Form 27 Revisions Under the Indian Patent Rules: What Has Changed and Why It Matters

INTRODUCTION

The Indian Patents Act, 1970 was introduced to encourage innovation while ensuring that public interest and transparency are not overlooked. Patents are not just about granting exclusive rights, they are meant to ensure that inventions are actually put to use and contribute to solving real-world problems. When a patent lies idle without any commercial or practical application, it fails to serve its true purpose. To keep a check on this, the Act requires every patentee or licensee to share details on how their invention is being used in India through Form 27, as laid down under Section 146 of the Act and Rule 131 of the Patents Rules, 2003. The recent 2024 amendments to Form 27 have made the reporting process simpler and more transparent, updating the format and clarifying what information needs to be disclosed. These changes aim to strike a fair balance, promoting openness while still protecting confidential business information.

PURPOSE AND SIGNIFICANCE

Form 27 acts as a formal declaration that patent holders must file to show how their inventions are being put to practical or commercial use in India. It helps ensure that patents don’t just exist on paper but actually serve a purpose, whether through local manufacturing, licensing arrangements, or imports. This idea ties back to Section 83 of the Patents Act, which stresses that patents should ultimately benefit the public by promoting the use of new inventions. From a legal standpoint, Section 146 of the Patents Act requires every patentee and licensee to submit an annual statement explaining how their patent has been worked in India. The detailed process, including deadlines and the format of the disclosure, is laid out under Rule 131 of the Indian Patents Rules, 2003, which was updated in 2024 to make reporting more efficient and clearer.

The main goals behind Form 27 are to increase transparency in how patents are used, prevent practices like patent evergreening, make data on patent commercialization available to the public, and help the government keep track of how effectively patents are being worked, particularly in cases where compulsory licensing might need to be considered.

LIMITATION OF 2020 AMENDEMENT

The idea of “working a patent” in India is captured through Form 27, as mentioned in the Patent Rules, 2003. Every patent holder or licensee must file this form within the set deadline to show whether their invention is being used commercially in India. If they fail to do so, they can face penalties under Section 122(1)(b) of the Patents Act, which may include a fine, imprisonment for up to six months, or both.

Form 27 requires the patent holder or licensee to share a few key details, such as:

• Whether the invention has been used commercially.
• If not, the reasons for not using it and the steps being taken to make it work.
• If it has been used, the quantity and value (in INR) of the patented product or both when it’s made in India and when it’s imported, along with the countries of import.
• Details of any licenses or sub-licenses granted during the year.
• Whether the invention has met the public’s demand at a fair and reasonable price, either partly or fully.

Before the amendment, this statement had to be filed every year by March 31st for the previous calendar year. However, despite being intended to ensure better compliance and transparency, the system did not work effectively. In fact, a Public Interest Litigation (PIL) was filed in the Delhi High Court in 2015, pointing out that the form lacked clarity. Terms like “adequate extent,” “commercial scale,” and “fullest extent that is reasonably practicable” were vague and confusing, leaving room for interpretation.

These shortcomings highlighted the need to revise Form 27 to simplify the process, encourage compliance, and address the concerns of all parties involved, including patent holders, licensees, and examiners.

WHY FORM 27 REQUIRED A CHANGE

The earlier version of Form 27 under the Patent Rules, 2003 contained several gaps and ambiguities that eventually led to the need for amendments. Some of the major concerns are outlined below:

1. Ambiguity in Terms like “Commercial Scale,” “Adequate Extent,” and “Fullest Extent”:

In 2015, a Public Interest Litigation (PIL) before the Delhi High Court brought attention to the unclear expressions used in Form 27. The form asked patentees to declare whether they had met public demand for the patented invention “partly,” “adequately,” or “to the fullest extent.” However, there were no specific parameters or official guidance to help interpret these phrases. As a result, patentees often relied on their own understanding, leading to inconsistent and subjective reporting.

2. Reporting Period and Filing Deadline:

Under the 2003 Rules, patentees were required to submit their annual working statement within three months after the end of the calendar year. This caused practical difficulties because most companies in India operate based on the financial year rather than the calendar year. Moreover, the tight filing deadline often overlapped with financial year-end activities, increasing the chances of delays or non-compliance.

3. Disclosure of Confidential Information:

Another major concern was confidentiality. The old Form 27 required patentees to disclose the quantity and value of the patented product manufactured or imported. This raised fears that commercially sensitive information could become publicly accessible. Unfortunately, neither the Patents Act, 1970 nor the Patents Rules, 2003 clearly explained how such data would be protected. The law merely stated that the Controller could publish such information as prescribed under Section 146(3) read with Rule 131(3), and under Section 145, it was within the Controller’s discretion to decide what to publish in the Patent Journal. This uncertainty made many patentees hesitant to share detailed figures.

4. Multiple Filings for Related Patents:

Previously, patentees were required to submit separate Form 27 statements for each patent, even when multiple patents were closely related or when the revenue from one could not be easily separated from another. This duplication created unnecessary administrative burden and made compliance more difficult for patent holders managing large patent portfolios.

These challenges highlighted the shortcomings of the older system and ultimately led to the introduction of the Patent (Amendment) Rules, 2020, which aimed to simplify the process, enhance clarity, and improve compliance across the board.

REVISED FRAMEWORK OF FORM 27 UNDER THE PATENT (AMENDMENT) RULES

1. Extended Filing Deadline:

Under the revised rules, Form 27 now has to be submitted for each financial year instead of the calendar year, as required earlier. Patentees now have six months from the end of a financial year that is, until September of the following year to file their statement. This shift has been widely welcomed, as it aligns with the accounting practices of most organizations and simplifies data collection. The additional three-month extension also provides a practical buffer for companies facing unexpected delays.

2. Submission of Approximate Value Instead of Exact Figures:

The amended Form 27 requires patentees or licensees to disclose only the approximate revenue or value generated in India through either manufacturing or importing the patented invention. Earlier, the 2003 Rules demanded precise details regarding the quantum and value (in rupees) of the products made or imported, which was often difficult to calculate. The new approach is seen as more realistic and less intrusive, particularly for inventions where accurate figures are hard to determine or where disclosure of such details could compromise confidentiality.

3. Removal of Licensee and Sub-Licensee Details:

Previously, patentees were required to list the names and details of licensees and sub-licensees, raising legitimate concerns over the disclosure of sensitive business information. The amended rules have eliminated this requirement, eased the compliance burden and ensured that proprietary licensing strategies remain confidential. This change has been especially appreciated by companies managing extensive patent portfolios.

4. Elimination of the Public Requirement Declaration:

The older version of Form 27 asked patentees to specify whether the public demand for the patented invention had been met “partly,” “adequately,” or “to the fullest extent” at a fair price. The absence of clear definitions for these terms caused confusion and inconsistency in reporting. The new Form 27 has removed this ambiguous clause, offering much-needed relief to patentees and making the reporting process clearer and more objective.

5. Single Form for Related Patents:

Another significant improvement is that patentees can now file a single Form 27 for multiple related patents, provided that the approximate revenue or value from each individual patent cannot be reasonably separated. This change has resolved the earlier issue of repetitive filings for interconnected patents, making the process smoother and far more efficient for innovators and patent holders.

DOES THE NEW AMENDMENT ENHANCE OR DILUTE THE PURPOSE OF PATENT WORKING REQUIREMENTS?

The revised Form 27 marks a noticeable improvement over the previous version. It now requires patentees to state the reasons for not working the invention and to describe the steps being taken to bring it into operation, within a limit of 500 words. This change ensures a higher degree of accountability compared to earlier formats that only demanded a justification for non-working.

However, despite these positive strides, a few shortcomings continue to raise concerns:

1. Absence of Information on the Quantum of the Invention:

The amended Form 27 no longer mandates patentees to report the exact number of units manufactured or imported in India. This omission weakens transparency, as such data helps determine whether a patent is being effectively worked in the country.
For example, in the NATCO Pharma vs. Bayer case, the authorities relied on the older version of Form 27 to assess the working status of Bayer’s patented drug before granting a compulsory license. Without quantitative data, assessing similar cases in the future may become increasingly difficult.

2. Lack of Details on Public Accessibility and Pricing:

The revised form has also removed the requirement to disclose how far public demand has been met at a reasonable price. Earlier, patentees had to indicate the estimated demand, the extent to which it was satisfied, and the initiatives undertaken to make the product available to consumers. With these details now excluded, it becomes challenging to evaluate whether patented inventions are truly accessible and affordable to the public, which undermines one of the core objectives of India’s patent framework.

3. Elimination of License and Sub-License Information:

Previously, patentees were required to disclose details of any licenses or sub-licenses granted. The new Form 27 does not seek this information, meaning patentees can simply declare that a patent is “worked” without offering evidence of licensing arrangements. This reduces transparency and weakens the monitoring mechanism for patent utilization, as authorities can no longer verify how widely the patented technology is being disseminated.

4. Word Limit Restricting Comprehensive Explanation:

While the inclusion of a 500-word limit was intended to streamline compliance, it may inadvertently serve as an escape route for patentees. The restriction prevents patentees from providing a complete account of why a patent remains unworked or underutilized. As a result, the limited space could lead to vague or insufficient justifications, allowing patentees to avoid full accountability under the guise of brevity.

CLOSING REMARKS:

It can be said that the revised Form 27 brings both strengths and shortcomings. On the positive side, it simplifies the process for patentees and licensees by removing confusion and reducing the amount of information they must disclose. However, from a regulatory point of view, allowing only approximate data within a limited word count makes it harder to accurately assess how effectively a patent is being worked. While many patentees and licensees manage to file Form 27 independently, the process can become quite complex when dealing with several unrelated patents, each having different compliance needs. In such cases, seeking assistance from a dependable third-party service provider can help ensure accuracy and timely submission.

Author:–Mr. Chetan Wagh,  in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.