With a growing patent portfolio comes the need to comply with local practice requirements. Whilst the basic principles of patentability may be similar in most jurisdictions, the prosecution of your patent application and route to allowance is ultimately shaped by a jurisdiction’s own legislation. A common misconception is that local practice only plays a part in prosecution. However, once a patent grants, local requirements remain relevant even if your patent is not under direct attack by a third party.
Aside from attending to renewal fee payments post-grant, many countries have patent working requirements which, if not met, could result in a third party obtaining a compulsory licence to your patented technology.
In this guidance note, we look at the general principles of patent working requirements and take a closer look at some jurisdictions which have more stringent requirements on patent working post-grant. We also look at what you can do in order to prevent a third party from accessing your patented technology.
Patent working requirements are statutory provisions whereby a patent owner is required to work their patented technology.1 Most countries have at least some passive provisions. However, there are also countries that have active requirements where a patentee must demonstrate that their patented invention is being worked in the relevant country.
The idea behind patent working requirements is a simple one – its goal is to enable access to products and processes without the jurisdiction in question having to invest capital into growing and developing its own industrial sector.
Another goal of patent working requirements is to prevent the establishment of non-practicing entities which dominate the market. In this scenario, ‘blocking monopolies’ have the potential to prevent third parties from accessing the patented product or from developing and commercialising similar technology. Depending on the product, this can impact the local economy since the patented technology is neither made available by the patentee, nor is the patent available to be licenced.2
But how serious are patent working requirements? Where and when does a patent owner need to provide proof of working? And what if a third party applies for a compulsory licence if you, as the patent owner, do not practice your patented invention?2 The answers to these questions depend on the country in which the patent is granted.
In view of the potential economic implications of failure to work a patented invention, patent legislation in most jurisdictions provides the right for a third party to apply for a compulsory licence under the patent so that the patented invention can be practiced locally. Only if the patentee refuses to licence the patent in the first place is a third party able to apply to the relevant patent office or court for a compulsory licence. Once a third party has successfully applied for a compulsory licence, the terms of the licence are negotiated with the patentee or decided by the patent office or court.
In practice, the grant of compulsory licences is rare and as mentioned earlier, most countries do not require the filing of proof for the extent of working of a patent by the patentee.
However, there are jurisdictions in which working statements must be submitted to the patent office. These must either confirm that the invention has been worked in the jurisdiction in question or provide reasons why the invention has not been worked in the relevant period.
Famously, the country with the most stringent working requirements is India. The provisions of a number of countries are summarised below which serve as a general guide. Should you require any detailed advice, please do not hesitate to get in touch with your usual Dehns attorney.
India3
In India, a patent has to be worked within three years from the date of grant.4 Statutory provisions require the patentee and all licensees to file regular working statements.5
Working includes any local production of a product that is protected by the patent in question and which is of commercial scale. This may also extend to importation.
The law in respect of filing statements of working in India has recently changed. As of 15 March 2024, a statement of working is required to be submitted once every three financial years, commencing in the financial year after the year in which the patent has granted. The first statement of working must be filed within six months from expiry of the three-year period which follows the year of the grant date of the patent, i.e. by 30th September in the last year of the three-year period.
Failure to file a statement of working may incur a penalty of over £900, with further daily fines for continuing failure to file. There are higher penalties for submissions of false information in a statement of working.
Failure to file a statement of working may also lead to an assumption that the patent is not being worked by the patent owner, thus giving potential grounds to third-parties to apply for a compulsory licence.
Türkiye6
Türkiye requires patent owners to use their patented technology within three years from the date of grant or four years from when the application was filed, whichever occurs later. A third party is unable to apply for a compulsory licence before expiry of this period.
Proof of use is only required when challenged by a third party through a request for a compulsory licence.
A third party seeking to obtain a compulsory licence, however, must first request a licence from the patent owner. Only if no agreement with the patent owner for a licence can be reached on reasonable terms can the third party initiate proceedings with the Turkish Courts in order to obtain a compulsory licence. In that case, the patent holder must provide evidence of use or valid reasons for non-use of the patent within one month from the date of notification.
The Implementing Regulation specifically states that market conditions are taken into account when assessing the use of patented technology. Problems in obtaining market authorisation, compliance with standards and similar are considered valid reasons for delaying the working of a patented invention.
UK5
The UK requires a patent to be worked within a period of three years from the date of grant of the patent so that the demand in the UK for the patented technology is met on reasonable terms. If the patent is not worked within this period and the patentee refuses to grant a licence on reasonable terms, a compulsory licence may be applied for. The grounds on which a compulsory licence may be granted differ depending on whether or not the patentee is a national of, or has an effective industrial or commercial establishment in, a country which is member of the World Trade Organization (WTO).
Germany5
Working requirements also exist in Germany, although no specific time limit is set for working a patented invention. If the patented invention is not worked and a third party has made reasonable efforts to obtain a licence to the patented technology under reasonable commercial conditions without success, then a compulsory licence may be granted if it is in the public interest. Importation is considered equivalent to working of the patented technology in Germany.
Compulsory licences may also be applied for and granted if it is necessary to ensure adequate supply of the patented technology to the German market. The German Federal Government also reserves the right to make a patent lose its effect in exceptional circumstances concerning public welfare or state security. However, this provision has never been applied thus far.
If a third party applies for a compulsory licence, an appeal may be lodged by the patentee against the application in front of the Federal Patent Court.
Norway5
In Norway, a patented invention is required to be worked within three years from the date of grant or four years from the filing date, whichever ends later. If the patented invention is not worked to a reasonable extent within this time period, then anyone may obtain a compulsory licence to work the invention. Other grounds for granting a compulsory licence include use of the invention being necessary for the use of another patented invention, important public interests and instances where the patentee is significantly limiting competition.7 Similar to other jurisdictions, an application will only be successful if prior efforts have been made to obtain a licence on reasonable business terms.8
Brazil5
According to Brazilian patent law, a patent must be worked within three years from the date of grant. However, Brazil does not require the patent owner to submit any declaration of use/non-use.
Working includes the local manufacture of a patented product or the use of a patented process. Importation may also qualify as “working” if actual working of the patent in Brazil is not possible due to economic viability. However, if that is the case, then Brazilian patent law allows for third parties to also import the patented product, provided consent of the patent owner is obtained or the product is directly put onto the market by the patent owner.
If the patent is not worked, then third parties are eligible to apply for the grant of a compulsory licence under the patent. However, in response to a request for a compulsory licence, a patent owner has the opportunity to provide legitimate reasons as to why the request should be refused.
If a compulsory licence is granted, it will be non-exclusive and sub-licensing is not permitted.9
Mexico5
A Mexican patent can become subject to compulsory licensing if the patented invention is not worked within three years from the date of grant or four years from filing, whichever occurs later. Working in Mexico includes manufacture, trade, distribution or importation of the patented product by the patent owner or those who hold a recorded or contractual licence under the patent.
Statements of working or other proof of working (or non-working) are not required to be submitted preemptively.10
Should a third-party attempt to obtain a compulsory licence, the patent owner has the opportunity to work the patent within a year from notification or to provide legitimate reasons for non-working.
To determine whether a compulsory licence should be issued and its duration, licence conditions, field of application and amount of royalties, a hearing will take place between the Mexican patent office and the parties following expiry of the one-year period.
Other countries
Working requirements across member states of the EPC and other countries such as Japan, Korea, China and the US are similar and generally relaxed. No statements of working are required. However, in general a patent which is not worked within three years from the date of grant, may be at risk of compulsory licensing.1
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The information in this document is necessarily of a general nature and is given by way of guidance only; specific legal advice should be sought on any particular matter. While this document has been prepared carefully to ensure that all information is correct at the time of publication, Dehns accepts no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy.