Dealing with patent delays

While delays and an excessive backlog of pending patent applications at the Indian Patent Office (IPO) have been an issue of serious concern for a while, it is only recently that the problem has been seriously addressed, following two writ petitions filed at the Delhi High Court by Nitto Denko, a company based in Japan.

According to the Patent Rules 2003, the first examination report should ordinarily be issued within six months of the date of the request for examination, or six months from the date of publication, whichever is later. However, the IPO is taking up to eight or nine years to grant a patent. It is against this backdrop that the writ petitions were filed before the Delhi High Court, which finally granted them on October 9, 2014.

Outcome of the order

The government has committed to spending more than 309.6 crore rupees (equivalent to about $49 million) for recruiting fresh examiners and solving all related problems with salaries, attrition rate, etc.

Additionally, a committee comprising eight members—including the joint secretary, representative of expenditure, representative of personnel and training and a few senior advocates—was created to deliberate on the issues of: a) waiver of maintenance fees as a compensatory measure for the delay in the patent’s grant; b) patent term extension to compensate for the delay; and/or c) out of turn/expedited examination. The committee submitted its report on February 27, 2015.

With respect to waiver of fees and patent term extension, the committee concluded that the practices exist only in the US and are not applicable to India.

"The local manufacturing requirement has been incorporated in the proposed rule 24(c) by the committee in a manner that places an undue burden on the patent applicant."

The committee also said that the 20-year patent term already provides for delays and therefore does not require a further extension.

According to the committee, out of turn examination may be considered a viable option subject to certain prerequisites:

Where the invention directly contributes towards the ‘public interest’; and

When the applicant sets up local manufacturing capabilities to utilise the invention as disclosed in the application or manufactures it within two years from the date of filing the request for expedited examination.

The committee proposed a new rule 24(c) to the Patent Rules 2003 to incorporate such a measure. Under the new rule, the patent applicant would be required to provide a corroborative statement from a bank or financial institution or auditor in India to show that the applicant, or its assignee or prospective manufacturer, has sufficient capital to meet the reasonable public requirement or that sufficient capital or facilities will be made available within six months if a patent is granted.

Likely impact

While the decision seemed like a way forward towards tackling the issue of unreasonable and untimely disposal of patent applications in India for the first time, the report of the committee has to an extent diluted the impact and the objective of the writ petitions.

The local manufacturing requirement has been incorporated in the proposed rule 24(c) by the committee in a manner that places an undue burden on the patent applicant. The committee also did not define the specifics that fall in the ‘public interest’ domain for it to be considered eligible for out of turn examination.

For example in the US, an applicant may file a special petition if the invention will materially enhance the quality of the environment, develop or conserve energy resources, or counter terrorism. The applicant’s age or health is also considered as a standalone factor for expediting examination in the US, whereas in some jurisdictions, potential infringement may also be a ground.

Clearly, out of turn examination of applications under this programme does not seem to be an option for most inventors, particularly for the pharmaceutical industry, which is already grappling with the stringent requirements of local manufacturing and public interest.

Moreover, there are strict procedural and substantive requirements and litigation risks (eg, prosecution history estoppel) because the applicant must make submissions and provide additional evidence in support of its case, with barely any visible benefit.

It is also pertinent to note that the word ‘ordinarily’ continues to be mentioned in the proposed rule 24(c) of the Patent Rules 2003 for expedited examination, and may still pose issues of delay at the IPO, as is the existing state of affairs. It would be futile if even after paying additional fees, collecting necessary funds, and establishing a local manufacturing plant, the applicant’s patent application continued to collect dust at the IPO.

Although the report of the committee did not take into account many recommendations and suggestions that were made on behalf of the petitioner, it is indeed a significant victory that through a single writ before the Delhi High Court, substantial funds were given to the IPO from the Indian government.

It is also the first time that the proposal of expedited/out of turn examination has been considered for introduction under Indian patent law. This is a new wave of reform and demonstrates the methodology for future patent law reform. 

The author represented Nitto Denko in this case.

Pravin Anand is a managing partner at  Anand and Anand. His practice area is IP, litigation and dispute resolution. Anand has been a counsel in several landmark IP cases, has received recognition for pro bono work for rural innovators, and has spoken at various forums. He can be contacted at: pravin@anandandanand.com