Indian Government Proposes to Dilute the Disclosure Requirement for Patent Working

In April last year, the Delhi High Court directed the government to complete all steps to make necessary amendments to optimize the patent working provisions. The Government had agreed to publish the amended version of Form 27.

These proposed revisions can be found in the recently notified Draft Patent (Amendment) Rules, 2019.

Huge Concerns in the Proposed Form

While the proposed Form does contain some improvements over the current one, these are pale in comparison to the other changes proposed that really damage the core essence of the patent working requirement and the Form 27 format.

Highlighted below are the changes and the concerns

The patentees and licensees are no longer required to submit any of the following information under the proposed format

  • Quantum of the patented product manufactured in India or imported into India;
  • Country wise details of the value and quantum of the patented product imported into India;
  • Steps being taken towards working (if patent has not been worked);
  • The licenses and sub-licenses granted during the year.

Instead of seeking more elaborate details as suggested by the court, the proposed Form has done away with the requirement of disclosing the very factum of licenses and licensees’ names.

This is despite the Court having clarified last year that the details of licenses such as number, date and particulars of the licensees are not confidential. Court had made it clear, that a patentee could not, under the guise of confidentiality, refuse to disclose the very existence/factum of licenses and the names of licensees.

It is important that disclosure of licensing details be mandated in Form 27 as one cannot merely self-certify that one has “worked” the patent without more.

They must be required to back this claim by data/information on how they have worked the patent, including through a set of licenses. Else, Form 27 becomes a meaningless form and our patent working disclosure norms will be rendered redundant. Also, this requirement may not pose too onerous an obligation, as patentees are already known to submit such information to tax authorities and also internally capture it for accounting and other commercial purposes.

Statement on whether public requirement has been met at a reasonable price

Again instead of calling for more particular information in this regard as suggested in the PIL, the proposed Form has omitted this requirement altogether. It is critical that the Form requires the patentees to submit particular information that would help the Patent Office assess whether the requirement of the public has been met at a reasonable price or not.

Brevity as an Escapee Route: Word limit!

The revised Form also sets a word limit of 500 words for the statement on justification for not working the patent. This limit appears quite arbitrary! It will end up preventing the patentee/licensee from submitting all information that may be necessary for explaining why it has not worked the patent. Further, it may also permit crafty patentees to supply minimal obscure information and then claim that they couldn’t “tell it all” owing to the word limit! The clause setting the word limit must be deleted. And patentees/licensees must be permitted to submit as much information as they deem necessary, including the option to attach relevant documents.

Improvements Made

A critical part of Form 27, Paragraph 3 currently merely asks to “Give whatever details are available” and includes the question on whether the patent has been worked or not. In the proposed version of the Form, a separate paragraph has been inserted asking whether patent has been worked or not and the words “Give whatever details are available” have been replaced by the words“If worked, details”. While this may appear to be a mere change in form, it does, to some extent, mandate disclosure in slightly stronger terms.

The current Form asked for the ‘value of the patented product’ manufactured in India or imported from other countries, but it fails to capture the actual sale of the product in India as it is not clear what is meant by ‘value’. The proposed version brings in clarity by instead asking for the ‘approximate value accrued in India from the patented product’ to the patentee/licensee filing the statement through manufacturing in India and importing into India. This is however just a slight improvement and still does not address the concerns raised by the court last year. For instance, the proposed format is still insufficient to assess the extent to which the patented invention or product is able to meet the reasonable requirement of public. When it comes to patented drugs, for instance, it is necessary to know the required dosage per patient to effectively assess as to how many patients are being served through the supply of the patented product.

Further, unlike the current Form, the proposed Form also calls for specific information in respect of ‘process’ patents. If the subject matter of the patent is a process, the Form asks the patentee/licensee to state the approximate value accrued in India to them from the product(s) obtained directly by that ‘process’ through manufacturing in India and importing into India.

Unlike the current Form, the proposed version mandates disclosure of the details of all related patents and the value accrued from all such patents, where the value accrued from a particular patented invention cannot be derived separately from the value accrued from related patents, and all such patents are granted to the same patentee(s). However, as suggested in the PIL such disclosure must be mandated in all cases, and not only in cases where the value accrued from a patented invention cannot be derived separately. A failure to disclose such information adversely impacts innovation and competitors significantly, as it unduly increases their search costs in all cases where there are potentially multiple patents covering the same product.

Call for Objections/Suggestions

The proposed amendment is open for objections or suggestions till June 30, 2019. There is a need of stronger Form 27 and hope that the final version of the Form requires disclosure of all information that is necessary for an effective assessment of the commercial working of the patented inventions.