Monthly Archives: May 2016

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.

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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.