Ask any patent agent to describe a patent in two words and you’ll hear “exclusionary right”. As in law and life, rights come with duties. If the state grants you the right to exclude everyone else, it expects the invention to actually reach the public — and it checks.
Why the requirement exists
The fundamental premise of granting a patent — or any form of intellectual property protection — is that the invention is used for the benefit of society. Think of it as the ubiquitous give-and-take.
But how does the Government know whether a patent is actually being used for society’s benefit? That is where the Statement of Working comes in.
What it is
A Statement of Working is a declaration by the patentee and any licensees attesting that the invention has indeed been commercially worked for the benefit of the public.
The legal provisions
The requirement sits in Section 146 of the Patents Act, 1970 and Rule 131 of the Patents Rules, 2003.
Section 146 is two-pronged. The first part allows the Controller to seek information from the patentee or licensees about the commercial working of the patented invention. The second part deals with the statement of working to be filed by the patentee and licensees.
How often to file. When this was written, Form 27 was an annual filing, due within six months of the end of each financial year — by 30 September of the following year.
The 2020 amendment changed this. Under the Patents (Amendment) Rules, 2020, the statement is now filed once every three financial years, starting from the financial year immediately after the year of grant, and is due within six months of the end of that three-year period. The form itself was also substantially simplified, removing the requirement to break down quantum and value in the detailed manner previously demanded. A single Form 27 may now cover multiple related patents where the applicant is the same and the value attributable to each cannot be derived separately.
What Form 27 asks
To determine whether an invention has been worked — made accessible to the public for its benefit — the form seeks:
- whether the invention was worked in India;
- if not worked, the reasons for not working; and
- if worked, the approximate revenue or value accrued in India from manufacturing in India and from importation, and whether the public requirement has been met at a reasonably affordable price.
The pre-2020 form additionally required the quantum and monetary value of patented products manufactured in India and imported, details of licences and sub-licences granted, and statements on whether the reasonable requirements of the public had been met partly, adequately or to the fullest extent, and whether the invention was available at reasonably affordable prices. Those questions were the source of most of the compliance burden, and their simplification was the point of the amendment.
Why it matters — the penalties
Indian patent law contemplates that patentees or licensees may choose not to file, or fail to file. The fine for that is up to ₹10 lakh (roughly USD 12,000).
There is also a trap for those who file false information in order to “comply”: a false declaration can attract imprisonment, with or without a fine.
The answers matter beyond compliance, too. The working information feeds directly into compulsory licensing — a patent not worked in India is one of the three grounds on which a third party may apply under Section 84. What you say in Form 27 is a statement about your own exposure.
For the curious
Before the 2005 amendment, the penalty for not filing was a relatively paltry ₹20,000. The sudden and enormous hike was clearly meant to deter non-filing. Whether it succeeded is debatable — under-compliance with Form 27 has been a persistent complaint, and was itself part of the impetus for the 2020 simplification.
Given the unpredictable nature of the IP Office in enforcing the letter of the law, it remains better to err on the side of caution and file.
The takeaways
- Section 146 and Rule 131 require a statement of working from patentees and licensees.
- Now once every three financial years — not annually — following the 2020 amendment.
- Up to ₹10 lakh for not filing; false declarations can attract imprisonment.
- What you declare feeds compulsory licensing — non-working is a Section 84 ground.
Frequently asked questions
How often must Form 27 be filed in India? Once every three financial years, starting from the financial year immediately after grant, within six months of the end of that period — changed from the earlier annual requirement by the Patents (Amendment) Rules, 2020.
What is the penalty for not filing a statement of working? A fine of up to ₹10 lakh. Filing false information can attract imprisonment, with or without a fine.
Who must file it? The patentee, and any licensees of the patent.
Why does the Patent Office want this information? To know whether the patented invention is being worked in India for the public’s benefit — information that also bears on compulsory licensing applications under Section 84.