This is in furtherance of Kalyan’s post, which looked at the issue largely from the philosophical perspective. I endeavor here to look at Statement of Working of Patents from the perspective of the statute and functioning of patent office and its priorities in today’s context. The provisions relevant are:
Power of Controller to call for information from patentees
(1) The Controller may, at any time during the continuance of the patent, by notice in writing, require a patentee or a licensee, exclusive or otherwise, to furnish to him within two months from the date of such notice or within such further time as the Controller may allow, such information or such periodical statements as to the extent to which the patented invention has been commercially worked in India as may be specified in the notice.
(2)Without prejudice to the provisions of sub-section (1), every patentee and every 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.
(3)The Controller may publish the information received by him under subsection (1) or sub-section (2) in such manner as may be prescribed.
Form and manner in which statements required under section 146(2) to be furnished
(1) The statements shall be furnished by every patentee and every licensee under sub-section (2) of section 146 in Form 27 which shall be duly verified by the patentee or the licencee or his authorized agent.
(2) The statements referred to in sub-rule (1) shall be furnished in respect of every calendar year within three months of the end of each year.
(3) The Controller may publish the information received by him under sub-section (1) or sub-section (2) of section 146.
Refusal or failure to supply information.—
(1) If any person refuses or fails to furnish—
(a) to the Central Government any information which he is required to furnish under sub-section (5) of section 100;
(b) to the Controller any information or statement which he is required to furnish by or under section 146,
he shall be punishable with fine which may extend to ten lakh rupees.
(2) If any person, being required to furnish any such information as is referred to in sub- section (1), furnishes information or statement which is false, and which he either knows or has reason to believe to be false or does not believe to be true, he shall be punishable with imprisonment which may extend to six months, or with fine, or with both.
Here is my understanding of the statutory provisions -Section 146(1) gives the Controller of Patents the discretion to call for information on working of patents from patentees, and Section 146(2) mandates filing of statements by patent holders. The term prescribed under Rule 131 is once every calendar year. If a patent holder does not file the statement, Section 122 imposes a fine of upto ten lakhs.
The patent statute mandates filing of statements of working, and imposes punishment if such statements are not filed. Section 146, which requires filing of statements reads in relevant part as follows:
” … as to the extent to which the patented invention has been commercially worked …”
On literal statutory interpretation, this simply means that a statement has to be filed if an invention is commercially worked, specifying the extent to which it has been worked. However, if an invention is not commercially worked, no statement need to be filed. It may however be argued that a patent holder must file a statement irrespective of working, but that interpretation may be non-literal.
If non-literal interpretation of provisions with respect to statement of working must be used, then it is important to look at the object of the provisions and whether such object is valid in today’s context. From the perspective of whether the provisions philosophically serve the purpose for which they have been framed, Kalyan has already given sufficient insights in his post.
“…….1. To strictly enforce compliance with Section 146(2) read with Rule 131(1) of the Patents Act, 1970 and Rules thereunder in relation to disclosure of information on commercial working of patent by every patentee and licensee;
2. To initiate proceedings under Section 122(1) of the Patents Act, 1970 against errant patentees and licensees who have failed to comply with the mandatory requirement of Section 146(2) read with Rule 131(1) of the Patents Act, 1970 and Rules;
3. To issue notices under Section 146(1) of the Patents Act, 1970 to patentees and licensees to furnish true and complete information in relation to incomplete disclosure of information on commercial working of the patent;…..”
From the writ of mandamus and public interest perspective, should the discretion be taken away from the patent office with respect to statement of working and should the patent office be mandated to acquire statements for all patents and impose punishment at this juncture?
There may be several practical repercussions on strictly mandating the implementation of the statement of working provisions on the patent office and having the patent office issue notices under section 146(1).
If the discretion is taken away, then the patent office must:
• Monitor and verify thousands of granted patents for filing of statement of working every year;
• Check appropriateness of each statement of working;
• Send notices if some one does not file in time or if the statement of working does not have appropriate information;
• Handle petitions, applications and hearings with respect to non-filing, delay in filing, insufficient information and so on;
• Impose punishment if the statements are not furnished; and
• Take several other necessary steps to implement the process.
Does the patent office have the time and resources for this? The patent office is already struggling to process patent applications due to dearth of resources. Should the patent office, at this stage, proactively take steps towards working statements? Should the patent office take steps merely because the statute provides for such steps or because there is actual and substantial public interest involved?
India’s immediate focus from patent perspective should be on cutting down unnecessary burden on the patent offices and making them light-footed and effective from the process angle. The patent offices are already burdened with a huge backlog and imposing additional burden with respect to statement of working may only worsen the situation.
While it may be beneficial to impose the burden on the patentee or licensee to submit the statement of working by providing appropriate guidelines, patent office should not be forced to get into a fact-finding role for all patents to verify whether the information furnished is true and complete or not and send out notices.
Authored by Somashekar Ramakrishna