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Local Working of Patents in India

There is a requirement to file a statement of information (Form 27) regarding the working of a patent in India. The working of a patent means the commercial exploitation of the invention that is embodied in the patent. These statements can be supplied every financial calendar year, within three months of the end of each year.

Although the working of an invention within India at a commercial scale amounts to local working (LW), it still is controversial as to whether the LW of a patent can only be satisfied by the local production and not importation. There is no statutory evidence to offer clarity as to whether only local manufacture amounts to working at a commercial scale; but as a signatory to the TRIPS Agreement (Art. 21[1]); India is under obligation to consider importation of a patented article as ample proof to constitute LW. Thus, while non-working continues as one of the basis for revocation (section 89(1), 2nd amendment), it is no longer the case that domestic demand needs to be met to “adequate extent or on reasonable terms from manufacture in India” (section 90(a) (ii), IPA). The time period to work an invention is 3 years from the date of grant of the patent; and if the patented invention is not worked within the prescribed period, any interested person can seek a Compulsory licence.

The information provided must clarify whether the invention is worked or not worked. If the invention is worked, the information must state:

The quantity and value of the invention worked; and this includes both the invention worked in India and/or importation from other countries;

Whether any licences and sub-licences have been granted; and

A statement as to whether the requirements of the public have been met adequately or not.

If the invention is not worked, the information provided must state the reasons for not working and the steps being taken to ensure working of the invention. A fine of up to India Rupees 1, 000, 000 (USD $25,000) can be given for not submitting or refusing to submit the required information. Also providing false information is punishable by imprisonment of up to 6 months and/or a fine.

Regardless of the fact that some information required in Form 27 may be unavailable, as a matter of practice, all patentees can file Form 27 with whatever information that is available to them. In most cases, the Patent Office will not object to receiving a partially complete Form 27. An authorised Patent Agent/Attorney can sign and submit Form 27. The statement must be submitted by March 31st of every year for the previous year. The first statement is to be submitted by the end of March in the second financial calendar year of the grant of patent. So, for example, if the patent is granted in 2007, the first statement should be provided by the end of March 2008.