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Advancing India’s national IPR policy (patents) through working statements

Creative India; Innovative India', is the aphorism of the National IPR Policy introduced in May 2016 with the objective of channelizing the creative and innovative capabilities of India and institutionalize intellectual property. Over the last three years, several initiatives and measures (administrative, legislative and procedural) have been adopted by the Government and Courts in furtherance of this objective.

The focus of this article is to analyse the recent proposed procedural changes in The Draft Patent (Amendment) Rules, 2019 in relation to "working statements/ Form 27" which is a statutory obligation upon the patentee licensee after the grant of a patent. While the efforts made by the Government are praise worthy in relation to "simplification of Form 27", but are these changes enough, is the real question.

On 31st May 2019, after at least three consultative stakeholder's meetings and pursuant to the directions of the Delhi High Court in a public interest litigation, the Government of India made its first move to simplify the filing of working statements and make it less burdensome on the patentee / licensee and notified the Draft Patent (Amendment) Rules 2019.

Be that as it may, if Form 27 is here to stay, then at least the information contained in it should be used to promote innovation rather than to punish innovators. Thus in today's digital world, where data mining / artificial intelligence have taken over our lives, India needs to now take a leap and act upon the information contained in these working statements so as to align our statutes with the objectives of the National IPR policy.

The report on the revision of patent law by Sri Justice N. Rajagopala Ayyangar was tabled in 1959. This report, for the first time, recognized that the then Indian Patent System had failed in its main purpose which was to stimulate invention and to encourage the development and exploitation of new inventions for industrial purposes so as to secure the benefits thereof to society. In order to achieve the said objectives, several recommendations were made including providing remedies for abuse of patent rights through compulsory license; revocation for non-patenting and disclosure by the patentee / licensee whether the patents are working in India or not through the filing of working statements. Section 83(1) of the Indian Patents Act 1970 outlines the objectives for grant of patents that includes working of the patent throughout India. Failure to work the patent in India for a stipulated period of time (3 years) can lead to the grant of a compulsory license by the government. This appears to be the real reason that necessitated the provisions relating to the filing of working statements (Section 146(2))

There is something we need to do more as a country to foster innovation as the numbers tell a different story. Despite induction of several examiner/Controller's at the patent office, introduction of the National IPR Policy to foster creativity and innovations; expediting grant to patents, concessions for start-ups, Start-up India programme, India has not seen a growth in their patent filings unlike other countries. For most of the years the growth has been insignificant while for the year 2016-2017, it is actually a drop in patent filing by 3.2%. Amongst several other reasons, we can also attribute the decline in numbers interalia to the harsh penal provisions for non- compliance of working statements.

Application 2012-13 2013-14 2014-15 2015-16 2016-17
Patent 43,674 42,951 42,763 46,904 45,444

(Source : Annual Report-2016-17)

Proposed revisions to Form 27/ working statements

  • The patentee / licensee does not have to file working statements for the year in which the patent is granted.
  • A single Form 27 may be filed for multiple patents that cover a product/technology.
  • Working statement details can be kept confidential
  • Declaration as to whether the public requirement has been met partly/adequately/to the fullest extent at reasonable price - deleted.
  • Providing country wise details in case the patented product is imported into India – deleted.
  • Providing the number of license/sub-licences granted during a year also deleted.

Having said this, and given the fact that the working requirements are here to stay for a while, India needs to make the best use of the information contained therein rather than just offering it a tool for compulsory license applications and can be used not only enhance creativity and innovation in the country but also to reduce gaps and provide impetus to neglected technology areas which might require intervention of other departments of the Government including technology areas that are crucial for India's economic growth and development such as pharmaceuticals, telecommunications, Information Communications and Technology (ICT), renewable energy, artificial intelligence, etc.

Despite, the provision relating to the working statement being mandatory in nature, the compliance rate is significantly low. Approximately 73 % of patents granted in India are still not being worked (assuming that the patents for which working statement have not filed are also not worked) and only 23 % of total granted patents are being worked.1

Be that as it may, how can we use the inform ation contained in the working statement to achieve our goals of the National IPR Policy. Let's have a look;

  • Classify the working statements into technological areas and analyse the same after every couple of years. Data mining will help in identifying the growth areas in India where there is maximum innovation and the softer areas where the government needs to invest more for the larger interest of society. Analysis of the data contained in Form 27 can be used to foster technology transfer in domains of interest such as inventions relating to emission norms, renewable energy, research in the area of diseases of the tropical/developing countries by collaboration and investment;
  • The patentee/licensee can always use the working statements as a platform for licensing patented technology. For instance, for standard essential patents, the working statements may be used to offer licenses on FRAND terms;
  • Form 27 can also serve as a constructive notice to public and therefore be an important consideration while granting reliefs particularly punitive and exemplary damages by the Court during infringement process. For instance, for pharmaceutical patents, the patent office can create something similar to an Orange Book/Purple Book where all patents are listed that cover a particular pharmaceutical product; and
  • Identifying gaps and determining the reasons for patents not being worked- are they policy related hindrances or something more

While the proposed revisions to the working statement (Form 27) is a positive move, the Government needs to revisit Form-27 as it has outlived its purpose. The draconian penal provision for unintentional deficiencies / non- compliance should not have a chilling effect on innovation and ease of doing business in India or slow down the Digital India movement.

  1. Calculations based on the figures provided in Annual Report 2016-2017, Government of India, Ministry of Commerce & Industry, Department Of Industrial Policy And Promotion