PIL on Patent Working Requirement: Timeline and Updates

This post presents recent updates and a timeline of events on Prof. Basheer’s PIL relating to the patent working requirement.

Brief Background

The writ petition brought into light the issue pertaining to non-compliance of the patent working requirement (known as the Form 27 requirement). The Indian Patent Act mandates a patentee (and their licensee) to file working statement of its patents on an annual basis in Form 27 within three months starting from March 31 of every year.

Interveners:

  • Mr. Narendra Thappeta
  • NATCO Pharma
  • Ericsson Inc.

Summary of the petition

Filed in May 2015.

Prof. Basheer pointed out the vague system of filling “Patent working documents” (Form 27 filling).  He quoted certain examples for non- compliance of section 146(2):

  • NATCO was granted compulsory license in 2012 and was required to provide accounting of sales to the controller on quarterly basis. Mr. Basheer filed RTI on 19th January 2015 to have a check on NATCO’s compliance and received response today for it’s Non compliance.
  • Ericsson in Form 27 had refused to disclose licensing details stating it to be confidential in nature or a trade secret.
  • Annual report of Government  clearly stated that more than 30% of patentees did not submit Form 27 in 2013. Under section 122 Controller General failed to take any action on them. Also, most of the application were either inaccurate or defective.

Prayer in the petition:

  • Requested court to issue directions for statutory enforcement by placing obligation under Patents, act 1970 and Rules.
  • Law should be backed by sanction i.e penalizing errant ones as provided under Section 122 r/w Section 146 of the Patents Act, 1970.
  • Filing of form 27 should be MANDATORY.
  • Sought a direction from High court to form committee to examine the present format of Form 27 and suggest amendments for the same.

Timeline of Events

January 01, 2018

he first detailed order dated 10.01.2018 of the division bench of Delhi High Court made it clear that the Form 27 requirement must be taken seriously by the Indian Patent Office as well by the patentees. The order made it clear that filing Form 27 is a mandatory requirement, failing which a patentee invites penalties and criminal action prescribed under Section 122 of the Act.

  • The bench asked the government to show all steps taken after filing of the present petition and course of action to rectify it the problems in Form 27 filings.
  • It directed all respondents to file status report before next date of hearing with respect to non compliance and steps taken further.
  • Actions to be taken for violation of section 146(2).

The government, in its reply, stated that vide Notification dated October 26, 2015 they have proposed (and invited public comments) draft amendment of the patent rules including amendments to Form 27.

The Court adjourned on the behest that on the next date of hearing the government will inform the Court with regard to the status of the amendment of the rules and the action taken under Section 122 of the Patents Act.

February 05, 2018

Court Room no. 1

Item no. 4

The matter came up for hearing at around 11:30 and a passover was sought since the counsel for the government was not present. The Court heard the counsels for the respondent interveners in part and waited for government’s reply in this matter.

The matter resumed at around 1:00 pm. Counsels for the interveners submitted that there is no need to form a committee for coming up with guidelines for checking working of patents. They submitted that making a committee would only put roadblocks in the entire process. The Court agreed.

Court’s order:

The Court directed the government (Patent Office – Dr. SS Singh, Deputy Controller of Patents) to form Rules for governing the working of patents. The Court directed the government to additionally incorporate, in the said Rules, a prodecure for making complaint in case of non-compliance of Section 146 r/w Section 122 of the Patents Act. The Court adjourned the matter to February 07, 2018 giving directions to the government to come up with a timeline as to how much time will it take to draft the said Rules for overseeing the working of patents, and also for scheduling stakeholders’ comments in this regard.

Counsels’ submissions:

The counsel for the petitioner submitted that Section 146 r/w Section 122 of the Patents Act mandates a patentee to furnish information relating to the working of its patents to the patent office and failure to comply with this requirement attracts fine and penal consequences. The Counsel for the petitioner argued that the information relating to the working of patents is important in that a patentee cannot be allowed to sit over its rights and enjoy the State monopoly for twenty years without making the patent available to the public. India being a social welfare country, it is imperative for a patentee to show the working of its patents, so that the patents which are not being worked could be compulsory licensed and made available for the benefit of public at large.

Respondents highlighted several problems with the present procedure for filing Form 27 and further stated that they all are have been complying with this requirement of the Patent Act. Counsels for the intervener respondents submitted that Form 27, in its current state, is itself flawed and there is an immediate need for making changes in Form 27. Counsels further submitted that Form 27 is currently being e-filed and such e-filing does not provide a willing patentee appropriate heads/space for furnishing requisite information. Counsel for an intervener respondent, submitted that the information required to be furnished under Form 27 is confidential in nature and thus, cannot be made public altogether in light of the upcoming privacy bill which is soon going to have a constitutional mandate. Therefore, the government should certainly come up with proper procedure for its implementation. Counsel for an intervener respondent, also sought clarification from the government in the said Rules with respect to the meaning of the word “value” in Form 27.

Observation of the Court:

To these submissions, the Court remarked that if the respondent interveners were willing and have been so complying with the requirement of Form 27 and additionally have been facing the highlighted difficulties in filing Form 27, why did they not file any petition in this Court for seeking directions to rectify the same.

The Court also expressed anguish over the fact that the present petition has been pending since year 2015 and all of a sudden, after the previous order, everyone started to respond, that too at a time when this petition was about to be disposed off by this Court. The Court disregarded the argument that procedure for filing a complaint under Section 122 of Patents Act can be ascertained form the Criminal Procedure Code and observed that these should be incorporated in the said Rules.

  • The recent hearing was of view that there is requirement of legal framework with addition to sanction or in place of sanction. The court has asked the counsel for appellant to file affidavit by tomorrow (7th February,2018) to lay out steps and timelines for placing robust enforcement mechanism instead of prosecution.

February 07, 2018

The Court in its order dated 07.02.2018 observed that one of the major difficulties in ensuring compliance with the provision of Section 146 of the Patents Act, 1970 is the manner in which Form-27 has been worded.

The order states:

“[Para 4] It is also astonishing that the matter has proceeded in this manner for a long period of 45 years since the statute was enacted. Be that as it may, expeditious steps regarding the working of the statutory provisions as well as the changes, if any, are required in the statute, rules and prescribed forms deserve to be taken.”

The Court directed the government to place before it, within two weeks, the timeline regarding the manner in which the steps required for effecting the necessary modification to the prescribed forms would be undertaken.

The order also makes it clear that confidential information pertaining to details of licensees,  licenses and sub-licensees may not be disclosed in Form 27, and only selected information is required to be disclosed. However, reasons for not furnishing information must be disclosed by the patentee.

The Delhi HC’s order dated 05.02.2018  is not available on the HC’s website (as checked on 14/02/2018). Reporting for the hearing dated 05.02.2018 has been done by Mr. Siddhant Sharma.

The post has been co-authored by Siddhant Sharma and Gurleen Kaur.

Image from here.

L&P Editorial Team

The Law & Practice Blog's editorial team.

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