The Delhi High Court (DHC) is currently hearing a Writ petition related to working of patents in India and in an interim order has observed that there appears to be non-compliance issues with respect to this highly debated provision.

Section 146, Rule 131 of the Patent Act empowers the Controller General of Patents, Designs, Trademarks and Geographical Indications (CGPTM office) to call for information in a format set out in Form-27 prescribed under the Patents Rules, 2003 regarding the working of Patents in India. Failure to comply with the statutory requirement invites penalties and criminal action under Section 122 of the Patent Act which includes imposition of fine as well as initiation of criminal proceedings.

Some major Court observations are as follows:-

• PATENTEE NON COMPLIANCE: The Annual Report 2012-13 of the CGPTM Office indicates failure of several patentees to conform to the requirements of even submission of statements of working and also that very few patents are actually worked.

“(i) Working of Patents (under Section 146): The Patent Office received 27946 Form 27 during the reporting year, of which 6201 were shown to be working.

• LICENSEE NON COMPLIANCE: The Patent Act makes it mandatory not just for patentees but also licensees to submit statements of working, however no such information with regard to the licensees are published in the Annual report of the CGPTM office. A glaring observation is that there is non-compliance of the requirement even is case of patents where a compulsory licence has been granted. The vital case of Bayer vs NATCO which led to the first CL being granted in India to M/s NATCO Pharma also does not have any submission by the Licensee which has further repercussions such as withdrawal of the CL.

• CG OFFICE IN ACTION: The DH Court also observed that CGPTM office are not taking any action for notional or incomplete compliance with the provisions related to this Section 146 of the Act.

The court clearly stated that- “The license holders are also required to file the information in Form-27 as a patentee.” Further, the details of the licenses and sublicenses certainly cannot be termed “confidential” and  therefore, the Patents Office has to treat such suppression as failure to comply with the requirements under the Patent Act, 1970 and to take action against those who have thus failed. There can be no exemption from statutory compliance and that in case any query in the prescribed Form could not be complied with, the person submitting the Form need to state so.

The Court also directed the CGPTM office to submit the status of the amendment of the rules and the action which was earlier proposed with respect to the statement of working.

With the 31^st March annual due date for submitting the working statement for the last financial year is approaching, the Patentees and License holders should be careful in preparing and submitting information regarding working amidst the above developments.