Monthly Archives: February 2017

BLACKBERRY SUES NOKIA FOR PATENT INFRINGEMENT: AN OVERVIEW

The once powerful mobile phone companies BlackBerry and Nokia are in the headlines again, not for their new technological developments but because of their legal battle.

The Valentine’s Day card for Nokia was in the form of complaint entailing 11 items that Blackberry did not like about it. The complaint listed out the 11 patents of Blackberry infringed by Nokia. The company has not commanded an injunctive relief, i.e. asking Nokia to stop using the patents; instead it has asked for compensation for the unauthorized usage of the said patents. Let’s have a brief overview of the case.

Blackberry:

Headquartered in Waterloo, Ontario, Canada, Blackberry Limited, formerly known as Research In Motion (RIM), was founded by two engineering students, Mike Lazaridis and Douglas Fregin in 1984. It is a multi-national wireless telecommunications software and mobile hardware company, currently chaired by John S. Chen. It had taken over the smart phone market with its flagship QWERTY keypad range of mobile phones. Blackberry uses its own operating system, and had recently entered the Android arena of smart phones. It had ruled the gadget market with its classy, easy and appealing technology and applications for over two decades until its plunge with the launch of Apple iPhone and other Android phones. It had also developed key innovations that underlie 3G and 4G mobile communication technologies, such as Long-Term Evolution (LTE), including LTE Advanced and Universal Terrestrial Radio Access Network (UTRAN) technologies, and Universal Mobile Telecommunication Systems (UMTS). Blackberry’s contribution to innovation, including investment in research and development has exceeded a total of $ 5.5 billion, and has protected the technical innovations by seeking patents from the US office.

Nokia:

In a paper mill in 1865, Nokia was created by Fredrik Idestam and Leo Mechelin in South-west Finland. It is a multinational communications and information technology company, considered to be one of the most important Fortune 500 organizations. Nokia launched Mobira Cityman in 1987, the world’s first handheld phone. The most famous Nokia’s first GSM handset, Nokia 1101, was a swift hit in the market when it was launched in 1992. The partnership of Nokia with Microsoft It is presently chaired by Rajeev Suri. With the ingression of new companies, Nokia has tumbled down.

Connecting the dots:

Rockstar Consortium Inc. (also Rockstar Bidco) was formed in 2012 to settle and negotiate patent licensing acquired from the bankrupt multinational telecommunications and data networking equipment manufacturer Nortel. It comprises of five members: Apple Inc. Blackberry, Ericsson, Microsoft and Sony.

Rockstar Consortium bought Nortel’s IP in 2011 for $ 4.5 Billion, and created a special-purpose-patent-assertion company to use them. The IP consisted of over 6000 patents covering 4G wireless innovations and a range of technologies. Nokia had also made an attempt to buy Nortel’s IP in 2009, but was unable to obtain them due to the latter’s bankruptcy proceedings. In 2012, Rockstar Consortium was also listed, by the Business Insider, as the 3rd most fearsome (out of 8) “patent trolls” in the industry.

Rockstar initiated a lawsuit against 8 companies in 2013, including Google, Smasung, and other Android phone makers. When the IP was purchased by it, Google anticipated this scenario. The complaint encompassed 6 patents, all from the same patent family. The case was settled on confidential terms.

untitled

Blackberry sues Nokia: Case name:

Blackberry Limited   [Plaintiff]

Vs.

Nokia Corporation, Nokia Solutions and Networks Oy, Nokia Solutions and Network Holdings USA Inc., and Nokia Solutions and Networks US LLC                 [Defendants]

Case number and Court:

17- 155, United States District Court for the District of Delware (Wilmington). This Court has personal jurisdiction over each of the defendants under the Delware Long-Arm Statue, 10 Del. Code § 3014, and the U.S. Constitution. The Court has jurisdiction over this controversy under 28 U.S.C. §§ 1331 and 1338(a). The action for patent infringement has arisen under the patent laws of the United States, 35 U.S.C. § 1 et seq., including but not limited to 35 U.S.C. § 271.

Allegations:

Blackberry has filed this complaint against Nokia due to the latter’s unauthorized usage of the former’s contributions to innovation technologies. Blackberry holds the following 11 patents, known as “Asserted Patents” (enforcement of patent by the owner who believes that his patent has been infringed) which are the subject matter of the case:

  1. ‘418 Patent: United States Patent No. 6,996,418 is entitled “Apparatus and Method for PFDM Data Communications” and was issued on February 6, 2006.
  2. ‘246 Patent: United States Patent No. 8,254,246 is entitled “Scattered Pilot Pattern and Channel Estimation Method for MIMO-OFDM Systems and was issued on August 28, 2012.
  3. ‘090 Patent: United States Patent No. 8,494,090 is entitled “Detecting the Number of Transmit Antennas in a Base Station” and was issued on July 23, 2013.
  4. ‘305 Patent: United States Patent No. 7,529,305 is entitled “Combination of Space-Time Coding and Spatial Multiplexing, and the Use of Orthogonal Transformation in Space-Time Coding” and was issued on May 5, 2009.
  5. ‘433 Patent: United States Patent No. 8,861,433 is entitled “Method for Accessing a Service Unavailable through and Network Cell” and was issued on October 14, 2014.
  6. ‘697 Patent: United States Patent No. 9,426,697 is entitled “Method for Accessing a Service Unavailable through and Network Cell” and was issued on August 23, 2016.
  7. ‘772 Patent: United States Patent No. 9,253,772 is entitled “System and Method for Multi-Carrier Network Operation” and was issued on February 2, 2016.
  8. ‘192 Patent: United States Patent No. 8,897,192 is entitled “System and Method for Discontinuous Reception Control Start Time” and was issued on November 25, 2014.
  9. ‘202 Patent: United States Patent No. 9,125,202 is entitled “Multi-Beam Cellular Communication System” and was issued on September 1, 2015.
  10. ‘683 Patent: United States Patent No. 8,243,683 is entitled “Method and Apparatus for State/Mode Transitioning” and was issued on August 14, 2012.
  11. ‘829 Patent: United States Patent No. 8, 644,829 is entitled “Method and Apparatus for Signaling Release Cause Indication in a UMTS Network” and was issued on February 4, 2014.

Blackberry is the owner of all rights, title and interest in the aforementioned patents, with the full and exclusive right to bring suit to enforce them, including the right to recover for past infringement. Blackberry and RIM have publicly declared to the European Telecommunications Standards Institute (ETSI), an industry organization that promulgates wireless telecommunication standards specified by 3GPP (3rd Generation Partnership Project), that the Asserted Patents may be or may become essential to LTE Standards and/or UMTS/UTRAN Standards [practising wireless telecommunication standards], and the declaration is in public domain, accessible on a search engine provided and maintained by ETSI (https://ipr.etsi.org/).

Nokia has taken action intending to cause others to directly infringe the patents, including by selling or offering for sale the Infringing Products to third parties in the United States while expressly promoting these products’ capability to practice the LTE Standards, knowing that using these products to practice the LTE Standards would constitute direct infringement of the ’418 patent.

Infringing Products:

The 3GPP specifications that enumerate LTE and UMTS/UTRAN Standards are and have been implemented in Nokia’s products like Nokia’s Flexi line of products, alone or in combination with Nokia software such as the Nokia Liquid Radio Software Suite (collectively, the “Infringing Products”).  The Infringing Products include, without limitation, the following products, alone or in combination:  Nokia’s Flexi Multiradio and Multiradio 10 base stations, the Flexi Zone (small cell) Micro and Pico base stations, Femtocell base stations, Flexi Network Server, the Flexi Radio Antenna System, Nokia radio network controllers, and Nokia Liquid Radio Software Suite.

Knowledge:

Blackberry alleges that Nokia had knowledge of the existence of the applications for or the family members of the Asserted Patents as it had used the same in various patent prosecutions of its own.

  • The family members of the ‘246 patent were cited in an international search report and were also cited by Nokia and by an examiner during prosecution of a number of patent applications assigned to Nokia. Hence, it had notice of this patent before the filing of this action.
  • The publication of parent application of the ‘090 patent was cited in an international search report, and was also cited by Nokia during prosecution of a number of patent applications assigned to it. Hence, it had notice of this patent before the filing of this action.
  • The publication of parent application of the ‘772 patent was cited by examiners during prosecution of a number of patent applications assigned to it. Hence, it had notice of this patent long before the filing of this action.
  • The publication of parent application of the ‘192 patent was cited by the examiner during prosecution of at least one patent application that was assigned to Alcatel-Lucent, which was acquired by Nokia. Hence, Nokia had notice of this patent long before the filing of this action.
  • The publication of the priority application of the ‘202 patent was cited by examiners during prosecution of a number of applications that were assigned to Alcatel entities, which were acquired by Nokia. Hence, it had notice of this patent long before the filing of this action.
  • Long before the filing of this action, Nokia knew or should have known from the prosecution of its own patent applications and those of Alcatel-Lucent that the asserted ’246, ’090, ’772, ’192, and ’202 patents covered LTE features used by their Infringing Products.
  • The publication of the application that resulted in the issuance of the ‘683 patent was cited by the examiner during prosecution of a Nokia patent application. Hence, Nokia had notice of this patent long before the filing of this action.
  • The publication of the application that resulted in the issuance of the ‘829 patent was cited by Nokia during prosecution of a Nokia patent application. Hence, Nokia had notice of this patent long before the filing of this action.
  • Long before the filing of this action, Nokia knew or should have known from the prosecution of its own patent applications that the asserted ‘683 and ‘829 patents covered UMTS/UTRAN features used by their Infringing Products.
  • By April 10, 2012, RIM had acquired the ’418, ’246, and ’305 patents and had caused to be recorded at the USPTO the assignments of ownership of these patents to RIM. Currently, the assignment of these patents to Blackberry has been recorded in the USPTO. Nokia has knowledge of the same through its due diligence of Nortel U.S. patents.

Infringement Claims:

Nokia knowingly and intentionally encourages and aids at least its end-users to directly infringe the asserted patents. Nokia has been, and currently is, an active inducer of infringement of these patents under 35 U.S.C. § 271(b) and a contributory infringer under 35 U.S.C. § 271(c). It has been willfully blind to the existence of the patents. Nokia’s infringement has been, and continues to be, willful and deliberate, and has caused substantial damage to BlackBerry. Nokia developed, commercialized, demonstrated, and/or tested the Infringing Products despite its evaluation and knowledge of the Nortel patent portfolio, including the application that led to the issuance of some patents, and its knowledge of family members of a few of the 11 patents from prosecution of its own patent applications. In spite of Nokia’s knowledge of the patents, Nokia has continued making, using, offering for sale/lease, and/or selling or leasing in the United States, and/or importing into the United States, the Infringing Products that are compliant with the LTE Standards, without a license from BlackBerry.  Nokia’s egregious infringement behavior warrants an award of enhanced damages.

Prayer for relief:

Blackberry prays that the Court:

  • Render judgment declaring that Nokia directly infringed, induced others to infringe, and/or contributed to the infringement of the asserted patents.
  • Award BlackBerry damages adequate to compensate it for Nokia’s infringement of the asserted patents.
  • Award an ongoing royalty for Nokia’s ongoing infringement of the asserted patents.
  • Render judgment declaring Nokia’s infringement of the asserted patents willful and deliberate, and award BlackBerry enhanced damages pursuant to 35 U.S.C. § 284.
  • Award BlackBerry pre-judgment and post-judgment interest to the full extent allowed under the law, as well as BlackBerry’s costs and disbursements.
  • Enter an order finding that this is an exceptional case and awarding Blackberry its reasonable attorneys’ fees pursuant to 35 U.S.C. § 285.
  • Award any other relief as the Court deems fit.

Conclusion:

Both the companies are having a downfall in their sales. Blackberry has stopped making smart phones, and Nokia has had a huge decrease in sales of its one-of-a-kind Lumia phones, manufactured in collaboration with Microsoft. Blackberry has started licensing its software and brand assets to others so that its name in the market continues. Also, it pledged to license these patents as they form essential elements for mobile telecommunication standard.  As is evident from the prayer of the complaint, no injunction has been claimed for. Instead, Blackberry has claimed damages and royalty for the unauthorized use of its patents. This is a smart move by the smart phone maker to commercialize on its leftover assets. Nokia has not responded to this complaint as of now, and is looking into the matter, as per a news article. Nokia’s counter is acutely awaited.

About the Author :

Ms. Aditi Tiwari, intern at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers.Queries regarding this may be directed to swapnils@khuranaandkhurana.com

 

Advertisements

FRAND-ING PATENT LICENSES AND ITS IMPLICATION IN LANDMARK CASES IN INDIA

Everyday, a number of products are being invented all over the world, some cascading over the improvement of existing inventions, and the others, portraying a unique set of methods and products unknown to man at large. Simultaneously, there is an eruption of infringements that remain unnoticed or noticed following an incredulous load of proceedings and exorbitant costs. It is essential to protect the rightful rights of these owners against such infringements and unlawful interference to avoid any possible losses or damages in their peaceful functioning of their entities. In the field of protection of inventions, the adoption of Agreement of Trade Related aspects of Intellectual Property Rights (TRIPS) and the Patent Act, 1970 and related amendments aim to let these owners benefit from their inventions without any unnecessary disturbance.

1. DEFINING STANDARDS

In our day-to-day activities, we try to sculpt our needs as per certain benchmarks to achieve our desired results. Similarly in the field of patents, every invention requires certain targets to abide by in order to facilitate an irreplaceable position in the market. To put it technically, standards are technical specifications that seek to provide a common design for a product or process[1]. Ensuring that the products conform to standards facilities almost definite reliability, quality, stability when purchasing the products and subsequently, an increase in their demand. To lay it down simply, a standard is a document that exhibits certain requisites for a particular product, element, system or service or elaborately describes a specific method. Formal standards are declared by Standard Setting Organizations (SSOs) and include establishments such as the European Telecommunications Standards Institute (ETSI), Institute for Electrical and Electronics Engineers (IEEE) and various other ad hoc informal organizations[2].   Standards can also be of two different kinds- those with are mandatory or those that are up to one’s discretion[3].

2. STANDARD ESSENTIAL PATENTS

The concept of Standard Essential Patents (SEPs) cropped up when controversies between smartphone giants came about. Standard Essential Patents are basically, patents that inform the users or anyone else that the particular invention conforms to a particular standard denoted by that patent. SEP was also defined by the Washington District Court in Microsoft Corp. v Motorola Mobility, Inc.[4], as “A given patent is essential to a standard if use of the standard required infringement of the patent, even if acceptable alternatives of that patent could have been written into the standard”. It is a universal truth that consumers prefer standard compliant products as they deliver an incorrigible quality. Thus, in order to save a spot in the demand market, the inventors are forced to adopt technologies conferred by Standard Essential Patents. In turn, these SEP holders gain a huge competitive edge in the market and do not face any competition until they expire and move into the public domain.

3. FAIR, REASONABLE AND NON-DISCRIMINATORY TERMS (FRAND)

Due to the ubiquitous yearning for snowballing sale of one’s products, the market players are in a constant struggle to find the most desirable, the most profitable, and the most economically efficient techniques to garner demand for their brands. For this reason, SEPs play an unparalleled role to fulfill such wishes of the inventors. However, this also means that they have unbridled power in the market. Creating a monopoly of such SEP holders would be detrimental to the inventors, as they will have no say in the unfair and discriminatory terms brought before them. They will be forced to succumb to such terms for meeting the primary objective of every company in the market. There are a number of issues that rise during the event of licensing SEPs to other companies that inevitably cause a disruption in the unadulterated functioning of licenses in the country. A commonly occurring issue is patent holdup when an SEP holder realizes his irreplaceability in the market and consequently, causes a rise in the royalty rates to order to unjustly profit from his dominance, thereby burdening the licensee companies. Another frequent issue is royalty stacking where the companies are forced to pay for all the patents held by the SEP holder, patents that are not even incorporated by them in their products, purely under the coercion by the SEP holders of revoking the license

Hence, in order to evade such prejudiced demands of the SEP holders, the concept of FRAND was incorporated. The SSOs stress the requisite for such holders to enter into a promise to not cultivate any unwanted competitive strategies and misuse of the power granted to them. This promise is to coincide with the FRAND terms. Following the licensing strategies stated under the FRAND terms forms the basis of the standard development process. Conformance to FRAND terms guarantee that the SEP holders do not abuse their dominant position in the market and they license SEPs to desiring companies in a ‘fair, reasonable and non-discriminatory’ manner.

4. THE ERICSSON AND MICROMAX CASE

On the 4th of March, 2013, Ericsson filed a case of patent infringement against Micromax for eight of its SEPs which related to its 2G, 3G and EDGE devices, in the Delhi High Court. In response, on the 19th of March 2013, the Court passed an order stating that both the companies would enter into a contract under FRAND terms for the next month purely under an ad-interim arrangement, with prescribed royalties given in the table below.

A mediator was appointed to resolve the disputes between the two companies, but it was in vain. As a result, on the 24th of June 2013, Micromax filed information under Section 19(1)(a) of the Competition Act, 2002, alleging Ericsson to have inculcated an abusive and unfair mode of setting royalties. On the 12th of November 2014, the Court agreed to a new set of interim arrangement for the parties wherein Micromax was asked to pay the royalty on different terms given in the table below.

 

Phones/devices Capable of GSM Capable of GPRS + GSM Capable of EDGE+ GRPS+GSM WCDMA/HSPA, calling tablets
From 19/03/2013(earlier interim order) 1.25% of sale price 1.75% of sale price 2% of sale price 2% of sale price Dongles or data cards- USD 2.50
From date of filing till 12/11/2015 (later interim order) 0.8% of net selling price 0.8% of net selling price 1% of net selling price 1% of net selling price
From 13/11/2015 to 12/11/2016 0.8% of net selling price 0.8% of net selling price 1.1% of net selling price 1.1% of net selling price
From 13/11/2016 to 12/11/2020 0.8% of net selling price 1% of net selling price 1.3% of net selling price 1.3% of net selling price

 

With regard to the complaint filed by Micromax, it was stated that Ericsson was allegedly demanding an unfair royalty for its SEPs relating to the GSM Technology. It contended that the royalty should be based on the patents relating to the chipset technology and not arbitrarily calculate the royalty as a percentage of the sales price of the licensed downstream product[7]. It also stated that Ericsson was confident that there was no alternate technology for its patents in the market and hence, Ericsson believed that it had the right to charge such royalty for its patents. Moreover, Ericsson also wanted Micromax to sign a Non-Disclosure Agreement, which was restrictive and was not in conformance with the FRAND terms. On the 12th of November 2013, under Section 26(1) of the Competition Act, 2002, in pursuance to the complaint filed by Micromax, the CCI laid down the following:

  1. Ericsson was the largest holder of SEPs in the country with regard to 2G, 3G and 4G patents used for smart phones, tablets, etc. Due to this, it undoubtedly held a dominant position in the market for devices that use the GSM and CDMA standards.
  2. While FRAND licenses were primarily meant to prevent patent hold-up and royalty stacking, the competitive endurance showcased by such SEP holders might prove detrimental to their integrity.
  3. Ericsson’s royalty rates were excessive and absurd, and these royalties had not linkage to the patented products. Thus, it was clear that there were discriminatory and contrary to the FRAND terms.

Due to these inferences, CCI ordered for an investigation on the same matter by the Director General, which was challenged by Ericsson in the court. What happened to the case from this point shall be discussed in detail in combination with two other cases with Ericsson.

 5. ERICSSON AND INTEX CASE

In 2013, Intex had filed a suit against Ericsson on the same terms as in the case of Micromax, about setting discriminatory and unreasonable royalties for the SEPs. The CCI, on its account, ordered for an investigation along with the complaint filed in the previous case. Ericsson filed a writ petition against this move for an investigation. Alongside, it filed a suit against Intex for the alleged patent infringement of the same eight patents and demanded damages of Rs. 56 crores.

6. ERICSSON AND BEST IT WORLD (INDIA)

In November 2011, Ericsson had sent a letter to Best IT World that it had infringed the same eight patents as in the previous cases due to its GSM and WCDMA related products. Ericsson suggested both the companies get into a Global Patent Licensing Agreement (GPLA) for all the infringed patents. Best IT stated that it was interested in entering the said agreement only under the condition that Ericsson discloses the alleged infringed patents in order to find out whether the allegations were valid and enforceable in the country. Ericsson intentionally refused to respond to that request and went ahead to impose the need to draft an NDA with ten years confidentiality agreement wherein all the confidential information would be shared only with the company affiliated to it, and any disputes arising out of the same would be settled in Stockholm, Ericsson’s location of its headquarters, which was evidently onerous and one-sided.  It further stated that the license agreement to be entered into would have to apply to the previous and future sale of the company. In September 2015, Best IT filed a suit under Section 4 of the Competition Act, 2002 against Ericsson for an abuse of dominant position.

Thus, as occurred in the cases above, the CCI ordered for an investigation to take place. Ericsson challenged the order of CCI and claimed that the order was ‘arbitrary in nature and without jurisdiction’. It was noticed by the Delhi High Court that the plea by Best IT ought to be disregarded as it had not entered into the licensing agreement with Ericsson and that it was evident that it used Ericsson’s SEPs.

ANALYSIS OF THE ABOVE ERICSSON CASES

Extracting the detail from the Micromax v Ericsson case, Intex v Ericsson case and Best IT World (India) v Ericsson case about Ericsson filing writ petition against the order of CCI for investigations, as per the judgment laid down by the Delhi High Court on the 30th of March 2016, the CCI had the authority to direct the investigations as in the event of an abuse of dominance, jurisdiction lies within the scope of Competition Act. The court agreed to use the net sales prices of the downstream product as the royalty base, and ordered that the royalty for licenses based on FRAND must be derived from sound economic reasoning.

In the Micromax case, the court ordered Micromax to pay the royalties as per the rates stated in the later interim order, rates mentioned in the table.

By the judgment delivered on the 13th of March, 2015, the Delhi High Court ordered that the royalties which were stated in the case of Ericsson v Micromax shall be applicable in this case too. The only difference that lies is that the court ordered Intex to pay 50% of the royalty as per total selling price per device and not chipset, from the date of filing of the suit till 1st of March, 2015, shall be paid directly to Ericsson by way of a bank draft within four weeks from the date of the judgement. The balance shall be secured with a bank guarantee within the said four weeks with the Registrar General, who would invest the same in an FDR for twelve months.

As per the order passed on the 2nd of September, 2015, the court declared that Best IT World must restrict importing mobiles, handsets, devices, tablets, etc. all articles that infringe the patents of Ericsson, which would be operative from the 9th of September, 2015.

7. ERICSSON AND XIAOMI TECHNOLOGY

Ericsson had filed a patent infringement suit for eight of its patents essential to 2G and 3G standards registered in India, against Xiaomi in December 2014. Ericsson had requested to obtain license from it before it sold the infringing products in India, but Xiaomi had entered into an agreement with Flipkart Internet Private Limited to sell the products under Xiaomi’s name. It had begun launching such products from the month of July 2014. Subsequently, the court had issued an injunction order against Xiaomi to restrain the import or sale of its infringing device. Xiaomi appealed to the injunction stating that it had entered into a ‘Multi Product License Agreement’ with Qualcomm Incorporated and used the chipset, which in turn was licensed to Qualcomm by Ericsson. Thus, it argued that it had not infringed any of Ericsson’s patents. As an interim measure, on the 16th of December 2014, the court allowed Xiaomi to sell only those devices that contained the chipsets, which were licensed by Qualcomm and had to deposit Rs.100 per device with the Registrar General of the Delhi High Court.

On the 22nd of April, 2016, the Court revoked the interim injunction on Xiaomi on account of concealment of significant information regarding the alleged infringing patents, by Ericsson. It laid down that Xiaomi was using the 3G patents licensed by Qualcomm, which in turn was licensed to it by Ericsson. The amount of royalty paid by Xiaomi to Qualcomm was provided to Ericsson as royalty and hence, there lay no requirement of paying royalty directly to Ericsson.

8. ERICSSON AND LAVA INTERNATIONAL PRIVATE LIMITED

Ericsson challenged Lava in a suit for patent infringement related to its AMR, GSM and EDGE technologies. On an order passed by the Delhi High Court in March 2015, both the companies tried to negotiate an agreement on FRAND terms but it was in vain. An interim order was passed by the Delhi High Court, operative from the 21st of June, 2016, ordering an injunction to prevent the import, export, manufacture and sale of mobile phones that use the concerned patents of Ericsson. The final order on the case is still pending before the Court.

With the judiciary at the brim of delivering justice to the deserving, the SSOs and various organization striving to protect the rights and inventions of the lawful owners, the Intellectual Property Appellate Board to discuss matters of concern of the distressed, and the laws on various aspects merging to bridge the gap between the people and justice, it is almost impossible to fathom a situation wherein the aggrieved parties could not be redressed. The only aspect which have to be looked into by these mechanisms is its clear and untainted practice. The salvo of the dominance and power of multi-national companies being fired at domestic companies who strive to maintain a position in the market have to be adjudicated in a fair manner, without any involvement of duress and coercion. The elixir of righteousness lies in the hands of these deciding authorities. The real question here is ‘Would the adjudicators choose impartiality and morality, or would they surrender to dominance?’

About the Author : Ms. Anjana Mohan, Symbiosis Law School, Pune, intern at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers. Queries regarding this may be directed to swapnil@khuranaandkhurana.com or swapnils@khuranaandkhurana.com.

9. REFERENCES

1. ONLINE NEWSPAPER/ MAGAZINE/BLOG ARTICLES

a. Narula, Ranjan. “Standard Essential Patents.” Rouse The Magazine, 2015. Available On Http://Www.Rouse.Com/Magazine/News/Standard-Essential-Patents/?Tag=India

b. Rao D And Shabana N, Standard Essential Patents, Singhania & Partners, Available On Http://Www.Singhania.In/Wp-Content/Uploads/2016/04/Standard-Essential-Patents.Pdf

c. Lakshane R, “Compilation of Mobile Phone Patent Litigation Cases in India”, The Centre for Internet & Society, Available on http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india

d. Chawla K, “Ericsson v. Intex, Part 1- SEPs, Injunctions, and gathering clouds for Software Patenting?”, SpicyIP, available on http://spicyip.com/2015/03/ericsson-v-intex-part-1-seps-and-injunctions-and-a-new-era-of-software-patenting.html

2. ONLINE JOURNALS AND OTHER GUIDELINES

a. Sidak G, Frand In India: The Delhi High Court’s Emerging Jurisprudence On Royalties For Standard-Essential Patents, Journel Of Intellectual Property Law & Practise, 2015, Vol. 100, No.8, Available On Https://Www.Criterioneconomics.Com/Docs/Frand-In-India-Royalties-For-Standard-Essential-Patents.Pdf

b. Meniere Y, ‘Fair, Reasonable And Non-Discriminatory (Frand) Licensing Terms’, Jrc Science And Policy Report, 2015, Available On Http://Is.Jrc.Ec.Europa.Eu/Pages/Isg/Euripidis/Documents/05.Frandreport.Pdf

c. Department Of Industrial Policy And Promotion, Ministry Of Commerce & Industry, Government Of India, Discussion Paper On Standard Essential Patents And Their Availability On Frand Terms, Available On Http://Www.Ipindia.Nic.In/Whats_New/Standardessentialpaper_01march2016.Pdf

d. Agreement On Technical Barriers To Trade, Annexure I, Available At Https://Www.Wto.Org/English/Docs_E/Legal_E/17-Tbt.Pdf

e. Delhi High Court Cases, available on http://delhihighcourt.nic.in/

f. Indiankanoon, available on http://indiankanoon.com/

Expedited examination and non-expedited (normal) examination: Who can file request for examination?

With effect from May 16, 2016 (effective date for Patent (amendment) rules, 2016), provision of expedited examination was introduced in the Patent system of India. This article does not intend to discuss the different timelines within which request for examination has to be filed in different situations, rather article is restricted to the eligibility of person who can file such requests. Specifically, article intends to highlight the difference between person who is eligible for non-expedited examination and expedited examination.

Section 11B (1) of the Patent Act, 1970 provides that no application for a patent shall be examined unless the applicant or any other interested person makes a request in the prescribed manner for such examination within the prescribed period.

According to section 2 (t), interested person is defined as including a person engaged in, or in promoting, research in the same field as that to which the invention relates.

Rule 24 (B) and rule 24 (C) provide procedures for the non-expedited (normal) examination and expedited examination respectively.

Rule 24 (B) (3) provides that  applicant as well any interested person can request for non-expedited examination, however in latter case, only intimation is given to such interested person, and examination report is shared with the applicant only.

Rule 24 (C)(1) deals with eligibility of person who can request for non-expedited examination.

Rule 24 (C)(1):

An applicant may file a request for expedited examination in Form 18A along with the fee as specified in the first schedule only by electronic transmission duly authenticated within the period prescribed in rule 24B on any of the following grounds, namely:-

(a) that India has been indicated as the competent International Searching Authority or elected as an

International Preliminary Examining Authority in the corresponding international application; or

(b) that the applicant is a startup.

Rule 24 (C)(2) provides for conversion of non-expedited examination to expedited examination.

Rule 24 (C)(2):

A request for examination filed under rule 24B may be converted to a request for expedited examination under sub-rule (1) of rule 24C by paying the relevant fees and submitting requisite documents as required under sub-rule (1). (Emphasis added).

As seen in section 11 (B)(1), there is no categorical difference provided in the eligibility to request for expedited and non-expedited examination (that interested person cannot request for expedited examination). But there is no parallel sub-rule as like 24 (B)(3) in rule 24 (C) and also rule 24 (C)(1) also puts restriction of applicant.

However, what if interested person submits documents available in the public domain to convert a non-expedited examination to expedited examination (by paying the required fees)? Though it is not categorically given that it cannot be done, language of 24 (C)(1) which restricts eligibility to applicant and absence of parallel provision as like 24 (B)(3) in rule 24 (C)indicates that interested person cannot convert non-expedited examination to expedited examination even after paying fees and submitting documents available in public domain that a particular applicant is eligible for expedited examination.

However it would be interesting to see if Indian Patent Office (IPO) faces such question and how it tackles the same.

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

Teva held responsible for Induced Infringement of Eli Lilly’s Blockbuster drug ALITMA

In Teva Parenteral Medicines, Inc.; APP Pharmaceuticals LLC; Pliva Hrvatska D.O.O.; Teva Pharmaceuticals USA, Inc.; and Barr Laboratories, Inc. (hereinafter referred to be as Defendants/Appellants/Teva) Vs. Eli Lilly & Co. (hereinafter referred to as Plaintiff/Appelle/Eli Lilly) decided by United States Court of Appeals for the Federal Circuit (CAFC) on January 12, 2017, Plaintiff had filed Hatch Waxman suit against defendant to prevent them from launching generic version of the lung cancer drug whose rights are reserved with the plaintiff. The decision from CAFC came after an appeal from the United States District Court for the Southern District of Indiana in No. 1:10-cv-01376-TWPDKL, Judge Tanya Walton Pratt.

Eli Lilly owns a patent US 7772209 (hereinafter referred to as US‘209) issued in 2010, relating to method of treatment administering the chemotherapy drug pemetrexed disodium (hereinafter referred to as “pemetrexed”) (used to treat certain types of lung cancer and mesothelioma) after pretreatment with two common vitamins—folic acid and vitamin B12 (reduce the toxicity of pemetrexed in patients). Eli Lilly markets pemetrexed under the brand name ALIMTA®.

In 2008-2009, Defendants notified Eli Lilly that they had submitted ANDA seeking approval to market generic version of ALIMTA®. After issuance of US’209 patent, Teva sent additional notice that they had filed Para IV certifications, declaring that US’209 patent was invalid, unenforceable, or would not be infringed. Subsequent to which Eli Lilly alleged Teva of induced infringement. Eli Lilly asserted that Teva’s generic drug would be administered with folic acid and vitamin B12 pretreatments and thus will result in infringement of the 209 patent.

Eli Lilly asserted claims 9, 10 (dependent on claim 1), Independent claim 12, and its dependent claims 14, 15, 18, 19, and 21 of the US’209 patent at trial.

Independent claims 1 and 12 have been reproduced below for reference:

Claim 1:

A method of administering pemetrexed disodium to a patient in need thereof comprising administering an effective amount of folic acid and an effective amount of a methylmalonic acid lowering agent followed by administering an effective amount of pemetrexed disodium, wherein the methylmalonic acid lowering agent is selected from the group consisting of vitamin B12, hydroxycobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-cobalamin perchlorate, azidocobalamin, cobalamin, cyanocobalamin, or chlorocobalamin.

Claim 12:

An improved method for administering pemetrexed disodium to a patient in need of chemotherapeutic treatment, wherein the improvement comprises:

  1. a) administration of between about 350 μg and about 1000 μg of folic acid prior to the first administration of pemetrexed disodium;
  2. b) administration of about 500 μg to about 1500 μg of vitamin B12, prior to the first administration of pemetrexed disodium; and
  3. c) administration of pemetrexed disodium.

It is important to note that current case involves issue of induced infringement i.e. a type of indirect infringement that may be committed under section 271 (b) (dealing with infringement of Patents).

In June 2013, Defendants conditionally conceded induced infringement under then-current law set forth in Akamai Technologies, Inc. v. Limelight Networks, Inc. (Akamai II) which at that time was the subject of a petition to the Supreme Court for a writ of certiorari. The parties’ stipulation included a provision reserving Defendants’ right to litigate infringement if the Supreme Court reversed or vacated Akamai II.

District court had rejected contentions of the defendant that Patent was invalid for obviousness or obviousness-type double patenting and also due to indefiniteness of the term vitamin B12.

Defendants filed an appeal on invalidity. While that appeal was pending, the Supreme Court reversed Akamai II, holding that liability for inducement cannot be found without direct infringement, and remanding for CAFC court to possibly reconsider the standards for direct infringement. In view of that development, the parties in this case filed a joint motion to remand the matter to the district court for the limited purpose of litigating infringement. CAFC granted the motion.

The district court held a second bench trial in May 2015 and concluded in a decision issued on August 25, 2015 that Defendants would induce infringement of the US’209 patent. This was after considering the effect of Akamai V decision, which had broadened the circumstances in which others’ acts may be attributed to a single actor to support direct infringement liability in cases of divided infringement.

Defendants appealed.

Below given factors are taken into consideration while deciding cases of induced infringement:

  • Whoever actively induces infringement of a patent shall be liable as an

Infringer;

  • There cannot be indirect infringement without direct infringement;
  • Patentee needs to prove alleged infringer knew or should have known his actions would induce actual infringements; and
  • Standard of proof required by Patentee to claim relief under induced infringement is ‘preponderance of the evidence’.

It was agreed by parties that Defendants’ proposed product labeling would be materially the same as the ALIMTA® product labeling and consists of two documents: the Physician Prescribing Information and the Patient Information. District court found that both the documents included instructions regarding the administration of folic acid—the step that the district court found would be performed by patients but attributable to physicians.

According to Akamai V, where no single actor performs all steps of a method claim, direct infringement only occurs if the acts of one are attributable to the other such that a single entity is responsible for the infringement. The performance of method steps is attributable to a single entity in two types of circumstances:

  • when that entity “directs or controls” others’ performance, or

 

  • when the actors “form a joint enterprise.”

In Akamai V, CAFC had held that directing or controlling others’ performance includes circumstances in which an actor:

(1) “conditions participation in an activity or receipt of a benefit” upon others’ performance of one or more steps of a patented method, and

(2) “establishes the manner or timing of that performance.”

District court found taking folic acid in the manner recited by the asserted claims is a critical and necessary step to reduce potentially life threatening toxicities caused by the Pemetrexed amounts to receive the benefit of the patented method.

Regarding first of the two pronged test, the court found, based on the product labeling, that taking folic acid in the manner specified is a condition of the patient’s participation in the Pemetrexed treatment. Regarding the second prong, the court found that physicians would prescribe an exact dose of folic acid and direct that it be ingested daily. Hence court held all steps of the asserted claims would be attributable to physicians.

Court further observed that the mere existence of direct infringement by physicians, while necessary to find liability for induced infringement, is not sufficient for inducement but there has to be also specific intent and action to induce infringement. Court went on to find intent on the part of physician for the inducement and held that there was no error in district court’s decision. Some important observations of court have been mentioned below.

CAFC made two important observations as below:

  • The intent for inducement must be with respect to the actions of the underlying direct infringer, here physicians.

 

  • Second, it is not required to show evidence regarding the general prevalence of the induced activity. When the alleged inducement relies on a drug label’s instructions, the question is not just whether those instructions describe the infringing mode,..but whether the instructions teach an infringing use such that we are willing to infer from those instructions an affirmative intent to infringe the patent. Court further observed that the label must encourage, recommend, or promote infringement and it is irrelevant that some users may ignore the warnings in the proposed label.

Court went on to observe a label that instructed users to follow the instructions in an infringing manner was sufficient even though some users would not follow the instructions, but vague instructions that require one to look outside the label to understand the alleged implicit encouragement do not, without more, induce infringement.

On the issue of invalidity on the indefiniteness of the term “vitamin B12”, CAFC hold that a person of ordinary skill in the art would understand the scope of the claim term “vitamin B12” with reasonable certainty. Applying Nautilus (outcome of this decision) in this case did not lead CAFC to a different result from the district court’s conclusion on the question of indefiniteness.

Regarding issue of invalidity due to obviousness, CAFC was not convinced that the district court committed clear error in concluding that Defendants failed to carry their burden of proving that it would have been obvious to a person of ordinary skill to use vitamin B12 pretreatment to reduce Pemetrexed toxicities.

Thus CAFC affirmed district court decision.

About the Author :  Ms. Rashmi Goswami, WOS-C at TIFAC, intern at Khurana and Khurana, Advocates and IP Attorneys and can be reached at swapnil@khuranaandkhurana.com

Obtaining a Certificate of Recognition from DIPP for IPR benefits

“A start-up would now require only a certificate of recognition from the Department of Industrial Policy and Promotion (DIPP) and would not be required to be examined by the inter-ministerial board, as was being done earlier. This is one rapid change that we have brought in,” said  Nirmala Sitharaman, Minister of Commerce and Industry in New Delhi at the ‘Start-up India States’ Conference’ in  2016.

This has been done to improve the ease of doing business by entrepreneurs, when earlier there was a complex and elaborate process of approaching the inter-ministerial board to procure the IPR benefits. After May 16, 2016, Start-Ups have been made eligible for expedited examination of Patent Applications.

This post particularly discusses the procedure of obtaining a ‘Certificate of Recognition’ from Department of Industrial Policy and Promotion (DIPP) before and after filing the Application of Patent.

Procedure to be followed varies depending on whether Start-Up has applied for Patent (and the application is published) or has not applied yet.

Type 1:

The procedure below is only for applicants who have NOT filed the application of patent.

The Application form is available on http://www.startupindia.gov.in/registration.php

Click on Startup India Services > Startup Recognition > Application.

  1. Fill the required information regarding the following ;
      a. Name of the Entity;
      b. Nature of the Entity – Private Limited Company/Limited Liability Company/Registered Partnership
      c. Incorporation/Registered No.
      d. Date of Incorporation/Registration
      e. Address of Registered Office
      f. Details of authorized representative
      g. Details of Directors/Partners
  2. Either of the following supporting documents are required to be filed in the Application for the Certificate.
      a. Letter of Recommendation, in a form specified by the DIPP from an incubator recognized by Government of India  ;or
      b. Letter of support by any incubator which is funded, in relation to the project, from Government of India or State Government as a part of specified scheme to promote innovation ; or

A panel of facilitators has been constituted for providing assistance and support in filing applications for Intellectual Property Rights (IPR), wherein, Department of Industrial Policy and Promotion (DIPP) would bear the facilitation cost. The list of the Incubators is available on ; –http://startupindia.gov.in/uploads/pdf/List_of_facilitators_for_patents.pdf

      c. Letter of Recommendation, in a form specified by the DIPP from an incubator established in post-graduate college in India; or.
      d. Letter of funding from the Government of India or any State Government as a part of specified scheme to promote innovation; or – If the Government of India or State Government has provided funds as a part of any scheme to promote innovation to the applicant, a Letter of Funding by GOI or State Government is admissible as a legit document to be submitted.
      e. Letter of funding of not less than 20 percent in equity by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with Securities Exchange Board of India that endorses innovative nature of the business – If SEBI has funded,  not less than 20% in equity by any above mentioned Funds which endorses the innovative nature of the business of the entity to the applicant, A Letter of Funding by SEBI can be submitted.
      f. Letter of recommendation from Industry association recognized by DEPARTMENT OF INDUSTRY POLICY AND PROMOTION – A Recommendation  Letter can be obtained by any Industry Association or Organisation which is recognized by DIPP.

The list of Industries/Organisations which can provide for the letter of Recommendation  are available on www.startupindia.gov.in .

Click on Information> List of Industry Association/Organisations for Recommendation Letter.

  1. Incorporation or Registration Certificate- Company/ Partnership Incorporation/LLP/ Registration Certificate is MANDATORY to be submitted.
  2. A Brief note or a supporting document regarding the innovativeness of the idea of the product or services offered by the entity.
  3. With respect to tax benefits, note that, if you opt for tax benefits, your application will go to the Inter–Ministerial Board for evaluation, which may take time. If your aim is only to obtain benefits related to IPR, you can refrain from choosing the tax benefits option.

The FORMAT for the above mentioned “Letter of Recommendation,  Letter of Support from Incubator, Letter of Funding from SEBI, Recommendation letter from Industry Association/Organisation”  is available on http://www.startupindia.gov.in/startup-recognition.php

An application for a certificate is processed within a period of 10-25 working days from the date of Application, if accepted, the certificate is available to be procured.

Type 2:

The points below discuss the procedure for obtaining a Certificate of Recognition for applicants who have filed for patent and the same is published.

  1. Visit http://startupindia.gov.in/uploads/pdf/List_of_facilitators_for_patents.pdf and fill in the details requested in the form as mentioned above.
  2. Against Nature of Recommendation, Select “Patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of business being promoted”.
  3. Against “Supporting document based on the nature of recommendation selected above”, upload journal extract of publication of your patent application.
  4. Upload Incorporation/ Registration Certificate.
  5. Against “Brief note on innovativeness of products /services offered by the entity”, upload a document in PDF format that provides details relating to the nature of business of your company and why products /services offered by your company is innovative.
  6. As mentioned above, with respect to tax benefits, note that, if you opt for tax benefits, your application will go to the Inter–Ministerial Board for evaluation, which may take time. If your aim is only to obtain benefits related to IPR, you can refrain from choosing the tax benefits option.
  7. Submit the application upon self-certification.

PENALTY FOR FALSE REGISTRATION:
If the application is found to be obtained, without uploading the document or uploading any other document or a forged document, the concerned applicant shall be liable to a fine which shall be fifty per cent of paid up capital of the startup but shall not be less than Rs. 25,000/- (Rupees Twenty Five Thousand only).

About the Author: Himani Kohli, D.E.S Law College (Fergusson Capmus), Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at swapnils@khuranaandkhurana.com

NEPAL’S IP LAW: AN ENCAPSULATION

Intellectual property law in Nepal is comparatively new and it enjoys the extension provided for under the TRIPS agreement to the least developed country. The Patents, Designs and Trademarks are protected under one head, and the governing act/ legislation is known as “The Patent, Design and Trade Mark Act, 2022 (1965)” (hereinafter referred to as “Act”).

Trademarks

Section 2: Definitions: Unless the subject or the context otherwise requires in this Act:

“Trade-mark” means word, symbol, or picture or a combination thereof to be used by any firm, company or individual in its products or services to distinguish them with the product or services of others.

FILING PROCEDURE:

Step 1: Filing

  • Who may apply: Section 17:
  • Any person desirous to register the trademark of his business shall submit an application to the Department in the format specified in Schedule 1(C).
  • Document: Four specimens of the Trade Mark sought to be registered.
  • Fees: NPR 2000.

Trademark Application in Nepal can be filed in a single class only. Mutli-class Application cannot be filed.

Step 2: Investigation:

  • Section 18: When an application is received by the department, it conducts necessary investigation/examination and provides an opportunity of being heard to the applicant in case of any concerns/objections.
  • Examination is done with regard to distinctiveness, possibility of distinctiveness and conflicting trademarks.

Step 3: Grant/ Refusal:

  • If the department is satisfied with the application for registration, it shall register the trademark in the name of the applicant and grant him a certificate. Registration fees: NPR 5000.
  • It may conduct further inquiry/ investigation.
  • The mark shall not be registered/ registration is liable to be cancelled when the subject mark:
  • Hurt the prestige of individual/ institution
  • Adversely affect public conduct or morality
  • Undermine the national interest
  • Undermine the reputation of another’s trademark
  • Found to have already been registered in the name of another person.
  • If the registered trademark is not used within 1 year from the date of registration, the department may cancel the registration after conducting necessary inquiries.
  • The term of the registered trademark shall be 7 years from the date of registration.

Step 4: Publication:

  • Section 21A: The department shall publish the trademarks registered under section 18. Such publication is made in the Trademark Journal.
  • Anyone who has any objection to the same shall file a complaint to the department within 3 months from the date of such publication in Trademark Journal.
  • Necessary actions shall be taken by the department after conducting inquiries.

Step 5: Renewal and Cancellation

  • Renewal: Section 23B:
  • A trademark holder needs to renew the registration within a period of 35 days from the date of expiration of the term for which he is entitled to use the same.
  • The prescribed form is Schedule 2(F) and the fee is NPR 500 each time.
  • When the time limit of renewal expires, renewal may be done within 6 months from the date of expiry of the time limit for the same along with a fee of NPR 1000.
  • A trademark can be renewed indefinitely for a period of 7 years each time after a payment of renewal fee.

 

Patents

Section 2: “Patent” means any useful invention relating to a new method of process or manufacture, operation or transmission of any material or a combination of materials, or that made on the basis of a new theory or formula.

FILING PROCEDURE:

Step 1: Filing:

  • Who may apply: Section 3 and 4:
  • Any person desirous of having any patent registered in his name shall submit an application to the Department in the format prescribed in Schedule 1(A) containing the following particulars, along with all evidences related to the same in his possession:
  • Name, address and occupation of the inventor (person inventing the patentable subject matter)
  • If the applicant is not the inventor, then information as to how and in what manner has he acquired title thereto from the inventor
  • Process of manufacturing, operating or using the patent
  • If the patent is based on any theory or formula, then the same needs to be mentioned.
  • Maps or drawings, if any.
  • Application fees: NPR 2000

Step 2: Investigation:

  • Section 5: On receipt of an application for registration, the Department shall conduct all investigation or study to ascertain two things:

(a)  Whether the patent claimed in the application is a new invention or not

(b)  Whether it is useful to the general public or not.

 

  • Section 6: The Department shall not register any patent under this Act in the following circumstances:

(a) In case the patent is already registered in the name of any other person, or

(b) In case the applicant him/herself is not the inventor of the patent sought to be so registered nor has acquired rights over it from the original inventor, or

(c) In case the patent sought to be registered is likely to adversely effect the public health, conduct or morality or the national interest, or

(d) In case it is contradictory to the prevailing laws (the registration of the patent) will constitute a contravention of existing Nepal law.

The Examination/Investigation is of two kinds namely;

  1. Formality Examination- It is done to determine whether the application for patent fulfills the requirements of the same.
  2. Substantive Examination- It is done to determine the patentability of the invention, whether;

–  The claimed product/process is patentable or not.

–  The claimed invention is new i.e passes the test of Novelty.

–  The claimed invention is capable of Industrial Application.

– The invention involves a ‘innovative step’

Step 3: Grant/ Refusal:

  • If the Department is satisfied with the findings under Section 5, it shall register the patent in the name of the applicant.
  • In case, the Application does not fulfill the statutory requirements, a notice to the applicant is sent regarding the Rejection of Application.
  • Section 7: Issue of registration certificate:
  • When the registration of the patent is granted, the Department shall issue a certificate of registration in the name of the applicant in the format prescribed in Schedule 2(A).
  • The fee for the same is NPR 10,000.
  • Section 8: The term of the patent granted shall be 7 years from the date of registration.

Grounds of refusal/ cancellation of registration: Section 6:

  • The patent is already registered in the name of other person
  • The applicant is not the inventor of the subject matter of the patent and has not acquired rights over it from the original inventor
  • The patent sought adversely affects public health, conduct or morality, or national interest
  • The patent sought is contradictory to existing Nepalese laws.
  • The applicant will be provided a reasonable opportunity of being heard before the department cancels the registration of the patent.

Step 4: Publication:

  • Section 7A: All patents registered under the Act, except those that are kept secret in the national interest, shall be published in the Nepalese Gazette by the department.
  • In case of objections, the complaint may be filed within 35 days from the date of seeing or copying the Patent, and thereafter, the Department shall conduct necessary inquiries and take further action. The fee for complaints and objections is NPR 1000.
  • In case anyone wants to see or copy the particulars, maps or drawings of a patent, he can do so by paying the prescribed fee of NPR 750.

Step 5: Renewal

  • Section 23B: Renewal:
  • A patent holder shall renew the registration within a period of 35 days from the date of expiration of the term for which he is entitled to use the same.
  • The prescribed form is Schedule 2(D) and the fee for
  1. First time: NPR 5000
  2. Second time: NPR 7500.
  • When the time limit of renewal expires, it may be done within 6 months from the date of expiry of the time limit for the same along with a fee of NPR 1000.
  • A patent can only be renewed twice for a period of 7 years at a time.

 

FILING CONVENTION PATENT APPLICATIONS IN NEPAL:

Nepal being party to Paris Convention since June 2001, an applicant desirous of filing patent application in Nepal claiming priority from one or more convention countries based on same invention may file such application within 12 months from the date of earliest priority. Pertinently, Nepal is not a member of PCT (Patent Cooperation Treaty).

 

Designs

Section 2:

“Design” means the form or shape of any material manufactured in any manner.

FILING PROCEDURE:

Step 1: Filing:

  • Who may apply: Section 12 and 13:
  • A person desirous to register the design of any article manufactured or caused to be manufactured, shall submit an application in the format specified in Schedule 1 (B) to the Department.
  • The applicant shall also furnish four copies of such design and maps, and drawings and particulars thereof.
  • Fees: NPR 1000.

Step 2: Examination

This involves “Formality check” and “Substanstive check” –

  1. Formality Check- An application is submitted to check if the statutory formalities and procedural requirements are fulfilled.
  2. Substantive Check- After the formality check, a substantive examination is carried out, weather ;

–  There is existence of a prior application or registration of the same.

–  Such design will hurt the prestige or interest of an individual or institution or conduct of public or morality of undermines national interest.

If either of the above mentioned points are

Step 3: Grant/ Refusal:

  • Section 14: On receipt of the application filed by any person under Section 13, the Department shall register the design in the applicant’s name and issue a certificate of registration in the format specified in Schedule 2(A). i.e If it has passed the stage of Examination.
  • In case, the Application is rejected, a Notice of Rejection is sent to the Applicant.
  • Registration fees: NPR 7000.
  • The term of a registered design is five years from the date of registration.
  • Renewal: Section 23B:
  • A design holder shall renew the registration within a period of 35 days from the date of expiration of the term for which he is entitled to use the same.
  • The prescribed form is Schedule 2(E) and the fee for
  1. First time: NPR 1000
  2. Second time: NPR 2000.
  • When the time limit of renewal expires, it may be done within 6 months from the date of expiry of the time limit for the same along with a fee of NPR 1000.
  • A design can only be renewed twice for a period of 5 years at a time.

Step 4: Publication:

  • Section 21A: The department shall publish the designs registered under section 14, along with their particulars of renewal or cancellation.
  • Anyone who has any objection to the same need to file a complaint to the department within 35 days from the date of such publication.
  • Post receiving the complaint, Department takes necessary actions after conducting inquiries.

Step 5: Renewal/ Cancellation

Grounds of refusal/ cancellation: Design is liable to be refused or cancelled, if the design or design registration, as the case may be:

  • Hurt the prestige of individual/ institution
  • Adversely affect public conduct or morality
  • Undermine the national interest
  • Found to have already been registered in the name of another person.
  • The design holder will also get an opportunity to show cause as to why his registration must not be cancelled.

Effect of Union Budget, 2017 on the R&D/ Intellectual Property Practices in India

Union budget that was highly waited for (after demonetization) had gained more attention also due to preponing to February 01, 2017.

As a matter of fact, every year budget has certain impact on various industries including IP industry and R&D sectors. In this article, we will try to analyze possible effects of 2017 budget on R&D/Intellectual Property (IP) Practices in India. Though there were no special funds/incentives proposed for R&D, budget did have certain announcements for indirect effect on the IP practices.

  1. With intent made clear in budget 2015 itself, in 2017 Hon’ble Finance Minister Arun Jaitley proposed that corporate income tax for smaller companies with annual turnover upto INR 50 CR be reduced to 25%.

In 2016, FM had proposed that companies with turnover less than INR 5 CR would have to pay tax less by 1% and new manufacturing companies who do not avail of any exemption would be charged only 25%.

 This move will make sure that medium size companies do not pay more tax as compared to larger companies as observed in 2015-2016, wherein 2.85 lakh companies making profit of less than INR 1 CR had to pay effective tax rate of 30.26% while 298 companies making profit of more than 500 CR paid effective tax rate of 25.90%.

This reduction in tax rate is likely to give smaller companies flexibility to invest saved 5% in R&D activities.


  1. FM also believes pushing digital transactions further would enable small and micro enterprises to access formal credit. He also made clear that Small Industries Development Bank of India (SIDBI) will be encouraged by government to refinance credit institutions which provide unsecured loans at reasonable interest rates to borrowers based on their transaction history. This is likely to give higher chances of eligibility to IP driven companies not having strong collateral.

  2. Focus on startups in 2016 seems to be continued in 2017 as well. Among the schemes announced for start-ups, eligibility for start-ups for expedited examination of Patent Applications was a great move. In 2017, government aiming to heavily utilize technology for pushing initiatives such as SWAYAM (providing opportunities for a life-long learning) and DIGIGAON (providing telemedicines, education and skills through digital technology), start-ups would never want to miss an opportunity to contribute through innovative ideas for the facilitation of implementation of schemes.

  3. In another move to encourage start-ups, in 2016 it was announced that 100% deduction would be available for any 3 consecutive assessment years out of 5 years beginning from the year in which the eligible start-up is incorporated with the condition that total turnover of eligible start-up should not exceed Rs. 25 Crore in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021. In 2017 budget, period of 5 years has been changed to 7 years.

  4. Research and Development Cess Act, 1986 is proposed to be repealed. Reduction in tax cost to the extent of 5% (R&D cess) on technology imports. Subsequently, service tax at 15% to be paid in full.

  5. On a disappointing note, there seems to be no separate incentive for R&D.

All in all, though there seem to be some encouraging proposals nothing substantial is coming to the way of IP fraternity as was provided in last year budget in the light of Make in India Regime. But this is not totally surprising as on all fronts, budget seems to be a cautious approach (understandable in light of other measures such as demonetization and GST being radical).

Comparative Advertisement: A Perspective

Ms. Sakshi Jhalani, Intern, Khurana & Khurana, Advocates and IP Attorneys looks into the fundamentals of Comparative Advertisement vis-avis Trade Mark Rights in India.

Advertising is indeed a crucial step in determining future of any product. It is the most successful and proven way to attract the attention of the potential consumers in the market. Since, the consumers have a wide variety of products to choose from, often the advertisers resort to a practice of comparing their products from that of the competitors. While this is an acceptable practice, many times in order to gain more pecuniary benefits and mileage, competitors end up using such tactics which either misleads the customers or amounts to denigration of other’s product. Comparative advertisement is a unique practice, where a manufacturer compares his goods or service from that of his competitors for the purpose of promotion and increased sale of his goods.

Comparative advertisement can be divided into two categories, puffery and denigration. Imagine a producer making superlative claims indicating his product is best so as to influence the public into buying it. Now, if the same claim is made through degrading the image of an identifiable competitive product, it crosses the limited scope of puffery leading to denigration of the product. This might not only amount to defamation of the competitor’s product, but also mislead the consumers since most of the time to producers does not have a valid ground to claim that other product is not good.

Though advertisements were considered a part of form of speech but, they did not constitute as ‘free speech’ since it was done merely for the purpose of commercial gain.[1] This position was reversed in the case of Tata Press vs. Mahanagar Telephone Nigam Ltd., where the court held that advertisements is not only profiting the producers but there is a free flow of information in free market economy fulfilling the greater goal of public awareness.[2]By virtue of this judgement, advertisements were held constitutive of ‘commercial speech’ under the ambit of Article 19(1)(a) of the Constitution.

Even though advertisements have been given constitutional protection under free speech, there cannot be blanket protection given to advertisements merely on the ground of public awareness. It needs to be checked that these advertisements are neither deceptive, nor they are disparaging the competitor’s goods. Initially, matters relating untrue or misleading advertisements were governed under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (‘MRTP Act’), which dealt with ‘unfair trade practices’. However, the MRTP Act was repealed by Section 66 of the Competition Act, 2002. But, this did not leave traders remediless since the definition of ‘unfair trade practices’ was incorporated parimateria under Section 2(1)(r) of the Consumer Protection Act, 1986 (‘CP Act’). The scope of CP Act was limited to the extent of providing recourse to the consumers only, it did not include manufacturers, sellers or service providers.

The absence of a proper statutory instrument for advertisers to address their grievances led to the creation of a self-regulatory body called Advertising Standards Council of India (‘ASCI’). The principles laid down by ASCI ensured that this practice of comparative advertisement is conducted in a fair way taking into consideration the interests of all the associated groups involved. It make sure that the manner in which the comparison is laid out is not in a way that provides the producers with an undue advantage over the competitor’s product. It also ensured that the comparisons are accurate and are based on the facts so as to not deceive the potential consumers.

Even though ASCI laid down reasonable and fair guidelines, it lacked effective implementation and faced problems when infringement is caused by the actions of non-members. The problems covering such infringements are better addressed by Section 29(8) and 30(1) Trademarks Act, 1999 (‘the Act’). While Section 29(8) deals with infringement of trademarks when done through advertisements, section 30(1) provides with an exception when such use of marks is done according to the “honest practices” in industrial and commercial matters. When a producer is using the method of comparative advertisement for promoting his/her goods or services, it might lead to dilution, tarnishment or blurring of the trademarks of the competitors. The Act protects the interests of such producers, whose marks are likely to get denigrate because of unfair actions of the competitors.

Honest practices, dilution, disparagement, all these essentials are not clearly defined under the Act, but can be traced through various judgments throughout the course of time. In the case of Reckitt & Colman f India Ltd. vs. M.P. Ramchandram&Anr, the court dealt with the component of puffery as a part of comparative advertisement for the first time. This case involved manufacturers of two clothing detergents ‘Robin Blue’, the plaintiff and ‘Ujala’ the defendant. It was contended by the plaintiff that the defendant in his advertisement, had on purpose used a bottle similar to that of plaintiff’s product. The defendant also mentioned in his advertisement that the plaintiff’s product was inefficient and was uneconomical.[3] The court in this case held relied on the case of De Beers[4] and held that a producer can declare his goods to be the best, or even better than his competitors even if the statement is untrue. But, while making such comparison he cannot state that his competitor’s goods are bad, even if that is true. He cannot make any statement which might lead to disparagement of his competitor’s goods.

Another landmark case that dealt with the meaning of word disparagement is Pepsi Co. vs. Hindustan Coca Cola Ltd. Pepsi Co. alleged infringement of trademark as Coca Cola, vide its advertisement has disparaged the products of Pepsi Co by calling Pepsi “Bacchon Wala Drink”. Further Coca Cola also used a bottle with same colour combination as that of Pepsi with the name “Peppi” written on it. The court while analyzing the meaning of disparagement held that, an advertisement is considered to be defaming if it is undervaluing, bringing discredit or dishonor upon the competitor’s product.[5]

Further clarity is laid down by the court in the recent 2015 judgment of Havells vs. Amritanshu, where the advertisement in dispute dealt with the Hevells’s and Eveready’s LED bulbs. The question in issue was whether for an advertisement to be an ‘honest’ one, does the comparison between the producer’s and the competitor’s product must involve all the features. The Delhi high court in this case held that if an advertiser is highlighting only a special feature of his/her product, that makes it distinct from that of his competitor’s, he/she is allowed to do so as long as the comparison is true. The failure to compare all features of a product while comparing will not amount to disparagement. The court in this case also laid down certain tests to be applies for the purpose of comparative advertising. The tests include, standard used in deciding a case of comparative advertisement, test of ‘honest’ advertising as per section 29(8) and 30(1), and test of a ‘misleading advertisement’.

The status of comparative advertisement in foreign countries like U.K. and USA is more liberal when compared to India. Where the practice of comparative advertisements is a common trend, the producers are generally not allowed to make any superlative claims with respect to their products without providing for any evidence. They are also allowed to compare their products with the competitors’ and mention that the other’s product is not as good as theirs provided they make a valid and reasonable claim. In my opinion, such trend should be adapted in India as well, as making superlative claims about their products without them being true fails the main purpose of protecting the consumers from deceptive practices of traders. Also, if the claim made by the producer with respect to his competitor’s product is true, it should be allowed since, it will provide consumers with a valid reason to choose between a better product, and in long-run promotes healthy trade practice as it will help the competitor to improve the quality of his goods.

About the Author: Ms. Sakshi Jhalani, Intern, Khurana & Khurana, Advocates and IP Attorneys.

References :

[1]HamdaedDawakhana vs. Union of India, AIR 1960 SC 554.

[2](1995) 5 SCC 139.

[3]1999 PTC (19) 741.

[4]1975 (2) AII ER 599.

[5]2001 (21) PTC 722.

REVOCATION OF PATENTS ACCORDING TO INDIAN PATENT ACT, 1970: INSIGHT

This article focuses on the revocation proceedings which is one of the mechanisms available for annulations of Patents in India.

  1. What is revocation of a patent?

When a patent has been sealed or granted, it is not always the case that the patent shall stay unhindered by any third party till the life of the patent. The patent can be challenged by certain people on different grounds, and a method to cause the same is by filing a revocation petition/ post-grant opposition proceedings. This article focuses on the revocation proceedings.

  1. Why does one file a revocation petition?

As the Patent Act does not presume Patents granted to be valid, rights granted on such Patents cannot be absolute. Third parties which are required to seek permission from Patentee for practicing any of the exclusive rights bestowed upon him are also given a chance to challenge the validity of the Patents. This challenge can be instituted on own as well as on Patentee asserting infringement of Patent rights.

  1. Who can file a revocation petition?

As per Section 64 of the Patent Act, 1970, the following persons can file the petition in the High Court:

  • any person interested[1];
  • the Central Government
  • the person making the counter-claim in a suit for the infringement of a patent
  1. Where can a revocation petition be filed?

Thus, a revocation petition can be filed in the Intellectual Property Appellate Board by the interested person or the Central Government, or it can be filed as a counter-claim in a suit for infringement at the High Court.

To bring in the aspect about jurisdiction of suits of infringement and the corresponding revocation petitions, Section 104 of the Patents Act, 1970 states that no suit of infringement can be brought before a court inferior to the District Court having jurisdiction to try the suit and in the event of a counter-claim for revocation of the patent made by the defendant, such suit for infringement and the said counter-claim must be transferred to the High Court.

  1. What are the grounds under which a revocation petition can be brought?

Under Section 64, the following are the said grounds:

  1. the invention, so far as claimed in any claim of the complete specification, was claimed in a valid claim of earlier priority date contained in the complete specification of another patent granted in India;
  2. the patent was granted on the application of a person not entitled to apply therefor;
  3. the patent was obtained wrongfully in contravention of the rights or the petitioner or any person under or through whom he claims;
  4. the subject of any claim of the complete specification is not an invention;
  5. the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known to publicly used in India before the priority date of the claim or to what was published in India or elsewhere in any of the documents referred to in Section 13;
  6. the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step, having regard to what was publicly known or publicly used in India or what was published in India or elsewhere before the priority date of the claim;
  7. the invention, so far as claimed in any claim of the complete specification, is not useful;
  8. the complete specification does not sufficiently and fairly describe the invention and the method by which it is to be performed, that is to say, that the description of the method or the instructions for the working of the invention as contained in the complete specification are not by themselves sufficient to enable a person in India possessing average skill in, and average knowledge of the art to which the invention relates, to work the invention, or that it does not disclose the best method of performing it which was known to the applicant for the patent and for which he was entitled to claim protection;
  9. that the scope of any claim of the complete specification is not sufficiently and clearly defined or that any claim of the complete specification is not fairly based on the matter disclosed in the specification;
  10. that the patent was obtained on a false suggestion or representation;
  11. that the subject of any claim of the complete specification is not patentable under this Act;
  12. that the invention so far as claimed in any claim of the complete specification was secretly used in India, otherwise than as mentioned in sub-section (3), before the priority date of the claim;
  13. that the applicant for the patent has failed to disclose to the Controller the information required by section 8 or has furnished information which in any material particular was false to his knowledge;
  14. that the applicant contravened any direction for secrecy passed under section 35
  15. that leave to amend the complete specification under section 57 or section 58 was obtained by fraud.
  16. that the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention;
  17. that the invention so far as claimed in any claim of the complete specification was anticipated having regard to the knowledge, oral or otherwise, available within any local or indigenous community in India or elsewhere.
  1. Does revocation restrict itself to Section 64?

It is important to note that section 64 does not restrict grounds to be used in revocation to only those provided in section 64 whereas section 25 (2) setting out grounds used in post-grant opposition proceedings is restrictive in nature.

  1. What are the other provisions concerning revocation?

Under Section 65, if a patent is claimed to be related to atomic energy, a revocation petition can be filed against it. Such patent shall not be granted under the Atomic Energy Act, 1962 and shall be revoked. Under Section 66, if the Central Government is of the opinion that a patent or the mode in which it is exercised was mischievous to the State or prejudicial to the public, after giving an opportunity to the patentee to be heard, it may make such declaration in the Official Gazette and the patent shall stand revoked.

Moreover in the Enercon (India) Ltd and Ors. v Enercon Gmbh (2014) 5 SCC 1 , it was laid down by the Supreme Court that when post grant opposition proceedings are instituted by a party, he cannot institute a revocation petition or counter-claim of revocation proceeding against the same patent.

  1. “‘Person interested’ under Section 64 would mean a person who has a direct, present and tangible commercial interest which is injured or affected by the continuance of the patent on the register. (Ajay Industrial Corporation v Shiro Kanao of Ibaraki City AIR 1983 Del 496)”

About the Author :  Ms. Anjana Mohan, Symbiosis Law School, Pune, intern at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers. Queries regarding this may be directed to swapnil@khuranaandkhurana.com or swapnils@khuranaandkhurana.com.

Section 3 (K) of Indian Patent Act: Case Study

Ms. Anjana Mohan, intern at Khurana and Khurana, Advocates and IP Attorneys attempts to analyze case study related to section 3 (k) of Patent Act, 1970.

ACCENTURE GLOBAL SERVICE GMBH (Appellants) V

ASSISTANT CONTROLLER OF PATENTS &

DESIGN AND THE EXAMINER OF PATENTS (Respondents)

CITATION- OA/22/2009/PT/DEL and Miscellaneous Petition No. 118/2012 in OA/22/2009/PT/DEL

HON’BLE JUDGES/CORAM:

Prabha Sridevan, J. (Chairman) and D.P.S. Parmar, Member (T)

Bibliographic Details:

Patent Application number 01398/DELNP/2003
Title Distributed Development Environment For Building Internet Applications By Developers At Remote Locations.
Applicant Accenture global services limited
Date of filing 01/09/2003
Date of publication of application 27/05/2005
Date of First Examination  Report 29/01/2008
Matter coming to IPAB 26/09/2012

As focus of the article is on section 3 (k), it has been reproduced below. For those who are new to this topic, section 3 of the Indian Patents Act, 1970 bars patent eligibility of some inventions.

Section 3 (k):

A mathematical or business method or a computer programme per se or algorithms

The appellants filed a PCT National phase application No. 01398/DELNP/2003 dated 01/09/2003 with 22 claims based on a PCT application No. PCT/US02/04964. On 03.02.2004 Form 13 was filed and claims were suo moto reduced to 18 and claims 19-22 were deleted.

In the First Examination Report (FER) dated 29/01/2008, based on the amended claims following objections, Inter-alia, were raised:-

  1. Claims 1-18 are not patentable in light of certain prior arts (US 5907704, US 6145119, US 5911075, US 5966535 and US 6014666).
  1. Claims in essence fall within the sense of section 3(k) of the Patent Act, 1970 (as amended).

During the hearing, the appellants submitted revised set of the claims, a new Claim 19 was also added without seeking amendment under section 57 and principle claim 1 is amended.

Appellant alleged that respondent’s order issued is influenced by incorrect facts and without application of mind and should be subjected to correction as Respondent indicated in the impugned order that the method claims were deleted by the Applicant only after raising of the objection by the Patent Office and have therefore on their own concluded that the objections raised by the Patent Office were correct and valid.  Appellant indicated fact that the method claims had been deleted from the present set of claims even before the filing a request for examination and only system claims were examined by the Examiner.

In the appeal it was found that allegations of appellant were true and board found it sufficient to say that the respondent has not applied his mind based on the existing facts.

Appellant alleged that ‘Applicable Standards’ relied on by the respondent to refuse the patent are neither mentioned in the Indian Patent Act nor in the Patent Office Manual or in guidelines by the Indian Courts in such matters.

Respondent had relied on below standards:

“1. A hardware implementation performing a novel function is not patentable if that particular hardware is known or is obvious irrespective of the function performed.

  1. If the novel features of the invention resides in a set of instructions (programme) designed to cause the hardware to perform the desired operations without special adoption of the hardware or modification of the hardware, then the matter claimed either alone or in combination is not patentable.”

IPAB agreed to such allegations.

IPAB also observed that passing the impugned order without giving appellant opportunity to amend the claims caused violation of the principle of natural justice and it is unsustainable in law.

Court did not go into the details of the merit of the case, even though appellant had submitted the argument relating to the merits, as it remanded the case back to the respondent.

Later, when invention was analyzed on merits, Indian Patent Office passed an order on May 10, 2013 to grant the application with below observation:

‘the invention as claimed is not software per se but , a system is claimed which is having the improvement in web services and software. the invention since not falling in the category of section 3(K), viz software per se , objection is waived and patent is granted’