February 02, 2012
Patent Holders to gear up: Deadline to file Form 27 approaches
This alert is a reminder for all patent holders in India to file Form 27 before the deadline of March 31, 2012. Form 27 is basically in the nature of a declaration by the patentee or its licensee(s), describing the extent of commercial exploitation of the patent in India in the past year and needs to be filed in relation to each patent granted.
WHY FILE FORM 27
A patent is a monopoly right granted in favor of a patentee to utilize and monetize the patented invention to the exclusion of others. This is done with an objective of encouraging the development of new and useful inventions and technology for public good. However, the purpose of grant of an exclusive monopoly right will become futile if the patentee does not commercially exploit the patent to the optimum, for the use by public. Thus, to keep a track on the magnitude of working of patents in India, the Indian Patent Act, 1970 ("Act") provides for the requirement of filing Form 27 by each patentee (or its licensee (s)), every year and this must be filed with the appropriate patent office in India (i.e. the original patent office where the patent was initially filed) before March 31st of the succeeding year.
A separate form is required to be filed in respect of each patent including in cases of related patents having common patentee. No official filing fees is required to be paid along with this Form 27.
DETAILS TO BE FURNISHED IN FORM 271
The form needs to be signed by the person making the statements or his duly authorized patent agent to certify that the facts and matters stated therein are true and correct.
In addition to the above, the Controller of Patents2 ("Controller") also has the power to send a notice and call for information such as periodical statements evidencing that the patented invention has been commercially worked in India. This notice may be issued at any time during the continuance of the patent. A patentee or a licensee receiving the notice must furnish such information to the Controller within two months from the date of such notice or within such further time as the Controller may allow.3
WORKING OF A PATENT THROUGH LICENSEE
If the patent has been exploited by the licensee(s) of the patentee in India, the patent would be deemed to have 'worked' in India and therefore, a direct exploitation of patent rights by the latter is not required. However, the mere act of having granted a license would not be considered as 'working of patent', unless the licensee has in fact worked the patent in India.
CONSEQUENCES OF NOT FILING FORM 27
Any person who is required to submit Form 27 or such additional information as called for by the Controller fails to submit Form 27 shall be liable to penalty which may extend to INR 1,000,000 4(i.e. INR One Million or approx. USD Twenty Thousand Dollars) .
Further, if it is discovered that the information provided in Form 27 is false, the provider of the information may become liable for imprisonment for a term which may extend to six months, or with fine, or with both5.
CONSEQUENCES OF NOT WORKING A PATENT IN INDIA
A patent that has not been worked for three years from its grant is vulnerable to issuance of a compulsory license.
Any interested party which has been unsuccessful in procuring a voluntary license from the patentee can file an application with the Controller requesting for a compulsory license after expiry of three years from grant of the patent. Such person needs to establish the occurrence of any of the three conditions mentioned in Section 843 of the Act. One such condition is that the patent should have 'not worked in the territory of India'. If the Controller is satisfied, he may grant the applicant a non-exclusive compulsory license for the balance term of the patent, unless a shorter term is consistent with public interest. The patent can subsequently be revoked after the expiration of two years from the grant of the compulsory license on application by any third party or the Government if it is established that the compulsorily licensed patent has not satisfied the purpose for which it was granted. Information contained in Form 27 filed, would be available to such applicant seeking a compulsory license to establish the non-working of the patent.
There is no provision for suo motu revocation by Controller. Neither is 'non-working' a ground for revocation of a patent by a person interested under Section 64 of the Act. Therefore, non-working would not directly lead to revocation of patent.
GROWING IMPORTANCE OF FORM 27
The necessity to file Form 27 and provide correct information in Form 27 has assumed even more importance as the Patent Office of India has decided to publish the details of working of the patented drugs on its website 6.
ANALYSIS: WHAT A PATENT HOLDER IN INDIA MUST ENSURE
Thus, not only is it vital for the patent holders to file Form 27, it is equally important to furnish adequate and correct information so as to avoid the risk of being penalized under the provisions of the Act. Further, all efforts must be made by the patent holder (either directly or through its licensees in India) to work the patent in India, else the patent may become susceptible to compulsory licensing.
The contents of this hotline should not be construed as legal opinion. View detailed disclaimer.