Imprisonment provisions removed from the Patents Act to bolster trust-based governance

After being cleared by both houses of Parliament, the Jan Vishwas (Amendment of Provisions) Bill, 2023 (JVB) received presidential assent on 11 August 2023 and thus became the law. Several provisions in different Acts have been decriminalized through this bill by removing imprisonment provisions and monetary penalties rationalized. 

The post discusses the changes made by JVB in the Patents Act, 1970 to remove imprisonment and instead enhance fines for not furnishing the statement of working or providing incorrect information or minor, technical, or procedural defaults while filing the working statement. The bill balances the severity of the offense/violation committed and the gravity of the prescribed punishment. 

In this post, we examine the impact of JVB amendments on the Patent Act regarding the working statement required to be filed under Section 146 (2) and Rule 131(1) of the Indian Patent Act. Every year the Patent holders are required to file, for granted, Patents, the statement of working for the previous financial year within six months from the start of the next financial year. The statement must state whether the Patent has been worked or not in India and provide reasons in support, if required.

1. As per the earlier provisions under the Patent Act, the failure to provide the information for the working statement required to be furnished by the Patentee under section 146 shall be punishable with a fine which may extend to 10 lakh rupees  (approx. US $ 12,500). But, with the Post JVB amendments, the term punishable has been removed and left with by way of penalty “which may extend to one lakh rupees (approx. US $ 12500, and in case of the continuing refusal, a further penalty of one thousand rupees for every day after the first during which such refusal continues’. 
2. Section 122 pertains to refusal or failure to provide information. In case the person furnishes information or statement which is false and which they either know is or have reason to believe to be false, or do not believe to be true, the earlier provisions mentioned, they shall be punishable with imprisonment, which may extend to six months, or a fine, or both. JVB bill has substituted imprisonment provisions with thewords they “shall be punishable with penalty which shall not be less than 25 lakh rupees (approx. US $ 31,250)”.  
3. Section 124of the Indian Patent Act pertains to offences by the companies. The earlier provision provides that company and every person in charge and responsible for the business conducted by the company at the time of the commission of the offence is deemed guilty of the offence and proceedings shall be initiated against them and punished accordingly. However, with the amendments under JVB, the Controller of Patents shall only assess penalties, and no punishment is provided. In case of refusal to comply with the Order of Controller, The amended Section 124 provides that “The Controller shall, before imposing any penalty, give a reasonable opportunity of being heard to the person in default. Where the person fails to comply with the order made under the above -section within a period of 90 days from the date of the receipt of the order, the person shall be punishable with imprisonment for a term that may extend to one year or with a fine which shall not be less than 25 thousand rupees, but which may extend to five lakh rupees, or both.”

The above-noted changes have clearly sought to remove penal provisions from the Patent Act which have long been a cause of concern for companies. The amendments would go a long way in restoring confidence in the business community and a landmark development in the journey of rationalizing laws, eliminating barriers, and trust-based governance. 

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