Breaking News: Delhi HC Issues Notice on “Patent Working” PIL

patent workingIn a development that will have significant ramifications for patent working norms in India, the Delhi High Court (Chief Justice Rohini and Justice Jayant Nath) issued notice today to the Government of India in a PIL (Public Interest Litigation) filed by me.

I was represented by my counsels, Abhimanyu Bhandari and Sai Vinod. Both represented me probono and I have to really thank both of them for their outstanding advocacy. I also want to thank Murali Neelakantan, Hersh Sewak, Gopal Sankaranarayan, Prashant Reddy, Rajiv Choudhry, Swaraj Barooah, Rupali Samuel, Thomas Vallianeth, Gopika Murthy, Saahil Dhaama and Aabhas Kshetarpal for their excellent inputs that helped shape this PIL.

The government accepted notice and was given 4 weeks to file its counter. We then have another 2 weeks to file our rejoiner. The matter is now posted to November 17th.

But first a bit of background: As many of you know, we’ve been railing against what can only be described as government apathy in not taking any action against patentees that routinely flout patent working norms. In 2011, we first brought this to the notice of the indian patent office through our SpicyIP report showcasing that most of the major pharma MNC’s routinely violate patent working norms. Our previous reports and blog posts on this can be found here and here. Through this recent PIL, we’ve requested the court to order the government to fully enforce patent working norms and take action (impose penalties etc) against errant patentees.

What are patent working norms?

Section 146(2) of the Patents Act, 1970 read with Rule 131 of the Patent Rules, 2003 compels every patentee and her licensee to make an annual disclosure as to how far and to what extent they have commercially worked their patent. The format for this mandatory disclosure is prescribed under Schedule II of the Patents Rules as ‘FORM-27’.

Patent working norms are extremely important, as they help demonstrate as to how the public is benefiting from the patent. Patent regimes and the Indian patent regime in particular is premised on a social bargain, where patentee gains a twenty year monopoly for disclosing valuable scientific/technological information to society and thereupon using the patent to presumably build an innovative product etc to help benefit society. We label this in our PIL as an important “intellectual property duty”,  a term used in contrast to intellectual property rights, and one that I picked up from my stellar supervisor at Oxford, Professor David Vaver. A term ever so apt for India, a country noted for its historical focus on “duties”.

Patent working norms are particularly important during compulsory licensing cases, to help establish whether the patentee has fulfilled the reasonable requirements of the public by interalia selling the patented product at an affordable price. Patent working information played a critical role in the Bayer vs Natco compulsory licensing dispute, with Natco using the various Form 27 (patent working data) submissions of Bayer to help demonstrate that its super expensive patented drug for kidney/liver cancer was reaching just about 2% of the patient population. In fact, as we’ve shown in our report here, there are several gaps in the filing of Form 27 information by Bayer, and we’ve highlighted this in our PIL  petition as well.

Funnily enough, as we’ve demonstrated in our petition, Natco, the beneficiary of the compulsory licensing order, failed to comply with the Controller’s order in the CL decision to submit timely information on its own sales etc of the generic version of Nexavar. Mathews George will bring you a separate blog post on all of this soon.

US/MNC Pressure to Kill Patent Working Norms

We are given to believe that there is major pressure being exerted by the US government and some MNCs to dismantle Indian patent working norms and have them removed from the statute. This PIL therefore comes at what I believe to be an opportune time so that those working in the government (the honest ones at least) can present this PIL as a perfect fait accompli to their US counterparts (and their industry lobbies) stating that since the PIL has been filed, their hands are tied! Well at least, one hopes so.

I extract the PIL synopsis as below. For those interested, the complete text of the PIL as filed can be found here. Mathews will bring you a more comprehensive post on this soon.

Shamnad Basheer vs Union of India & Others (W.P.(C)  5590/2015)


The Writ Petition is being filed in public interest to seek an appropriate writ or directions against the Respondent authorities to compel patentees and licensees to comply with the statutory mandate to declare information on the working of their patents, as per the Patents Act, 1970 & Rules thereunder.

 Section 146(2) of the Patents Act, 1970 read with Rule 131 of the Patent Rules, 2003 compels every patentee and her licensee to make an annual disclosure as to how far and to what extent they have commercially worked their patent. The format for this mandatory disclosure is prescribed under Schedule II of the Patents Rules as ‘FORM-27’.

The Petitioner conducted an extensive survey of patent working in three critical areas (a) pharmaceutical drugs (lifesaving drugs for fatal diseases such as Cancer, AIDS, Diabetes and Hepatitis); (b) telecommunications; and (c) publicly funded research and development.

The survey revealed a blatant disregard for an important statutory mandate, with close to 35% of the patentees failing to disclose their patent working status during 2009 to 2012. Even among those patentees that purported to make this disclosure, the said disclosures were highly defective, inasmuch as they were either incomplete, negligent or incomprehensible.

More worryingly, the Respondents authorities have never initiated action against any of the errant patentees. What makes this government inaction even more egregious is the fact that the blatant non-compliance was already brought to the notice of the government four years ago through a similar investigation conducted by the Petitioner in a public report titled “The ‘Non-Working’ of the Patent Office ‘Working’ Requirement!”

This cavalier disregard for an important statutory mandate is particularly problematic, as patent working norms lie at the very heart of India’s patent system. The Patents Act grants a twenty (20) year monopoly for inventions that are novel, non-obvious and useful. The grant of exclusionary “rights” are, however, not absolute, but comes with corresponding “duties” imposed on patentees to work their patented invention, as far as practicable, for the public benefit, by ensuring inter alia that patented products are available in adequate quantities and a reasonable price.

If the patentee fails to fulfill this important statutory mandate, the Act imposes a penalty in the form of a compulsory license, where third parties are given permission to manufacture and sell the drug for the benefit of consumers. If the compulsory licence also fails to fulfill this important public purpose, the patent could then be revoked. The compulsory licensing and revocation provisions will come to naught, if patent working information is not made readily available.

Besides this, courts routinely deny the grant of an equitable remedy (i.e., interim injunctions) when the patent has not been worked.

A patent is effectively a fetter on the freedom of trade guaranteed under Article 19(1)(g) of the Constitution of India, as it blocks competitors from introducing their goods and services in the market. But for such competition, the consumer suffers, particularly in terms of affordable versions of patented medicines. Therefore, such fetter must be tolerated only when it is subject to reasonable safeguards such as ensuring that it is worked for the public benefit ensuring availability in reasonable quantities and at reasonable prices.

Patent working disclosure (as mandated by the Patents Act) is therefore a critical one underpinning the very essence of India’s patent regime. The lack of such transparent disclosure will deny valuable information around patents and their commercial working to the larger public which is effectively suffering the monopoly. It will render the compulsory licensing and revocation provisions largely illusory, as without working data, it is impossible to determine whether a patentee has satisfied the reasonable requirements of the public, an important precondition for compulsory licensing and revocation. It will also make it difficult for honest competitors to assess their IP risks, whilst doing research and developing advanced technologies or products that are likely to be of great value to society. As a result, the rate of technological development and research is likely to be hampered. More worryingly, this detrimental impact on competitors will ultimately affect the general public, who are denied access to more affordable technologies, a concern most starkly felt in the context of medicines.

Lastly, it is humbly submitted the present format of the FORM-27 disclosure specified under the Patent Rules is wholly insufficient to fulfill the objectives of the Patents Act, inasmuch as it lacks precision and fails to ask for several critical particulars that are necessary for an effective assessment of the commercial working of patented inventions. Without such working information, the compulsory licensing and revocation provisions will remain ineffective, and a failure to invoke them in appropriate cases will ultimately affect the general public, particularly in cases involving patented medicines and public health. “

I also extract the prayer as below:

WHEREFORE the Petitioner respectfully pray that this Hon’ble Court may, in public interest, be pleased to issue a Writ of Mandamus, or any other appropriate writ or order directing Respondent authorities:

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;

4. To immediately rectify the ‘comprehensive online filing services for patents’ to enable patentees and licencees to submit full and complete working information;

5. To publish and upload the entire information relating to commercial working of all patents for all years of operation of the patent on their website as per Section 146(3) of the Patents Act, 1970 and Rules thereunder;

6. To declare that the present format of FORM-27 as contained in Schedule II of the Patents Rules, 2003 is insufficient to sub-serve the purpose of the Patents Act, 1970;

7. To constitute a committee of experts to suggest reforms to improve the public disclosure norms around the commercial working of patents;

8. Grant such other reliefs, including the costs of this writ petition, in the interests of justice.

ps: image from here.

Please click here, here and here to view Mathews’ three part post covering the PIL in detail. 

Tags: , ,

About The Author

Leave a Comment

Scroll to Top