Patent Working Requirements and Complex Products

Abstract

Patent working requirements exist throughout the world to ensure that the exclusive rights granted under patents result in an economic benefit to the granting jurisdiction. In India, if a patent is not locally worked within three years of its issuance, any person may request a compulsory license, and if the patent is not adequately worked within two years of the grant of such a compulsory license, it may be revoked. The potency of India’s patent working requirement was demonstrated by the 2012 issuance of a compulsory license for Bayer’s patented drug Nexavar. In order to provide the public with information about patent working, India requires every patentee to file an annual statement on “Form 27” describing the working of each of its issued Indian patents.

We conducted the first comprehensive and systematic study of all Forms 27 filed in India with respect to a key industry sector: mobile devices. We obtained from public online records 4,916 valid Forms 27, corresponding to 3,126 mobile device patents. These represented only 20.1% of all Forms 27 that should have been filed and corresponded to only 72.5% of all mobile device patents for which Forms 27 should have been filed. Forms 27 were missing for almost all patentees, and even among Forms 27 that were obtained, almost none contained useful information regarding the working of the subject patents or fully complying with the informational requirements of the Indian Patent Rules. Patentees adopted drastically different positions regarding the definition of patent working, while several significant patentees claimed that they or their patent portfolios were too large to enable the reporting of required information. Many patentees simply omitted required descriptive information from their Forms without explanation.

It is likely that a combination of factors have led to this high degree of non-compliance, namely technical and administrative failures of the Indian Patent Office, and inadvertent or deliberate omission by patent holders. However, it is also likely that there are more fundamental issues with the very notion of working requirements with respect to complex, multi-patent products. In effect, products that embody dozens of technical standards and thousands of patents may not necessarily be amenable to individual-level reporting of working, or even working requirement themselves. We hope that this study will contribute to the ongoing global conversation regarding the most appropriate means for collecting and disseminating information regarding the working of patents.

Keywords: India, patent, mobile device, working, compulsory license

JEL Classification: L96, O31, O34, O38