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Analysis of Recently Published Annual Report of Indian IP Office

Analysis of Recently Published Annual Report of Indian IP Office

By Kshitij Malhotra, Partner

                In July this year, the Office of Controller General of Patents, Designs & Trademarks or CGPDTM, the administrator of Indian IP Offices, issued its annual report for financial year 2017-2018[1][2]. The report is considered by many as one of the authentic sources of information about developments of IP in the country, and despite coming out a year after completion of the concerned fiscal, the report is widely awaited. The present report of 2017-18 fiscal is significant, as it is first official account, after the Indian IP offices undertook major administrative reforms in fiscal year 2016-17. The instant article investigates some key information reflected in the report.

                Context of the present report

                Just to give the readers a context of the significance of this report, the growth of number of IP filings in India has been stagnant for last 5-6 years. Many have attributed the main reason of the sluggishness to be the delays in examination and granting IP rights. Some reports, as recent as 2017, suggested that around 232,000 patent applications lay pending at the IP offices[3].

                It is interesting to note that in year 2014, plagued by the problem of pendency of its patent applications, Japanese corporation, NITTO DENKO[4], had sued the Indian government for delays in patent grant procedure. The High court of Delhi looking into the matter ordered formation of a high-level committee to investigate the problem. The committee recommended various emergency administrative reforms in the Indian IP set up.

                Accordingly, in fiscal year 2016, the government implemented various changes[5][6]in the rules governing IP registration. Some of these reforms included reducing the statutory acceptance period of patents by half, improving e-filing systems for filing IP applications, change of opposition procedures, increasing the strength of patent & trademark examiners, centralizing examination process, coordinating allocation of patent & trademark applications among the four branches of the IP offices in a better manner, and other similar reforms.

                Although it is little farfetched to anticipate that the 2017 fiscal data would have been significantly influenced by the measures taken in preceding fiscal, still it will be interesting to analyse the data to locate any positive indicators that augur well for users of patent & IP system of the country.

                Overall Filing Trends of Patents, Designs & Trademarks

                The charts below show the overall filing & issuance trends at the Indian IP offices in 2017 fiscal year as compared to last 5 years.

Chart 1: Overall IP filing trends at Indian IP office

                As you can see, the overall number of filings in fiscal year 2017 has remained almost same as compared to 2016 fiscal. In 2017-18, 46,846 patent applications were filed, which increased marginally by around 3 percent only as compared to 2016 fiscal. Similar marginal growth is observed in design and trademark applications. The story seems little better when it comes to number of issuance of IP rights.

Chart 2: Overall IP registration trends at Indian IP office

                As seen in Chart 2, the data for number of IP registrations shows that the number of IP rights issued to various applicants increased reasonably in 2017 fiscal. The number of granted patents increased by 32.4 percent, while the number of design registrations increased by 21 percent. The number of trademark registrations also shows a significant increase of around 20 percent.

                Looking at the data, it is fair to conclude that the administrative reforms in 2016 fiscal, do not seem to show a significant early impact on the IP filings scenario in the country. However, they do seem to suggest more effectively towards the patent offices working effectively to resolve the backlog. This is in consonance with the feeling among IP practitioners in India, who have observed a markable improvement in working of the IP offices on the ground.

                Since the suggestions of the committee instituted post NITTO DENKO ordered a special focus on reforms in patent examination and grant procedure, the next part of this article analyses the fiscal data of 2017 to identify deeply the potential impact of the 2016 reforms[7]on patent examination in the fiscal.

                Trend of Patent Filings by Foreign Applicants

                As you might be aware, in India, around 70-80 percent patent applications are filed by foreign applicants. Since one of the majority users of the patent system in India are foreign applicants, it would be interesting to see impact of the 2016 reforms on foreign companies filing in India? The chart below shows the filing trends based of Paris Convention and PCT applications in India.

Chart 3: Trends of no. of applications filed through PCT/ Convention route in India in last 5 years

                As shown in chart 3, the PCT/ Paris Convention applications form a major share of the patent filings in India. Further, the trends indicate that the number of applications remained almost same in fiscal 2017, as compared to previous year, i.e., fiscal 2016. Again, the trends are early indicators, but, seem to show no significant immediate impact of the reforms of 2016 on the patent filings from foreign applicant.

                Such a trend could be indicative of various factors in play. The first being that the foreign applicants, who started to use Indian patent offices extensively post the 2005 landmark reforms which introduced many changes like product patent regime, allowance of pharma patenting and the like, might be on standby mode to see real impact of the recent reforms before starting to use the system again. 

                The next set of trends look into comparing the number of applications filed from companies of top 5 patent offices, at the Indian patent office. Three sets of data are looked into keeping the Japanese perspective in mind. The first is comparing trends of Japanese applicants in India verses their American and European counterparts. The second is comparing the trends of Japanese applicants in India with their Korean and Chinese counterparts. The third set of data is identifying the top foreign applicants filing patent applications in India.

Chart 4: Trends of no. of applications filed with Japanese, American and European applicants in India in last 5 years

Chart 5: Trends of no. of applications filed with Japanese, American and European applicants in India in last 5 years

                It should be noted that the American and European companies majorly filed in India between 2005 and 2015, followed by Japanese applicants, who started to file in India majorly after year 2008. However, from the charts above, the trends seem to indicate that the number of applications from Japan have in fact decreased in last 5 years. This trend is also seen among American and European applicants, i.e., applications with US and European priority in India have decreased.

                Nevertheless, the main reason for the decline of patent filings from Japan, US and Europe seems to be indicative of many factors. A first factor could be degrading of economic activities of these countries in India. The other factors could point towards persisting negative sentiments of Japanese, European and American corporations on the IP ecosystem in India. However, Foreign Direct Investment data or FDI data seem to point towards the latter rather than former.

                On the contrary, the data in chart 5 seem to indicate an increased patent filing from China and Korea at the IPO in recent years. As shown in chart 5, the patent applications from Korea have increased, while those from China remained constant but increased overall since 2013. The increased filings could generally point towards higher economic activities in these countries among various other reasons. The other could point towards special significance of the companies in these countries towards economic activities in India.

                The chart 6 below summarizes the top 10 applicants at the IPO in fiscal year 2017.

Chart 6: Top 10 foreign applicants at IPO in 2017-18

                The trends indicate that although the greatest number of patent filings in India are from American applicants, big European corporations seem to have overtaken the Americans in taking the top spots. It is interesting to note that two Japanese corporations, Mitsubishi Electric and Honda Motors, also feature in top 10. Their increased filing in India could be attributed to increased economic activities of Japanese corporations in India in recent years.

                Trend of Patent Examination in Fiscal 2017-18

                A part of patent reforms in year 2016 focused especially on hiring junior examiners in order to build a higher capacity at the patent offices. Accordingly, since then the patent offices carried out special recruitment drives to hire examiners, and train them to assist various patent examiners at the patent offices. The annual report data of 2017 fiscal reflects the above fact. The data shows that at present more than 550 examiners work at the Indian patent offices, and the number of examiners at the patent offices are more than 5 times the number in 2015 fiscal.

Chart 7: Examiner strength at Indian patent offices

                The patent examination system in India now involves both the junior and senior examiner, called Controllers, working in tandem. While the junior examiners carry examination of patent applications and prepare examination reports called FERs, the controllers review them before sending to the applicant. It is believed by the patent offices that by increasing the strength of junior examiners, the senior examiners or the controllers could focus better on ensuing the quality checks of the examination report. Accordingly, it will be interesting to note if the 2017 fiscal data point towards any relation between increased capacity and the rate of office actions [examination reports] issuance?

                The chart no. 8 below shows the trends of examination of patent applications at the Indian patent offices. More specifically, the data shows the no. of applications that were examined [issued first office actions or first examination reports] and disposed, that is decided [accepted or rejected] by the IPO.  

Chart 8: Trends of no. of applications examined [OA issued] V. disposed

                As seen from the chart 8, the number of first OAs issued every year by Indian patent offices has increased considerably to more than three folds the number of OAs issued 5 years back. Similarly, the number of cases disposed [either accepted or rejected by IPO] has also increased four times as compared to the cases disposed 5 years back. This data could be indicative of a positive development for clearance of backlog of patent applications. And if the trend continues, which many IP practitioners see are in continuity, it could augur well for the IP ecosystem in India.

                Commercialization of patents

                As you might be aware, the Indian patent laws are based on a premise that a patentee is granted exclusive rights vide patents in India on condition that they would commercialize their invention in territory of India. Accordingly, Indian laws require patentees to furnish annual statements with regards to the commercialization of their patents. This is also called as “working of patents” requirement.

                The patent office annual report publishes yearly data regarding working of patents in its annual report. This edition of the report is no exception. In fact, the commercialization information of patents seems to show some interesting facts. The chart no. 9 below shows the Form 27 [the reporting form of the annual statement] information.

Chart 9: Form 27 [Working of patents] data of last 5 years

                The chart 9 shows that, firstly there seems to be growing tendencies among patentees in not reporting the Form 27 information. The second seems to be that more companies are in fact reporting that their patents are not worked or commercialized. This information could point towards the fact that foreign companies might not be actually increasing their technological transfer in India, something that could be worrisome in longer run.

                Conclusion: The IPO came out with its annual report for fiscal year in July 2019. The report is first official account of filings at Indian IP offices post the IP reforms introduced in fiscal year 2016. An analysis of the early trends from the data published in annual reports seem to point towards the fact that the reforms do not seem to have an instant effect on the growth of IP filings. Although, it should be noted that the number of IP registrations and examination of patent applications seem to have increased notably. The applicant data shows that the number of applications from foreign applicants seem to be same as compared to fiscal year 2016. The number of applications filed by Japanese corporations have in fact reduced. On the other hand, those from Chinese and Korean companies have increased in last few years. The top 10 applicants are dominated by European corporations, however, there seems to be a trend that more and more companies are tending towards not commercializing their patents in territory of India.


[1]Indian financial year is from 01st April to 31st March of succeeding year

[2] Full 2017-18 Annual Report available @ URLhttp://www.ipindia.nic.in/writereaddata/Portal/IPOAnnualReport/1_110_1_Annual_Report_2017-18_English.pdf

[3]https://economictimes.indiatimes.com/news/economy/policy/2-32-lakh-patent-applications-pending-with-patent-office/articleshow/62269712.cms?from=mdr

[4]http://delhihighcourt.nic.in/dhcqrydisp_O.asp?pn=202118&yr=2014

[5]Patent Amendment Rules of July, 2016 available @ URLwww.ipindia.nic.in/writereaddata/Portal/IPORule/1_42_1_Patent__Amendment_Rules_2016_16May2016.pdf

[6]Trademark Amendment Rules of July, 2016 available @ URLhttp://www.ipindia.nic.in/writereaddata/Portal/IPORule/1_69_1_312_1_TRADE_MARKS_RULES_2017__English.pdf

Expedited cases
Expedited Examination in India
Expedited Examination in India
Expedited Examination in India

Expedited Examination System in India and its Possible Effects on Foreign Applicants

Expedited Examination System in India and its Possible Effects on Foreign Applicants

By Vijeth Bhat, Patent Associate

In the newly amended Patent Rules 2016, considerable emphasis was given to establishing an expedited examination regime. There were certain provisions regarding filing expedited or accelerated examination in which the application is supposed to be taken out of the normal queue and examined.

Although these provisions have been directly proposed for startup companies, interestingly, big Indian corporates also stand to gain from these provisions. Especially, companies, who have filed a corresponding PCT application with India as the International Search Authority (ISA) or International Preliminary Examination Authority (IPEA), could also use this route to expedite the examination of their corresponding domestic patent application.

The expedited examination procedures suggest a patent grant within a time frame of 12-15 months of submitting such expedited request. The condition being that the applicant must satisfy the criteria mentioned above, i.e.,

  1. the applicant should be a startup company or
  2. the applicant should have selected India as an ISA or IPEA at the international stage.

It is believed that the IPO will extend the expedited examination provisions to foreign applicants as well in future.

An applicant may file a request for expedited examination in Form 18A along with the fee of Rs. 8,000/- for individuals and startups. 25,000/- for small entity and Rs. 60,000/- for others.

The newly amended patent rules also allow applicants who have already filed a Request for Examination (RFE) under rule 24B (in Form 18) to convert it into a request for expedited examination under rule 24C (1).

Below table shows some of the recent cases that were granted in Expedited Examination Procedure:

Expedited Examination in India

Nevertheless, above trends are showing that the patent office is issuing first OA within 4-6 months of submitting the request for expedited examination to domestic Indian companies. This has been unprecedented and a positive step for expediting the patent grant in India.

 

Implications of Expedited Examination for Foreign Applicants

Department of Industrial Policy and Promotion (DIPP) has amended Patent Rules 2003 with effect from 1st December 2017 called as the Patent (Amendment) Rules, 2017[i]

According to the Patent (Amendment) Rules, 2017:

(i) “Startup” means

(a) an entity in India recognised as a startup by the competent authority under Startup India initiative,

(b) In case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation/ registration as per Startup India Initiative and submitting declaration to that effect.

Explanation: In calculating the turnover, reference rates of foreign currency of Reserve Bank of India shall prevail.

Previously, the foreign startup entities were not considered to be eligible to file a request for expedited examination. With these amendments in the rules, foreign applicants that are startups can now obtain patents expeditiously as they will now be eligible to file a request for expedited examination.

The new expedited examination mechanism might lead to Indian competitor companies getting an advantage by getting early patents and using them against foreign competitors. In light of the expedited examination system, the foreign applicants could look into possible transferring IP rights of specific technologies to Indian subsidiaries and first filing in India as a way to obtain early patent rights, if needed in some specific cases.

Disclaimer: The above article should not be constituted as legal opinion.

 

 

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Filing your Patent outside India – Be Cautious of the Foreign Filing Restrictions

 

 Filing your Patent outside India – Be Cautious of the Foreign Filing Restrictions

By Garima Rai, Senior Associate

Over last few years, more and more Indian applicants are applying for patents outside India. This trend is shown by the increase in the number of patent applications filed by Indian nationals at the US Patent & Trademark Office[i], the nodal office granting patent rights in the US. The charts below show the stats of patents filed by and granted to Indian nationals at the USPTO. Interestingly, the number of patent applications filed by Indian nationals in the US these days is comparable to the number of domestic patent applications filed by Indian nationals at the IPO[ii].

Source: USPTO Annual Report

 There could be many reasons for such selection. One of the reasons could be the essential market of the product embodied in the patent. Another reason could be faster patent prosecution. In comparison to rest of the world, the patent prosecution time is generally much lesser at the USPTO. Typically, the first office action is issued within 12-18 months from the filing of a patent application at USPTO.

Another important factor that affects the decision of the applicant to first apply for patent in the US might be domain of the technology. Although the criteria regarding patent eligibility are becoming stricter in US as well in light of landmark cases like Bilski v. Kappos[iii], Mayo v. Prometheus[iv], and Alice Corp. v. CLS Bank International[v], the general feeling is that the USPTO considers most of the inventions as patent eligible unless it specifically falls under excluded subject matter. This might also be true for software inventions, which are generally patent ineligible subject matter in many countries including India. In comparison, software inventions are usually patentable at the USPTO, provided the software invention qualifies the various tests laid out by US Supreme court.

Accordingly, the US is a destination of choice for India’s huge IT/ software sector to file for patents. Not to forget, the ever-growing patent market of the USA has always bestowed a competent opportunity to the patentee to exploit patent rights to their advantage.

In-house captives in India

 It is also very interesting to know that many multi-national corporations including American ones have been using their technology centers in India to add to their patent portfolio worldwide. These companies use the technology staff at their Indian centers to create solutions and directly file application for patents outside India, especially the US to protect their innovation. Some of the notable companies, which have been actively working on such model in India, are General Electric (US), Honeywell (US), Accenture (US), Google Inc. (US) and Motorola (US). Below are the data showing the number of patents granted and the number of published patent applications at the USPTO (where one or more inventors have Indian nationality) for these companies in last 5 years.

Table showing the number of patents granted and published patent applications with at least one inventor with Indian nationality; *Source: WIPS

First Filing outside India and the Implications of Section 39 of the Indian Patents Act

According to provisions in Indian Patent Laws, the Indian statutes do not provide unrestricted rights for directly foreign filing patents outside India. According to Section 39 of the Indian Patents Act,

(1) No person resident in India shall, except under the authority of a written permit sought in the manner prescribed and granted by or on behalf of the Controller, make or cause to be made any application outside India for the grant of a patent for an invention unless—

(a) an application for a patent for the same invention has been made in India, not less than six weeks before the application outside India; and

(b) either no direction has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.

(2) The Controller shall dispose of every such application within such period as may be prescribed:
 Provided that if the invention is relevant for defence purpose or atomic energy, the Controller shall not grant permit without the prior consent of the Central Government.

(3) This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India.

Therefore, the provisions of Section 39 require applicants to obtain a foreign filing license or first file their patent in India. This forces multinational companies operating in India having captive units in India to be cautious when a patent application for protection of an invention is first made directly outside India. The provisions require them to obtain a foreign filing license (FFL) from the Indian Patent Office or first file their application in India. Since filing Indian priority application could lead to complications in foreign prosecution, most often these companies would find the provisions of applying for a foreign filing license as more practical and appealing.

Repercussions of not following Section 39

In case an applicant does not follow provisions of Section 39, he/she may face the penal provisions under Section 40, which could lead to revocation of their corresponding patent in India. Below is the quoted section from the Indian Patents Act:

Section 40

Without prejudice to the provisions contained in Chapter XX, if in respect of an application for a patent any person … makes or causes to be made an application for grant of a patent outside India in contravention of Section 39 the application for patent under this Act shall be deemed to have been abandoned and the patent granted, if any, shall be liable to be revoked under Section 64.

According to Section 40, if a person has not complied with the requirements under Section 39, then any corresponding Indian patent application shall be treated as abandoned. In case, a patent has already been granted, it is liable to be revoked under Section 64[vi].

In addition to the above, there are penal provisions of serious nature when the requirements under Section 39 are contravened by a person. As stated, Section 118 recites as follows:

Section 118

If any person ….. makes or causes to be made an application for the grant of a patent in contravention of section 39 he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.

The provisions clearly state that if a person has contravened the directions under Section 39, he shall be punishable with imprisonment for a period extendible to TWO years, or fine, or both. The Indian system is crucial and secretive about inventions developed within the Indian Territory unless the invention passes the test of secrecy. If you are a company, it is better to obtain a license than have a punitive action taken against the management later on.

Obtaining FFL in case of directly filing a PCT application:

One of the questions that are also commonly asked is the applicability of Section 39, in case the applicant is desirous to file the first application as a PCT application. This question was discussed in famous case law named Puneet Kaushik V. UOI[vii].

In this case, the applicant had applied for PCT (India as the Receiving Office) and submitted an application for foreign filing license under Section 39 simultaneously at the Indian Patent Office. Among the two, the application for the license was accepted and taken on record by the IPO whereas the PCT application was not. However, the patent office later accepted the PCT application and gave a later filing date after grant of the foreign filing license to the applicant.

The applicant filed an appeal at the Delhi High Court demanding the PCT application to be accorded the same date as the application date for obtaining foreign filing license. The applicant argued that since the PCT has been filed with India as Receiving office[viii], there should not be any need of obtaining the foreign filing license at the first place. Therefore, the PCT application should be accorded the same date as the foreign filing license application date.

But it was argued by the IPO that even if the PCT application is filed at the Indian Patent Office with India as the receiving office, the application is forwarded to WIPO which is an International body and the applicant is required to wait for the issuance of foreign filing license. The permission to file patent application outside India is generally granted by the IPO within 21 days from the date of such request by the applicant. To this, the court held:

“The legal consequences flowing from a PCT application filed in the Indian Patent office are that of an application filed outside India. The Receiving office is only empowered to assure that a PCT application is in conformity with all the prescribed documents under the treaty. All further processing is done by the International Bureau and the International Searching Authority.”

Therefore, it is essential on part of the applicant to understand and be cautious while filing a first application as a PCT application to avoid rather burdensome implications of Section 40 and Section 118.

Obtaining FFL in case the invention is conceived outside India:

A question that is asked commonly is the applicability of Section 39 to inventions conceived by Indian residents outside India. Interestingly, in Section 39, the sub-section 3 states that if the application for patent has been filed outside India by a person resident outside India, the requirements of sub-section 1 shall not apply. It is to say that if an inventor is of Indian origin and residing at the US, has invented his invention in the United States, and has filed a patent application at the USPTO, then the provisions of Section 39(3) preclude them from seeking permission from the Indian Patent Office. Accordingly, FFL from India is not required for inventors working for companies abroad for inventions conceived out of India.

Obtaining FFL in case the inventor (s) is/are Indian residents, the applicant is non-Indian & the application is made outside India:

There are situations when an inventor is an Indian resident but has assigned his invention rights to a foreign entity. Global MNCs have their R & D departments at multiple locations across the globe. They are often desirous to file application for a patent in their home country when the inventions are developed outside home country, say in India. The question is whether in such cases, the Indian resident inventor or the assignee is liable for obtaining foreign filing license from the IPO?

It should be noted that the provisions of Section 39 require any person making or causing to make an application outside India to obtain permission for routing the invention outside India in order to apply for a patent. The foreign assignee might argue that since he/she is not resident in India, the provisions of Section 39 do not apply, and he might be correct.

However, such assignment does not devolve the duty of the inventor as he/she could be construed as the one causing the application to be made outside India by way of assignment.

Therefore, the inventor should insist the assignee or apply himself and get the FFL before the patent application is filed outside India.

Obtaining FFL in case of joint research between Indian resident inventors and non-resident inventors:

An invention is often a result of joint research between Indian resident inventors and non-resident inventors. An inventor residing at India and an inventor residing at say Singapore may develop an innovative product working at R & D department of a company located at India and Singapore respectively. It may happen that the applicant company foresees better market opportunities at United States and is keen in obtaining exclusive patent rights in US rather than in India or Singapore. The applicant company should then file a patent application at the USPTO. In such situations, the question is whether the India residing inventor must seek permission from the IPO before the patent application is filed at the USPTO?

The answer to this question is similar to the answer in case of assignment. That is even though the assignee might be non-resident of India, the Indian inventor could still be considered to be causing an application to be made outside India without following the due process of law. Accordingly, the inventor should insist the assignee or apply himself and get the FFL before the patent application is filed outside India.

Patent rights are territorial in nature and every country follows its own procedure for protection of rights. It is essential to understand the practice followed. As described above, non-compliance of laws may lead to penal consequences and revocation of patents in some countries. Even though, Indian applicants can find good business opportunities by obtaining patent rights for their inventions outside India, they should be cautious of the foreign filing restrictions as some of the restrictions are of punitive nature. Similarly, captives of various multinational companies may see a lot of benefits in using the Indian technical workforce to add to their global patent portfolio, but they should not forget to follow proper compliance when first filing their applications outside India.

If there are specific queries, please write to us at mail@gip-india.in .

 

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Decoding Patent Marking Provisions in India

Decoding Patent Marking Provisions in India

By Kshitij Malhotra, Partner and Garima Rai, Senior Associate

Introduction

With the fast paced growth in technologies in today’s world, patents are considered as essential for corporations as well as individual inventors or applicants.

It is known that the general purpose of a patent is to provide exclusive right to the patent owner for manufacturing and selling a patented product. Going by the definition, patent marking relates to making the general public aware of the fact that a product has been patented or a patent has been applied for the product.

When a person applies for a patent or has been granted a patent, it becomes very important to protect its rights on a product, as well as the rights of the competitor to know that a patent exists on that product by making the public aware that a patent has been granted on it.

Provisions of Indian Patents Act, 1970

According to Indian Patents Act[i], a person who has been granted a patent may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice.

If a patent is yet to be granted, the patentee may use words such as “patent pending” or “patent applied for”.

Patent marking not only creates awareness about the patented product to the general public but also constructively informs the infringer who has a similar product and is involved in the act of infringing on patentee’s product.

According to Section 111[ii] of the Indian Patents Act, in the event of failure to mark, the patentee cannot claim for any damages in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. In other words, marking a product being covered by a patent is essential when it comes to obtaining compensation from potential infringers.

However, there are chances of innocent infringement when the infringer is not aware of the patent. In such cases, patent marking plays a major role. If a patent is marked along with the patent number or with the patent application number quoting “patent applied for”, then there arises very less chance for infringement.

Summarizing the purpose of Patent Marking as below:

  1. Helping to avoid innocent infringement;
  2. Encouraging patentees to give notice to the public that the article is patented; and
  3. Aiding the public to identify whether an article is patented.

Types of Patent Marking

To satisfy the marking requirements, a patented article must be marked either with the word “patent” or the abbreviation “pat.,” together with the applicable patent number. Where an article is already on the market and a patent covering it is issued later, the patentee is required to update the mark to identify the patent number of each newly issued patent. There are basically two types of patent marking as explained below:

Physical Marking

Physical marking relates to physical printing of the patent application number or the patent number along with “patent applied for” or “patent” on the product. Such an example is provided in Fig. 1. There exists wide range of products which contain such marking of the patent number such as medicines, ointments, hair cleansers, mechanical devices etc.

There are situations when a patent is yet to be obtained for a patent application which has already been marked and product is sold in the market. Once, a patent is granted for such product, the patentee is required to amend the marking on its products by replacing the patent application number with the patent number.

However, it will be appreciated that updating physical marks in such situations can result in additional manufacturing costs, due to retooling of manufacturing processes or development of new product moulds to include new patent numbers on the products or to delete inapplicable ones. The magnitude of the additional costs is difficult to ascertain reliably given the lack of empirical data regarding the impacts of physical marking on manufacturing processes, but several public commenters noted that it is costly to make changes to a product.

Virtual Marking

In this era of versatile internet and easy access to information across the globe, if the patent information is put on respective websites, the public would certainly get the knowledge for existence of such patent. This introduced the concept of Virtual Marking. Virtual marking allows patent owners to effectively mark their products with a single “virtual patent marking” comprised of the word “Patent” (or “Pat.”) together with a URL address accessible to the public that associates the patented article with the number of the patent.  This benefits companies by not having to update moulds every time they are granted a patent for a product. An example of such virtual marking is provided in the adjacent Fig. 2.

Although, virtual marking holds high importance when compared to physical marking, Indian provisions are directed to stamping, engraving or impressing of patent application no. or the patent number on the product. The teachings of the Indian Patent Law are reticent on virtual marking. However, it is believed that with growing number of patent applications being filed at the Indian Patent Office and the growing number of patents being granted, the concept of virtual marking should be instigated as an alternative way to patent marking.

False Patent Marking

A patentee can mark his patented product with the patent number; however, there is a word of caution. There could be cases when a person who is not a patentee or does not own a patent, puts up a false patent number information marked on his product with the intention of earning benefits from such marking.

The Indian Patents Act[iii] puts a restriction to a person to false mark a product with a patent number when the product has actually not been patented. According to Section 120, if a person represents on his product that it has been “patented” in India or a “patent has been applied for”, the person is considered to be punishable with a fine of up to INR 100,000/- (~1500USD).

Conclusion

It is evident that the Patent Marking law has not mandated any duty on the patentee. However, if patentees diligently follow the law, patent marking can prove to be a good marketing and a quality source tool. It also satisfies the authenticity and genuineness of the product. India is growing in the field of innovation and technology and it is believed that strict implementation of such laws will certainly reduce infringement, thereby benefitting the common public.

***


End Notes:

[i] Explanation 2 in Section 120 as provided below

[ii] Section 111, The Patents Act 1970:

Restriction on power of court to grant damages or account of profits for infringement. –

(1) In a suit for infringement of patent, damages or an account of profits shall not be granted against the defendant who proves that at the date of the infringement he was not aware and had no reasonable grounds for believing that the patent existed.

Explanation. -A person shall not be deemed to have been aware or to have had reasonable grounds for believing that a patent exists by reason only of the application to an article of the word “patent”, “patented” or any word or words expressing or implying that a patent has been obtained for the article, unless the number of the patent accompanies the word or words in question.

[iii] Section 120, The Patents Act 1970:

 

Unauthorised claim of patent rights. -If any person falsely represents that any article sold by him is patented in India or is the subject of an application for a patent in India, he shall be punishable with fine which may extend to [one lakh rupees].

Explanation 1.-For the purposes of this section, a person shall be deemed to represent-

(a) that an article is patented in India if there is stamped, engraved or impressed on, or otherwise applied to, the article the word “patent” or “patented” or some other word expressing or implying that a patent for the article has been obtained in India;

(b) that an article is the subject of an application for a patent in India, if there are stamped, engraved or impressed on, or otherwise applied to, the article the words “patent applied for”, “patent pending”, or some other words implying that an application for a patent for the article has been made in India.

Explanation 2.-The use of words “patent”, “patented”, “patent applied for”, “patent pending” or other words expressing or implying that an article is patented or that a patent has been applied for shall be deemed to refer to a patent in force in India, or to a pending application for a patent in India, as the case may be, unless there is an accompanying indication that the patent has been obtained or applied for in any country outside India.

 

 

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Iconic Taj Mahal Palace Hotel to be the first Trademarked Monument of the Country

Iconic Taj Mahal Palace Hotel to be the first trademarked monument of the country

By Kshitij Malhotra, Partner and Moumita Roy, Associate

A first for the Mumbai skyline and a first for India, the iconic hotel building and the signature dome of The Taj Mahal Palace, Mumbai acquire an image trademark for its defining structure

The recent changes introduced in trademark law in India are auguring well for registration of unconventional marks. One of the recent registrations that has made the news is that of Exterior Image of “Taj Mahal Palace and Tower”. With the registration of the opulent palace as a trademark, the trend of Indian trademark has set into a broader direction. 

The Taj Mahal Palace is the first monument of India, which has been recognized as a trademarked building. Just to give the historical context, the hotel started working in 1903. At that time it was marked as first ever harbor landmark of the country. The location of the building is an alluring site facing the Gateway of India. The majestic location gives an opportunity to view the beauty of Arabian Sea. The luxury hotel is recognized as the world leader in hospitality and has a rich history of hosting kings, dignitaries and eminent personalities from across the world. Unfortunately, the hotel was also one of the sites of terrorist attack that shook Mumbai in 2008.

Commercially the exterior of the monument is a source indicator distinguishing the famous Taj Mahal Palace. The monument and its red tiled Florentine Gothic dome which crowns the Indo Saracenic arches and architraves tombs are leading the sky of Mumbai since more than a century and are acting as the “trig point” for the Indian navy. The view is the inseparable identity of the city itself.

Interestingly, the Taj Mahal Hotel is owned by THE INDIAN HOTELS COMPANY LIMITED. Apparently, after completion of its successful 114 years of operation, the hotel owners decided to file a trademark application for the registration of the building as a trademark.

The application for registration was filed by IHC on 13/10/2016, vide its application no 3386351. The application was made in class 43 for services of providing food and drink; temporary accommodation. The mark was applied claiming use since 11/02/1903. The registration certificate no: 1555165 was issued on 17th may, 2017 and the registration is valid till 13/10/2026. Apparently, there is another application with application No: 3387665 dated: 14/10/2016 for Taj Mahal Palace (image) which is still pending.

It will be fair to say that the registration category of Taj Mahal Hotel is more of a Trade Dress. Interestingly, the registration not only will offer protection from unauthorized reproduction of the image of the hotel, but also should bring the applicant the exclusive right to use its extraordinary building design in hotel business. This could mean that architecture of the building cannot be copied by any hotels or restaurants engaged in providing similar services.

Also interestingly, the registration of the mark brings out the apparent shift in mentality of the trademark offices in India towards unconventional marks. Historically, the trademark office has been conservative in registering such unconventional marks. Registration of this mark is a paradigm shift. It should be remembered that the new trademark rules initiated in March of this year has set a procedure for registration of unconventional marks, such as color mark, sound mark, shape of goods marks etc. The registration of this mark would act as a basis for registering many such similar marks and should encourage the trademark applicants to venture into registering valuable IPs in form of such marks lying with them.

Revised CRI Guidelines by Indian Patent Office

Revised CRI Guidelines by Indian Patent Office

By Kshitij Malhotra, Partner and Garima Rai, Senior Associate

On 30th June 2017, the Indian Patent Office introduced a fresh set of CRI Guidelines[i] for examination of Computer Related Inventions (CRI). Notably, this is the third set of guidelines issued by the Indian Patent Office in last three years. The previous two versions were introduced on 21st August 2015 and 19th February 2016 respectively. In the newly introduced guidelines, IPO has introduced changes in comparison to the earlier versions for examination of computer related inventions.

Determination of excluded Subject Matter:

It has been a matter of debate for patentability of Computer Related inventions in India. The issue of patentability arises when an invention involves computer software. In their previous guidelines of Feb, 2016, the Patent Office had mandated the presence of novel hardware to claim protection for the computer software involved therein. This was a complete reversal of guidelines of Aug 2015 in which the Patent Office has suggested that computer programs are patent allowable subject matter, and the allowability of a particular software program would depend on whether there is any technical effect of the software program claimed.

In the new guidelines, the requirement of novel hardware has been eliminated from the patentability requirements. In the new guidelines, although it is clearly mentioned that the Section 3(k)[ii] excludes mathematical methods or business methods or computer programme per se or algorithms from patentability, the patent office has emphasized that invention should be examined and judged to its entirety or as a whole.

Emphasis has been added to the underlying substance of the invention and not in the manner of its presentation. The guidelines also specifically describe the various possible ways of presentation of computer related inventions such as method/process, apparatus/system/device, computer program product/ computer readable medium. The technical advancement over the existing prior arts must be judged keeping the claimed invention as a whole and not into its way of presentation.

Accordingly, these guidelines are little closer to the Aug 2015 guidelines than the Feb 2016 guidelines. Unlike the Aug 2015 guidelines, the new guidelines are bereft of any examples or any concrete criteria on evaluation of patentability of software patents.

The present guidelines should prove to be beneficial and hopeful for applicants with inventions falling in the vicinity of computer related inventions. However, the biggest disappointment from these guidelines is the absence of any case examples or listing on specific criteria to judge whether the invention’s subject matter is patent allowable? The absence of specific criteria would encourage disagreement between the Patent Office and patent applicant. More likely, it will result in higher discretion on part of the Patent Office, which could be unhealthy for the intellectual property rights ecosystem.

***


[i] http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Revised__Guidelines_for_Examination_of_Computer-related_Inventions_CRI__.pdf

[ii] Section 3: What are not inventions. -The following are not inventions within the meaning of this Act,-

            (k) a mathematical or business method or a computer programme per se or algorithms;

THE CURIOUS SAGA OF WWW.GOOGLEE.IN

THE CURIOUS SAGA OF WWW.GOOGLEE.IN

 By Kshitij Malhotra, Partner and Moumita Roy, Associate

“You no longer search for something. You Google it.”

Google, the internet search portal, is a big name throughout the world. Infringement of the brand value of Google, not only is threatening but also critical in the internet space. Therefore, the recent Delhi High Court Decision relating to registration of conflicting .in registry of search portal googlee.in is such an interesting topic of discussion.

Back ground of the dispute:

In this interesting case, way back in 2007, an ingenious defendant had managed to secure registration of a domain named www.googlee.in and incredibly operated the website for almost 4 years. After use of the website came into notice of the world famous brand Google,  and they immediately launched a complained at the National Internet Exchange of India, the watchdog of internet space in India. As per the available IN Registry dispute resolution mechanism, any complaint has to be referred to the arbitrator, and accordingly an arbitrator was appointed to look into this case.

Figure 1, Figure 2 are the comparative screen shorts of the web pages of Googlee (on left) and Google (on right).

In complaint to the IN registry, Google contended that they are a well-established brand worldwide since 1997. They added the following contentions:

  1. That the disputed domain name is visually conceptually and substantially identical to their domain, and
  2. The use of both the domains is as search engine.

The arbitrator awarded in favour of the Google and found a proprietary right of the complainant over the domain name googlee.in. The arbitrator ordered cancellation of the disputed domain with such direction to the registry. The infringer appealed.

The Proceedings at Delhi High Court:  

In the appeal filed before Delhi High Court, the appellant, without having many choices to defend, tried to challenge the arbitrator award on technical grounds on which the arbitrator reward was granted rather than denying infringement of domain name. The court rejected the grounds taken by the appellant.

Interestingly, the court pointed out that the appellant/ petitioner had failed to defend why have he selected a domain name similar to world’s most popular search engine. Further, the court pointed out the intentional adoption of similar domain names. The court said that:

“It was clear that the adoption of such a name is not a co incidents but intentional.”

The court pursued the decision of the arbitrator and rejected the defence of the petitioner mentioning the conflicting search portal as a slavish imitation.

Conclusion: The advocate representing the brand Google has rightly gauged the well-known ness of the Google in terms of a search engine. He said “You no longer search for something. You Google it”. The search verb has metamorphosed in web English into Google. Moreover, Google is a recognised well known mark in India since 2011.

It is interesting to know that in India, domain names are recognized as trademarks. In a similar case, Rediff Communication Limited vs. Cyberbooth on April, 1999, the High Court of Bombay decided that:

“Internet domain names are of importance and can be a valuable corporate asset. A domain name is more than an Internet address and is entitled to the equal protection as trade mark. With the advancement and progress in the technology, the services rendered in the Internet site have also come to be recognised and accepted and are being given protection so as to protect such provider of service from passing off the services rendered by others as his services.”

In any case, the incorporation of a domain by just adding mere ‘e’ with the name of such a mammoth brand can only is caused by the ignorance of the amount of legal protection behind the brands. It is alarming to the legal system. The true sense of brand value, the meaning of trade mark protection should be taught to the trading class explicitly. The High Court decision is a steady stride in desired direction which is worth acclamation.

Links:

The Arbitration Award

The High Court of Delhi Order.

Important points in patent rules, 2016
Possible options for foreign entities to use Expedited Examination in India

Expediting Patent Examination in India, Patent Procedure in India

EXPEDITING PATENT EXAMINATION IN INDIA

By Kshitij Malhotra, Partner and Garima Rai, Senior Associate

INTRODUCTION

Important points in patent rules, 2016Patent rights have always played a vital role in encouraging innovations across the globe. Patent Rights not only provide exclusive right to the patentee for manufacturing and selling the patented product or process, they also provide the said exclusive right for a substantial period of 20 years from the date of filing.

One of the problems in the patent ecosystem in India is the delay in grant of patents. Many patent applicants complain that patent grant process in India takes a long time. On the other hand, unlike US, there is no patent term extension system in India, where a patent applicant could be compensated for the procrastination of the patent office. Many believe, this considerably deprives the innovators from enjoying their patent rights to the fullest.

 

 

DELAYED EXAMINATION OF PATENT APPLICATIONS

Any inventor who files a patent application wishes an early examination and faster prosecution of the patent application. A quick grant of patent is encouraging; it is an imperative. This is especially true in today’s day and age when technology moves at a high pace. By the time a technology is developed and commercialized these days, the tech community most often embraces a newer and more efficient alternative.

Such faster prosecution of patents requires a profound working of the Patent Office and active compliance from the patent applicants. It is a team effort of the entire patenting ecosystem, and sadly, it is not the case in India.

Presently, there is a huge backlog of pending patent applications at the Indian Patent Offices. For example, according to some recent reports, there are about 200,000 patent applications which are lying pending with the IPOs[i].

Accordingly, many plans by the government of India to encourage innovation and increase manufacturing in India is being threatened due to such delayed examination of patent applications. Companies who invest a large amount of money in research and development are losing on their opportunities to capitalize, and are unable to enjoy the patent rights to the fullest because of the delay at the Patent Office.

The problem of delay of grant of patents is so grave that even patent applicants have started to take the patent offices to courts. In a recent case[ii] at the Delhi High Court, Japanese company, Nitto Denko Corporation, filed a suit against the patent office for delay in grant of their patent.

In this case, the court had set up a task committee to address the issue of pendency of patent applications at the IPO. The committee reported in their final report that the issue of pendency could be resolved by proactive efforts from the patent office not only limited to increasing manpower i.e. number of patent examiners.

As a consequence of this case, on 16 May 2016, the IPO published new patent amendment rules to address the issue of reducing the backlog of patent applications and expediting the examination process at IPO.

In order to address the backlog problem, the Indian Patent Office has launched many new initiatives directed at faster examination of patent applications. According to some reports, the plan of patent office is to work towards reducing the grant period to 18 months by the year 2018[iii].

This article focuses on explaining some of the ways in which patent grant could be expedited in India. At first, this article includes a discussion on practical ways using which the applicants can expedite the grant of their patent rights in India. Thereafter, the article looks into the newly introduced expedited examination system in India.

  1. PRACTICAL POINTERS TO EXPEDITING EXAMINATION OF PATENT APPLICATIONS:

Usually, patent applications are taken up for examination in the order of Request for Examination at the Indian Patent Office. In India, a Request for Examination or RFE has to be mandatorily filed within 48 months from the earliest priority date for the patent office to take it for examination.

It has been observed in many cases that clients wait until the due date for filing Request for Examination arrives. This could be understandable from client’s perspective, as they might want to take some more time to understand the patentability of their patent application by looking at the international search reports, international preliminary examination reports or examination in other patent offices. Delaying examination request in India could provide some extra time to the clients without incurring extra costs[iv]. However, one of the direct consequences of such a wait is that it delays the grant of a patent even further.

Nevertheless, once a patent application is taken for examination by an Indian examiner, it is inevitable that the patent application will be granted/ refused in another 6 months[v] discounting any voluntary extensions if filed by the patent applicant. Therefore, it becomes all the more important to focus on how the time period from the filing of the patent to the issuance of office action could be reduced.

Contemplating the above, if there isn’t any reason for the otherwise, it is always advisable for the applicant to file the Request for Examination simultaneously at the time of filing the patent application which will queue the patent application in the list of applications being examined. On similar lines it is also suggested to foreign applicants to choose Paris Convention route over PCT national phase route and file the request for examination simultaneously while strategizing their filings in India. The logic is simple, the earlier the RFE date, the earlier the office action issuance date.

Although the above strategy might lead to some extra costs for your patent portfolio initially, the recent amendments at the patent office might allow an applicant to recover major portion of this cost if they think that their patent is not worth pursuing.

According to recent amendments, a patent applicant is allowed to withdraw their request for examination at any time before office action issuance, and claim a refund of fees if the request for examination is withdrawal. According to Rule 7(4A) of Patent Rules 2016, upon withdrawal of an application for which a Request for Examination was filed and First Examination Report (Office action) has not been issued, the 90% of the fee paid for Request for Examination may be refunded to the applicant. This provision seems to be inserted in order to encourage applicants to withdraw their applications if they do not see a merit in pursuing patent rights in India.

Another important aspect in expediting patent grant is that once an office action is issued, the endeavor of the patent applicant should be to respond to the office actions at the earliest. The amended Indian patent procedures require the applicant to respond within 6 months from the issuance of the first office action. More specifically, Section 21 of the Indian Patents Act requires that on issuance of the office action, the applicant has to be comply with all regularities within 6 months of such issuance. Therefore, a late response, say in the sixth month, might leave very less amount of time for the applicant to meet any further objections issued by the patent examiner. 

Moreover, in light of the aforesaid, it also makes a lot of sense for the applicants to make sure that all the procedural formalities are duly complete and all the required documents are on record before the examination of the application. The logic is that the more the informalities there are in a submitted application, the more time it will take to traverse the objections/ rejections issued by the examiner.

For example, the applicant or their agents should be cautious of requirements under Section 8 of the Indian Patents Act also called as Form 3 requirements. It has been noted that many times timely submission of the foreign filing particulars lessens down the number of objections in the First Examination Report, or might prevent some trivial office action issuance.

Similarly, the applicants should also take note of submitting the Power of Attorney and the Proof of Right of the applicant within the prescribed deadline. This further smoothens the examination process and would reduce the chances of unnecessary objections which could delay the grant process.

  1. OFFICIAL EXPEDITED EXAMINATION IN INDIA

Recently, in the newly amended Patent Rules 2016[vi] introduced by the Indian Patent Office, considerable emphasis has been given to establishing an expedited examination regime. Among the several benefits, which include reduction in official fees, there are provisions regarding filing expedited examination in which the application is supposed to be taken out of the normal queue and examined.

Although these provisions have been directly proposed for start up companies, interestingly, non-start up companies also stand to gain from these provisions. Especially, companies and inventors, who have filed a corresponding PCT application with India as the ISA or IPEA, could also use this route to expedite the examination of their patent applications. Initial trends are showing that the patent office is issuing office action within 3-4 months of submitting the request for expedited examination. The procedures suggest a patent grant within a time frame of 12-15 months of submitting such expedited request.

According to the newly amended Patent Rules, 2016, the following category of applicants can use this expedited examination route –

  1. A start-up company[vii] as defined under norms laid by the government; or

  2. A patent applicant which has selected India as the International Searching Authority in the PCT application corresponding to the Indian applicant.

The newly amended patent rules also allow applicants who have already filed the Request for Examination (RFE), for converting the already filed RFE to an expedited one by paying the balance fee. The condition being is the applicant must satisfy the criteria mentioned above.

 

HOW CAN FOREIGN ENTITIES BENEFIT FROM EXPEDITED EXAMINATION ?

One of the questions that arises out of the newly introduced provisions is as to how can foreign entities benefit from the expedited examination measures taken by the Indian Patent Office.

Possible options for foreign entities to use Expedited Examination in IndiaIt is known to many that there are many foreign companies who own Indian subsidiaries established in India. Some of these companies are into Research and Development activities, especially localizing foreign products for the Indian markets. It is very straight forward that such companies have the option of filing patents for their locally developed inventions and using the expedited examination route for expediting their patent grants in India. What they will need to do is that they will have to submit a corresponding PCT application and designate IPO as ISA or IPEA in the said PCT application. The process though will be little costly but is practically possible.

Another strategy, although little complicated, that foreign companies could use is to either assign their inventions to their Indian subsidiaries authorizing them to file their Indian patent application or designate them as co-applicant in their Indian patent application. However, simultaneously in such cases, the foreign applicant has to ensure that a corresponding PCT application is also on record with India as designated ISA or IPEA.

It will be appreciated that although this strategy has limited application, it could be useful in certain cases where the Indian patent is so critical for a company that it could undertake the complex activities for such assignment or co-ownership, as the case may be.

Another question, which comes to the mind, is that can a foreign start-up company use the expedited examination route? In other words, can a foreign start-up company qualify the definition of start-up in Rule 2(fb) of the Patent Rules, 2016 as amended?

According to the said rule, a start-up Company is an entity which:-

  1. is not more than 5 years old, and
  2. does not have an annual turnover of twenty five crores of Indian rupees, and
  3. is involved in research and innovation.

According to explanation adduced to Rule 2(fb), an entity is defined as a private limited company as defined under the Indian Companies Act, or a registered partnership firm registered under section 59 of the Partnership Act, 1932 or a limited liability partnership under the Limited Liability Partnership Act, 2002.

An immediate question that comes to the mind is that whether a company registered outside India is excluded under the criteria? Although there is a lack of certainty in the enacted rules, the answer is most likely, not. There are multiple reasons for such an inference.   

Firstly, it should be noted that the enacted rule 2 (fb) only derives equivalence when it comes to defining companies, while it points out to absolute criteria for registration when it comes to Partnerships or LLPs. In other words, the term “entity” in the said rule is equated to a private company in case of companies, while for partnerships and LLPs the term “entity” means ones that are “registered” under the Indian Partnership and LLP Acts. If the rule makers wanted to clearly exclude private companies established outside India they would have clearly required registration in India, just like they have done in case of partnerships and LLPs.

If there is any doubt about to the aforesaid argument, then the attention is also drawn to prescribed Form 28[viii] under the Patent Rules, 2016. The Form 28 clearly requires foreign companies to provide relevant documents in column 2 (ii)(b).

Nevertheless, it has been observed that many applicants filed the Request for Expedited Examination last year 2016. It was noted that Examination Report was issued within 2.5 months[ix] from the date of filing of the Request for Examination in one of the cases. In another case, the Examination Report was issued in about one month[x] from the date of filing of the Request for Examination.

It is anticipated that in coming times the expedited request for examination could become a viable alternative for expediting the grant of patents in India.

 

***


[i]http://timesofindia.indiatimes.com/city/bengaluru/India-has-1-92-lakh-active-researchers-2-37-lakh-pending-patents/articleshow/52226942.cms  

[ii] http://delhihighcourt.nic.in/dhcqrydisp_O.asp?pn=202118&yr=2014  

[iii] http://www.thehindu.com/business/Industry/now-a-tatkal-system-to-expedite-patent-examination/article8612218.ece  

[iv] The average fees for completing request for examination formality would be around USD 500/-

[v]  The recent amendments have reduced the acceptance period under Section 21 of Indian Patents Act to 6 months from 12 months. This time period could be extended another 3 months.

[vi] http://www.ipindia.nic.in/writereaddata/Portal/IPORule/1_42_1_Patent__Amendment_Rules_2016_16May2016.pdf   

[vii] See rule 2 (fb) of Patent Rules, 2016 as annexed

 

 

[viii] http://www.ipindia.nic.in/writereaddata/Portal/IPOFormUpload/1_40_1/form-28.pdf  

[ix] See prosecution history of Indian Patent Application No. – 201631028557

[x] See prosecution history of Indian Patent Application No. – 201611031492

 

 

 


Annexure 1

RULE 2 (fb) OF PATENT RULES, 2016

In these rules, unless the context otherwise requires,-

(fb) ―Startup means an entity, where-

(i) more than five years have not lapsed from the date of its incorporation or registration;

(ii) the turnover for any of the financial years, out of the aforementioned five years, did not exceed rupees twenty-five crores; and

(iii) it is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property:

Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered as a start-up. Provided further that the mere act of developing

a. products or services or processes which do not have potential for commercialization, or

b. undifferentiated products or services or processes, or

c. products or services or processes with no or limited incremental value for customers or workflow, would not be covered under this definition.

Explanation 1- An entity shall cease to be a start-up on completion of five years from the date of its incorporation/ or registration or if its turnover for any previous year exceeds rupees twenty-five crores.

Explanation 2- Entity means a private limited company (as defined in the Companies Act, 2013), or a registered partnership firm registered under section 59 of the Partnership Act, 1932 or a limited liability partnership under the Limited Liability Partnership Act, 2002.

Explanation 3- The term ―Turnover shall have the same meaning as defined in the Companies Act, 2013 (18 of 2013).

Explanation 4- An entity is considered to be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize a new product or service or process, or a significantly improved existing product or service or process that will create or add value for customers or workflow.

Explanation 5- The reference rates of foreign currency of the Reserve Bank of India shall prevail.

 

 

 

 

 

LAW OF WELL-KNOWN MARKS IN INDIA

LAW OF WELL-KNOWN MARKS IN INDIA

By Moumita Roy, Associate

 INTRODUCTION

With Globalization at high pace, India opened its doors to foreign investors at the end of twentieth century and permitted the use of foreign brand names in India. A number of globally well-established brands started to explore investment options in India. In order to address different infringement issues in this market, they relied on the common law remedy of passing off, as there was no specific provision in the old Trademark Act for the protection of well-known marks.

The set of new Laws to handle well known marks and related issues was enacted in 1999 following the requirement enshrined in General Agreement on Trade and Tariff (GATT). The new Act included that any Trade Mark which is well-known in any part of the world can be registered even if there are no goods in Indian Market.

DEFINITION OF WELL-KNOWN MARK

The term “well-known trade mark” has been defined in the Trade Marks Act, 1999 and refers to a mark which has become so very known to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first mentioned goods or services.

Sec 2(1) (zg) of the Trade Marks Act, 1999, gives the definition of a well-known mark as under:

well-known trade mark”, in relation to any goods or services, means a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services”.

HOW TO DECIDE WHETHER A MARK IS WELL-KNOWN?

In the trademark Act, the definition of well-known mark has been provided. But whether a mark is well-known or not is a factual question? The factors generally considered in determining the well-known criteria of the mark are as follows:

  • The number of actual or potential consumers of the goods or services;
  • The number of persons involved in the channels of distribution of the goods or services;
  • The business circle dealing with those goods or services,
  • That the trade mark is well known to the public at large in India.

Notably, there is no provision under the Indian trademark law to seek a declaration from the Trademark Registry that a mark is well known. However, the registry has formed a committee of members who review and update the list of well-known trademarks periodically. Thus, rights holders can bring any court decisions where their marks have been held to be well known to the attention of this committee and present a case for their mark’s inclusion.

TYPES OF PROTECTIONS IF A MARK IS A WELL-KNOWN MARK

In the realm of trademarks, getting a “well-known” status is perhaps akin to attaining “MOKSHA” because the protection of well-known marks transcends the traditional standards and objectives of trademark protection.

The protection of well-known marks acquired a new hue in India. The TM Act contains essentially five provisions referring to well-known marks, namely, Sections 2(1)(zg), 11(2), 11(6), 11(7), and 11(9). Also, under Section 29(4) of the TM Act, dealing with trademark infringement, there is a specific provision to protect registered trademarks that have “a reputation in India” against third-party use in connection with dissimilar goods and services.

Immunities granted to well-known trademarks can be summed up as under:

  • The owner of a well-known trademark may prevent others from registering the same as, or similar to, the well-known trademark in identical or similar categories of goods or services. For that it is not important for him to be registered in India.
  • The owner of a well-known registered trademark may injunct others from incorporating the well-known trademark in the name of their enterprises;
  • The owner of a well-known registered trademark is not restricted by the five-year time limit for bringing cancellation actions against trademarks registered in bad faith, while such five-year time limit applies to ordinary trademarks; and
  • In infringement cases, courts or administrative bodies tend to grant larger awards to owners of well-known trademarks, and subject infringers to more severe punishment.

While considering an application for registration of a trade mark and opposition filed in respect thereof, the Registrar shall-

  • Protect a well-known trade mark against the identical or similar trade-marks;
  • Take into consideration the bad faith involved either of the applicant or the opponent affecting the right relating to the trade mark.

JUDICIAL INTERPRETATION

Judicial authorities in India have successfully protected well-known trademarks from infringement and passing off. The trend of court decisions reveals the truth vividly.

In the year 1994, the Delhi High Court applied the concept of dilution when considering use of the BENZ mark. This is the first case where a court took judicial notice of a mark’s reputation without insisting on actual confusion and restrained use of a similar mark.

In the year 1996, the Bombay High Court restrained an Indian company, Kamal Trading Co., from using the mark 7’O CLOCK on toothbrushes. It held that the plaintiff had acquired an extensive reputation all over the world.

In, 1996, an Indian company was injuncted from using the mark Whirlpool for their goods. The Court held that the mark Whirlpool had established a trans-border reputation and is a well-known mark.

Since the Act came into effect in 2003, the protection of well-known marks has raised several issues in India. The list of well-known mark take a shape with the courts realistic decisions like TATA, VOLVO, PepsiCo, Telco, ENFIELD BULLET, KIT KAT, NIVEA, NIRMA and so on.

Judging from court decisions, it would appear that the protection of well-known marks in India is a high balancing act because it involves many competing considerations. Several cases have been decided by various High Courts in India where well-known marks were protected.

DRAFTED AMENDMENT RULE (SEC 127)

To revamp the existing Trademark Rules, 2002, the Department of Industrial Policy & Promotion (DIPP) has proposed a new set of Rules in latest draft of rules issued in 2015. As per the draft Rules, a right holder will be able to make request to the Registrar of Trade Marks to declare a trademark as a “well-known” mark. The request will need to be supported with a statement of case and evidence.

As per the proposed Rule 127 of the Draft Rules[1], a mark may be determined as a well-known mark and will be included in the list of well-known marks based on the discretion of the Registrar. The Registrar shall also have the power for deciding the criteria to get well-known status of a mark. To be included in the list of well-known mark the applicant has to pay the fee. This list will be maintained by the Registry. The enlisted name can also be removed from the list at the satisfaction of the registrar if the mark has gained the status erroneously or with misrepresentation.

HOW CAN FOREIGN ENTITIES BENEFIT FROM AMENDED RULE?

Recent rulings show that the courts are pragmatic in giving due credence to the international character of trademarks and recognizing their well-known status. The amended rule will add a new dimension to this effort. Renowned brands throughout the world will be attracted to get enlisted in well-known marks and explore the attractive emerging market destination of India. The magnificent protection history will entice the intention of world famous brands of getting protected in Indian market.

Till date, a brand is required to wait for court’s decision where an infringement case is involved and the brand drags the infringing mark to the court. Clarifying the above, it can be interpreted that a well-known brand can get favourism if the applicant moves to a court for infringing marks. However, once the amendment comes into force, the well-known brands will get intrinsic protection of well-known ness.

In its present form, Indian trademark law precisely extends statutory protection to well-known trademarks. After the amendment, there will be a process to claim well-known status as recognition to a well-known brand. The brands will be protected from infringement, dilution, free-riding and tarnishment as a right.

Consequently, the big and renowned brands will be relieved from the complex court proceedings which are truly foreign to them.

The quality consistency will help the brands to earn consumer loyalty on a larger scale in the dynamic Indian market.

CONCLUSION

Concluding the above discussion, the present set of amended rules will outset a new trend in the Trade Mark terrain in India. It is worth mentioning that the current trade mark laws as well as the common law have shielded the well-known trade marks in India thoroughly. In future, this will grant the owners a legal right to declare their trademarks as well known. This will undoubtedly increase the interest of the foreign investors to protect their well-known marks in India. A reputed mark can be protected comprehensively in India by Indian laws. The big brands can enjoy the freedom of using their well-known trademarks without any apprehension of infringement, tarnishment and dilution controversies. There are high chances of elimination of duplicate or deceptively similar products from the market and markets will be expectedly comprised of original products. Such amendment is Trademark Rules will bring considerable change to the nature of Indian market.

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REQUIREMENTS UNDER SECTION 8 OF THE INDIAN PATENTS ACT

REQUIREMENTS UNDER SECTION 8 OF THE INDIAN PATENTS ACT

By Garima Rai, Sr. Associate

Introduction to Section 8 of the Indian Patents Act:

Section 8 of the Indian Patents Act deals with the “Statement and Undertaking” regarding submission of details of foreign applications by an applicant at the Indian Patent Office.

Section 8 quoted below:

Information and undertaking regarding foreign applications:

(1) Where an applicant for a patent under this Act is prosecuting either alone or jointly with any other person an application for a patent in any country outside India in respect of the same or substantially the same invention, or where to his knowledge such an application is being prosecuted by some person through whom he claims or by some person deriving title from him, he shall file along with his application or subsequently within the prescribed period as the Controller may allow—

(a) a statement setting out detailed particulars of such application; and

(b) an undertaking that, up to the date of grant of patent in India, he would keep the Controller informed in writing, from time to time, of detailed particulars as required under clause (a) in respect of every other application relating to the same or substantially the same invention, if any, filed in any country outside India subsequently to the filing of the statement referred to in the aforesaid clause, within the prescribed time.

(2) At any time after an application for patent is filed in India and till the grant of a patent or refusal to grant of a patent made thereon, the Controller may also require the applicant to furnish details, as may be prescribed, relating to the processing of the application in a country outside India, and in that event the applicant shall furnish to the Controller information available to him within such period as may be prescribed.

This is a peculiar requirement by the Indian Patent Office in connection to a patent application filed in India. Under Section 8(1) of the Indian Patents Act, an applicant has to provide a statement disclosing the detailed particulars of applications filed outside India corresponding to the Indian patent application[1]. According to Rule 12, the applicant is required to submit the information within 6 months from date of filing in India. It should be noted that the requirement is about submitting family member information and not any disclosure about prior art etc.

In compliance with clause (b) of Section 8(1), the applicant is required to submit an undertaking that he would keep the Controller updated from time to time about the detailed particulars of the corresponding foreign applications[2].

In addition to that, under Section 8(2), the applicant is required to submit such information when the Controller (Patent Office) requires or calls for such information from the applicant. According to Rule 12, such information is required to be submitted within 6 months of such a request.

Difference between Section 8 requirements and IDS requirements in US patent law:

It is worth noting and emphasizing that the IDS[3] requirements in the US patent law are different in comparison to the Section 8 requirements of the Indian Patents law.

According to the IDS requirements of the USPTO, an applicant is required to submit the background art, prior art documents, citations, and other such documents which are relevant to the patentability of a particular patent application. There is a specified Information Disclosure Statement[4] form available at the USPTO for such submissions.

Whereas according to Section 8 of the Indian Patents Act, the applicant is required to submit the details regarding corresponding foreign applications.

In simple words, one can say that the IDS requirements of the USPTO, requires the prior arts which the applicant might have found before filing his patent application. The applicant might have conducted a prior art search and hence concluded to file the patent application.

Section 8 – Some issues

There are some questions that frequently arise with respect to Section 8. One of the questions which arise is what actually is required to be submitted under Section 8(2)? Another question which arises is that what does the details relating to processing of foreign applications mean?

With respect to these questions, the applicant must furnish the details (name of the country, date of application, application number, status of the application, date of publication, patent no. and date of grant) of family members to the patent office in officially prescribed Form 3. As noted above, even if the invention is assigned to another entity in another country, still the applicant is required to keep the Patent Office informed of such an application.

Further, an applicant should submit the copies of all searches and examination reports including claims as allowed in respect of any family applications including CIPs, divisional, refiling etc. as the applicant is under a continued obligation to provide such details. The table below provides the details for suggestive practice for furnishing:

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In view of developments and case laws with respect to Section 8, it is observed that failure to disclose such information may lead to opposition and may also be a ground for revocation of a granted patent. Under Section 25(1)(h)[5] of the Act, a person may file an opposition either to a pending published patent application or the person may file a post grant opposition under Section 25(2)(h)[6].  

Consequences of Non-compliance:

Further, failure of submission of such information may lead to revocation of a granted patent under Section 64(1)(m)[7] by the Intellectual Property Appellate Board.

Rationale behind Section 8 requirements

It is observed and understood that the objective of submitting documents under Section 8 is to assist the Examiner in examining the patent application. Few decades ago, the availability of internet to people was localized and limited. During those days, it was difficult for the Examiners to get the updates on the corresponding foreign filed patent applications. Hence, the burden of submitting the foreign filing details relied upon the applicant.

To the contrary, now-a-days, internet is widely available and at much higher speed in comparison to olden days. Moreover, it has become extremely simple to surf the internet and find out information about the foreign filed patent applications. But, there still lies a responsibility of the applicant to acquaint the Examiner with the developments of the corresponding foreign filed patent applications due to complexity of global patent regimes and language complications.

Some Case Laws

Below are few of the important judgements from the history of Indian Patent System in relation to the requirements under Section 8:

1. Richter Gedeon vs. Cipla[8]: In this case, at the Indian patent office, Indian company Cipla filed a post grant opposition to the Indian Patent No. 202297 of Richter Gedeon under Section 25(2) of the Patens Act alleging multiple grounds including non-compliance with Section 8. The patentee had filed a national phase application in India on December 9, 2003 with an undertaking under Form 3. The next updated Form 3 was filed on October 25, 2004 only mentioning the patent application’s entry into several countries.

The Controller in this case observed that:-

even though substantial updated information on the corresponding application filed in foreign countries were expected to be available like the information in JP and USA, the same was not informed to the Indian Patent Office. I view this irregularity by patentee as violation of provision as required under Section 8 of Patents Act. I conclude that such a ground of opposition is validly established by the opponent.

From the facts narrated in this instant order it appears that the applicant had voluntarily abandoned the JP and USA applications after the grant of the Indian patent. The obligation to provide updated information with the patent office, is applicable till the Indian patent is granted and not thereafter. However, from the order of the Controller it appears that the applicant may not have kept the Patent Office updated about the information in relation to the JP and USA prosecution before the grant of patent. The Patent was revoked on multiple grounds including Section 8 compliance.

2. Chemtura Corporation vs. Union of India[9]:  In this case, Chemtura Corporation was granted Indian Patent No. 213608 on January 9, 2008. In some infringement proceedings in High Court, Union of India alleged that Chemtura had failed to comply with the requirements under Section 8 and therefore their patent was invalid. In this case, it is mentioned that even though the Patent Office through its letter dated October 20, 2004 had called upon Chemtura to disclose “details regarding the search and/or examination report including claims of the application allowed…. in respect of same or substantially same invention filed in any one of the major patent office such as USPTO, EPO and JPO etc”, in its response, Chemtura did not submit any relevant information. In fact, Chemtura had replied by a letter dated October 17, 2005 that there had been no further development and thus no further information was required to be submitted.

The High Court observed that the patent applicant was required to furnish any and all foreign search reports in its possession at the time of its reply to the patent office i.e. as on October 17, 2005. The court referred to the corresponding US application and European application where the claims were narrowed to a greater extent and an acceptable limit.

The Delhi High Court then held that an applicant was required to periodically update the Controller on the current status of the corresponding foreign applications and that mere furnishing of information on the status of the application did not satisfy the requirements of Section 8(2) of the Act. Especially, the court in this case pointed out to the deliberate attempt of the applicant in concealing the status of family members, in light of unfavourable developments in other patent offices. 

3. Roche vs. Cipla[10]: It is interesting to note that in this particular case, the High Court did not revoke the patent even though it was concluded that Section 8 requirements had not been complied by Roche prima-facie. The Delhi High Court relied on the fact that Section 64 uses the word ‘may’ and this gives the Court discretion not to revoke the patent based on the facts of this case. 

It was a fact, that Roche was granted an Indian Patent No. 196774 on February 23, 2007 and application for the Indian Patent was filed on March 13, 1996.  Roche had filed an infringement action against Cipla for infringing on its patent 196774.

In its counter claim, Cipla alleged that Roche did not comply with the requirements under Section 8 of the Indian Patents Act. In this regard, Cipla mentioned that Roche did not disclose US Patent 6900221 which was filed subsequent to the filing of the Indian Patent application, in 2000. Cipla contented that this US patent consisted of a polymorph B version of the drug and thus relates to the same or substantially the same invention and should have been disclosed to the controller as required under Section 8.  

According to Roche, polymorphic version B of the said compound would not come within the meaning of same or substantially the same invention. Further, Roche also contended that Polymorphic version B compound is different from the Indian patent and therefore Roche was not required to disclose the US patent under Section 8.

Further, Roche in its infringement claim had contended that the drugs made available in the market by Cipla, was a polymorph version B of the drug and this drug fell within the scope of the Indian Patent 196774.

The court held that Roche had not complied with the requirements of section 8. However, the court did not revoke the patent. The court stated that the discretion to revoke or not to revoke a patent lies with the Court and this exists by use of the word “may” under Section 64 of the Patents Act.

4. KONINKLIJKE PHILIPS ELECTRONICS N.V. vs. Sukesh Bahl[11]: This is another interesting case, in which a patent was spared of revocation by the courts even though on the face of it, the patentee did not seem to comply with literal requirements of Section 8.

In this particular case, Philips owned an Indian Patent no. 218255 which was granted on 31st March 2008. They filed a suit for infringement against Maj. (Retd.) Sukesh Behl, proprietor M/s. Pearl Engineering Company (Defendant No.1) and M/s. Pearl Engineering Company (Defendant No.2) for permanent injunction to restrain the Defendants from infringing the Plaintiff's Essential DVD Video/DVD ROM Disc Patents, in particular Indian Patent registered under No. 218255 and for other incidental reliefs.

In their counter claim, the defendants prayed that the said patent should be revoked and be declared as invalid. The ground for seeking revocation was the failure of the Plaintiff to disclose the information to the Controller of Patents in relation to the requirement under Section 8. To this, the plaintiff filed a list of corresponding foreign applications before the Controller of Patents. The reason assigned for delay and inadvertence was that the details of the corresponding foreign applications which were printed on back side of the paper were inadvertently not filed and only some part could be filed.

The court was of the view that the any violation of the requirement under Section 8 may attract Section 64(1)(m) for revocation of the patent, such revocation is not automatic. Further, the court pointed out that in this particular case, the applicant was inadvertent and not deliberate in concealing information about foreign family members. Furthermore, the court also was non-conclusive in regard with the importance of information which was omitted from submission by the patentee.

Conclusion:

The Section 8 requirements in Indian patent law, requires an applicant to furnish the details (name of the country, date of application, application number, status of the application, date of publication and date of grant), within a stipulated filing in India. As noted above, even if the invention is assigned to another entity in another country, still the applicant is required to keep the Patent Office informed of such an application. Further, the applicant is required to submit the copies of all searches and examination reports including claims as allowed in respect of any family applications including CIPs, divisional, refiling etc. as the applicant is under a continued obligation to provide such details. Additionally, please note that in the Examination Report, the Examiners may require the applicant to submit English translation of any non-English document corresponding to the foreign filed patent applications.

Although the requirements of this provision may seem to be taxing for the applicants, according to recent case laws and developments, the level of compliance seems to have been diluted. Especially, in Roche case and Philips case, the courts seem to have brought the dimensions of materiality of information and intention of the applicant in following the provisions of Section 8. The courts have further emphasized on the discretionary power of the courts and factual context in determining whether Section 8 requirements have been met or not.

These new dimensions added in the law about Section 8 have come as a relief for applicants, who at one point have complained about the stringency of Section 8 requirements. Although, this should not make the applicants complacent while meeting Section 8 requirements. The Section 8 requirements still pose enough burdens on the applicants to be careful while meeting the requirements. Therefore, a careful consultation with your patent attorney about meeting Section 8 requirements is advisable.

In case, there are any queries, you may feel free to email us at mail@gip-india.in.

 

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ANNEXURE I

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