DECODING WORKING STATEMENT

As patent attorneys, it is our duty to clear up the myths circulating about the Indian patent system. One common misconception is that non-commercialization of a patent automatically leads to compulsory licensing or government use. In reality, the patent holder may provide legitimate reasons for non-working, such as financial or regulatory challenges, and this does not trigger immediate external use of the patent.

Read this article in full to gain a clearer understanding of what exactly is the Working Statement and its importance in the Indian patent system - From the Author

What is a Working Statement?

Under India’s patent law, submitting a Working Statement through “Form 27” is mandatory. The Working Statement is basically a declaration, as per Section 83, 146 and Rule 131 (2), that is made by the patentee or licensee which specifies whether the patented invention is being commercially worked (used or applied or licensed) in India.

As per Manual of Patent Office Practice and Procedure, Version 3.0, “the patentee and every licensee shall furnish a statement as to the extent to which the patented invention has been worked on a commercial scale in India, in Form 27”.

Further, Patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay.

This provision highlights the practical utilization of patents to benefit society, aligning with India’s innovation-driven policies.

What Does Indian Law Say?

Under the Patents Act, 1970, the Working Statement (Form 27) is a legal requirement for patentees or licensees to report the commercial working status of their patent in India. As per Section 83, 146 and Rule 131(2), patentees must file this statement every three years, providing details on whether their patented invention is being worked in India.

Let’s simplify this for you:

As per Rule 131:

• Who must file: Both patentee and licensee.
• When to file: Every three financial years, starting after the financial year the patent was granted. It must be submitted within six months of the period's end, with an optional extension of three months if requested using Form 4.
• Verification: The information in Form 27 must be authenticated by the patentee, licensee, or their authorized agent.
• Publication: The Controller of Patents may publish this data to ensure transparency.

Purpose of the Working Statement

The purpose of the Working Statement is to monitor the actual use of patents. The government wants to ensure that patented inventions are actively being used in the country, whether for manufacturing, sale, or any other form of commercial exploitation. It helps to promote the intended social and economic benefits of patented inventions by ensuring they aren't just lying dormant or unutilized. The ultimate goal is for patents to benefit the public by contributing to technological and economic advancements.

What Happens If the Invention Is Not Being Commercially Worked?

If a patent is not being commercially worked in India, there’s no cause for concern. The patentee can provide valid reasons for the delay in commercialization, such as:

• Lack of funding, which may prevent the scaling of production.
• Market challenges, such as limited demand or competition.
• Regulatory hurdles, like delays in obtaining necessary approvals or certifications.

These reasons are considered legitimate explanations and are shared with the Indian Patent Office for transparency, demonstrating the patentee's intent to commercialize the invention once the barriers are overcome.

For example, let’s consider a patentee who holds a patent for a new medical device in India. Due to lack of funding, the patentee has not been able to scale up production. Additionally, there is limited demand for the device in India. In such a case, the patentee may explain these challenges in Form 27.

Busting the Myths

As a myth-buster, it's important to clarify that non-commercialization of a patent in India does not automatically lead to compulsory licensing or government use. While the patentee is required to file a Working Statement (Form 27) explaining the reasons for non-commercialization, such as lack of funding, market challenges, or regulatory hurdles, these are considered legitimate explanations.

Non-compliance with this requirement does not mean the patent will be immediately exploited by others. Rather, it reflects the patentee's intent to commercialize the invention once the obstacles are addressed.

Conclusion

If a patent is not being commercially worked in India, there’s no need for concern. The patentee can provide valid reasons, such as lack of funding, market challenges, or regulatory hurdles, in the Working Statement (Form 27). These explanations show a genuine intent to commercialize the invention once the obstacles are overcome. Importantly, non-commercialization does not automatically lead to compulsory licensing or government use. It’s simply a reflection of the current status of the working of the patent in India.

Frequently Asked Questions (FAQ)

• Q1: What is Form 27 in Indian Patent Law? A declaration filed by patentees/licensees to show if the patent is commercially worked in India.
• Q2: Is non-commercialization a violation? No, patentees can provide valid reasons for non-working, such as funding or regulatory delays.
• Q3: How often must Form 27 be filed? Every three financial years, within six months of period end (extendable by three months).
• Q4: Does non-working trigger compulsory licensing? Not automatically. Only repeated unjustified non-working could be grounds for further action.