Significance of Statement of Working In The Indian Patent System

Introduction to statement of working 

Statement of working is a disclosure provided by the patentee or the licensee to the patent office stating if the patent is commercially exploited in the country to meet the reasonable requirements of the public. 

Governing statute 

Statement of working of the patent has to be submitted as per Section 146(2) of the Indian Patent Act and rule 131. This statement can be submitted in Form 27 each year within 3 months from the end of the calendar year.

Section 146(2) of The Indian Patent Act:
 (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.  

Rule 131 of The Patent Rules: 
(1) The statements shall be furnished by every patentee and every licensee under sub-section (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.
In addition to the above voluntary disclosure, the controller at any time, if required, may ask the patentee or the licensee to provide details in writing as to what extent the patent has been commercially exploited in India, as per Section 146(1).

Section 146(2) of The Indian Patent Act:  
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. 
Details to be furnished in the statement

 (i)   The patented invention: {        } Worked {        } Not worked

(a)  If not worked: reasons for not working and steps being taken for working of the invention.

(b)  If worked: quantum and value (in Rupees), of the patented product:

i)   manufactured in India

ii)  imported from other countries (give country wise details)

(ii)   licenses and sub-licenses granted during the year;

(iii) State whether public requirement has been met partly/adequately/to the fullest extent at reasonable price.

Significance of the statement 
If a patentee or licensee refuses or fails to furnish information required under Sec 146, the patentee or licensee will be punished with fine, which may extend up to Ten lakh rupees under Section 122(1)(b). Further, providing wrongful information or statement can impose the patentee /licensee to imprisonment up to six months or fine or both Section 122(2).

Section 122(1)(b) of The Indian Patent Act:

 122. Refusal or failure to supply information (1) If any person refuses or fails to furnish—


 (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.

Compulsory licence: 
Information provided in the statement of working is used while deciding on applications for compulsory license on patents. The Intellectual Property Appellate Board (IPAB) of India, while granting the first compulsory licence in India heavily relied on the information provided in the statement of working submitted by the patent owner.  
In the above instance, Natco was granted a compulsory licensee to a patent, which was held by Bayer, covering the Nexavar drug. The IPAB relied substantially on the information submitted by Bayer corresponding to the patent, while granting the license. 
Patent litigation: 
In case of infringement, the patent owner, as relief, can seek injunction and damages or an account of profit under Section 108. The information submitted in statement of working can be used by the court to estimate the damages that may be awarded. On the other hand, in case statement of working is not filed, the alleged infringer may argue that the patent owner might not have encountered any damages in view of the missing statement of working.
Patents are granted to encourage the growth of technology and to ensure that the patented invention is commercialed for the welfare of the public. Filing of statement of working provides the patent office to seek periodic information relating to Commercialization of the patented invention in the territory of India thereby preventing the misuse or non use of patented inventions. Therefore, the filing of Form 27 after the grant of a patent is a statutory requirement and the patent office should enforce strict action against those violating the law.
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