Game-changer: The Intellectual Property Division of the High Court of Delhi
Surendra Sharma and Udayvir Rana of Remfry & Sagar report on the successful introduction of the Intellectual Property Division in Delhi and regional legislation that should serve as an example for the rest of India
In recent years, the High Court of Delhi has come to be regarded as a leading venue for the resolution of intellectual property rights (IPR) disputes in India. The creation of the Intellectual Property Division (IPD) followed by the Delhi High Court Intellectual Property Rights Division Rules, 2022 cements its position.
The IPD is a distinct and specialised division that was set up to exclusively adjudicate matters pertaining to intellectual property (IP). Apart from obvious advantages that stem from specialist judges, the IPD is also very progressive in terms of procedure.
The setting up of the IPD
On April 4 2021, the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (later replaced by the Tribunals Reforms Act, 2021) was promulgated, which abolished the Intellectual Property Appellate Board (IPAB). This development marked a significant shift in the country’s IP practice as all matters pending before the IPAB were transferred to the respective high courts.
The abolition of a specialised dispute resolution tribunal such as the IPAB, and its replacement with generalist courts, raised concerns on how the latter would perceive deeply complex and technically nuanced IPR matters. There was also the matter of the existing backlog before the high courts. Many feared that timelines for the resolution of IP disputes were now set to become even longer.
The High Court of Delhi received nearly 3,000 IP cases transferred from the erstwhile IPAB. To resolve these cases expeditiously and to streamline the adjudication of other IP disputes, a committee was formed by the chief justice of the High Court of Delhi.
After undertaking an extremely rigorous evaluation of practices and procedures prevalent in almost 40 jurisdictions across the world, the committee recommended the creation of an IP division, or, in other words, specialist IPR benches. The purview of such a division would include all matters relating to IP, such as:
Fresh and pending infringement suits;
Appeals against the decisions of the patent/trademark/copyright offices;
Revocation/cancellation actions; and
Applications for rectification of the patents/trademark register.
The creation of the IPD at the High Court of Delhi was announced on July 7 2021 and, after consultation with stakeholders, on February 24 2022, the Delhi High Court Intellectual Property Rights Division Rules, 2022 (the ‘IPD Rules’) and the High Court of Delhi Rules Governing Patent Suits, 2022 came to be notified. Apart from providing new nomenclatures for different kinds of proceedings before the IPD, both sets of rules comprehensively lay down the procedure and timelines for various actions, including:
Appeals arising from refusal orders passed by the Indian IP offices; and
Various other proceedings that, in the past, were managed by the IPAB.
It is appropriate to mention here that the creation of commercial courts in 2015 had already ushered in change.
All IP cases in the country are now ‘commercial cases’, which are subject to strict timelines and procedures to shorten litigation. Inflexible deadlines are set for the completion of pleadings; case management procedures allow judges to supervise, control, and monitor the speed of litigation; summary judgments can be passed against either party if it has no prospect of winning at trial; and instances of appeal to a bigger bench of the high court against interim orders of a single judge are greatly reduced.
Changes in the High Court of Delhi's working rules in 2018 and 2020 also enabled electronic means of service, the recordal of evidence through videoconferencing, and the setting up of ‘confidentiality clubs’ as a means of exchanging confidential information between parties.
The IPD Rules reinforce these concepts and add new ones, such as ‘hot tubbing’ (the evidence of two opposing experts is taken concurrently). Additionally, the IPD Rules empower the high court to seek the assistance of subject matter experts and entitle judges to appoint two law researchers to assist them in techno-legal aspects on a daily basis, in addition to law researchers appointed under the Delhi High Court (Original Side) Rules, 2018.
Moreover, if the judges of the IPD are of the opinion that parties to a suit ought to explore mediation, the court may appoint a qualified mediator or panel of mediators, including mediators with expertise in a particular stream of IP.
Notably, the consent of the parties is not required once the court is of the opinion that an amicable resolution needs to be explored by both parties. However, the mediation proceedings may proceed concurrently with the legal proceedings before the court so as not to delay adjudication.
The IPD Rules also contain special provisions for persons with disabilities.
Initially, two benches of the High Court of Delhi were exclusively dedicated to hearing all IPR subject matters. More recently, a third bench has been created given the large volume of IPR cases before the court.
The IPD, apart from original jurisdiction, has infringement jurisdiction, appellate jurisdiction from the IP Office, revisional jurisdiction from the commercial courts, and extraordinary writ jurisdiction supervising the IP Office.
In hindsight, the abolition of the IPAB has not proved disadvantageous for rights holders. While the IPAB resolved several long-pending IPR matters in the six months before its dissolution, the road was not entirely smooth after the IPAB’s inception in 2003.
Administrative difficulties (such as the appointment of technical/judicial members) and a lack of resources plagued the IPAB for long stretches and disrupted its efficient functioning. From time to time, the IPAB’s ability to adjudicate time-critical IPR cases swiftly was gravely impaired and the fact that only four benches of the IPAB sat in metropolitan cities across the country impeded many a right holder from accessing the forum, especially those that resided in smaller/remote towns across the country.
Nearly six months on from the establishment of the IPD, the results are laudable. One stark difference between the hearings before the IPAB and the IPD resides in the representation by the Indian IP offices. The appearances of the Indian IP offices before the IPAB were occasional, but this has changed. The appearances of the nominated counsel for the Indian IP offices before the high court are mandatory to ensure that both parties are heard before justice is dispensed. Furthermore, a steady stream of sound orders and judgments have been issued from the IPD benches that are transforming Indian IP jurisprudence, as the decisions discussed below bear out.
Under the IPD Rules, if a trademark or patent is involved in multiple suits, the court can consolidate the proceedings towards a common trial. In a case pertaining to cancellation of a trademark (Octave Apparels v. Nirmal Kumar trading as Apricot Fashion Alloy & Anr. [C.O. (Comm.IPD-TM) 352/2022]), the IPD bench directed a lawsuit filed before the district court pertaining to an identical trademark between the same parties to be transferred to the High Court of Delhi to be tried along with the cancellation action filed before it. Consolidation, without causing prejudice to the rights of either party, saves judicial time and costs for litigants.
A recent case involving copyright (Phonographic Performance v. Lookpart Exhibitions and Events; CS(COMM) 188/2022) highlighted another unique feature under the IPD Rules through which the court can seek the assistance of an independent expert(s) relating to the subject matter of a dispute. Here the issue was whether playing music in wedding and religious ceremonies amounted to copyright infringement or fell within a statutory exception. An expert was appointed to file a written note keeping in mind the legislative intent behind provisions of the Copyright Act, 1957 and to assist the court with foreign jurisprudence on the question. Persuasive and technically competent opinions would enable the court to pass well-reasoned judgments while addressing nuanced questions in IPR disputes.
With regard to patents, close to 500 patent matters (transferred from the IPAB) have already been listed by the registry and are expected to be heard on merits by the IPD in the next few months. In fact, there have already been pronouncements of a few important judgments that have sought to clarify grey areas in patent law.
For instance, in European Union v. Union of India (W.P.(C)-IPD 5/2022 and 6/2022), the court carved out an exception and held that while the Indian Patent Office may not have the power to extend statutory deadlines, the court, in extraordinary circumstances, may invoke writ jurisdiction under Article 226 of the Constitution to condone delay. In particular, the court was of the opinion that a missed deadline for responding to an examination report may be a condonable act when it is clear that the applicant had no intention of abandoning the application, and its Indian agent acted in a manner contrary to the applicant’s intent. The court, however, clarified that exercise of its jurisdiction to condone such delays is not a blanket power and would be based on the facts of each case.
In Agriboard International v. Deputy Controller of Patents and Designs (C.A. (COMM. IPD-PAT) 4/2022), the controller cited several instances of prior art and refused the application at the stage of examination on the ground of lack of inventive step but did not elaborate the reasons for his decision. Undertaking an in-depth analysis of the technical features of the invention, the IPD held that detailed reasoning was required to explain how a person skilled in the art would arrive at the teachings of the patent application by following prior art references. Underscoring the necessity of detailed reasoning in orders issued by the Patent Office, the controller’s refusal was set aside and the matter remanded back to the Patent Office for fresh consideration.
Often, controllers at the Patent Office state that in amendments of claims, no additional features from the description can be added in the claims. In Nippon A&L v. The Controller of Patents (C.A. (COMM. IPD-PAT) 11/2022), the IPD held that the amendments to a patent specification or claims before grant ought to be construed more liberally rather than narrowly. The court clarified that an invention before and after amendment need not be identical in the case of an amendment before acceptance “so long as the invention is comprehended within the matter disclosed”.
Another noteworthy feature of the IPD Rules is the supervisory jurisdiction granted to IPD benches. This has enabled the IPD to pass orders to enhance the overall functioning of the Indian IP office while hearing appeals emanating from decisions issued by the IP office.
An order issued by the IPD on March 21 2022 with regard to a batch of five writ petitions (Writ Petitions against the Controller General of Patents, Designs and Trade Marks) is a good example of the exercise of such jurisdiction as it clarified a legal position on trademark oppositions for all IP holders.
On account of the COVID-19 pandemic, the Supreme Court of India had extended limitation deadlines falling between March 15 2020 and February 28 2022 (an ‘extended period’) through a series of notifications. The period was to be excluded for the calculation of limitation under all statutes, both before judicial and quasi-judicial bodies (which would include the Trade Marks Office).
However, certain individuals who wished to file trademark oppositions during the extended period were disallowed from doing so by the Trade Marks Office on the ground that the statutory four-month period prescribed under the Trade Marks Act, 1999 had expired. Rather, the office proceeded to issue registration certificates in favour of certain trademark applications that the individuals had sought to oppose. Therefore, the writ petitions were filed challenging the Trade Marks Office’s stance.
Ruling in favour of the petitioners, the IPD said that oppositions could be filed beyond the initial four-month opposition window, as the Supreme Court's orders on extended period were applicable. Any registration certificates granted for the trademarks in question were suspended until such oppositions were decided.
In terms of trademark oppositions, as of March 2022, more than 225,000 opposition cases were pending before the five trade marks offices in India, a large number of which awaited the appointment of hearings.
When the IPD was apprised of the issue of pendency in March 2022, it directed the IP office to table a proposal on resolving the backlog, putting on record year-based details of all pending opposition matters, including their stage of pendency.
An affidavit was subsequently submitted by the IP office revealing inadequate manpower as the chief reason for all delays. Corrective measures were also outlined and with the recruitment and training process of 30 new hearing officers and 18 new assistant registrars now complete, the appointment of hearings in contested opposition cases is picking up pace. At the time of writing, a further report on progress is expected to be placed before the court by the IP Office in October 2022 indicating the number of hearings being conducted every day at all five Trade Marks Offices in the country, along with statistics on settlement and disposal of oppositions. In such manner, the supervisory jurisdiction of the IPD will serve as an important complement to streamlining the functioning of the IP Office.
A model to follow
As various innovation indices bear out – whether it be the Global Innovation Index or the Indian Innovation Index – the fostering, protection, enforcement, and monetisation of IP is gaining prominence in India. Rising IP filings at the Indian IP Office and a surge in IP litigation offer conclusive proof of this. That said, IPR are time-bound rights and can involve complex technical layers, particularly with regard to patents. If there is a delay in the protection of rights or settlement of disputes, the economic value of the intellectual asset is threatened. Against this backdrop, the creation of the IPD and the specialised set of rules by the High Court of Delhi is praiseworthy.
Within one and a half years of the abolition of the IPAB, one can clearly say that a tremendous positive step towards efficiency and a more streamlined IP jurisprudence has been made. It is to be sincerely hoped that other high courts in the country will follow the Delhi IPD model to ensure consistency in the adjudication of IP disputes across India.