Working on It: An Overview of Patent Working Requirements, Part 2
As clients and legal counsel begin to develop global patent portfolios, one topic comes up annually: working requirements. A working requirement is a provision of a national patent statute that states an owner of a patent must practice the patented invention within the country that granted the patent. To satisfy the requirement, a patent owner may need to build new manufacturing capacity in the country, utilize existing capacity in the country, or license the patented invention to a third-party for manufacturing the patented invention, or perform the patented process, locally. Consequences for not working a patented invention in contravention of local statutes may include monetary sanctions, as well as potential for loss of patent rights or compulsory licenses to third parties.
Patent Working in Various Jurisdictions
When managing a client’s global portfolio, it may be necessary to consider patent working requirements in different intellectual property (IP) jurisdictions. For example, each country can establish their own definition of “patent working.” As such, several national entities have working requirements that state “an owner of a patent must practice his or her patented invention within the country that granted the patent.”
Often, working requirements are tailored to ensure that countries achieve their individual goals and meet the needs of their own national interests. Understanding the existence of working requirements, the differences of working requirements between national entities, and the potential, related consequences for non-working is an important aspect of IP protection to establish effective and high-quality representation of the client.
Countries that belong to IP5, a forum for the world’s five largest patent offices, have relatively minimal standards for working requirements. The five largest patent offices include the Japan Patent Office, the European Patent Office, the Korean Intellectual Property Office, the China National Intellectual Property Administration, and the United States Patent and Trademark Office. Many IP5 countries share similar working requirement features. For example, some European countries (for example, Great Britain, Italy, the Czech Republic, among others) and Korea share similar requirements in which a patented invention should be sufficiently worked within three years (or sometimes four years) from filing the application or the patent may become subject to the risk of compulsory licensing. In these countries, no annual statement of working is required to prove working of a patent. Similarly, Brazil requires a patent be worked by three years from grant, with no annual statement of working required. In Brazil, a non-worked patent could theoretically also be at risk for compulsory licensing. However, a compulsory license request would be subject to analysis and could be rejected if the patent owner can point to legitimate reasons for a non-worked patent. Notably, Brazilian Patent Law does not provide any definition as to what these “legitimate reasons” may include.
Some member states of the European Patent Convention also specify that to qualify as working a patent, patent activity, such as manufacture, importation, or both, must be performed by a member of the World Trade Organization (WTO) to be deemed in use. Non-limited examples of these member states include Cyprus, Estonia, Netherlands, and Ireland.
Mexico includes a statement of working requirement applied in response to a request for a compulsory license. For example, if a third party files an application requesting a compulsory license, the patent owner will have one year to start working the patent. If the owner does not work the patent within the one-year period, it would still be possible to justify the lack of working and oppose the grant of the compulsory license. In Mexico, a patent may lapse only after the expiration of a two-year term from the date of the grant of a first compulsory license, or said patent remains unused by a cause attributable to the patent owner.
Countries with more stringent working requirements include Turkey and India. While Turkey is a participating member of the European Patent Convention, working in Turkey requires a patented invention must be worked by the owner of the patent (or a person authorized by a patent owner) within three years from the date of publication of the grant of the patent in the Bulletin of Patents. In addition, working of a patented invention may not be discontinued for a period of three consecutive years or longer.
Working of a patented invention in Turkey must be demonstrated by the owner of the patent, or a licensee, by an official certificate prepared by a competent authority (e.g., Chamber of Commerce or Industry), filed with the Turkish Patent Office, and to be entered in the Patent Register. Furthermore, the working certificate is to be issued after an inspection of the production in the industrial establishment where the invention is worked. Should a patented invention, without legitimate reasons, be deemed not worked under the established Turkish statues, the patent may become subject to the grant of compulsory licenses.
In India, a patented invention must be commercially exploited within three years from the date of grant of the patent. Similar to regulations established in Turkey, a statement of working is required, which should include approximate revenue or value accrued in India to the patent owner or licensee. Further, the patent owner or licensee must separately indicate the revenue generated by manufacturing in India as well as the amount of revenue or value obtained by importing into India. A brief statement regarding the approximate revenue or value accrued in India is also required to be provided. Notably, a single form may be filed to show working of multiple patents, provided all are related patents, and the approximate revenue or value accrued from a particular patented invention cannot be calculated separately from the approximate revenue or value accrued from related patents, and all patents are granted to the same patent owner. This statement of working is required to be submitted once every financial year (1st of April to 31st of March of the following year). The statement is required starting from the financial year commencing immediately after the financial year in which the patent was granted and should be submitted within six months from the expiry of each such financial year (i.e., statements should be filed by September 30th each year). If the patented invention is not being worked, the patent owner must provide reason(s) for not working, and detail the steps being taken to work the invention. Furthermore, the Indian Patent Office states that if any person refuses or fails to furnish to the Controller any required information or required statement, the person is punishable by a fine of up to USD $13,000 (INR 1,000,000). In addition, false information or false statements could be punishable with up to six months imprisonment, a fine, or both.
Moreover, any person interested may make an application to the Indian Controller for grant of a compulsory license on the ground that the patented invention is not worked in the territory of India. Revocation of a patent in India may occur if a compulsory license has been granted. For example, after the expiration of two years from the date of the order granting the first compulsory license, the Central Government or any person interested may apply to the Controller for an order revoking the patent. The grounds for this revocation are that the patented invention has not been worked in the territory of India, reasonable working requirements have not been satisfied, or that the patented invention is not available to the public at a reasonably affordable price.
As demonstrated by the various examples of working requirements in jurisdictions provided above, it is not only important to understand the novelty of the IP, but also related business strategies with respect to an international system for which IP protection is desired. In effect, a legal representative should strive to support a successful IP strategy for IP owners, which includes a plan for the development, growth, leverage, and monetization of an IP owner’s assets on the national and international scale. As such, successful IP representation includes maintaining strong client relations that include effective and ongoing client communication, even after grant of a patent.
 Trimble, M. “Patent Working Requirements: Historical and Comparative Perspectives” UC Irvine Law Review, vol. 6, 483, pp. 483-508.
 Part 1 of “Working on It: An Overview of Patent Working Requirements” provides a general overview of the definition of patent working requirements.
 IP5 (https://www.uspto.gov/ip-policy/patent-policy/ip5) United States Patent Office. Accessed on 08/05/2022
 To date, the Authors are unaware of the fine for non-compliance being imposed. However, when considering the threat of such consequences, many companies, especially those with a large portfolio in India, prefer to simply file statements of working rather than risk being an example.