Patents Amendment Rules, 2020

The Department for Promotion of Industry and Internal Trade (DPIIT) has notified Patents (Amendment) Rules, 2020 and published its Official Gazette on 19^th October, 2020. The amended rules come into force from the same date as the publication of the notification, i.e. 19^th October 2020.

The major highlight of the said notification is the publication of “fresh” Form 27, the requisite form for filing statements of commercial working/non-working for granted patents. It may be recalled that draft rules, namely the Patents (Amendment) Rules, 2019 were published on 31^st May, 2019. The said draft rules had introduced a new format for Form 27. The said format was widely criticized and several representations were made by stakeholders to both the IPO (Indian Patent Office) and the DPIIT. Both the IPO and DPIIT had held wide consultations with stakeholders in which there was virtual unanimous view that either the requirement for filing Form 27 should be shelved altogether as such a requirement was obsolete and archaic; or it should be substantially simplified. The representations were made not only by the industry representatives and law firms but also by several industry organizations like the CII. The new Form 27 addresses only a few concerns, for instance the time frame within which Form 27 has to be filed (more details can be found below). However major issues like confidentiality of information (revenue accrued); criminality attached to giving (purportedly) false information; and reasons for non-working remain unattended. In fact, there is an additional burden of providing a list of patents that are related to each other, in a single form.

Following are the amendments in rules:

1. Amendments in the format pertaining to Form 27 (working statement) 

1. Due date of filing Form 27:

   Form 27 is required to be furnished once in respect of every financial year (fiscal year in India is from 1^st April to 31^st  March of the next year), starting from the financial year commencing immediately after the financial year in which the patent was granted, and will be required to be furnished within six months, i.e. by 30^th September of the following year, from the expiry of each such financial year.

   Changes: Earlier, the due date for filing Form 27 was calculated on the basis of calendar year (1^st January to 31^st December) and was required to be submitted within three months of end of each calendar year, i.e. by 31^st March of the next year. Accordingly, essentially the deadline to furnish working/non-working statements has been increased by three months.

   Effect: This change simply postpones the filing of statements and has no material effect on the filing per se. The stakeholders had complained that it is difficult to gather the information to be disclosed within three months’ time of the previous calendar year i.e. by 31^st March. The time line has been extended considering this difficulty and has also been changed according to the fiscal year followed in India, which is from 1^st April to 31^st March (of the next year).

2. Format of Form 27

   Following are the changes in the new Form 27:

   1. Para 1: Form 27 may be filed in respect of multiple patents, provided all of them are related patents, wherein the approximate revenue / value accrued from a particular patented invention cannot be derived separately from the approximate revenue/value accrued from related patents, and all such patents are granted to the same patentee(s). 

      Effect: The patentee will now be required to map all the patents to a technology and providing as a list in one form. This goes beyond the mandate of section 146 of the Patents Act or Rule 131. It appears that the use of the word “may” give an optionality, but in reality, it does not. While giving the revenue in para 4 of the form, it will be required to either give revenue patent wise OR if that is not possible, the list of patents will have to be given.

   2. Para 3: This paragraph requires providing a list of patents that have been worked/not worked. If the patentee has given multiple patents in para 1, then which ones have been worked/not-worked are required to be given here.

      Effect: The problem is same as mentioned above in point a. This amounts to product marking which is not mandated by the Patent Act and goes beyond the requirement of Section 146.

   3. Para 4: If Patent is worked, there is requirement for submission of approximate revenue / value accrued in India to the patentee(s)/ licensee through:
      o Manufacturing in India …… (in INR)
      o Importing into India ………. (in INR)

      Brief in respect of above in not more than 500 words.

      Effect: Though the requirement of “quantum” has been removed, but revenue accrued is still required to be given along with how much is manufactured in India and how much is manufactured outside. In effect it does nothing to protect the confidential information of the patentee. However, the opportunity to provide a brief about the working, revenue and manufacturing requirement may allow the patentee to give an explanation.

   4. Para 5: If Patent is not worked, reasons for not working the patented invention(s) and steps being taken for working of the invention(s), have to be given in not more than 500 words.

      Effect: This remains the same as in the earlier form, except that the patentee is expected to provide a long explanation.

   5. The declaration “state whether public requirement has been met partly/adequately/to the fullest extent at reasonable price” has been removed.

   6. Every patentee and every licensee (exclusive or otherwise) is required to file this form; where a patent is granted to two or more persons, all such patentees may file this form jointly; however, each licensee is required file this form individually.

      Effect: This is an added burden on the patentee and the licensee.

Given below is a comparison of the old and the new Form 27:

2. Amendments in Rule 21 concerning the submission of priority document and its verified English translation for national phase applications:

1. Only when the applicant has not complied with requirements of submission/request for the certified copy of priority application before the International Bureau or the Receiving Office under PCT Rule 17.1, there is a requirement for submission of certified copy of priority application within 31 months from priority date.

2. The English translation of priority application duly verified by the applicant or the person duly authorised by him, is required to be submitted within 31 months from the priority date, only:

   1. where the validity of the priority claim is relevant to the determination of whether the invention concerned is patentable; or
   2. where an element or part has been incorporated by reference, for the purposes of determining whether that element or part is completely contained in the priority document concerned.

3. Where there is requirement for submission of certified copy of priority application or its verified English translation and applicant does not submit the same within 31 months from the priority date, the Patent Office shall invite the applicant to file the priority document or the translation thereof, as the case may be, within three months from the date of such invitation, and if the applicant fails to do so, the claim of the applicant for the priority shall be disregarded for the purposes of the Act.

Effect: The applicant or his agent will have to be vigilant with respect to the submission of priority document when invited by the Controller, otherwise there is a danger of losing the priority claim.

Patent amendment Rules 2020