ADVICE ON THE SUBMISSION OF WORKING STATEMENTS UNDER ALTERED INDIAN PATENT LAW _ INTERPRETATION OF AMENDED RULE 131(2)
What follows represents our advice with respect to the effect which the amendment to Indian patent law last year has had on the filing of annual patent working statements in India and how altered Rule 131 (2) is to be interpreted. Our comprehensive advice on the filing of working statements in general is retained in a separate section which follows and has been modified to include the recommendations set out herein.
In an Extraordinary Gazette of India dated October 20, 2020 the Indian Government published an official Notification dated October 19, 2020 identifying changes to the Indian Patents Rules, 2003. One of the changes introduced involved the amendment of Rule 131 (2) which identified the period in which a statement of working should be filed and the date by which such filing should take place. The alteration to the sub-rule in question gave rise to a difference of opinion with respect to the date, essentially the year, by which the first set of working statements were due to be filed. The purpose of this presentation is to clarify definitively the altered situation.
As soon as the Extraordinary Gazette dated October 19, 2020 identifying changes that were to come in to effect in was published, we set about analysing the altered sub-rule in order to assess specifically and accurately what such changes were and how they impacted the manner in which statements of working now needed to be filed. From our study of the altered rule, the changes could, in a nutshell, be identified as follows:
1. The filing of working statements would no longer be based on the calendar year but on the Indian financial year of April 1 of one year to March 31 of the next; and
2. Working statements under the new directive identified at 1 above would be required to be filed six months from the end of the financial year in question.
After analysing the revised Rule 131(2), we prepared a Note on the changes in question which included our take on amended Rule 131 (2) and its requirements. On the basis of our understanding, the Note we forwarded our clients and such correspondence we had with them on the subject, stated that by virtue of the change to Rule 131 (2), working statements in respect of the financial year extending from April 1, 2020 to March 31, 2021 would be due by September 30, 2021.
When we presented our clients with advice based upon what is stated above, we could not have foreseen the welter of emails and other communications we received pointing out that the advice we had given conflicted with the advice they had received from other Indian attorneys. According to these other Indian attorneys, the working statement in respect of the financial year from April 1, 2020 to March 31, 2021 was not due until September 30, 2022.
Given the reputation which our firm has garnered over the years, we found it difficult to accept that we could have misinterpreted the altered rule so greatly. We immediately sat down and had another session in which we re-analysed amended Rule 131(2) threadbare. This session did nothing to convince us that our earlier expressed opinion was incorrect.
We did not leave matters there. To ensure that ours was not a classic view of not seeing the wood for the trees, we took the issue to additional discussions with the Deputy Controller responsible for policy at the Indian Patent Office and with a very senior Indian patent attorney. In fact, we had two successive discussions with the Deputy Controller and though his advice on each occasion differed slightly, he agreed with our view that if the working statement for the financial year from April 1, 2020 to March 31, 2021 was not due until September 30, 2022, it would mean that a patentee or a licensee was the beneficiary of an exemption from the filing of file a working statement for an Indian financial year. The Deputy Controller confirmed that it was never the intention of the framers of the law that their amendment of Rule 131 (2) should afford a patent or licensee such an exemption.
The senior attorney with whom we also discussed the matter had no hesitation in confirming our view and added to it that the change from calendar year to financial year implemented in October 2020 simply meant that the original deadline for the filing of working statements for that (calendar) year was pushed forward from March 31, 2021 to September 30, 2021.
At this juncture, it is germane to review the content of amended Rule 131(2) which is reproduced hereafter:
Rule 131 (2):
The statements referred to in sub- rule (1) shall be furnished once in respect of every financial year, starting from the financial year commencing immediately after the financial year in which the patent was granted , and shall be furnished within six months from the expiry of each such financial year.
As stated, the two differences between the original sub-rule 131 (2) and the amended sub-rule are the replacement of the reference to “calendar year” by “financial year” and the extension of the period for filing a working statement beyond the termination of the year in question, which now has to be the financial year, to six months instead of three months as contained in the sub-rule afore amendment.
What is most significant is that the amended sub-rule 131(2) commences with a categorical statement which in our opinion cannot be open to any second interpretation, namely that following the change, a working statement shall be furnished once in respect of every financial year. There can be no doubt that the period from April 1, 2020 to March 31, 2021 constitutes a financial year. furthermore, since it was never the intention of the legislators responsible for the change in Rule 131(2) that any financial year should go by without a patentee or a licensee under a patent being required to file a working statement, the financial year April 2020 to March 2021 exception and therefore certainly requires a working statement filed in respect thereof.
The next clause in revised sub-rule 131(2) provides an indication as to when the first statement of working under the revised rule should be made. The rule in question states, once again unequivocally, that a working statement is to be filed in the financial year commencing immediately after the financial year in which a patent is granted. Taken in the light that the year in question is now the financial year running from April 1 of any year to March 31 of the next year and that the period April 1, 2020 to March 31, 2021does constitute a financial year, then by virtue of the requirement of Rule 131 (2) for a statement to be filed in the financial year immediately following in the year which a patent is granted, all Indian patents granted from April 1, 2020 to March 30, 2021 will require to have a statement of working filed in respect thereof in the financial year commencing from April 1, 2021. Since the change in the Rule has shifted the due date by which such a working statement is to be filed from March 31 to September 30, it must follow that statements for the financial year April 2020 to March 2021 are due for filing by September 30, 2021.
The following points may assist further is appreciating the opinion we have on the situation as it exists:
1. The law, i.e. Rule 131 (2), changes with effect from October 19, 2020 at which time the date for filing a working statement was calculated according to a calendar year.
2. As a result of the change, the date by which the filing of a working statement is incurred is extended from the older calendar year limit of December 31, 2020 to March 31, 2021 which represents the end of the Indian financial year in which the change was effected.
3. Amended Rule 131 (2) still maintains that a patentee or a licensee must file a working statement in respect of every financial year.
4. It must follow, therefore, that in respect of any Indian patent granted between April 1, 2020 and March 31, 2021 (which is without doubt a financial year), a working statement would be due by September 30 of the financial year following the year in which the patent was granted, that is to say by September 30, 2021.
5. Of course, in respect of any patents granted in the current financial year from April 1, 2021 to March 31, 2022 statements of working will fall due only by September 30, 2022.
What I have presented herein represents the considered opinion of our firm on the subject. We are secure in the belief that it correct and even in the unlikely event that the opinion presented by us is erroneous, at least it is an error on the right side since it ensures for a patentee that he files a working statement in every financial year and thereby avoids contravening the opening directive of revised Rule 131 (2).