Delhi HC Issues Notice To Indian Govt In A PIL Filed On Working Of Patents

October 6, 2015by Usharani0

The Delhi high court issued notice to the Government of India on Sep 1st 2015, in response to a public interest litigation (PIL) on working of patents filed by eminent IP professional, Shamnad Basheer and the matter is now listed for November 17th.

The PIL was filed based on the outcome of a survey undertaken by the petitioner and his research group and information gathered by the petitioner through RTI applications. The PIL claims that the statutory requirements on working of patents are either not fulfilled/ inadequately fulfilled by most of the patentees and that the respondents (government authorities) are complacent in this regard. The petitioner contends that the working of patents lies at the very heart of the Indian patenting system and that the grant of exclusionary ‘rights’ to the patentees for twenty years are “not absolute, but comes with corresponding ‘duties’ imposed on patentees to work their patented invention, as far as practicable, for the public benefit, by ensuring inter alia that patented products are available in adequate quantities and a reasonable price” and hence the present petition.

Statutory requirements on working of patents:

A statement on working of the patented inventions on a commercial scale in India is required to be filed by the patentee or the licensee every year in Form 27 under section 146(2) and rule 131 of the Indian Patents Acts and Rules. Section 146 (3) further proclaims that such statements might be published by the Controller. The statement should disclose whether the patented invention is worked or not worked. If the invention is worked, the quantum and value (in Rs.) of the patented product that is manufactured in India and/or imported from other countries should be disclosed. If the invention is not worked, the reasons for not working and steps being taken for working the invention should be given. The statement should further include details on the licences and sub-licences granted during that year and should state if the public requirement has been met either partly, adequately or to the fullest extent at reasonable price. Section 122 imposes a maximum fine to the tune of ten lakh rupees on any errant patentee who refuses or fails to furnish the patent working disclosure.

Patent working disclosure and public interest:

Patent working norms are critical to the grant of compulsory license (section 84) and for revocation of patents for non-working (section 85). One of the grounds for grant of compulsory license is “that the reasonable requirements of the public with respect to the patented invention have not been satisfied.” In Form 27, the patentee has to disclose if the public requirement has been met. In fact, Form 27 played a crucial role in the grant of compulsory license to NATCO pharma Ltd., for Bayer’s patented anti-cancer drug, Nexaver. Section 83 that proclaims the general principles on working of patented inventions and section 89 that proclaims the general purposes for granting compulsory licenses are also relevant in this regard. Under section 89 (a), a compulsory license shall be granted to secure “that patented inventions are worked on a commercial scale in the territory of India without undue delay and to the fullest extent that is reasonably practicable”. A combination of lack of proper patent working disclosure by the patentees and lack of proper enforcement of the statutory requirements on working of patents by the authorities might render grant of compulsory licenses extremely difficult even in genuine cases. This would seriously undermine public interest that is as important, if not more important, as the private privilege granted to the patentees.

The petitioner further states that without a comprehensive patent working disclosure it will be “impossible for honest competitors to assess their IP risk thereby stifling competition, innovation and industrial growth” which goes against the public interest. The petitioner has also pointed out that effective enforcement of patent working norms would safeguard the Indian patent system against patent trolling.

Main Contentions of the PIL:

  • Non-compliance/defective compliance by patentees/licensees on patent working disclosure.
  • Non-enforcement of statutory requirements on patent working disclosures by the respondent government authorities.
  • Defective online filing format for form 27
  • Current format of form 27 i.e. statement on working of patented inventions on a commercial scale in India is “irrational and grossly insufficient”.

Non-compliance/defective compliance:

In the survey done by the petitioner and his group, it was found that the percent of non-compliance i.e. non-filing of form-27 by the patentees, was ~35% for the year 2009 and 2012, ~ 13% for the year 2010 and ~30% for the year 2011.

When the filed form-27s were studied, it was found that most of the statements were incomplete, incomprehensible and inaccurate. For non-working of patents, the reasons were not disclosed. For patents that were worked, many patentees failed to properly disclose the quantum, value and place of manufacture of the patented products. In many cases, the licensing information was not given or incomplete. Statements on meeting reasonable requirements of the public were not supported by factual data or evidence.

Though licensees were required to submit patent working disclosures under section 146 (2), the survey found blatant non-compliance by licensees in submission of form-27. Shockingly, when the petitioner sought information through RTI on the number of valid patents for which form-27 was submitted by the licensees between the years 2009 and 2012, the respondent government authorities replied that “form-27 are filed by patentees only”, though the law states otherwise.

Non-enforcement by government authorities:

In response to an RTI application filed by the petitioner, the respondent authorities had admitted that till date no action had been taken by the authorities against any errant patentee or licensee for non-compliance/defective compliance of patent working disclosures.

In the case of first compulsory license granted to NATCO Pharma Ltd. in 2012, one of the licensing conditions was an obligation on NATCO to submit a quarterly account for the sales of the patented drug, Nexaver. Through RTI application, the petitioner came to know that NATCO has not submitted any such sales details till Feb 2015 and that no action has been initiated by the respondents against the overt violation of the licensing agreement by NATCO.

Defective online filing format for form 27:

The respondent government authorities introduced online filing facility including form-27 filing in the year 2012. But form-27 filing format is incomplete and does not require the patentees to disclose all relevant particulars such as the quantum of the patented product that is imported or manufactured.

Faulty format of current form-27:

The PIL states that the current form-27 is vaguely worded and insufficient to achieve the objectives of the patenting system. A revised format is essential wherein specific details of patent working are asked for as in the case of licensing information and statement of meeting requirements of public. Form-27 should also be revised keeping in mind inventions related to high technology sector where one patent might be used for multiple products or one product might be covered by multiple patents.

Prayer of the PIL:

The PIL seeks the following from the court:

  • To issue appropriate writs or orders to direct respondent government authorities to effectively enforce the statutory requirements on patent working disclosures and
  • To declare that the current form-27 is insufficient and to constitute an expert committee to improve and strengthen the present patent working disclosure norms.

There is immense pressure from different quarters to quash the patent working disclosure requirements of the Indian Patent system which is critical to compulsory licensing. Let us hope that the painstaking and arduous effort put in by the petitioner in bringing the attention of the civil society to this issue bears fruit and deters such pressure tactics.

Usharani

Usharani

Dr. Usharani is a registered Patent agent. She holds a M.Sc., M.Phil. degree in Biochemistry and a Doctoral degree in Biosciences. She also holds a Postdoctoral diploma in Intellectual Property Rights and is trained by the World Intellectual Property Organisation (WIPO) in drafting patent applications

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Telangana, India.
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