Section 146 of the Patents Act, 1970
Image Source -

This article is written by Avanish Singh. The article is a synopsis of Issues and Suggestion about Section 146 of the Patents Act, 1970 suggested by Various Stakeholders to IPO.

Under India Patent Law regime every patentee and licensee of the granted patent is required to file a statement as to the extent to which the patented invention has been worked on a commercial scale, to be filled every year, the requirement of Form 27 under Section 146 of Indian Patent Act, 1970.

There are defaults in compliance by the patentee or the Licensee fails to comply or defectively comply with the statutory requirement of Section 146 of the Act (herein referred as Patent Act). Also, IPO fails to take a strict step so as to overcome the failure of not fulfilling the compliance by several patentees or licensee in past recent years. Section 146 of Indian Patent Act reads, that every patentee or 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.

In the Year 2015, Prof. Shammed Basheer filed a PIL before Delhi High court. The PIL filed was against IPO, for non-compliance with Section 146(r/w Rule 131) of Indian Patent Act, 1970.

In 2018, Delhi High court passed an order asking the Government of India to submit an affidavit outlining a plan for putting in place standard operating/procedure enforcement mechanism w.r.t Form 27 and take strict action against aberrant patentees or licensees.

In view of above order, the Indian patent office asked suggestions from various stakeholder regarding an issue related to working of Patents under the Patents Act, 1970 which was to be submitted on or before 30th March 2018.

On 2nd April 2018, various response as received from stakeholders regarding an issue related to the working of Patents has been uploaded on IP India portal.

Few points which have been largely discussed by most of the stakeholders are herein below:

The first point which has largely been discussed by most of the stakeholders is “One Patent One Product”. It means disclosure of patented technology by patentee which has been used in the one product. Most of the stakeholders commented on this point and said that patent could be worked across many fields, telecommunication is such an example. One product may contain many patents through cross-licensing or be the result of complex licensing arrangements. So it is impossible to provide information related to those which are embedded within a products having a plurality of patented technology incorporated within it especially for those patents which are working outside the countries. So the suggestion provided by the stakeholders includes deletion of such requirement in Form 27.

The Second point which is raised by most of the stakeholders is “quantum & value of the patented product”. Form 27 ask patentee to furnish the quantum & value of a patented product including both product manufacturing in India and outside India. It is difficult to calculate actual sale in India or outside. It is a very vague requirement which makes the compliance extremely difficult. Every county has its own timeline. It is very difficult to gather such information within a prescribed time period i.e. within 3 years.

The third point on which most of the stakeholders emphasized is about “confidentiality of information”. When a patentee goes for voluntarily licensing, it includes many commercial sensitive and confident information, public disclosure of which may prejudice to their business. Accordingly only disclosing the name of licensee and sublicensee and keeping rest of content confidential can be the new format of Form 27. Some of the stakeholders are in favor of disclosing a number of the license granted so as to ascertain if the patented invention has achieved the reasonable satisfaction of the public.

No patentee should demonstrate the “Neglectful Conduct” as far as India is concerned. In that case of receiving a demand from the third party, the Controller may ask for the foreign patent working data.

The next but not the least point which most of the stakeholders have pointed out is about compulsory licensing. According to Section 84 of Indian Patent Act, 1970 “The Compulsory Licensing” defines that a compulsory license on patent would be provided to any person interested in the reasonable requirements of the public with respect to the patented invention have not been satisfied, that the patented invention is not available to the public at a reasonably affordable price. Stakeholders say that it is a subjective question. No patentee can answer the question correctly. Demand is met adequately/partially/ to the fullest is very subjective. Definition /scale for assessment of such requirement is also not provided as per act.

About “Miscellaneous” most of the stakeholder views are that Form 27 should be computerized.

Section 122 defines “Penalties” provision under Section146. A plain reading of Rule 122 provides an understanding that if any person refuses or fails to furnish the details or information which he required to furnish under Section 146 shall be punishable with a fine which may be extended to 10 lakh rupees. One of the stakeholders has given a suggestion that if patentee wilfully filed form incorrectly or provide wrong information or knowingly failed to file the form, then in such case appropriate penalty would be to declare patent unenforceable. Otherwise, if the patentee does not do intentionally should get adequate chance to provide the details and the further controller may make necessary inquiries as it may deem fit.

Few of the stakeholders suggested giving exemption from submitting Form 27 for the first 3 years of the patent issued.

The above mentioned are few suggestions which many stakeholders have discussed and suggested. Stakeholders who gave their suggestions include eminent person form various law firms like Anand & Anand, CANON, Patterson Thuente IP, BSA, Lex Orbis, SS.Rana etc., academicians from several universities, several companies like BOSHE, Japanese IP Group, FICCI, Huawei Technologies, etc. In view of the above suggestion, it can be said that patent office needs to exhaust the old format of Form 27 and come up with new updated Form 27 covering several issues suggested by various stakeholders. This would help the patent office to reduce the overload from patentee as well as from the IPO.

Did you find this blog post helpful? Subscribe so that you never miss another post! Just complete this form…