a long list of hardships faced by patent holders in compiling data and information. It is also a relief for the Indian IP office which has faced a lot of criticism in international forums due to such stringent and cumbersome requirement. We now look forward to next year’s filing of form 27s.
This article was first published by Asia Business Law Journal