Trademark/ Copyright and Patents Suits/ Civil Proceedings: Why Non-uniformity in Jurisdictions Available to Plaintiffs?

Section 62 of the Copyright Act, 1957, Section 134 of the Trademark Act, 1999, Section 104 of the Patents Act, 1970 and section 20 of Code of Civil Procedure (CPC), 1908 govern the applicable jurisdiction to file suits/ civil proceedings in case of Copyright, Trademark and Patent disputes.

These sections have been reproduced below:

For Copyright:

Section 62 of the Copyright Act, 1957:  

Jurisdiction of court over matters arising under this Chapter.—

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

(2) For the purpose of sub-section (1), a “district court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.

P.S. – (Emphasis added)

For Trademark:

Section 134 of the Trademark Act, 1999:

Suit for infringement, etc., to be instituted before District Court.—

(1) No suit—

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation —For the purposes of sub-section (2), “person” includes the registered proprietor and the registered user.

P.S. – (Emphasis added)

For Patent:

Section 104 of the Patents Act, 1970:

No suit for a declaration under section 105 or for any relief under section 106 or for infringement of a patent shall be instituted in any court inferior to a district court having jurisdiction to try the suit: Provided that where a counter-claim for revocation of the patent is made by the defendant, the suit, along with the counter-claim, shall be transferred to the High Court for decision.

For Copyright, Trademark and Patent:

Section 20 of CPC:

Other suits to be instituted where defendants reside or cause of action arises.- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction—

(a) The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Explanation: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Analysis:

Section 20 of CPC provide for filing of suit at the court within local limits of which cause of action arises wholly or in part or at the court within local limits of which defendant resides, or carries on business, or personally works for gain. In the absence of any other specific section of the law currently in force, plaintiff cannot choose to file suit at the court within local limits of which he resides, or carries on business, or personally works for gain. Fortunately in case of Trademark and Copyright, section 134 of the Trademark Act, 1999 and section 62 of the Copyright Act, 1957 respectively provide for filing of suit also at the court within local limits of which plaintiff resides, or carries on business, or personally works for gain. Unfortunately Section 104 of the Patents Act, 1970 for patents does not provide such convenience. Section 104 of the Patents Act, 1970 only provides that infringement suits can be instituted at any court not inferior to a district court. As section 104 of the Patents Act, 1970 does not provide the details of the territorial jurisdiction of district/ high court where suits for patent disputes are to be filed, jurisdiction is to be decided in accordance with section 20 of CPC.

Reader is advised to read article written by IIPRD on the inclusive nature of section 62 of the Copyright Act, 1957 and section 134 of the Trademark Act, 1999.

Below given table compares the convenience of plaintiffs being a corporation (which includes a company) in case of trademark/copyright and patent suits.

trademark copyright and patent suits

In the times to come when patent infringement suits will be on the rise, plaintiff should not be driven to file suits at the location where infringement took place or location where defendant resides, or carries on business, or personally works for gain. Change in law to bring the section 104 of the Patents Act, 1970 in lines with section 62 of the Copyright Act, 1957 and section 134 of the Trademark Act, 1999 is required to stop the inconvenience being caused to plaintiffs in case of patent suits.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Analyzing the Applicable Jurisdiction for Trademark and Copyright Disputes

Years 2015 and 2016 have been very important in terms of what they have offered to bring clarity on the jurisdiction where suits/ civil proceedings related to Trademark and Copyright can be instituted. IIPRD has written one article discussing some of these cases. Intent of the instant article is not to discuss facts of those cases again but to understand the latest position on the applicable jurisdiction for Trademark and Copyright disputes.

Section 62 of the Copyright Act, 1957 (hereinafter referred to as section 62), Section 134 of the Trademark Act, 1999 (hereinafter referred to as section 134) and section 20 of Code of Civil Procedure (CPC), (hereinafter referred to as section 20) 1908 govern the applicable jurisdiction.

These sections have been discussed below:

For Copyright:

Section 62:

Jurisdiction of court over matters arising under this Chapter. —

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

(2) For the purpose of sub-section (1), a “district court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.

P.S. – (Emphasis added)

For Trademark:

Section 134:

Suit for infringement, etc., to be instituted before District Court. —

(1) No suit—

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation. —For the purposes of sub-section (2), “person” includes the registered proprietor and the registered user.

P.S. – (Emphasis added)

For both Copyright and Trademark:

Section 20:

Other suits to be instituted where defendants reside or cause of action arises. – Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction—

(a) The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Explanation: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Section 62 and Section 134 are pari materia. It is important to note that both of these sections are ‘inclusive’ in nature. They are categorical in nature. The inclusive nature of these sections can be inferred from the word ‘include’.

To better understand the intent and effect of section 62 and section 134, let’s understand what recourse plaintiff would have in absence of these sections and what recourses they have now with these sections.

In absence of Section 62 and Section 134, having resort to section 20, plaintiff may be able to file the suit of infringement against the defendant only at the district court (in case of copyright) or at a court that is not inferior to the district court (in case of trademark) within local limits of which cause of action wholly or in part arises, or where defendant resides, carries on business or personally works for gain. But when we read Section 62 and Section 134 with section 20, plaintiff can also file suit for infringement at a place where he resides or carries on business or personally works for gain. Plaintiff is not barred to file suits at courts having jurisdictions where cause of action has arisen wholly or in part or at court having jurisdiction where defendant resides or carries on business or personally works for gain even if plaintiff is not residing or carrying on business or personally working for gain in any of those jurisdictions.  

Section 62 and section 134 are not in derogation of section 20, instead they just provide an additional forum for the suing to the plaintiff. Such interpretation of section 62 and section 134 has been confirmed by division bench of Hon’ble Madras High Court in M/S. MICRO LABS LIMITED, REP., BY ITS COMPANY SECRETARY V/S M/S. ERIS LIFE SCIENCES PVT. LTD., decided on Tuesday, September 15, 2015.

After INDIAN PERFORMING RIGHTS SOCIETY LTD. Versus. SANJAY DALIA AND ORS: (2015) 10 SCC 161 decided on July 01, 2015 by Hon’ble Supreme Court and ULTRA HOMES CONSTRUCTION PVT. LTD Versus PURUSHOTTAM KUMAR CHAUBEY & ORS FAO (OS) 494/2015 & CM 17816/2015 decided on January 20, 2016 by Hon’ble division bench of Delhi High court, plaintiff being a corporation (which includes a company), can sue at places as discussed below:

Picture2

By drawing analogy from the case laws read with section 134, section 62 and section 20, below is produced a table that discusses the applicable jurisdiction that may arise in different cases.

Picture1

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Submission on SEPs and Their Availability Under FRAND Terms

  1. Introduction

This submission is with respect to the discussion paper published by DIPP on Standard Essential Patents (SEPs) and their availability under FRAND terms. As one of the prime objects of IP laws is to promote/establish a fair balance between IP protection and Public interest, it is becoming essential for the governing bodies to have a closure look on the way SEPs are being commercialized.  In absence of any clear frameworks or guidelines by the government and standards making organizations, a lot of concerns have been raised recently with regards to working of standard essential patents.  It has been observed across the globe that there is no standard for terming any patent as Standard Essential Patent and there certainly are no standard /clear enforceable guideline under which the SEPs should be licensed to interested parties.

In view of the issues raised during recent litigations and foreseen issues related to SEPs and the ways they are licensed, the DIPP has taken a welcome step to develop a suitable policy framework to define obligations of the essential patent holders and their licensees.  Though the discussion paper under heading of “issues for resolution” attempts to explore a variety of issues, the objective appears to be conservatively defined. We think that the objective should be to develop a suitable framework/guideline for (a) Standards Setting Organizations (SSOs), (b) Government Bodies that approve or mandate any standard, (c) Rights holders of SEPs and  (d) Potential Licensees; and to evaluate need for change in domestic laws, if required.

Through this paper, we intent to submit our opinion on different issues listed for resolution and some other inputs to be evaluated further. We have also made an attempt to propose some obligations for each of the above listed entities

  1. Legislative measure

Let’s start with the first issue listed for resolution.

  1. Whether the existing provisions in the various IPR related legislations, especially the Patents Act, 1970 and Anti-Trust legislations, are adequate to address the issues related to SEPs and their availability on FRAND terms? If not, then can these issues be addressed through appropriate amendments to such IPR related legislations? If so, what changes should be affected.

Though the Patent Act, 1970 incorporates several provisions (like compulsory license) to strike a balance between the interest of IP owners and public interest, the issues related to SEPs were never explored to be addressed by the law.  As the issues related to SEPs have potential to directly impact public interest, it is right time for the legislators to explore possibility of suitable changes in the law or clarification of law to address the issues related to SEPs.

            The patent act 1970 through section 66 has also provided tool for revocation of patent in public interest that reads as “Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked”.Though the provision has been rarely, in fact never,  invoked (at least to my knowledge), there should be some clarify on the term “generally prejudicial to the public”, and whether the section 66 can be a potential tool to revoke the SEP if the public interest is undermined due to abuse of dominance by the SEP holders.  Here are some of the proposals that can be incorporated through appropriate amendments after careful evaluation.

Proposed Legislative Measures:

  • Addition of grounds of revocation: An additional group of revocation under section 64 can be added to enable revocation of patent in case of failure of timely disclosure of essential patents related to a standard by a member or non-member of the associated standard, especially when the patent makes a claim of it being a SEP, to avoid any potential patent hold-up issues.
  • Requirement under section 146 rules 131 requiring disclosure on working on patents in form-27 to clearly state if the patent is a SEP and associated standard,if any, for which the patent has potential of becoming SEP. Though most of the SSOs require disclosure of the IP by member of the SSOs, the obligation is mostly contractual and may not have binding effect in the law of land, and hence a suitable legislative measure in this regard is required to avoid practice of patent hold-up.
  • Avoid injunction by the court if bona-fide intent is shown by the potential licensee: Courts should refrain from granting injunctions in suits initiated by the SEP holders without giving reasonable opportunity to the potential licensee to prove a bona-fide intent to take a license from the SEP holder.
  • Limiting the right conferred by a patent in case the patent is an SEP.
  • Provision for “license of right” should be explored in order to ensure license of the patent to a potential licensee at RAND terms. Section 46 of the UK Patent Act 1977 (as amended) provides a patent proprietor with the possibility of having an entry made on the register that licences are available as of right under a patent.   By having a patent endorsed “licences of right”, a patent proprietor effectively offers any third party the opportunity to have a licence under the patent, on reasonable terms. If terms of a licence cannot be agreed between the parties then the UK Patent Office sets the licence terms[1]. A similar provision can be made in India, as it benefits both the right holder and the potential licensee.  Through this provision, the patent holder can get rebate on the annuity fee as well.

Though it is a well perceived notion that the interference of Government in IP commercialization can undermine interest of the right holders, the same cannot be said for SEPs, as unregulated SEPs create opportunity for abuse of dominant position of right holders. Legislative measures to address issues related to SEPs have also been discussed and explored during thirteenth session by the WIPO standing committee on the law of patents[2]. The legislative measures are also required in absence of any strong enforceability within India for contractual violation by members of SSOs with respect to agreement of the members with the SSOs. Requirement of legislative measures has also been felt in recent cases which show uneven negotiating power of IP owner and potential licensor-especially in case of SEPs, where mutual contracts-especially with unreasonable terms of NDA-may not be right tool for executing the licensing agreement.  The advantages of these solutions are that they are universal, and also apply to non-participants in the standard-setting process.

  1. Guidelines for Standards Setting Organizations (SSOs)

The proposed policy framework should also define the guideline/obligation for standards setting organizations, especially with respect to adaptation of technology for setting the standard and terming any patent essential for standard. The rationale behind FRAND is that it benefits the inclusion of patented technology in technical standards while ensuring that the holder of SEPs should not abuse the dominant market position it gains from widespread adoption of a voluntary technical standard. It has clearly been observed by the communities over the world that Patents are essential to implement  chosen industry standards, and those patents (SEPs) cannot be exploited like any other patent, and certainly not to the exclusion of other market participants.

SSOs should also ask members to identify their most restrictive licensing terms and conditions, including the maximum royalty rate, basis of royalty (whether smallest tradeable unit or the end product etc.), that they would demand if access to their patents becomes necessary to implement the standard. Such disclosures, made in advance of a standard being selected, provide SSO members important information that allows them to choose a standard based not only on technical merit, but also on the cost of accessing the IP needed to implement that standard.

Selection of SEPs should be one of the essential part during standard making.  Members should / must disclose all granted and pending applications, which should be examined by a team of SSO with respect to their essentiality and should be termed as SEP only if their essentiality is established at a broad level.  Members should also disclose in future any granted and pending applications in order to allow SSOs to evaluate essentiality and terming those patents as SEPs.  Members should essentially disclose the IPR which might be essential if that proposal is adopted and the law should be amended accordingly to ensure invalidation/revocation of IPRs in absence of such disclosure.

The SSOs should have a transparent system in which technology standards are adopted, and should have clear IP policy requiring binding obligation on the members to disclose their IP.

  • Representation of Government

To make the system more transparent, wherever possible or for standard having potential to impact public at large, there should be representation of the Government during standard making process.

  • Onus of SSOs to monitor SEP

Having technical experts in their panels, the SSOs should have an onus to monitor SEPs and evaluate IP declared by its members to determine whether the disclosed patent is essential for the standard or not.  There should be guideline on what becomes an essential patent and what should be reasonable terms and conditions for licensing the SEPs.

Washington District Court in Microsoft Corp. v. Motorola Mobility, Inc. defined SEP as “A given patent is “essential” to a standard if use of the standard requires infringement of the patent, even if acceptable alternatives of that patent could have been written into the standard.” A patent is also essential “if the patent only reads onto an optional portion of the standard.” Thus, it is impossible to manufacture standard-compliant products without using technologies covered by one or more SEPs.

The judgement very broadly defines the term SEPs and has never been examined by any other court in other jurisdiction, which leaves a question mark on the merit of the definition itself. With this very broad definition of SEP, the SSOs have to have  an obligation to define a transparent way in which  patents become SEPs and how they should be licensed. As some of the standards set by the SSOs are directly impacting the public interest, the SSOs can’t be an elite club of influential corporate houses and a tool for the elites to secure dominant position.  SSOs should take onus to getting the license from the IP owners and make them available at FRAND terms.

  • IP Policy of the SSOs

IP policy of the SSOs should have some mandatory provisions to create binding obligation on the members. Some of the essential provisions are listed as below

  • Disclosure requirement: IP policy should have a building clause for disclosure of patent or pending applications by the members on timely manner (may be within 6 month of claim being grated or application being filed).The ANSI Patent Policy Guidelines suggest that, in order to encourage early disclosure of essential patents, one or more requests be made to participants during the development of standards for the disclosure of essential patents. Such a request could be made by including it in letter ballots or in requests could be repeated at working group(s) or by a semi-annual notice given to each participant. The Guidelines, however, clarify that participants in the standards development process are not required to conduct a patent search of their own or others’ patent portfolios. The Guidelines also suggest that the ASD makes it clear that any participant in the process, and not only a patent holder, is permitted to identify or disclose essential patents. They state that it is desirable to encourage disclosure of as much information as possible concerning the patent, such as the identity of the patent holder, patent number, information regarding how it may relate to the standard being developed and relevant unexpired foreign patents. Further, the Guidelines encourage disclosure of existing pending US applications, although there may be an issue of confidentiality regarding unpublished applications and uncertainty as to whether the application would mature into a patent and what the scope of the claims in the granted patent would be.
  • Disclaimer to offer license on FRAND terms: Written declaration by the member to grant the license of SEPs on FRAND terms without any discrimination between existing or potential licensees should be mandatory. Agreement to grant the SEPS on FRAND terms should be the primary requirement when any technology is adopted by the SSOs and they must ensure that the FRAND terms are used in essence. Deviation of set guideline of FRAND should be treated as violation of agreement and should be linked with loss of IP rights.
  • Royalty base: Declaration by the members that they will negotiate Royalty for the SEPs based on smallest saleable component. The same view on royalty base has been suggested by the CCI and even by the some SSOs for example IEEE-SA. There can be an indicative price of royalty set by the SSOs, and share/percentage of each member, which respect to contribution of claim in the technology should be defined by the SSOs for each member. For example the SSO can define that the highest royalty rate for a compliant smallest saleable component would be “X” percentage of the cost of that smallest component, and royalty share for company A be M percentage of X, company B be N percentage of X and like that.
  • Injunction Against potential Licensee: Member can’t seek, or threaten to seek, injunction against potential licensee who is willing to negotiate for license.
  • NDA: Terms of the NDA for execution of licensing agreement can’t hide the SEPs in question. SSOs around the world have raised the issue of Patent Hold-up and Royalty Stacking in view of non-conformity of FRAND practices by licensors which gets complicated due to the discriminatory NDAs. Hence, there is a need to frame an acceptable framework for NDAs, in case both the licenser and licensees consider it as obvious in some cases.  To supplement, SSOs should seek advanced binding commitments from members before a standard is accepted.
  • Bundling of SEP patent with other patents: The member should not bundle SEPs with other patents of the members, as this creates an unfair practice and leads to abuse of dominance.
  • Patent Pool

The stacking up of royalty rates is a major issue, particularly in the IT industry where thousands of patents are involved in a single product.  In the instance of multiple royalty rates, that too with jacked-up values, at times the viability of profit diminishes, and thereafter, the burden shifts to the customer. A probable solution, although somewhat hard, would be step-down royalty rate or total royalty pool.  For step-down royalty rate, the share of each subsequent SEP holder will diminish as per a present declining rate. This makes sure that the multiple SEPs bring in their patents and the cost of the standard is disclosed to the SSO.

Patent pool managed by the SSOs can be a suitable option that may benefit all the members and potential licensees.  SSOs or any appropriate administrative body should facilitate patent pool for SEPs and define portion of royalty to be made to each SEP holders.  By doing so, chance of a single member getting an unreasonable royalty and undermining the interest of other member can also be avoided.   SSOs/ administrative body can work in coordination with Patent offices and should keep an eye on any potential patent-hold up. An attempt should be made to include maximum patents, those are essential for standard. A suitable royalty model for sharing of royalty among members can be explored.

In order to bring more transparency and predictability to the overall royalty price for the implementation of standards, some propose a new model (“Industrial Royalty Pie” model). In the telecom environment which is characterized by complex and dynamic standards having broad technical scope and long evolution cycles over many years, it is felt that a mere ex ante disclosure of licensing terms at the SSO is not effective, since it is too early for prospective patent owners to put a meaningful price tag on the technology. The Industrial Royalty Pie model therefore combines the ex ante process with other measures so that both individual royalty rates are FRAND-compliant and cumulative royalty rates are reasonable.

  • Special IP policy for Standards enforced/recommended by Government /Law

There should be guidelines from the Government for licensing of patents relating to technical requirements that are imposed by law, referred as technical regulations based a defined framework. There should be special guideline for licensing SEPs under FRAND for SEPs related to standards that are enforced by Government/law (like encryption Techniques, security features in automobile or medical devices etc.).

  1. Miscellaneous

Further question arises about scope of claim and rights protected for possibly changed claim in different countries.  As IP rights are territorial in nature, complete family of a patent can’t be essential. For example, a patent granted in US may be SEP, while the same patent granted in India may not be, as its scope of protection may have varied during prosecution, and again onus lies on the SSOs to compile the SEPs for different jurisdiction.

Special care should be taken by Government agency before issuing any ruling on a standard to be followed, keeping in view the potential IP licensing issues related to SEPs.

Disclaimer

Opinion and suggestion provided in this submission are personal to the author and not indicative of the organization that they belong to.

[1]http://www.bios.net/daisy/patentlens/2528.html

[2]STANDARD AND PATENTS DOCUMENT SCP/13/2   www.wipo.int/edocs/mdocs/scp/en/scp_13/scp_13_3.pdf

About the Author: Gyanveer Singh, Senior Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at:gyanveer@khuranaandkhurana.com and Harsh, Junior Patent Associate at IIPRD and can be reached at: harsh@iiprd.com.

Employee VS Employer: Country Wise Ownership Rights on IP

The renewed focus on R&D especially under ‘Make in India’ to boost the manufacturing sector, needs the internationalization of Intellectual Property (IP) Rights policies. The confusion over the rights of employees and employer over the ownership of inventions needs special attention. The judgment of High Court (HC) of Bombay in Darius Rutton Kavasmaneck v Gharda Chemicals Ltd & ors (2014) SCC Online Bom 1851, discussed in more detail later, rules in favor of employees to own patents in their own name if their claimed invention was not part of their scope of work.  This blog aims to focus on some of these issues by taking examples of major countries and the practices being followed by them.

Germany

As per German law, employee inventions are of two kinds- tied or free. Tied inventions come under term of employment either from the employee’s tasks in the public or private organizations or are essentially based upon the experience or activities of these organizations. All other inventions are considered free and they belong to the employee. An employer has all the rights to the intellectual property for the invention by the employee during an employment for an unlimited period. The inventions at high schools, colleges of science by professors, research assistants and lecturers are considered free inventions.

UK

An invention made by an employee:

  • Made in the course of normal duties or in the course of the duties falling outside the normal duties, but specifically assigned to him.
  • At the time he had a special obligation to further the interests of the employer’s undertaking.

In both of the above cases the invention belongs to the employer. Any other invention by the employee belongs to him.

US

The inherent ownership right of the invention belongs to the owner. In general, the federal government obtains title, domestic rights and interests of invention by any government employee during working hours or using government facilities. But if the government’s contribution is found unjustifiable or the government has insufficient interest in the invention, then the employees own the right. The government retains the royalty free license.

In case the employee owns the invention, the employer may be entitled to “shop rights” (right to practice the invention on a nontransferable, royalty free basis), as a matter of equity for making use of employer’s resources.

Japan

In case the employee obtained a patent for an invention while working within the employer’s scope of business function, then the employer is entitled to a nonexclusive license to the patent. Noticeably the employer has no claim if the case does not belong to the invention in service.

France

All inventions that the employee makes for his inventive mission and functions as defined by his employment contract belong to the employer. The same is the case for the explicitly entrusted studies and research. In these cases the employee is entitled to an additional remuneration.

In all other cases, the invention is deemed to belong to the employee. If an employee’s invention belongs to the company’s field or uses company’s resources and data then the employer may claim ownership rights of the invention. Here the employee is entitled for due remuneration.

China

In China, the right to apply for a patent is subject to the division between the service and non-service invention.

  • Service invention, in execution of tasks of entity that employs the inventor or made using the entity’s resources, give entity the right to apply for it.
  • Non-service inventions give right to the inventor to apply for a patent. Additionally, the inventors are awarded money as prize for non-service inventions by any entity holding patents rights for such inventions.

Scenario in India and ideal practices

In India, public-funded research institutes have one of appointment terms assigning patent rights to the employing organization. Further the rules applicable to R&D personnel, involved in carrying out scientific and technical research, restricts them from applying or obtaining a patent for their inventions. Also there is a need to take permission from the employing organization in order to take commercial benefit out of a work.

Although, some premier institutes of research and development in India such as Indian Institute of Technology (IIT) and Indian Institute of Science (IISC) have framed their own IP Rights policies which are encompassing the rights of employees giving them more rights and benefits. Some of the other practices in India, and their comparison with more employee friendly norms in other countries, make a case for changes in the existing laws and policies like discussed below:

  • In public- funded R&D organizations the case in Indian does not grant freedom to claim rights over the inventions made outside normal working hours or without using the employer’s resources. In many major countries the employees get the rights in this case.
  • In India, an employee is not entitled to IP Rights for inventing outside the scope of the field of the employers. In other countries inventions made outside the business activity or the scope of specifically assigned tasks give rights to the employee.
  • Surprisingly the situation is more confusing and complicated in case of private enterprises. There have been cases when employees have taken away intellectual property from the private employer, after resigning and claiming an invention for the work done in that organization. In an opposite scenario, companies also exploit employees by binding them for not using some information and skills even after termination of employment.

To conclude on a high note, the Bombay HC in Darius Rutton Kavasmaneck v Gharda Chemicals Ltd & ors (2014) SCC Online Bom 1851 applied the test of ‘duty to invent’. More particularly, the court was of the opinion that the defendant managing director, not under duty or instruction to invent per se, was not obliged to register the patent in the employing company’s name. Additionally, the court pointed out the contract of employment, which only stated managerial powers, along with the Indian law principles did not suggest that the patent filed by the employee belong to the employer, particularly in this case.  These developments again bring forward the stress on clear employment contacts in order to address the conundrum of IP rights.

Reference

  1. Douglas Morgan, India – Employee-Owned Intellectual Property, March 2015
  2. John P. McNeill, EMPLOYERS, EMPLOYEES, And INTELLECTUAL PROPERTY RIGHTS, Nov. 2011
  3. V K Gupta, Employer VS Employee Inventions : IPR Issues in R&D Organizations, Vol 5, September 2000, pp 239-250

About the Author: Gyanveer Singh, Senior Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: gyanveer@khuranaandkhurana.com and Harsh, Junior Patent Associate at IIPRD and can be reached at: harsh@iiprd.com.

Era of Start-Ups in India-ease in Intellectual Property Registration to be Decisive Factor

There have been many developments recently that have streamlined the process of registration of Intellectual Properties (IPs) of Start-Ups. This article discusses the chronological events and the latest position on the IP registration of Start-Ups. Under the ambitious plan, ‘StartUp India, StandUp India’, Government of India launched Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP). This move was taken primarily to facilitate registration of Patents, Designs and Trademarks for Start-Ups. This scheme attracted attention of most of the Start-Ups as scheme requires them to borne only statutory/ official fees for registration of IPs and registration of their IPs is to be handled by government appointed facilitators. Professional fees payable to facilitators is to be paid by Government and not by Start-Ups.

On March 03, 2016, IPO released forms for appointment of facilitators for patents and trademarks.

On April 22, 2016, IPO notified the scheme, application information, patent facilitators, and trademark facilitators. And on May 16, 2016, IPO notified about Patent (Amendment) rules coming into effect from May 16, 2016.

One can refer to Department of Industrial Policy and Promotion’s (DIPP) Frequently Asked Questions (FAQ’s) to understand how Start-Ups can avail the benefits of the schemes of Government of India. These frequently asked questions are related to Start-Ups, Incubators providing Recommendation/ Support/ Endorsement Letter to Start-Ups, and funding Bodies providing Recommendation/ Support/ Endorsement Letter to Start-Ups. Qualification to be defined as Start-Up, how to get benefits of various government schemes, timelines, procedure, documentation required for registration as Start-Up, who can be incubator, how to issue recommendation/ support/ endorsement letter, liabilities of incubator, what are funding bodies, liabilities of funding bodies are some of the example of questions dealt in the list of FAQs. Reader of this article is encouraged to go through the entire list of FAQs to understand the nitty-gritty regarding of the registration of entity as Start-Up.

Amended patent rules give definition of Start-Ups and amazingly apply same fees to Start-Ups as applicable to natural persons. Another big advantage given to Start-Ups is that they are eligible to apply for expedited examination as against normal examination of patent applications.

Definition of startups is given as below:

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 commercialisation of new products, processes or services driven by technology or intellectual property:…

  1. Fees applicable to Start-Ups:

It is important to note that if an applicant is start-Up at the time of filing of patent application but ceases to be so afterwards, it will not have to pay the additional fees to patent office. However, in case of transfer of patent application to other than natural person, the person to whom application is being transferred has to pay the difference in fees applicable to Start-Ups and to itself.

  • Patents:

The below table gives overview of important statutory fees that have be paid till the grant of patent.

  • Trademarks:

Till trademark registration, the statutory fees have to be paid only at the time of filing of trademark application. Fees payable at the time of filing of trademark application is INR 4,000.

  • Designs:

There has been no change in fees applicable to design registration so statutory fees have to borne by entity as per the current schedule.  Statutory fee for conducting a standard search for establishing registrability of Design is INR 2,000 for small entity, INR 4,000 for large entity and for design application preparation and filing is INR 2,000 for small entity, INR 4,000 for large entity.

The below table gives the professional fees payable (in INR) to facilitators by Government:

In case of withdrawal or abandonment of application before disposal, facilitator shall be entitled only for filing of application and not for disposal of application.

  1. Eligibility to apply for expedited examination:

Start-Up applicant may request for expedited examination of patent application in form 18A with fees as mentioned in the table. It is important to note that form 18A can only be filed through electronic mode and not physical mode. After filing request for expedited examination, there is  obligation on the controller to dispose off the patent application within three months from the earlier of two dates, first of them being the date of receipt of the last reply to the first statement of objections, and second date being the last date to put application in condition for grant under section 21. This time limit is not applicable in case of pre-grant opposition. The patent office deserves the right to limit the number of requests to be received for expedited examination during the year. It is beyond doubt that because of the difference in the scale of fees applicable to Start-Ups and small entities/ larges entities, advantages of expedited examination over non-expedited examination of patent applications, and appointment of facilitators, Start-Ups are feeling motivated to get their IPs registered.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Patent (Amendment) Rules, 2016 takes effect from May 16, 2016

Patent (Amendment) rules, 2016 making amendments to the Patents Rules, 2003 (Principal Rules) of the Patents Act, 1970 have taken effect from May 16, 2016. Public notice from CGPDTM regarding the same can be accessed here. Patent (Amendment) rules, 2016 are already popular and making the headlines mainly because of what it has to offer to startups, and provisions of expedited examination of patent application. With this article, we are examining key changes (appealing to the author in first look as all changes are important in a way) brought into effect by the said rules. We must say the provision of expedited examination, benefits given to start ups are making most of the people to check what else this amendment has to offer to the patent agents, applicants (and public of course). We had also blogged earlier on the issue of pendency of the application which can be accessed here.

Key Changes:

  1. Expedited examination and reduction in time allowed for putting an application in order for grant under section 21 are given below:

An applicant may request for expedited examination of patent application on either of two grounds, first of them being indication of India as International Searching Authority (ISA) or election of India as International Preliminary Examining Authority (IPEA) in the corresponding international patent application, and second of them being eligibility of applicant as start up as defined by the said rules. This request is to be made in form 18A. Fees applicable for natural person(s) and/or Start up is INR 8,000, for small entity is INR 25,000, and for others is INR 60,000. Fees applicable for Converting an earlier filed request for examination (non-expedited) into expedited examination are INR 4,000 for natural person(s) and /or Start up, INR 15,000 for small entity, and INR 40,000 for others. This conversion can also be done through form 18A. It is important note that form 18A can only be filed through electronic mode and not physical mode. The time for putting application in condition of allowance under section 21 has been reduced to 6 months as against earlier 12 months irrespective of request for examination filed by applicant is expedited or not. On May 18, 2016, IPO has issued clarification regarding the effective date for the provision applicable for time for putting application in condition of allowance under section 21. The clarification says the said time limit shall be 12 months in respect of those applications for which First Statement of Objection have been issued before 16/05/2016, and the time limit shall be six months from the in respect of applications for which First Statement of Objection have been issued on/after 16/05/2016. Provision has also been given to extend this period of six months by another 3 months if extension is sought in form 4 before expiry of six months. Irrespective of request for examination filed by applicant is expedited or not, reply to first statement of objections and subsequent reply shall be processed in order in which it was received. Although there are other differences in the manner in which applications shall be treated depending on whether request for examination was expedited or not, the most important to note is the obligation in the first type of applications put on the controller to dispose off the patent application within three months from the earlier of two dates, first of them being the date of receipt of the last reply to the first statement of objections, and second date being the last date to put application in condition for grant under section 21. This time limit is not applicable in case of pre-grant opposition. The patent office deserves the right to limit the number of requests to be received for expedited examination during the year.

  1. For start ups:

The rules give definition of startups and amazingly apply same fees to start-ups as applicable to natural persons.

Definition of startups is given as below:

  1. Where more than 5 years have not lapsed from the date of its incorporation/registration;
  2. The turnover for any of the financial years, out of the above mentioned 5 years, did not exceed Rs. 25 crores; and
  3. Where it is working towards innovation, development, deployment or commercialization of new products, processes, services driven by technology or Intellectual Property: ……

It is important to note that if an Applicant is startup at the time of filing of patent application but ceases to be so afterwards, it will not have to pay the additional fees to patent office. However, in case of transfer of patent application to other than natural person, the person to whom application is being transferred has to pay the difference in fees applicable to startups and to itself.

  1. Refund of fees:

Amended sub-rule (4) of rule 7 provides that if the Controller is satisfied that during the process of online payment, the fees was paid more than once for the same proceedings, the excess fees shall be refunded. The newly inserted sub-rule 4A provides that in case of withdrawal of patent applications for which request for examination has been filed but first statement of objections have not been issued, 90% of fees for non-expedited or expedited request for examination may be refunded to Applicant if he/she requests in newly inserted form 29 (which requires zero fees).

  1. Changes brought about to the existing forms/ newly introduced form:

Forms 1, 3 and 13 have been amended to suit new changes they need to serve, and forms 18A, 29 and 30 have been newly introduced.

  1. Patent Agents to submit all documents by electronic transmission:

Now Patent Agents are required to submit even those documents by electronic transmission that need to be submitted in original i.e. through scanned copies and then mandatorily submit the original documents within period of 15 days.

Following documents have to be submitted in original by patent agent after filing them electronically:

  1. The Authorization of Patent Agent or Power of Attorney
  2. Proof of the right to make an application
  3. Deed of assignment, certificate regarding change in name of the applicant, license agreement
  4. Declaration of inventorship
  5. Priority document
  1. Power of attorneys to be filed within three months:

Now, the deadline for filing a power of attorney is 3 months from the date of filing of patent application or document and failing of which no action shall be taken on such applications or document till such deficiency is removed. No such time limit in place before these rules took effect.

  1. Amendments to the international patent application:

An application corresponding to an international application under PCT can include amendments made under Article 19 or article 34 of PCT, provided that the applicant while filing such application may delete a claim in accordance with Rule 14.

  1. No more than 2 hearing adjournments:

Amended rules put restriction on the number of hearing adjournments to two and each adjournment shall not be more than thirty days each. These adjournments have to be requested at least three days before the date of hearing.

  1. Hearings may be conducted through video conferencing or audio-visual communication devices:

Hearings in relation to a patent application may be held through video conferencing or audio-visual communication devices and such hearing will be considered to have taken place at appropriate place. Written submissions and documents (if any) have to be filed within 15 days from the date of hearing.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

Deciphering the Intricacies Related to Protection of Graphical User Interface in India

Mahima Sharma, an intern at Khurana & Khurana looks into the intricacies involved in the process of protection of Graphical User Interface in India which seems to be in limelight wherein there exists some uncertainty over the same.

GUI Protection under Designs Act, 2000:

In India, a Design registration can be obtained for new or original features of shape, configuration pattern, ornamentation or composition of lines or colors as applied to an article, whether in 2 or 3 dimensions or both.

India enacted the New Design Act, 2000 to protect the rights and designs of creators and innovators in compliance with TRIPS. The new Design Act which replaced the preceding Design Act, 1911 has widened the scope of classification system as an earlier act was based on the material categorization of the article whereas the new act provided an elaborate classification adopted in 2008 based on Locarno Classification System which deals with the subject matter for particular design to be registered according to the respective classes, for instance: Class 2 deals with article of Clothing, Class 14 deals with Recording, Communication or Information Retrieval Equipments. While India not being signatory to Locarno Agreement, its new design classification system is a prototype of the Locarno classification system includes Class 14-04 titled “Screen Displays and Icons”. This new classification acknowledges visual images, graphical user interfaces or Icons shown on an image display of a portable electronic device which includes tablet computers and Smartphone and all other electronic gadgets which have an image display to be registrable under Design Law. Through the records as maintained and reflected on the IPO website for Design Registration, it has been observed that icons as such have usually been registered under Class 14-99, titled “Miscellaneous” and not in class 14-04 while none of GUI is registered under class 14-04.

A Questionnaire dealing with the Design Registration in India titled “SPECIAL TOPICS for Design Committee of APAA 2013” deals with certain aspects related to GUI Protection in India under Designs Act, 2000. In the same article it was explicitly mentioned at Question 3-2:

What matters should an applicant/attorney be aware of when preparing or drafting an application request and drawings of a design for a visual image, graphical user interface (GUI) or icon shown on an image display of a tablet computer and a smartphone to be submitted at your national Office under your Design Law?

“Under Section 6 of the Act, a design may be registered in respect of any or all the articles comprised in a prescribed class of article. Under Section 2(a) “article” means any article of manufacture or any substance, artificial, or partly artificial and partly natural; and includes any part of an article capable of being made and sold separately.

In the circumstances, the Applicant/Attorney must ascertain that visual image, GUI or icon shown on an image display of a tablet computer or smartphone must be an article capable of being made and sold separately. Alternatively, an application for registration of a design can be made in respect of a tablet computer or a smartphone bearing the visual image GUI or Icon shown on an image display thereof. In such a case the application and each of the representation should be endorsed with a brief statement that novelty resides in the visual image, GUI or icon shown on an image display of a tablet computer or a smartphone as the case may be (Rule 12).”[1]

Instances of Attempt to protect GUI under Designs Act, 2000[2]:

There are certain incidents where certain designs and icons have been registered under Design Act, 2000 vide application no. 205350 under class 14-99. However, regarding GUI there was one incident known from the past wherein Amazon filed for Design Registration for GUI in India, but the same was refused by the Patent Office on the ground that impugned design does not fall within the purview of definition as provided under section 2(a) and 2(d) of the Design Act, 2000.[3] After the verdict of Amazon’s case, the Patent office has started considering stringent interpretation of the definition of the word “article‟ in the Act and it can be concluded that no screen display could be registered.

GUI as a subject matter under Copyright Act, 1957..?

Artistic work, literary, dramatic, musical or sound recording, source code for software among others are subject matter of Copyright. GUI as a subject matter also seems to be governed and protected under Indian Copyright Act, 1957 to some extent.[4]  As such there are no specific guidelines as to armor GUI in India. This led to an anomalous situation particularly in view of section 15 of the Copyright Act which specifically states that “Copyright in any design, which is capable of being registered under the Designs Act, 2000, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or, with his license, by any other person.” So if at all GUI is a subject matter under Designs Act as prima facie it seems from the newly adopted classification based on Locarno Classification, the Copyright in the same will cease immediately after application of the same more than 50 times to any article.

It is clear from above that there are a few occurrences, where certain icons have been registered under Design Act, 2000 under class 14-99 while GUI is considered as subject matter under Copyright. Thus fundamentally, there is an earnest call to amend our current Design law to an extent which shall make GUI as a subject matter of Designs Act, 2000, also to bring uniformity in protection of Intellectual Property at International level. It is pertinent to note that Design Act, 2000 provides for any applicant, who has applied for protection of the design in convention countries or countries which are members of inter-governmental organizations, can claim registration of the design citing a priority date in India. This is the date of filing of the application in any of such countries provided the application is made in India within six months. Thus accordingly the fate of any application from Convention country filed in India for GUI protection is at stake which is not desirable particularly in the era of commercialization and globalization and ‘Make in India’ regime. This in fact may discourage the growth of software/GUI domain in India which is not desirable.

To cut a long story short, it is high time that legislature step in and revise the definitions of article and design in the Act to make way for the new age communication devices and their embedded applications-design eligible, the status of protection of GUI under Designs Act seems ambiguous. It is indeed need of the hour that our laws need to be timely updated and such amendments shall also be in total consonance with the complete law in that regards, especially law related to the Intellectual Property Rights.

About the Author: Mahima Sharma, Intern, Khurana & Khurana, Advocates and IP Attorneys and Abhijeet Deshmukh, Trade Mark Attorney, Khurana & Khurana, Advocates and IP Attorneys who can be reached at Abhijeet@khuranaandkhurana.com

[1] http://www.apaaonline.org/pdf/APAA_62nd_council_meeting/DesignsCommitteeReports2013/India-Questionnaire-2013.pdf accessed on 16-May-2016

[2]   http://www.lexology.com/library/detail.aspx?g=1af5cff8-3f1a-42ac-81f1-269a4c949d07 accessed on 16-May-2016

[3] An article published by Ranjan Narula & Sandeep Agarwal of RNA,IP Attorneys –     http://www.lexology.com/library/detail.aspx?g=1af5cff8-3f1a-42ac-81f1-269a4c949d07 accessed on 16-May-2016

[4] http://deity.gov.in/content/copyright-0 as accessed on 16-May-2016

Combating Opioid Misuse – COMBAT (Curb Opioid Misuse By Advancing Technology Act of 2016)

The Congress recently introduced a bill on the COMBAT Act (Curb Opioid Misuse By Advancing Technology Act of 2016) to incentivize the development of abuse-deterrent opioids by amending the Federal Food, Drug, and Cosmetic Act to extend the exclusivity period for certain drug products developed or labeled so as to reduce drug abuse, and for other purposes.

Implications on Exclusivity to Certain New Drug Applications (NDAs) –

The COMBAT Act would amend Section 505(c)(3)(E) of the Federal Food, Drug, and Cosmetic Act i.e. 21 U.S.C. 355(c)(3)(E) by adding at the end the following:

(vi) With respect to an application described in clause (iii) or a supplement to an application described in clause (iv), if such application or supplement is approved on or after the date of enactment of the Curb Opioid Misuse By Advancing Technology Act of 2016, the 3-year period specified in each such clause shall be extended for an additional period of 12 months if the person submitting such application or supplement provides documentation to the Secretary demonstrating that the drug that is the subject of the application or supplement—

(I) is approved, in whole or in part, on the basis of one or more new clinical abuse potential studies; and

(II) is approved with labeling that characterizes the abuse-deterrent properties of the drug product.

Implications on Exclusivity to Certain Abbreviated New Drug Applications (ANDAs) –

The COMBAT Act would amend Section 505(j)(5) of the Federal Food, Drug, and Cosmetic Act i.e. 21 U.S.C. 355(j)(5) as following

(1) in subparagraph (B), by adding at the end the following:

‘‘(v) With respect to an abbreviated application described in clause (iv), if such application is approved on or after the date of enactment of the Curb Opioid Misuse By Advancing Technology Act of 2016, the 180-day period specified in such clause shall be extended for an additional period of 60 days if the first applicant submitting the abbreviated application provides documentation to the Secretary demonstrating that the listed drug referred to paragraph (2)(A)(i) and referenced in the abbreviated application—

(I) is approved, in whole or in part, on the basis of one or more new clinical abuse potential studies; and

(II) is approved with labeling that characterizes the abuse-deterrent properties of the drug product.

 (2) in subparagraph (F), by adding at the end the following:

‘‘(vi) With respect to an application described in clause (iii) or a supplement to an application described in clause (iv), if such application or supplement is approved on or after the date of enactment of the Curb Opioid Misuse By Advancing Technology Act of 2016, the 3-year period specified in each such clause shall be extended for an additional period of 12 months if the person submitting such application or supplement provides documentation to the Secretary demonstrating that the drug that is the subject of the application or supplement—

(I) is approved, in whole or in part, on the basis of one or more new clinical abuse potential studies; and

(II) is approved with labeling that characterizes the abuse-deterrent properties of that drug product.

Access copy of the bill here

About the Author: Mr. Tapan Shah, Senior Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: tapan@khuranaandkhurana.com.

Notification Related to Abeyance of Mass Abandonment Orders: A Sigh of Relief to Trademark Applicants

Reportedly, the Trade Mark registry has abandoned huge number of trademark application since 28th March 2016. The Intellectual Property Attorneys Association, an organization based in Delhi, filed writ petition at Delhi High court alleging that the trademark registry has cancelled an unusually huge number of trademark applications without issuing notices to the applicants or their agents. Through a separate petition Tata Steels Ltd also moved to the court seeking stay on the order affecting its rights by such abandonment.

The matter was taken on board on dated 4th April 2016 considering the urgency and seriousness of the matter and the Hon’ble Delhi High Court stayed all orders issued after 20th March 2016 by the Registrar of Trademarks, for abandonment of the trademark applications.

The Hon’ble Delhi Court held that considering the startling figures of disposal within a short period of time as well as the serious allegations in the writ petition, the orders of the abandonment passed by the respondents on or after 20th March, 2016 were stayed. Also, it was ordered that till further orders, the respondents shall not treat any Trade Mark applications as abandoned without proper notice to an effected party as provided under Sections 21, 128 and 132 of the Trade Marks Act, 1999

Pursuant to the Order by the Hon’ble Delhi High Court in the said writ petition, Trade mark registry passed notification dated 11th April 2016 notifying that abandonment orders passed by the Registrar of Trade Marks after 20/03/2016 are being kept in abeyance. The applicants or their authorized agents concerned can file the reply to examination reports containing office objections either through comprehensive E-filing services of trademarks available at the official website or through email. In case, the reply has already been filed and the office has erroneously treated applications as abandoned, information to this effect may also be sent through email at abhishek.p@nic.in along with copy of the reply already filed. It is further indicated that further action in this regard will be taken in accordance with the law and the directions/orders of the Hon’ble court in ongoing writ petitions. The detailed notification can be accessed here.

About the Author: Mr. Abhijeet Deshmukh, Trade Mark Attorney, Khurana & Khurana, Advocates and IP Attorneys and can be reached at:Abhijeet@khuranaandkhurana.com.

Snapshot of the Latest Examination Guidelines for Computer-Related Inventions (CRIs) in India – Feb 2016

Indian Patent Office (IPO) has come up with another set of revised guidelines indicating how CRIs would be examined in India. This piece is a quick update and summary of the guidelines, although practically speaking, nothing much has really changed as regards the interpretation of the statute Section 3(k) is concerned and the tests mentioned in the instant guidelines are substantially the same as the previous guideline and are in consistency even the original intent of the statute.

Brief of the Guideline

The guideline essentially starts with definition/interpretation of various terms relating to computer-based inventions, followed by how novelty/non-obviousness (inventive step) is to be interpreted/evaluated. Section 4.4.4 relates to how section 3(k) excludes mathematical methods or business methods or computer programme per se or algorithms. The guideline states:

Computer programmes are often claimed in the form of algorithms as method claims or system claims with some ‘means’ indicating the functions of flow charts or process steps. The algorithm related claims are even wider than the computer programmes claimed by themselves as a single algorithm can be implemented through different programmes in different computer languages. If, in substance, claims in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium belong to the said excluded categories, they would not be patentable.

The guideline further goes onto state:

Even when the issue is related to hardware/software relation, (e.g., when the claims recite ‘processor is programmed to… or ‘apparatus comprising a processor and configured / programmed to…..) the expression of the functionality as a ‘method’, is judged on its substance. It is well-established that, in patentability cases, the focus should be on the underlying substance of the invention, not the particular form in which it is claimed. The Patents Act clearly excludes computer programmes per se and the exclusion should not be allowed to be avoided merely by camouflaging the substance of the claim by wording (e.g. different sub-routines are performed in different physical locations such as processors will not suffice).

In sum therefore, a subject matter that is expressed simply as a sequence of steps/flow diagram would have lower chances of being held patentable until the steps indicate an improvement in the underlying hardware/substance of the invention. Type of the claim (be it system or method) would therefore have little dent on eligibility of patentable subject matter as it is only the form/expression of the claim, and does not indicate whether the core inventive step is on the functionality/steps or on the underlying tangible medium. Therefore a “processor configured to process a financial transaction” would not be patentable but a “processor configured to optimize the structure segments of a data block of a network packet might be”.

The guidelines further mention that means + function claims would not be patentable unless the means is clearly expressed in the form of a physical/tangible component and at a part of the inventive step lies in in the means part of the claim. In case the means do not constitute inventive step but the function does, patentability may not be rendered to be strong.

The guideline then further goes onto mention exclusivity of mathematical methods and business methods from patentability. The guideline further states that subject matters relating to computer programmes, set of instructions, routines, sub-routines, storage medium with instructions, database, among other like expressions would not be held patentable in India. Finally, before the guideline proceeds forward to give examples of subject matters that are not patentable in India, below are given as the tests/indicators that would be followed by the examiners to determine patentability of the CRIs.

Examiners may rely on the following three stage test in examining CRI applications:

(1) Properly construe the claim and identify the actual contribution;

(2) If the contribution lies only in mathematical method, business method or algorithm, deny the claim;

(3) If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claim. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability.

In sum therefore, the present guidelines re-iterate the same conclusion as made in the previously issued guidelines wherein it was stressed that in India, in order to get a patentable subject matter, the inventive step has to be on the underlying hardware, and therefore subject matters that relate to reduction in processing time, optimization of memory, firmware, image/video/graphics processing, network packet processing, among other like subject matters would be patentable. However, what contrasts the position of the IPO is an exemplary recently issued patent, which we respectfully believe does not meet the patentability criteria outlined in the instant guideline, and hence gives the same old impression that what is intended by the statute (and also outlined in the instant guideline) might not actually be practically followed on a daily basis during prosecution of multiple cases.

Just for instance, a simple review of Granted Patent 271931 relating to Instant Messaging System gives an impression that step 3 of the three stage test is not being followed critically as no clear novel hardware element/technical effect has been identified/substantiated and the claimed subject matter incorporates two types of authentication, wherein confidential information is processed by a first type, and non-confidential information is processed by the second type, making the contribution of the invention to lie solely in the computer programme. Even while responding to the 3k objection, the Applicant submitted that it is necessary for the messaging system to learn whether first authentication and second authentication are passed successfully, and that interaction with exterior is necessary for carrying out the determination step (of whether first/second authentication is passed). It is further argued that the present invention facilitates the user to perform non-confidential data related operation, and that security requirements of the messaging are met. Would leave it to an open assessment if the arguments are strong enough to overcome the cited 3k objection!!!

About the Author: Mr. Tarun Khurana, Partner and Patent Attorney in IIPRD can be reached: Tarun@iiprd.com.

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