Statute corresponding to patents in India has provisions that mandate furnishing of information that attempts to establish the extent to which patented technology is being worked on a commercial scale in India. The nature of the information sought is such that compliance with these provisions is onerous, if not impossible, given the changing dynamics of business and inventions. Consequently, one could argue that most of the patent owners have in-principle failed to comply with these provisions. Further, although there are penal provisions applicable for noncompliance, such provisions have never been exercised.

Concerns regarding the above discussed provisions always existed among patent professionals and other stakeholders. However, these provisions are now being discussed extensively because of a public interest litigation, and the order that followed. The provisions, which are at the centre of the controversy include Sections 146(1), 146(2), 122, Rule 131 and Form 27.

146. Power of Controller to call for information from patentees

(1) The Controller may, at any time during the continuance of the patent, by notice in writing, require a patentee or a licensee, exclusive or otherwise, to furnish to him within two months from the date of such notice or within such further time as the Controller may allow, such information or such periodical statements as to the extent to which the patented invention has been commercially worked in India as may be specified in the notice.

(2) Without prejudice to the provisions of sub-section (1), every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India.      

122. Refusal or failure to supply information.

(1) If any person refuses or fails to furnish

(a) to the Central Government any information which he is required to furnish under sub-section (5) of section 100;

(b) to the Controller any information or statement which he is required to furnish by or under section 146, he shall be punishable with fine which may extend to ten lakh rupees.

(2) If any person, being required to furnish any such information as is referred to in sub-section (1), furnishes information or statement which is false, and which he either knows or has reason to believe to be false or does not believe to be true, he shall be punishable with imprisonment which may extend to six months, or with fine, or with both.

131. Form and manner in which statements required under section 146(2) to be furnished.

(1) The statements shall be furnished by every patentee and every licensee under subsection (2) of section 146 in Form 27 which shall be duly verified by the patentee or the licencee or his authorised agent.

(2) The statements referred to in sub-rule (1) shall be furnished in respect of every calendar year within three months of the end of each year.

(3) The Controller may publish the information received by him under subsection (1) or subsection (2) of section 146.

(Emphasis added)

Section 146(1) recited above gives power to the Controller to call for information describing the extent to which the patented invention has been commercially worked in India. In practice, the Controller can exercise the power conferred by the referred section to decide request for compulsory licence to a patent, which may not be sufficiently worked in India.

On the other hand, Section 146(2) read with Rule 131 requires every patentee and licensee to furnish, every year, information describing the extent to which the patented invention has been commercially worked in India. Failure to comply with either of the above referred sections attracts penal provision as recited in Section 122.

In our view, Section 146(1) is an extremely useful provision, which may be exercised in specific circumstances, as explained earlier. However, an amendment to the section to explicitly recite the circumstances under which the Controller may/shall exercise the power to call for information, may prevent arbitrary use of such power.

The real problem, in our opinion, lies with Section 146(2), which requires voluntary submission of information, on a yearly basis, describing the extent to which the patented invention has been commercially worked in India. In our view, Section 146(2) should be amended to require at least one among patentee or licensee to state whether the patented invention is commercially worked or not in India, instead of requiring information concerning the extent of working of patented invention in India.

Our proposed amendment to Section 146(2) is based on the very purpose of having this provision in the Act, and the practical usage of the information furnished under this provision. The information submitted under Section 146(2) may be used to adjudicate request for compulsory licence to a patent, request to revoke a patent, or request for injunction. However, the proceedings concerning each of the listed requests may typically involve extensive submission, by parties involved in the dispute, of information describing the extent to which the patented invention is commercially worked in India, and the eventual judgement may rely of such information, and not on the information submitted under Section 146(2) on a yearly basis. In case the listed topics were to be adjudicated purely based on information collected under Section 146(2), then the efforts involved in putting together such information is colossal, if not impossible for large patent portfolios. The legislature also recognises the same, and its intent is expressed by the very fact that Section 146(1) exists. In view of all this, the information sought under Section 146(2) is redundant, and unnecessarily burdensome.  

In conclusion, in our opinion, Section 146(2) should be amended such that, it should suffice if the patentee submits whether the patented invention is worked or not commercially in India, on a yearly basis. In case the patented invention is not worked, then the patent may be considered for license or compulsory licence, by third party. On the other hand, if the patented invention is marked as worked, then in all probability, detailed proceedings would follow when the patent is the subject matter of a challenge, in which case the Controller has the power to call for information under Section 146(1).

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