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Significance of Statement of Working In The Indian Patent System
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Author: invntreepatent
May 15, 2013
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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
Penalty:
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.
Conclusion:
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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5 options available if your product is infringing on a patent
Author: invntreepatent
February 4, 2011
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Companies and individuals alike take aggressive steps to protect their patent rights. Most often, if a patent holder finds out that a product or a process is violating his patent rights, he might seek damages from the infringing party. Such enforcement of patent rights is usual in developed economies, such as US and Europe. However, in the recent years, even India has seen its share of attempts to enforce patent rights (Ex: TVS vs Bajaj).
Generally, one may realize that his product may be infringing on a patent(s) by carrying out a freedom to operate study (our article on freedom to operate) and an infringement analysis (our article on infringement analysis). On the other hand, a patent holder might have informed you that your product is infringing his patent and asked you to stop all activities relating to the infringing product. Irrespective of how you found out, the question now is to find out a remedy in this scenario.
This article attempts to provide an overview of the options you may consider when you find out that your product is most certainly infringing on someone’s patent. In a nutshell, you may consider the 5 options listed below:
1 – Product reengineering
2 – Compulsory license
3 – Cross licensing
4 – Licensing
5 – Invalidation
2 – Compulsory license
3 – Cross licensing
4 – Licensing
5 – Invalidation
1. Product reengineering
Product can be reengineered in such a way that the reengineered product does not infringe existing patents. It may be noted that a product is said to be infringing on a patent, if the product maps on to the claims of a patent. Hence, to reengineer a product, you will have to clearly understand the scope of the claims of relevant patents. Thereafter, the product should be modified in such a way that the modified product works around the scope of existing patents.
Product reengineering can be an effective strategy if you are at an early stage of product development or if reengineering the product is not an expensive procedure. In some cases product reengineering may require significant investment of time and money. Further, product reengineering may delay the product launch, which may in turn affect the success of the product. In case where product reengineering is not a suitable option, you may consider the viability of the remaining 4 options provided below.
2. Compulsory license
The provision of compulsory license exists in India, and you can give this option a serious thought with respect to the Indian market.
According to the Indian Patent Act, a patent holder within 3 years from the date of grant, work the patented invention in India. Further, the patent holder has to make the patented invention available to public at reasonably affordable price and fulfill reasonable requirement of the public (Refer to section 54 of the Indian Patent Act). The Indian Patent Act also recites that patent holder has to file a statement every year regarding working of patent (there can be significant penalties for not filing this statement). This statement of working helps the patent office in determining which patents are worked in India and which ones are not.
As a strategy, you can check if the relevant patents are worked in India. If the patents are not worked, then you can use the appropriate grounds to seek a compulsory license from the patent holder.
3. Cross licensing
Cross licensing as a strategy can be explored if you have a patent portfolio. In this approach, you would essentially check if the holders of those relevant patents are infringing on patents in your portfolio or if they would benefit from practicing your patented invention. If answer to one or more of the above conditions is in affirmative, then you can reach an arrangement, wherein you let the holders of the relevant patent practice your patented invention(s) and in return you are given a license to practice their patented invention(s).
4. Licensing
In the previous approach, as the name suggested, you provide license to patent holders to practice your patented invention, and in return, you get a license to their patented technology. On the other hand, if you do not see a significant advantage in cross licensing, you can explore the option of getting licenses from the patent holders. There are different options, such as buying the patent, fixed royalty, running royalty and fixed plus running royalty, which you may want to explore when you are contemplating on adopting this strategy.
5. Invalidation
Invalidation means proving that a patent was wrong granted and having the same revoked. This approach can be used when there is a good probability of invalidating the relevant patent(s). Invalidation, although an effective approach in some cases, it can be a time-consuming affair, as invalidation proceedings are generally carried out in courts.
In India, one can invalidate a granted patent by filing a “post-grant” opposition in the patent office within 1 year from the data of publication of grant of patent. Thereafter, you will have to take a different approach to have a patent invalidated. On the other hand, if you feel that a patent application, if granted, can be a threat to your business, then you can file a pre grant opposition anytime between the publication of patent application and grant of patent.
Companies generally use services such as technology monitoring and competitor monitoring to keep a watch on granted patents and published application and take actions, such as, filing of pre-grant and post-grant oppositions.
Please feel free check our patent services page to find out if we can cater to your patent requirements. You can also contact us to explore the option of working together.
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Best regards, Team InvnTree
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