Positive outlook for India’s patent regime in a pandemic age
Shukadev Khuraijam of Remfry & Sagar describes how India is making steady and progressive steps in the right direction with a patent landscape that is undeniably positive
It would be an understatement to say that things have changed in the past year and a half in the wake of the COVID-19 pandemic – India is among the countries affected profoundly. Yet it has been a busy time for India’s patent regime.
There have been a string of changes in practice and policy, which have struck a positive note in these otherwise gloomy times, underscoring the government’s commitment to steadily improve the standards of patent governance in the country. This article highlights recent developments and analyses their impact.
Patent application processing
Patent application filing and processing showed good buoyancy amidst the pandemic. International patent applications filed via WIPO’s Patent Co-operation Treaty (PCT), which is a metric for measuring innovative activity, grew by 4% in 2020, despite an estimated drop of 3.5% in global GDP.
Figures from the annual report of India’s Department for Promotion of Industry and Internal Trade (DPIIT) reveal that 43,028 patent applications were filed in the nine-month period from April 1 to December 31 2020 as compared to 41,800 applications filed during the same period in 2019 – an uptick of 2.9% over the previous year.
Moreover, despite the unprecedented challenges of the past year, data indicates that the Indian Patent Office (IPO) maintained its trend of recent years of processing applications at a quick pace. Some of the measures which made this possible are its revamped electronic filing system, effective video conferencing facility for hearings and increases in staff strength all of which were well in place when the pandemic struck and ensured that the IPO could function remotely and efficiently even when physical access to the office was limited.
Further, the IPO had endorsed the extension of limitation period for all deadlines which was put in place by the Indian Supreme Court with effect from March 15 2020. This step undoubtedly aided both the IPO and stakeholders in preserving patent rights particularly in the early days of the pandemic when uncertainties surrounding regular functioning were at their peak on account of India’s extremely strict first lockdown.
The original extension was lifted in March 2021, but the severe second wave of COVID-19 that India experienced in the early summer of 2021, led the Supreme Court to extend the period of limitation once again for all proceedings on April 27 2021, which remains in force at the time of writing this article. Cumulatively, patent practitioners and applicants alike have much appreciated the smooth and efficient functioning of the IPO during these uncertain times. Particular mention can be made of the many national phase applications filed in 2019–2020 which have been processed for grant especially in the field of chemicals and metallurgy.
Statement of working
The regulation for filing an annual statement of working for granted patents is a provision not seen in major jurisdictions and it has always been a point of discussion between foreign right holders and practitioners and their Indian counterparts. In a welcome move, on October 20 2020, the Patents (Amendment) Rules, 2020 (rules) came into force and simplified the process surrounding the statement of working.
A modified format has been notified for submission of information relating to the ‘working of patents’. A statement of working for a granted patent(s) will have to be filed for each financial year (as opposed to calendar year) starting from the financial year commencing immediately after the grant of a patent.
Accordingly, for the upcoming reporting, patents granted prior to April 1 2020, will need to be reported and relevant information from April 1 2020 to March 31 2021 will need to be submitted. The time limit for submitting this information is now six months from the end of the financial year, i.e. until September 30 2021.
Significantly, the amended form also allows one submission in respect of ‘related patents, wherein the approximate revenue/value accrued from a particular patented invention cannot be derived separately from the approximate revenue/value accrued from related patents.’ This change will now allow patent holders to submit a consolidated statement in appropriate cases, which will save time, cost and effort.
Other notable changes include removal of the earlier requirements of identifying licenses/sub-licenses entered into in a given year; of a patentee/licensee having to state whether the public requirement had been met to the fullest extent at a reasonable price; and of entering the quantum associated with a patented product/process.
Filing of priority document and its translation
Another welcome amendment came about in connection with the filing of a priority document and its verified English translation. Under existing rules a priority document was not required to be filed if the same had been filed at the receiving office under rules 17.1(a) and 17.1(b) of the PCT Regulation. The amended rules broaden the exception to include cases whereunder Rule 17.1(b-bis) of the PCT Regulations, the applicant asks the Receiving Office to obtain the priority document from a digital library.
Further, per the amended rules, the IPO can ask for submission of a translation only when a case falls under rules 51bis.1(e)(i) and (ii) of the PCT regulations, i.e. only when:
Validity of the priority claim is relevant to determination of patentability; or
Errors in the international filing date have been corrected (under rules 20.3(b)(ii) or 20.5(d) on the basis of the incorporation by reference under rules 4.18 and 20.6 of the PCT regulations).
IPAB abolition and special IP benches
A development which caught the IP fraternity by surprise earlier this year was the government proposal (in February 2021) and subsequent abolition of the Intellectual Property Appellate Board (IPAB) on April 4 2021 via ‘The Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021’.
Since its inception in 2003, the functioning of the IPAB had not been seamless, mostly on account of a lack of adequate staffing. Reports indicate that, for example, the IPAB had not had a chairperson for a cumulative total of 1,130 days, and the most recent delay was for a period of almost 600 days. Such inefficiencies were cited as the reason for the IPAB’s abolition.
Consequently, all matters/appeals pending before the IPAB under various IP statutes (the Patents, Trademarks, Geographical Indications of Goods, Copyright, and Plant Varieties Acts) stand transferred to the respective High Courts (of Delhi, Bombay, Madras, Calcutta or Ahmedabad, as the case may be) or commercial courts in the case of copyright matters. Also, fresh appeals/proceedings pertaining to IP matters are now being filed before the respective High Courts or Commercial Courts, as applicable.
Seizing the occasion and living up to its reputation of a proactive and progressive IP jurisdiction, on July 7 2021, the Delhi High Court created an intellectual property division (IPD), which is to have special IP benches to deal with all intellectual property rights (IPR) matters.
Such benches (to be notified from time to time) will hear IPR suits; revocation applications; cancellation applications; other original proceedings; appeals from the office of the Registrar of Trade Marks, Controller of Patents, Copyright Registrar; all other proceedings which were hitherto maintainable before the IPAB under the various IP statutes; and all original proceedings and appellate proceedings relating to IPR disputes, except matters to be heard by a two-judge Division Bench.
A comprehensive set of fresh rules – the IPD Delhi High Court Rules – are currently in the process of being framed. Significantly, the provisions of the Civil Procedure Code (CPC) pertaining to commercial disputes, and the provisions of the Commercial Courts Act, 2015 (with procedures conducive to speedy resolution of lawsuits) would also be applicable.
This development is a positive step towards efficient adjudication of contentious IP matters and effectively allays concerns regarding lengthier court procedures and delays in adjudication by courts already beset with backlogs that had arisen in the wake of the IPAB’s abolition. One hopes that the Delhi High Court’s lead in setting up a mechanism to ensure efficient disposal of IP matters will be followed soon by other high courts in the country.
Patent Prosecution Highway
Implementation of a pilot PPH programme between India and Japan had been approved in November 2019 which is to run for a three-year period. It offers several benefits for patent applications, among them reduction in time taken for their disposal; reduction in their pendency; improvement in the quality of search and examination; and an opportunity for Indian inventors to get accelerated examination of their patent applications in Japan.
Under this programme, the IPO receives patent applications wanting to take advantage of a granted Japanese application only in certain fields of technology – electrical, electronics, computer science, information technology, physics, civil, mechanical, textiles, automobiles and metallurgy. In the reverse scenario, the Japanese Patent Office (JPO) can receive an application claiming the PPH benefit (from a granted Indian patent) in all fields of technology.
One hundred cases are slotted to be processed under the PPH programme each year. The 100 applications received from Japanese applicants to be examined at the IPO in the first year (2019–2020) were, in the experience of the author himself, processed smoothly and quickly, proceeding to grant in record time! 72 applications had already taken up slots in the second year of the IPO-JPO PPH at the time of writing this article. It is expected that soon there will be PPH agreements with other jurisdictions as well.
COVID-19 and compulsory licensing
Turning once again to the inescapable presence of COVID-19, when the country was in the throes of its devastating second wave and faced shortages of certain COVID-19 drugs, the Supreme Court of India as well as the Delhi High Court had suggested the government implement compulsory licencing provisions. Though the situation has improved, times are yet uncertain for India is a large and very populous nation.
The public health emergency brought about by COVID-19 meets all the requirements for invoking the grant of a compulsory license and one could say that implementation of such licenses might still be in contention. Yet the Indian government surprised many in its submissions before the Supreme Court when it indicated that invoking the compulsory license provision was not required.
Non availability of raw materials and essential inputs was listed as the main constraint in connection with scarcity of certain COVID-19 drugs and, in the opinion of the government, additional licenses would not lead to increased production of medicines and vaccines immediately.
It also supported the role of voluntary licenses from innovator companies. Mentioning that if a situation arose befitting a compulsory license, it would look into the matter, presently the government laid more emphasis on executive level engagements and diplomacy and stated “it is earnestly urged that any discussion or a mention of exercise of statutory powers either for essential drugs or vaccines having patent issues would have serious, severe and unintended adverse consequences in the country’s efforts being made on a global platform using all its resources, good-will and good-offices though diplomatic and other channels”.
This stand and policy would certainly not go unnoticed by the international patent fraternity – especially in light of the fact that India had, jointly with South Africa, proposed a waiver of IP rights to deal with COVID-19 before the TRIPS Council meeting in October 2020.
It bears mention that despite the limitations imposed by the pandemic, the courts have also done exemplary work in devising appropriate procedures (including those for remote hearings) to ensure efficient and expeditious adjudication of IP cases. Given all these developments, it does not come as a surprise then to learn that the latest International Intellectual Property (IP) Index, 2021 (released by the US Chamber of Commerce) has upped India’s rank to 40, highlighting tangible improvements in its IP ecosystem.
In conclusion, mention must be made of the Indian Parliamentary Committee report released on July 23 2021 that takes stock of the progress made in the country’s IP regime and outlines what needs to be done next to further boost IP creation, protection and enforcement in the country.
Apart from a recommendation on a possible roll back of the abolition of the IPAB (to be followed with interest by the IP fraternity!), from a patent perspective, the committee has reviewed the various provisions under section 3 of the Indian Patents Act concerning subject matter eligibility.
It suggests exploring the feasibility of granting patents to non-living substances occurring in nature in the backdrop of section 3(c); questions whether, in some instances, section 3(d) acts as a bar on protecting incremental innovations; recommends a thorough analysis of approving patents on plants and seeds with a pre-requisite of making the government of India a participant in the context of section 3(j); and talks of reviewing section 3(k) in view of the growing number of AI innovations and suggests considering grant of patents linking mathematical methods or algorithms to a tangible technical device.
All the above changes will aid patent applicants in securing a wider scope of subject matter protection in different fields of inventions, if adopted. Overall, the mood prevailing across the patent landscape in India is undeniably a positive one and foreign applicants are looking at a jurisdiction which is making steady and progressive steps in the right direction.
Remfry & Sagar
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Shukadev Khuraijam is a partner at Remfry & Sagar. He has more than 15 years of experience in advising clients on contentious and non-contentious issues.
Shukadev is an expert in offering strategic advice on legal and techno legal aspects in complex patent cases; his particular areas of focus are pharmaceutical, biotech and chemical patents. He appears before many forums including various civil courts and the IPO and is noted for his involvement in several cases that have shaped Indian patent jurisprudence.
Shukadev holds dual degrees in science and law from the University of Delhi.