What is a "Commercial Working Statement" of Patent in India?

A patent is awarded for 20 years considered from the date of filing. After the expiry of the period, the patent holder or his legal agent may apply the specified mode for the lapsed patent’s renewal. Where the patent has two or more owners, then with the Controller’s consent, one or more of them without joining others may apply for restoration within 18 months from the date the patent has terminated.

What is a commercial working system?

The foundation of patent law lies in the requirement of the security and execution of patent rights of innovators. That contributes to the improvement of technological innovation conducive to social and economic prosperity. 

What is the legal provision regulating the commercial working system?

The Patent Act of 1970 empowers under section 146(1) the Controller of Patents to conduct any patent owner or license holder to submit a statement on the range of commercial workings of their patent. The responsibility is inflicted on all patent owners and license holders to submit a statement on the commercial operation of their patent at periodical intervals, as prescribed. The Controller can issue such a report in the prescribed method, following sec. 146(2) and sec. 146(3) respectively.

Rule 131 of the Patent Rules shall bind every patent owner to unveil the true scope of commercial working of their patent annually, as per the format specified for ‘FORM-27’. The form essentially asks for details about the patented invention operating on a commercial scale inside India for the year, grounds for such non-work if relevant. 
If the patent is in operation, the details concerning quantum and the value of the product's sale are covered by the patent in India. Aspects of licences and sub-licences issued during the relevant year and the details regarding the patented invention are manufactured within the boundaries of India. Moreover, the aspects of public provision of the patented invention have been satisfied either partly, appropriately or to the entire extent at a reasonable price for the relevant year. 

Also, patent owners and license holders who neglect to comply with the regulations provided under section 146 of the Patents Act and Rules can be fined a fine extending up to Rs. 10,00,000 (Ten Lakh Rupees) under sec. 122(1)(b) of the Patents Act, 1970.

Implemented improvements to commercial working statements through Patents (Amendment) Rules 2020, where the reporting period was aligned with the Financial year, i.e., from April 1 to March 31 of the succeeding year. The reporting period was raised from three months to six months, changing the due date to September. It also granted for the filing of a single record for multiple patents if the working of the discovery is such that the commercial characters are difficult to isolate and allowed the patent owner and license holder to register joint statements of commercialization.

What are the aspects under the amendment to Form 27?

According to the amended Form 27, the patent owner/ license holder is obliged to submit only the estimated revenue accrued within India through manufacturing in India or imported to India of the patented invention. This raises the requirement to implement a statement on complying with the removed public provisions.

It is crucial to transcribe that the operation of the patent is distinct from the provision of the utility of a patent. The patent law claims that the complete blueprint shall fully and particularly describe the work or use and process by which the invention is to be made. The patent claimant is also bound to unveil the best mode of performing the invention. Thus, the utility requirement is continuously controlled.

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