Working of Patents Statements in India: Form 27 and Commercial Utilization
Introduction
In India, patents are not granted solely to provide a monopoly to inventors but to encourage practical utilization of inventions for the benefit of the public. To ensure that patented innovations are worked commercially within the country, the Indian Patents Act, 1970 mandates submission of Working of Patent Statements (Form 27).
These statements are critical for startups, MSMEs, and international patent holders to demonstrate compliance with Indian patent law and to maintain legal enforceability of their patent rights in India.
What is a Working of Patent Statement?
A Working of Patent Statement provides details on the commercial exploitation of a patented invention in India. It ensures that inventions are actively utilized, not left dormant, and that public access to patented products is reasonably satisfied.
Key regulatory references:
- Indian Patents Act, 1970, Section 146
- Form 27 – Statement of Working of Patent
Who Must File Form 27?
- Patentees of an Indian patent
- Licensees (exclusive or non-exclusive) who commercially work the patented invention
The statement must be submitted annually to the Controller of Patents for each calendar year within three months from the end of the year. The Controller may also request updates at any time during the patent term.
Information Required in Form 27
The working statement must provide the following information:
- Whether the patent has been worked or not
- If not worked: Reasons for non-working and steps planned for commercialization
- If worked: Quantity and value (in INR) of the patented product:
- Manufactured in India
- Imported (with country-wise details)
- Licenses and sub-licenses granted during the reporting period
- Public requirement assessment
- Whether the patented invention meets public demand at a reasonably affordable price
- Extent of fulfillment: Partial, adequate, or full
Importance of Form 27 Compliance
Commercial working of patents serves as a key factor in:
- Compulsory Licensing: Ensuring public access to essential inventions if the patent is underutilized
- Patent Revocation for Non-Working: Failure to commercially exploit the invention may trigger revocation proceedings
Failure to submit Form 27 or providing false information carries significant penalties:
- Fine: Up to INR 1,000,000 (~US$16,292)
- Imprisonment: Up to six months for falsified submissions, or both[1]
Natco Pharma Ltd. vs Bayer Corporation[2]
Background:
Bayer Corporation, Germany, held the patent for Sorafenib Tosylate (brand name Nexavar) for treating primary kidney and liver cancer. Natco Pharma requested a voluntary license to produce a generic version in India, which Bayer denied.
Controller Findings:
- Public demand not met: Bayer supplied only 2% of patients in need
- Excessive pricing: Rs 280,428 per patient per month, unaffordable for most
- Patent non-working in India: Minimal local manufacturing
Outcome:
- Natco was granted a compulsory license
- Allowed to sell the generic at Rs 8,800 per month (120 tablets)
- Required to donate free supplies to 600 needy patients annually
- Bayer obligated to receive a 6% royalty on net sales
- Bombay High Court upheld IPAB’s order on appeal [2]
This case highlights the critical importance of actively working patents in India and maintaining transparency through Form 27.
Best Practices for Startups, MSMEs, and International Applicants (2024-25)
- Maintain an annual tracking system for all patented inventions
- Submit Form 27 on time within three months after year-end
- Record production and import data accurately, including licenses granted
- Monitor public requirement and affordability metrics
- Integrate Form 27 compliance into IP portfolio management for cross-border operations
Adhering to these best practices not only ensures legal compliance but also strengthens your IP credibility with investors and partners.
Keywords:
- Working of patents in India 2024-25
- Form 27 commercial working statement India
- Compulsory licensing India
- Patent compliance for startups and MSMEs
- Indian patent filing for international companies
Conclusion
Working of Patents Statements (Form 27) is a crucial compliance mechanism for startups, MSMEs, and international patent holders in India. Timely submission ensures legal protection, mitigates risks of revocation or compulsory licensing, and strengthens your intellectual property management strategy.
For detailed guidance on Form 27 submissions, compulsory licensing, and patent compliance in India, you can contact us at info@ssrana.com.
[1] Indian Patents Act, 1970, Section 146 – Commercial Working of Patents.
[2] Natco Pharma Ltd. vs Bayer Corporation, IPAB Order and Bombay High Court, 2012.