Delhi High Court Makes Clear that Patent Working Information is not “Confidential”

The Delhi high court order on “patent working” that we blogged about earlier is now available on our resource page here. As you can see, it is a very well reasoned order. And one of the few decisions that is not unduly long winded, but short, crisp and legally lucid.

Here are the key excerpts from the decision. Am reproducing the introductory paragraphs of the courts ruling, since the court captures the core essence of the petition quite well.

The court makes clear (see para 13 excerpted below) that patent working information is not “confidential” and has to be mandatorily submitted by all patentees. And that all licensees (including those that have been granted compulsory licenses such as Natco) have to comply with the disclosure requirement (see para 10-12 excerpted below).

I’m glad the court refused to buy into the rather clever argument by the intervenor Naren Thappeta (who represents a number of high technology companies) that owing to Form 27 being vague, they simply could not comply. As I’d noted in our earlier post, had this been so, they ought to have sought clarifications from the Patent Office. After all, many of these errant patentees are multinational corporations, with deep pockets and even deeper lawyers. In the immediate aftermath of my post, I received an email from Naren Thappeta stating that he did in fact make such a representation to the patent office. Unfortunately, this was done only in September 2017…more than 2 years after our writ had been filed highlighting how a number of patentees had been systemically flouting the patent disclosure norm for several years in a row. As some of our readers may recollect, we’d been doggedly tracking this issue of non compliance since at least 2008 (and here I must note the stellar contributions of Prashant Reddy who played a pivotal role when we first began tracking this issue).

Given the submission of the government counsel Amit Mahajan that he would take stock of the situation and present a status report, the court was pleased to adjourn the matter to the 18th of January.

So here goes. I’ve reproduced the writ details (number, names of parties/lawyers etc), followed by key excerpts from the decision.

IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C) 5590/2015

SHAMNAD BASHEER ….. Petitioner

Through: Mr. Abhimanyu Bhandari with Mr. N. Sai Vinod and Ms. Roohina Dua, Advs.

versus

UNION OF INDIA & ORS ….. Respondent

Through:

Mr. Amit Mahajan, CGSC forUOI.

Mr. Sanjoy Ghose, ASC with Ms. Urvi Mohan, Adv. For GNCTD.

Ms. Pritha Srikumar with Ms. Neha Mathen, Advs. for intervener.

CORAM:

HON’BLE ACTING CHIEF JUSTICE GITA MITTAL

HON’BLE MR. JUSTICE C.HARI SHANKAR

Order (10.01.2018)

1. Para 1-2: This writ petition highlights glaring non compliance with the provisions of the Patents Act, 1970 on the part the Controller General of Patents. Mr Abhimanyu Bhandari, counsel for the petitioner submits that the grant of patents results in the patentees getting exclusive rights over the inventions and therefore, it is imperative that the Controller General of Patents maintains a scrutiny as to whether the patent is being worked or not. To ensure that the patentees have not merely acquired rights over the invention and are actually working the same, the statutory scheme requires a patentee to submit periodic information. In this regard, Section 146 of the Patents Act, 1970 empowers the Controller General of Patents, Designs, Trademarks and Geographical Indications to calf for information in a format prescribed in accordance with Rule 131 of the Patents Rules, 2003. The manner in which the information has to be submitted has been set out in Form-27 annexed to the Patents Rules, 2003. Failure to comply with the statutory requirements invites penalties and criminal action prescribed under Section 122 of the statute which includes imposition of fine as well as initiation of criminal proceedings.
2. Para 3: Our attention is drawn to several admissions to the effect that the respondents are not ensuring compliance with the requirements o f Section 146 o f the Patents Act, 1970 and, despite failure of the patentees to conform to the requirements of Rule 131 of the Patents Rules, 2003 and Form-27, no action at all has been· taken under Section 122 of the Patents Act, 1970.
3. Para 7: The second glaring instance of non-compliance with the statutory scheme of the Patents Act, 1970 is highlighted by the petitioner in respect of grant of a compulsory licence to M/s NATCO Pharma in relation to patent no.215758 by order dated 9th March, 2012 in C.L.A. No.1 of 2011 under Section 84 of the Patents Act. It is pointed out that the order dated 9th March, 2012 imposed an obligation on NATCO Pharma in Para 15(b) thereof, to report accounts of sales to the Controller on a quarterly basis, on or before the 15th of each succeeding month.
4. Para 8: By the RTI query dated 19th January, 2015, the petitioner sought inter alia information as to whether M/s NATCO Pharma had complied with the above condition imposed in para 15(b) of the order dated 9th March, 2012. In its response dated 6 February, 2015, the Patent Office informed the petitioner that as per its records “no details are available”.
5. Para 10: Counsel for the petitioner also points out that Section 146(2) read with Rule 131 of the Patents Act, 1970 makes it mandatory even upon licensees to submit Form-27 containing information on commercial working of the patented invention. Section 146 of the Patents Act, 1970 draws no distinction between the original patentees and license holders. Thus, it has been pointed out by the petitioner that license holders are also required to file the same information in Form-27 as a patentee.
6. Para 11: Vide the response dated 11th March, 2014, the Controller of Patents & Designs, CPIO has informed the petitioner to the effect that “Form-27 are filed by Patentee only”. There is certainly substance in the objection of the petitioner that this position is contrary to the statutory requirement.
7. Para 12: Counsel for the petitioner has also submitted that the respondents are not taking any action for notional or incomplete compliance with the provisions of Section 146 of the Act. In this regard, an instance has been pointed out wherein Form-27 was submitted by M/s Telefonaktiebolaget LM Ericsson (Pub.) in respect of patent no.203034 of 24th August, 1999. Against the column wherein the patentee was required to disclose information regarding “the licenses and sub-licenses granted during the year”, this patentee stated as follows: “As all the licenses are confidential in nature, the details pertaining to the same shall be provided under specific directions from the Patent Office.”
8. Para 13: It is pointed out that so far as the grant of patents are concerned, information in regard thereto is available on the website of the Patents Office. All that the patentees submitting Form-27 are required to submit, is the details of the licenses and sub- licenses. This information certainly cannot be termed “confidential” and therefore, the Patents Office has to treat such suppression as failure to comply with the requirements of Section 146 of the Patents Act, 1970 arid to take action against the patentees who do not furnish the required information.
9. Para 14: Ms. Pritha Srikumar, Advocate for the intervener has submitted that the petitioner has also pointed out that Form-27 itself was extremely vague and the same deserves a relook by the respondents. Mr. Srikumar would, therefore, contend that non- compliance of such form cannot be faulted with.
10. Para 15: In our view, this submission is erroneous inasmuch as there can be no exemption from statutory compliance and that in case any query in Form-27 could not be complied with, the person submitting the return would be required to state so. So far as the submission that Form-27 deserves a relook is concerned, we find that in the counter affidavit, the official respondents have stated that they had issued a Notification dated 26th October, 2015 for a proposed draft amendment of the Rules by “The Patents (Amendment) Rules, 2015”. The respondents have also submitted that the same included amendments to Form-27 and the same has been posted on the official website of the Department of Industrial Policy and Promotion (DIPP). The counter affidavit says that public comments have been invited.
11. Para 17: This writ petition has remained pending in this Court since 2015. We also do not have any information as to whether there is any change in the status with regard to the filing of returns under Section 146 of the Patents Act, 1970 and whether any action taken by the Controller General of Patents and Designs under Section 122 of the Act.
12. Para 18: Mr. Amit Mahajan, ld. CGSC prays for an adjournment to inform this Court with regard to the status of the amendment of the rules and the action taken under Section 122 of the Patents Act, 1970. On his request, list on 18th January, 2018.

ps: Image from here