EXPEDITING PATENT EXAMINATION IN INDIA
By Kshitij Malhotra, Partner and Garima Rai, Senior Associate
Patent 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.
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.
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 –
A start-up company[vii] as defined under norms laid by the government; or
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.
It 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:-
- is not more than 5 years old, and
- does not have an annual turnover of twenty five crores of Indian rupees, and
- 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.
[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.
[vii] See rule 2 (fb) of Patent Rules, 2016 as annexed
[ix] See prosecution history of Indian Patent Application No. – 201631028557
[x] See prosecution history of Indian Patent Application No. – 201611031492
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.