Nitto Denko v. Union of India
24 April 2015
While patent office delays and excessive backlog of pending patent applications at the Indian Patent Office has been an issue of serious concern for a while, it is only recently that the issue has been seriously dealt with and exposed vide two writ petitions before the Delhi High Court filed by Nitto Denko Corporation, a company based in Japan and represented by Pravin Anand of Anand and Anand Advocates.
As per the mandate of Patent Law, the First Examination report is to be issued ordinarily within six months from the date of the request for examination or six months from the date of publication, whichever is later, under Rule 24B(3) of the Patent Rules, 2003. However, the word ordinarily is being stretched to almost indeinitely, and currently the Patent Ofice is taking eight to nine years for a patent to be granted, thus signiicantly reducing the term from 20 to 13 years. The writ petitions were inally disposed of on October 9, 2014.
Outcome of the Order
The government has committed to spending more than Rs30.96 million (US$49.2 million) for recruitment of fresh examiners and to solving all related problems, including salaries, attrition, etc.
Additionally, a committee was constituted to deliberate upon:
a) Waiver of maintenance fees as a compensatory measure for the delay in patent grant;
b) Patent term extension to compensate for the delay; and/or
c) Out-of-turn/expedited examination. The Committee submitted its report on February 27, 2015.
Waiver of Maintenance Fees/Patent Term Extension Not Viable
With respect to waiver of maintenance fees and patent term extension, the committee concluded that the said practices only exists in the United States and nowhere else in the world, and is not conducive to India.
The committee was of the view that the 20 year patent term, which was originally seven years and thereafter 14 years, already provides for delays and therefore does not require a further patent term extension, particularly in India, where monopoly itself is considered too long to block genuine competition.
Out-of-turn Examination-Public Interest/Local Manufacturing
The committee was of the view that out-of-turn examination may be considered as a viable option subject to certain prerequisites:
a) Where the invention directly contributes towards public interest, and
b) When the applicant sets up local manufacturing capabilities utilizing the invention as disclosed in the application or undertakes to manufacture the same within two years from the date of iling the request for expedited examination.
The committee proposed a new Rule 24C to incorporate such a measure. As per the new rule, the patent applicant would be required to provide a corroborative statement from a bank or inancial institution or auditor in India with evidence in support showing applicant or his assignee or prospective manufacturer has suficient capital to meet the reasonable public requirement or that suficient capital or facilities will be made available within six months if a patent is granted.
Likely Impact
While the said decision seemed remarkable and a way forward towards tackling the issue of unreasonable and untimely disposal of patent applications for the irst time in India, the Report of the Committee has, to an extent diluted the impact and the objective of the writ petitions.
The local manufacturing requirement has been incorporated in the proposed Rule 24C by the committee in a manner which places undue burden on the patent applicant. The committee also grossly failed in deining the speciics that fall in the public interest domain to be considered eligible for out of turn examination. For example, in the US, an applicant may ile a petition to make special where the invention will materially enhance the quality of the environment, develop or conserve energy resources or counter terrorism. The applicant’s age or health is also considered as a standalone factor for expediting examination in the US whereas in some jurisdictions, potential infringement may also be a ground.
Clearly, out-of-turn examination of applications under this program does not seem to be an option for most inventors particularly for the pharmaceutical industry which is already grappling with the stringent requirement of local manufacturing and public interest. Moreover, there are strict procedural and substantive requirements and litigation risks (e.g., prosecution history estoppel) because the applicant must make submissions and provide additional evidence in support of its case.
It is also pertinent to note the word ordinarily continues to ind a mention in the proposed Rule 24C for expedited examination and may still pose issues of delay at the patent ofice, as is the existing state of affairs. It would be futile if even after paying additional fees, collecting necessary funds, establishing a local manufacturing plant, the Applicant’s patent application continues to collect dust at the Indian Patent Office.
Although the report of the committee did not take into account many recommendations and suggestions that were made on behalf of the petitioner, it is indeed a signiicant victory that through a single writ before the Delhi High Court, substantial funds were sanctioned to the Indian Patent Office.
Anand and Anand
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