Category Archives: Patents

Patent Filing Procedure: Vietnam

Step 1: Filing:

  • Who may apply: Article 86 and 89:
  • Authors who have created inventions with their own efforts and expenses
  • Organizations or individuals who have supplied funs and material facilities to authors in the form of job assignment or hiring unless otherwise agreed by the involved parties.
  • Foreign nationals residing permanently
  • Foreign organizations having a production or trading establishment
  • Non-resident foreign nationals or organizations not having a production or trading establishment shall apply through a lawful representative.
  • Documents required: Section 100
  • Declaration for registration in the prescribed form
  • Documents, samples and information identifying the invention
  • Power of attorney (if applied through representative)
  • Documents evidencing the registration right if such right is acquired by another person
  • Documents evidencing the priority right, if it is claimed
  • Vouchers of payment of fees and charges
  • A copy of the first application certified by the registration office
  • Requirements of the registration application:
  • Description of the invention, along with scope of protection
  • The scope of protection must be described in the form of technical combinations which are necessary and sufficient to identify the scope of rights to such inventions, and compatible with the description and drawings (if any)
  • Abstract, disclosing the principal features
  • Fully and clearly disclosing the nature of the invention to the extent that such invention may be realized by a person with average knowledge in the art
  • Briefly explaining the accompanied drawings, if any
  • Clarifying the novelty, inventive step and susceptibility of industrial application of the invention
  • Filing Date: Article 108:
  • All applications shall be received by the State administrative authority.
  • The filing date shall be the one on which the application is received by the state administrative authority.
  • First to file: Article 90:
  • Where two or more applications are filed by several people to register the same invention, protection may only be granted to the valid application with the earliest date of priority or filing date among the applications that satisfy all the requirements.
  • Vietnam is a member of PCT, hence international applications are also accepted.
  • Filing fees:
  • Filed in paper form without digital database of the whole content of the application: 180 thousand VND.
  • Filed in paper form with digital database of the whole content of the application: 150 thousand VND.
  • Filed online: 100 thousand VND.
  • PCT filing, excluding fees and charges collected by the international bureau: 500 thousand VND.

Step 2: Examination:

  • The application shall be examined within 1 month from the filing date (Article 119).
  • Formal Examination: Article 109:
  • To verify the formal validity of the application, an examination process shall be conducted.
  • Substantive Examination: Article 119:
  • 12 months from the date of publication of invention. If a request for substantive examination is filed before the date of application publication, or from the date of receipt of a request for substantive examination if such request is filed after the date of application publication
  • Invalidity in the following circumstances:
  • The applicant does not fulfil the requirements of formality;
  • The subject matter of the application is not eligible for protection;
  • The applicant does not have the right to registration;
  • The application was filed in contrary to the mode of filing;
  • The applicant fails to pay the fees and charges.

Step 3: Acceptance/ Refusal:

  • The application for registration may be accepted with or without amendments.
  • Until the notice of refusal by the State administrative authority, the applicant shall have the following rights:
  • To make amendment or supplement to the application;
  • To divide the application;
  • To request for recording changes in name or address of the applicant;
  • To request for recording changes in the applicant as a result of assignment under the contract, as a result of inheritance, bequest, or under a decision of an authority;
  • Any amendment or supplement to an industrial property registration application must not expand the scope of the subject matter disclosed or specified in the application and must not change the substance of the subject matter claimed for registration in the application and shall ensure the unity of the application.
  • Fee for amending applications, including for request of supplement, separation, assignment, change (per each amendment/ application): 120 thousand VND.
  • Refusal: Article 117:

Refusal to register an application may be on the following grounds:

  • The subject matter claimed in the application does not fulfil the protection requirements;
  • The application satisfies all the conditions for the issue of a protection title but is not the application with the earliest filing date or priority date as in the case referred to in Article 90.1 of this Law.
  • The application falls within the cases referred to in Article 90.1 of this Law but a consensus of all the applicants is not reached.
  • The State administrative authority shall serve a notice of an intended refusal to grant a Protection Title, in which the reasons are clearly stated with a set time limit for the applicant to oppose to such intended refusal.
  • The State administrative authority shall serve a notice of the refusal to grant a Protection Title if the applicant has no objection or has unjustifiable objection to such intended refusal.

Step 4: Publication:

  • Article 110: An industrial property registration application which has been accepted as being valid by the State administrative authority shall be published in the Industrial Property Official Gazette.
  • An invention registration application shall be published in the 19th month as from the filing date or the priority date, as applicable, or at an earlier time at the request of the applicant.
  • Fee for publication of application, including application for amendment, supplement, separation, assignment (each application): 120 thousand VND.
  • The application for registration shall be examined as to its substance within 6 months from the date of its publication.
  • Charge for substantive examination of application (for each group of six products/services) – without information searching charge: 420 thousand VND.

Step 5: Protection Title:

  • Article 93 stipulates the validity of the protection titles:
  • It is valid throughout the territory of Vietnam.
  • The registration of Patent shall be valid up to 20 years from the date of filing. Their validity commences on the date of grant of protection.
  • Rights accruing after registration: Article 122 and 123:
  • Moral Rights:
  • To be named as authors in invention or utility patents
  • To be acknowledged as authors in documents in which inventions are published or introduced.
  • Economic rights:
  • Owners of inventions are obliged to pay remuneration to their authors, unless otherwise agreed by the parties.
  • Minimum level of remuneration:
  • 10% of the profit amount gained from the use of invention
  • 15% of the total amount received by the owner in each payment for licensing of an invention
  • To use or permit others to use the industrial property object in accordance with Article 124 and Chapter X of the law (Transfer of rights: Assignment and Licensing):
  • Manufacturing the protected product
  • Applying the protected process
  • Exploiting utilities of the protected product or the product manufactured under the protected process
  • Circulating, advertising, offering, stocking for circulation the product
  • Importing the product
  • To prohibit others from using the industrial property object in accordance with Article 125 (Right to prohibit others from using industrial property objects).
  • To dispose of the industrial property object in accordance with Chapter X of this Law (Transfer of rights: Assignment and Licensing).

Biological Diversity Act, 2002 and Patenting of Biological Inventions in India – Part I (Section – 6)

The Biological Diversity Act of 2002 (BDA) is a piece of Indian legislation which came into being in response to compliance with the Convention on Biological Diversity (CBD), to which India is a ratified member. In fact, India has taken the lead among developing and developed nations both in introducing a substantive legislation in conformance with the objectives of the CBD.

The objective of the BDA is broadly to conserve India’s biological diversity, ensure sustainable use of its biological resources, and ensure equitable sharing of benefits arising out of use of its biological resources. Though the BDA came into being in 2002, it was only in 2004 when the Rules were notified, hence, for all practical purposes, the effective implementation date of the BDA is 2004.

The BDA, in general, quite broadly covers access and use of biological resources occurring in India or knowledge associated thereto for various purposes, be it for research or commercial activity, by Indian citizens or non-citizens alike, in India or abroad.

Recognizing the importance of IPR, the BDA makes special mention of the application of the provisions of the BDA to IPR in Section 61. A careful reading of Section 6 reveals the truly wide mandate of the BDA with regard to IPR. Firstly, it is to be noted that Section 6 is not limited to Indian citizens or Indian residents (as defined in the Income Tax Act, 1961). The term “no person” used in Section 6, sub-clause 1 can be broadly interpreted to include any natural or legal person irrespective of nationality. Secondly, the application of the law is extra-territorial in that it is applicable upon IPR laws of other foreign countries also. Thirdly, it is interesting to note that the scope of the said section is not merely limited to biological material “occurring” in India. In fact, the term used is “obtained” from India, which is suggestive in its broadest implication that even exotic material would be within the ambit as long as it is obtained from India.

The language of Section 6 of the BDA leaves open a lot of questions, many of which have no definitive answers due to lack of any judicial precedents established by the judiciary of India. For instance, Section 6 states that permission of the NBA is required when IPR is applied for research or information based on a biological resource obtained from India. There is lack of clarity as to how the NBA will construe the scope of “obtained”? As the objective of the NBA is to safeguard Indian biodiversity, will “obtaining” be limited to only those biological resources which are literally sourced from within India? What about Indian biological material sourced in India but subsequently exported, and obtained elsewhere (outside of India)? Alternatively, does the term “obtained” necessarily mean that the biological resource shall also be found to be “occurring” in India? Does “occurring” mean only indigenous biological resources which are sufficiently distinct compared to their foreign counterparts? Or will it include biological resource of foreign origin which is also found in India regardless of any distinctive trait? How does one determine any time frame after which a biological resource can be considered to be “occurring” in India?

In another instance, Section 6 clearly states that no application for IPR rights is to be filed in any foreign country without prior NBA approval. The first proviso provides that in the event an application is filed, NBA permission may be obtained after the acceptance of the patent but before patent grant by the patent authority concerned. An obvious question here is whether the foreign patent office is legally bound to keep the patent grant in abeyance until NBA approval is provided?

In yet another instance, as per Section 6, the term “no person” is used. While it is clear that the term includes any Indian citizen, or a resident of India (as defined in the Income Tax Act, 1961), does it cover a foreign national operating outside India? A casual reading of the statute would suggest so, however, it puts an unnecessary burden on such a particular group to comply with Indian laws, which they may be contravening without their knowledge! This would make the jurisdictional reach of Act worldwide, whereas Section 1(2) clearly states that the Act extends to the whole of India and not elsewhere!

The definition of “biological resource” can be found in Section 2(c)2 of the BDA. It may be appreciated that the definition is quite broad, while specifically excluding value added products3 and human genetic material. It is quite clear from the definition in Section 2(c) that the legislation is principally directed towards patenting of biological inventions, which puts an additional burden, largely regulatory in nature, on the Applicant to comply with.

The gravity of non-compliance with Section 6 of the BDA can be appreciated from Sections 55(1)4, 575 and Section 586 of the Act. Briefly, under Section 55(1) and 57, the punishment for contravention of Section 6 is imprisonment for a term of up to 5 years, or a fine of up to INR 10,00,000 or more, or both. Under Section 58, such offences are cognizable and non-bailable. This is of particular significance in that the police, upon a complaint, can arrest the person concerned without prior Judge order, and bail is not a matter of right, but at the discretion of the Judge!

Under current Indian Patent Office (IPO) practice, it is observed that for patent applications, which disclose any biological material, in the First Examination Report (FER), it is almost routine to come across an objection requiring clarification as to furnishing of NBA approval in the case of use of any biological resource obtained from India. As mentioned previously, as per Section 6 of the NBA, grant of the patent would be kept in abeyance until proof of NBA approval is provided.  It should be pointed out that for patenting purposes, the application of provisions of the NBA as per the IPO is not limited merely to claimed biological resource. Instead, it encompasses use of any such resource or knowledge thereof in any part of the application. For instance, use of any biological resource for validation purposes of a claimed product would fall within the ambit of NBA!

In the case of national phase or convention applications deriving priority from a foreign country, typically a declaration may be provided stating that no biological resource obtained from India has been used in the invention. Understandably, it may be difficult for an Indian applicant to do so.

Interestingly, it is to be noted while the IPO does not require evidence of compliance with any other law of the land prior to grant of patents, it particularly requires compliance with the BDA! This “cooperation” between the IPO and the NBA is admirable in that it represents a cooperation between two different ministries, namely, The Ministry of Environment and Forests under which the NBA is a statutory autonomous body, and The Ministry of Commerce and Industry (Department of Industrial Policy & Promotion, under which the Office of the Controller General of Patents, Designs & Trademark functions.

In conclusion, under current IPO practice regime, any Applicant using any biological resource (as defined under Section 2(c) of the BDA) is suggested that he seek NBA clearance at the earliest instance in order to ensure a timely and smooth prosecution progress.

In the next part of this article, provisions of the BDA with respect to access of biological resources by Indian citizens or non-citizens, and sharing of research results generated from such biological resources will be elucidated and discussed.

About the Author: Amitavo Mitra, Sr. Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at amitavo@khuranaandkhurana.com.

1Section 6 of BDA: (1)“ No person shall apply for any intellectual property right, by whatever name called, in or outside India for any invention based on any research or information on a biological resource obtained from India without obtaining the previous approval of the National Biodiversity Authority before making such application

Provided that if a person applies for a patent, permission of the National Biodiversity Authority may be obtained after the acceptance of the patent but before the seating of tile patent by the patent authority concerned

Provided further that the National Biodiversity Authority shall dispose of the application for permission made to it within a period of ninety days from the date of receipt thereof”.

(2) “The National Biodiversity Authority may, while granting the approval under this section, impose benefit sharing fee or royalty or both or impose conditions including the sharing of financial benefits arising out of the commercial utilization of such rights”.

(3) “The provisions of this section shall not apply to any person making an application for any right under any law relating to protection of plant varieties enacted by Parliament”.

(4) “Where any right is granted under law referred to in sub-section (3), the concerned authority granting such right shall endorse a copy of such document granting the right to the National Biodiversity Authority”.

2Section 2(c) of BDA: “biological resources” means plants, animals and micro-organisms or parts thereof, their genetic material and by-products (excluding value added products) with actual or potential use or value, but does not include human genetic material.

3Section 2(p) of BDA: “value added products” means products which may contain portions or extracts of plants and animals in unrecognizable and physically inseparable form.

4Section 55(1) of BDA: “Whoever contravenes or to or abets the contravention of the provisions of section 3 or section 4 or section 6 shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to ten lakh rupees and where the damage caused exceeds tend lakh rupees such fine may commensurate with the damage caused, or with both”.

5Section 57 of BDA: (1) “Where an offence or contravention under this Act has been committed by a company, every person who at the time the offence or contravention was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence or contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention”.

(2) “Notwithstanding anything contained in sub-section (1), where an offence or contravention under this Act has been committed by a company and it is proved that the offence or contravention has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence or contravention and shall be liable to be proceeded against and punished accordingly.

 

6Section 58 of BDA: “The offences under this Act shall be cognizable and non-bailable”.

Can non-compliance of mandatory provisions under the patents act, 1970 land you behind the bars?

Technically YES.

The Patents Act, 1970 (hereinafter referred to as the “Act”) is a piece of legislation, penalties under which are largely civil in nature, such as fines, award of monetary damages, injunction, loss of patentee rights including compulsory licensing, abandonment of application or revocation of a patent.

However, violation of certain provisions, such as Section 39 attracts liabilities as set forth in Section 40, and Section 118 of the Act.

In 2002, the foreign filing license (FFL) requirement was introduced in the Act. This requirement required that any inventor / applicant who is a resident of India should file or cause to be filed a patent application for his/her own invention first in India; and only after a period of six weeks after the date of filing of the patent application, a filing could be done in a country outside India. Such a requirement clearly indicates that any Applicant (including inventor) who is a resident of India and desirous to file a patent application firstly outside India is required to U/S 39 to seek a Foreign Filing License (FFL) prior to filing the patent application in any foreign jurisdiction. The principal intent behind FFL is to allow the Indian Patent Office (IPO) to track applications which may be of national importance and/or of sensitive nature, such as atomic energy, defense or national security. It is to be noted that there is no provision under the Act to seek a FFL retrospectively, which makes adherence to the provisions of Section 39 and related Sections that much more critical and important.

Under Section 39: “Residents not to apply for patents outside India without prior permission.—(1) No person resident in India shall, except under the authority of a written permit sought in the manner prescribed and granted by or on behalf of the Controller, make or cause to be made any application outside India for the grant of a patent for an invention unless—

(a) an application for a patent for the same invention has been made in India, not less than six weeks before the application outside India; and

(b) either no direction has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.

(2) The Controller shall dispose of every such application within such period as may be prescribed: Provided that if the invention is relevant for defence purpose or atomic energy, the Controller shall not grant permit without the prior consent of the Central Government.

(3) This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India”.

It is also important to note that, the scope of Section 39 with respect to “Residents” is not limited to citizens of India or people (citizens of India or elsewhere) living in India. The term “resident” in law is construed to be broader than the term “citizen.” The term “resident” is not defined anywhere in the Patents Act of 1970. The lack of a definition for the term “resident” in the Act necessitates that this interpretation be made from the definition of “resident” as given in the Income Tax Act, 1961. According to the Indian Income Tax Act, an individual is termed as a ‘Resident of India’ if he stays for the prescribed period during a fiscal year i.e. 1st April to 31st March, either for: 182 days or more; or Has been in India in the aggregate for 365 days or more in the previous 4 years. Thus, the scope of who is a resident, while not defined in the Act, can be found in Section 6 of the Income Tax Act, 19611.

Violation of directions under Section 39 attracts civil liabilities under Section 402 of the Act.  Briefly, under the said Section, contravention of Section 39 would result in the application deemed to have been abandoned, and if granted, shall be liable to be revoked under Section 64, sub-clause (n). The language of the provision clearly suggests that non-compliance of Section 39 would severely prejudice the interests of a patent applicant or patentee. A plain reading of the statute suggests that there is no option provided to the applicant to remedy the deficiency, and there are no judicial precedents established by the higher judiciary which may allow any such relief to the Applicant.

More importantly, violations of directions under Section 39 also attract criminal liabilities under Section 1183 of the Act, in which the term of imprisonment may extend to 2 years or a monetary fine imposed on the inventor, in addition to abandonment of the patent application or revocation of the patent even if it is already granted.

It is to be noted that judicial proceedings under Section 118 are to be initiated by the Controller. However, since the Controller has no powers to pass any order of imprisonment, the matter is to be sent to the Courts for formal proceedings.

The language of the said Section, particularly in reference to the word “shall” suggests that judicial proceedings are to be mandatorily initiated and that the Controller has no discretion in the matter. It is up to the Judge’s discretion to pass an order of fine, imprisonment or both. While there is no prior case of prosecution under Section 118, it is important for an Applicant to assume strict compliance in order to avoid unnecessary judicial proceedings.

Therefore, it is in the interests of the Applicant to not only be aware of the provisions of Section 39, 40, and 118, but also take timely action to be in compliance. The said Sections assume more relevance in the present context as many foreign companies have R&D centers in India, research findings of which are filed as patent applications first outside India.  Another common scenario is Indian citizens carrying out research abroad which can lead to generation of patents, or conversely, foreign citizens in India carrying out research. In any of the instances, it is likely that the foreign patent attorney may not be aware of the particular provisions as discussed herein and may inadvertently not only prejudice patentee rights, but also expose the applicant to court proceedings.

Thus, it is always recommended that, in the case of doubt over the residency status of an inventor, it is always safer to first file a patent application in India or to obtain written permission from the Controller of Patents for the grant of foreign filing license and thereby, safeguard the inventor from criminal consequences of Section 118 of The Indian Patents Act of 1970.

ABOUT THE AUTHOR:

Dr. Amitavo Mitra is a Patent Agent and Sr. Patent Associate at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the author and do not reflect the views of either of any of the employees or employers.

Queries regarding this may be directed to amitavo@khuranaandkhurana.com or swapnils@khuranaandkhurana.com

1Section 6 of Income Tax Act, 1961: (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty- two days or more; or (b) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty- five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

Explanation.- In the case of an individual,- (a) being a citizen of India, who leaves India in any previous year 4 as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958 ), or] for the purposes of employment outside India, the provisions of subclause (c) shall apply in relation to that year as if for the words” sixty days”, occurring therein, the words” one hundred and eighty two days” had been substituted; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub- clause (c) shall apply in relation to that year as if for the words” sixty days”, occurring therein, the words 5 one hundred and eighty- two days”] had been substituted.]

(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

(3) A company is said to be resident in India in any previous year, if- (i) it is an Indian company; or (ii) during that year, the control and management of its affairs is situated wholly in India.

(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.

(6) A person is said to be” not ordinarily resident” in India in any previous year if such person is- (a) an individual who has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more; or (b) Hindu undivided family whose manager has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more.

2 Section 40 of Patents Act, 1970: “Liability for contravention of section 35 or section 39.—Without prejudice to the provisions contained in Chapter XX, if in respect of an application for a patent any person contravenes any direction as to secrecy given by the Controller under section 35 or makes or causes to be made an application for grant of a patent outside India in contravention of section 39 the application for patent under this Act shall be deemed to have been abandoned and the patent granted, if any, shall be liable to be revoked under section 64”.

3 Section 118 of the Patents Act, 1970: “Contravention of secrecy provisions relating to certain inventions.—If any person fails to comply with any direction given under section 35 or makes or causes to be made an application for the grant of a patent in contravention of section 39 he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both”.

Early publication of patent application under the Indian patent law system

Publication of a patent application is one of the prime stages in the process of getting a patent. The publication date of the patent application is considered of a specific significance because the applicants’ advantages as well as rights start from the publication date. Even though the applicant cannot seek any infringement proceedings till the patent is granted.

Generally, the patent application is published in the Official Patent Office Journal automatically after 18 months from the date of filing of the application or the priority claimed date, whichever is earlier. It is to be noted that only complete applications are published, whereas the provisional applications, unless filed as a complete after provisional (CAP) application (i.e., complete application before the expiry if 12 month form the filing date of the provisional application), are neither published nor examined by the Patent Office. The provisional application will be deemed abandoned at the expiry of the 12 month period if a CAP application is not filed.

The provision for early publication is given under Section 11A(2) of the Indian Patents Act, 1970, which states that “The applicant may, in the prescribed manner, request the Controller to publish his application at any time before the expiry of the period prescribed under sub‑section (1)1 and subject to the provisions of sub‑section (3)2, the Controller shall publish such application as soon as possible”.

Thus, a request for early publication can be made by filing a Form 9 along with a payment of fees of INR 2500 (if applicant is a natural person/startup) or INR 6250 (if applicant is a small entity) or INR 12500 (if applicant is other than natural person/startup or small entity). Under rule 24A, and upon the request for early publication, the application will normally be published within 1 month from the date of such request.

It is important to note that the provision to file the request for early publication for any patent application is available ONLY to the Applicant of the patent application, whereas any other person, apart from the Applicant of the patent application, cannot file such request for any reason whatsoever.

Advantages of early publication:

Reducing prosecution time. Examination of a patent application takes place only after publication of the patent application (subject to the queue position of the application pending examination and filing of request for examination by way of Form 18). Provided that if an Applicant files a complete application in the first instance along with Form 18 and Form 9, the Applicant stands to advance prosecution time by approximately 17 months. In another example, if the Applicant files a CAP along with Form 18 and Form 9 at the 12 month deadline, the Applicant stands to advance prosecution time by approximately 5 months.
Start time of patentee rights. A patentee can institute a suit or other proceeding for infringement against the infringing party only after grant of the patent, however, the rights start accruing only after the publication date. Therefore, in the instance of early publication, the applicant gets “extra” time for which damages may be claimed from potential infringers.
Prior art: A patent application does not become prior art until it is published, i.e. it becomes a prior art only after 18 months from the date of filing of the application or the priority claimed date, whichever is earlier. An applicant interested in securing his patent rights at the earliest can take advantage of detracting his competitors by making his invention/application public at the earliest instance.
Discouraging competitors: Early publication allows the applicant to advertise to potential competitors that a particular subject matter is already a subject of the patenting process. This may serve to detract the competitor from coming up with a similar product or process. However, with India following first-to-file system, the utility of this advantage has diminished and of limited value.
Disadvantages of early publication:

Fees: Though the fees for filing a request for early publication (as stated above) is not significant, however, for many individual or small entities, the amount may not be trivial and represents a cost over and above the regular fees.
Withdrawal of application: Under normal procedure, the applicant has upto the 15th month from priority date to withdraw the application. However, with early publication, depending upon when the request is made, the Applicant’s choice to withdraw may be greatly curtailed.
Pay-to-play: The early publication feature allows those with financial wherewithal to leapfrog the examination queue in part by eliminating or substantially decreasing the latency time while the application is not published. This may be unfair to applicants who otherwise cannot avail of this opportunity.
Risk of pre-grant opposition: A pre-grant opposition can be filed by any person upon publication of the application and at any time before grant of the patent if the prescribed examination fee has been paid. Thereby, early publication certainly gives more time for the opponents for pre-grant opposition.
Overall, it can be appreciated that based on the strategy of the Applicant and his interest, the provision of early publication can be exercised at the Applicants discretion to maximize the value of the patent.

It should be noted that given the long pendency of applications currently awaiting examination at the Indian Patent Office, early publication just might be a relatively non-expensive method (for those who can afford it) to expedite the prosecution process.

1Section 11A(1): Save as otherwise provided, no application for patent shall ordinarily be open to the public for such period as may be prescribed.

2Section 11A(3): Every application for a patent shall, on the expiry of the period specified under sub‑section (1), be published, except in cases where the application-(a) in which secrecy direction is imposed under section 35; or (b) has been abandoned under sub‑section (1) of section 9; or (c) has been withdrawn three months prior to the period specified under sub‑section (1).

ABOUT THE AUTHOR:

Mr. Amitavo Mitra, Patent Agent and Sr. Patent Associate at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the author and do not reflect the views of either of any of the employees or employers.

Queries regarding this may be directed to amitavo@khuranaandkhurana.com or swapnils@khuranaandkhurana.com

Injunction against Cipla COPD Drug ‘INDAFLO’ Upheld: Delhi High Court

Reportedly, on an appeal filed by Cipla pertaining to COPD drug INDAFLO, the Delhi High court division bench maintained the interim injunction imposed by single judge against Cipla.  As per the order, Cipla has now been restrained from, inter alia, using, manufacturing, importing, selling any pharmaceutical products etc. containing ‘INDACATEROL‘ or ‘INDACATEROL Maleate‘, alone or in combination with any other compound or Active Pharmaceutical Ingredient (API) leading to the infringement of Novartis patent over INDACATEROL.

Background:

INDACATEROL is a bronchodilator and used in the treatment of the patients suffering from Chronic Obstructive Pulmonary Disease (COPD). The drug has been protected and patented by Novartis under Patent no. 222346 and Novartis markets the drug in India through Lupin under the trade name “ONBREZ”. However, Cipla had launched a generic version of the drug with the trade name ‘UNIBREZ’ to which Novartis filed a trademark infringement suit and Cipla agreed to change the trade name to ‘INDAFLO’. Further, Novartis moved to Delhi High Court to seek permanent injunction against manufacturing and selling of INDAFLO and thereby stopping Cipla to infringe its patent over this drug. Hon’ble Single Judge Justice Manmohan Singh passed order for interim injunction against Cipla, until the decision on the application for compulsory license to manufacture and sell INDAFLO is decided by the respective authority.

Being aggrieved by the order of the Learned Single Judge, Cipla filed an appeal challenging the interim injunction.

Arguments and Observations:

Cipla contended and relied on Section 48 (Rights of the Patentees) of the Patent Act 1970, referring to the wordings as mentioned in Section 48 “subject to other provisions in the Act” to be viewed in the light of Section 83 (dealing with General Principles applicable to working of patented inventions) of this Act.

Taking Sections 48 and 83 of the Patents Act, Cipla argued that since Novartis does not manufacture the drug in India and therefore Novartis does not comply with the principles under Section 83. The court rejected this argument stating that Section 83 has no relevance as far as Rights of Patentees as mentioned under Section 48 is concerned.

As per the bench of two judges, Section 83 begins with the words ‘without prejudice to the other provisions contained in this Act’ meaning that Section 83 is without prejudice to any sections in this Act which includes Section 48 as well and further it has been stated that Section 83 belongs to the different chapter of the Act and therefore this does not have an effect on the rights awarded to the patentee under Section 48 of this Act.

Cipla has further argued that since Novartis does not practice the patent in India as it imports the drug in limited quantities and market through Lupin, Cipla should not be restricted to manufacture and sell its generic version. Taking the 2002 case Telemecanique in light, the bench of the two judges rejected the Cipla’s claim, stating that the working of the patent need not compulsorily imply to only manufacture in India, however, the patent can be exercised by even importing the products. However, the court at this stage concluded that on the basis of data submitted by Novartis, sufficient quantities are imported in India since other drugs for treating COPD are also available in the market and also INDACATEROL does not fall in the category of Life Saving Drug.

Cipla further argued on the grounds of “public interest” that Novartis is not importing the sufficient quantity of the drug and also the drug marketed by Novartis is approx. 5 times as expensive as compared to Cipla’s generic version. Cipla argued that pubic interest would not be served in case the injunction is allowed to remain and contended that while granting an injunction “public interest” has to be considered as one of the four aspects (in addition to prima facie case, balance of convenience and irreparable harm and injury).  To which, the court rejected this plea stating that “public interest” is only one of the four factors to be considered while granting an injunction. Further, the bench brought it to the notice that Cipla in this case till now has not even proved that the grant of injunction against Cipla would really harm the public interest. Whereas, Novartis has duly established the validity of the patent and the revocation of the interim injunction in this case, would cause irreparable injury to Novartis under their rights as Patentees as mentioned under section 48 of Indian Patent Act.

Judgment:

Therefore, the bench maintained the interim injunction passed by Hon’ble Judge Manmohan Singh judgment and refused to interfere with the impugned judgment proving to be a disappointment for Cipla in the respiratory drugs market.

About the Author: Ankur Gupta, Lead Operations-Hyderabad, IIPRD and can be reached at: ankurg@iiprd.com

Delhi High Court sought Explanation through Counter Affidavit over Repudiation of Patent application for Xtandi

Xtandi, the wonder drug for prostate cancer, was developed at UCLA, Los Angeles, by the innovation of NIH and Department of Defense grants. The drug was later licensed to Medivation, a biopharma company, which in October 2009 struck a deal with Japanese Astellas Pharma to collaborate on developing and commercializing Xtandi. The two companies now work in partnership to market the drug in US while Astellas Pharma is entrusted with the commercialization of the drug even outside US. The rights to Xtandi were later taken over by Pfizer Inc as a part of Medivation acquisition in August 2016.

In the current scenario, Astellas Pharma, which sells Xtandi in India (a country where most of the people that require the drug make just over $4 per day), is condemned for making the drug available to the Indian metastatic castration-resistant prostate cancer patients at a whopping price of 335,000 rupees or about $5014.60 US Dollars for 112 capsules (a monthly supply), translating to roughly $180 or Rs. 11,000 per day. To this condemnation, the Japanese Pharma giant responded by saying that the cost has been fixed to recuperate the cost of innovation and is commensurate with patient benefit. The blockbuster drug currently nets nearly $3 billion in worldwide sales[1].

The patent application towards Xtandi, titled “DIARYHDANTOIN COMPOUNDS”, was duly filed by UCLA with Delhi Patent Office on December 13, 2007 (Application Number – 9668/DELNP/2007). The application was rejected by the Delhi Patent Office in November 2016. Hitherto, the varsity has been granted patent for this innovation in over 50 jurisdictions across the world since 2007. The rejection of the patent application in India came in the wake of a large array of pre-grant oppositions that were filed by a clutch of companies[2] like Fresenius Kabi on December 12, 2012, BDR pharma on July 24, 2013, Indian Pharmaceutical Alliance, and a few individuals -Mr.Umesh Shah and Ms. SheelaPawar on the following grounds of the Indian Patents Act:

  1. Section 25(1)(e) – Lack of Inventive Step
  2. Section 25(1)(f) – Not inventive (u/s 3(d) and u/s 3(e))
  3. Section 25(1)(g) – Lack of Clarity and sufficiency

The opponents had argued that the claimed compound is not patentable under Section 3(d) of the Patents Act, 1970 as amended by the Patents (Amendment) Act, 2005 as it is a new form of known substances. It was also held that the inventiondid not entail any material improvement in efficacy. Additionally, the Assistant Controller in the case held that the claimed invention did not entail an inventive step over US patent ‘981 and ‘257, inasmuch as it did not entail any non-obvious addition to the compounds envisaged by these documents[3].

For the reasons indicated supra made the Assistant Controller of Patents Designs, Mr. Umesh Chandra Pandey, rejected the invention under Section 25(1) in November 2016 (order by Patent Office). However, now the UCLA (the applicant), represented by senior advocate P Chidambaram, has contended that its application was rejected merely on the ground of opposition by some competitors. The writ petition filed by the UCLA also indicates that even the evidences submitted by UCLA in support of its claims were not considered by IPO and so it has been contested that the application be remanded for consideration of the same[4].

This ongoing attempt of UCLA to get Xtandi (Enzalutamide) patented in India witnessed a development on March 2 when Delhi High Court passed an order in the case of The Regents of the University of California v. Union of India (order), asking the Centre to render an explanation on rejection of patent application (on November 10, 2016).

About the author: Tanu Goyal, Patent Associate at IIPRD and can be reached at: tanu@khuranaandkhurana.com

[1]http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Patent-denied-price-of-prostate-cancer-drug-may-10112016014006

[2]http://www.pharmabiz.com/NewsDetails.aspx?aid=98990&sid=1

[3]http://www.mondaq.com/india/x/576168/Patent/IPO+Rejects+Patent+Application+For+Xtandi+Prostrate+Cancer+Drug

[4]http://www.dnaindia.com/health/report-hc-seeks-reason-for-denial-of-prostrate-cancer-drug-patent-2342983

Khurana & Khurana expands footprint in South East Asia

With business models over the world turning more idea-driven, Intellectual Property Rights (IPRs) are now one of the most valuable assets for any economy. With a significant increase in IPR related activities, South East Asia is developing as a key market for IP Protection and initiating Enforcement actions. Khurana & Khurana, Advocates and IP Attorneys (K&K) one of the leading IP and Commercial law firms in India is committed to provide high quality consistent End-to-End Legal Services in IP and Corporate Legal Matters, and with a belief that success comes only when one has a long-term perspective and high level of client orientation, we are expanding our footprints in South Asian countries (Bangladesh, Vietnam, Myanmar, Nepal) with our strong associations with an objective of being a single-point of contact for IP Prosecution Matters in South-East Asia.

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About K&K

Khurana & Khurana, Advocates and IP Attorneys (K&K) is more than a full-service Intellectual Property and Commercial Law firm.  K&K was formed with a very firm focus on providing end-to-end IP Prosecution/ Litigation and Commercial Law services in a manner that is Corporate Centric and follows stringent delivery practices that are consistent and are above-defined quality standards. K&K works closely with its sister concern IIPRD, both of which supplement each other in order to provide end-to-end IP Legal, Offshored IP Support, and Commercialization/Licensing services to over 3000 Corporates.

Our team of over 95 professionals spread across 6 Offices in India having high level of technical and legal competence, gives us the right competitive edge and positioning, as a law firm focused on creating immense IP value for our clients. K&K, through its experienced and qualified team of Attorneys/Practitioners, across Technology and Legal Domains, gives a rare synergy of legal opinion, out-of-box thinking for the protection of ideas/IP’s and entrepreneurial spirits to its client base. K&K is strongly ranked and recommended by Chambers and Partners, IAM, MIP, Legal 500, Asia IP, among other like agencies, and is an active member of INTA, APAA, AIPLA, LES, and AIPPI.

India’s time to delve into IP laws

Shireen Shukla, legal intern at Kkurana & Khurana, probes the recent International IP Index report, released by U.S. Chamber of Commerce, where India stood at 43rd position, out of 45 countries.

On 8th February, 2017 U.S. Chamber of Commerce released its 5th annual International IP Index, “The Roots of Innovation,” rating 45 world economies on patents, trademarks, copyright, trade secrets, enforcement, and international treaties with the aim to provide both, an IP report card for the world and a guidebook for policymakers seeking to bolster economic growth and innovation.

It is an undeniable fact that protection of intellectual property serves dual role in the economic growth of a country. Where on one hand it promotes innovation by providing legal protection of inventions, on the other it may retard catch-up and learning by restricting the diffusion of innovations. Therefore a sounder IPR protection in a country encourages technology development and technology transfer from developed to least developed countries. Countries that would demonstrate a commitment to IP laws will only reap rewards.

Often we have seen that major companies and brands invest their money or open their outlets in another country only after seeing the soundness of their IP laws. This proves the role of IP laws and enforceability on the GDP of a country.

GIPC is leading a worldwide effort to champion intellectual property rights as vital to creating jobs, saving lives, advancing global economic growth, and generating breakthrough solutions to global challenges  (Reddy, 2017). The Index ranked the IP systems of 45 countries. Where on one hand United States was ranked number 1, India and Pakistan were ranked 43 and 44 respectively.

Image Source: U.S. Chamber International IP Index: http://www.theglobalipcenter.com/ipindex2017-chart/#

 

Some major facts from the IP Index:

  • A pack of global IP leaders emerged among the 2017 Index rankings, with the U.S., UK, Japan, and EU economies, ranked more closely together than ever.
  • Canada signed the Comprehensive Economic and Trade Agreement (CETA), which raised the bar for life sciences IP protection.
  • Russia introduced new forced localization measures.
  • Japan’s score increased by 10% due to ratification of TPP and accession to the Index treaties.
  • South Korea passed amendments to the Patent Law.
  • Uncertainty around software patentability, Section 3(d) of the Patent Law, and High Court copyright decisions in India continue to present challenges.
  • Indonesia’s Patent Law included a heightened efficacy requirement and outlawed second use claims.
  • South Africa introduced new local procurement policies.
  • UAE created a specialized IPR Court.
  • Indian government issued the National Intellectual Property Rights Policy in 2016.

India announced the much-awaited National IPR Policy in May 2016. This act proved to be a positive attitude to foster the IP laws in India. The Policy is a boon for the IP industry as it provides constructive ways and methods to improve IP administration. The policy has enumerated the importance to educate Indian businesses about IP rights.

The Policy makers realizing the real issue in hand, addressed a number of important gaps in India’s national IP environment, which included the need for stronger enforcement of existing IP rights through the building of new state-level IP cells and investing more resources in existing enforcement agencies; reducing processing times for patent and trademark applications; as well as the need for introducing a legislative framework for the protection of trade secrets

Major developments and landmark judgments in Intellectual property laws since 2015:

  • The Delhi high court on 7 October 2015, barred Mumbai-based Glenmark Pharmaceuticals Ltd from selling, distributing, marketing or exporting its anti-diabetes drugs Zita and Zita-Met,as they tentatively infringed the patent of US-based pharmaceuticals company Merck Sharp and Dohme Corp.
  • In March, 2016, the Delhi High court in the case of Ericcson v. CCI for the first time ever, considered at how IP law interfaced with competition law. It allowed Competition Commission of India (CCI) to continue its investigation into anti-competitive practices by Ericsson regarding use of its SEP’s by other companies such as Micromax and Intex.
  • National IPR Policy in 2016, released last year is entirely compliant with the WTO’s agreement on TRIPS.
  • Examination time for trademarks has been reduced from 13 months to 8 months in the 2016 policy.
  • Bombay HC passed a series of judgments cases (Phantm Films pvt, Ltd. v. CBFC & Anr; Eros International Media Ltd. & Another v. Bharat Sanchar Nigam Ltd.) laid down a strict agenda for the grant of John Doe orders leading to path breaking shift in the John Doe jurisprudence in India. The above-mentioned judgments are focused on balancing the interests of not just copyright holders but also the Internet users and innocent third party providers.
  • The judgment by Bombay HC in Eros v. Telemax, is a pioneer that unwrapped the scope of arbitration of IP disputes arising out of licensing and other commercial transactions.
  • In December 2016, the Delhi High Court in the case of Agri Biotech v. Registrar of Plant Varieties declared section 24(5) of the Plant Varieties Act unconstitutional. The court giving a momentous judgment stated that the section violates Article 14 as it gives unchecked powers to the Registrar. The registrar is not required to be from a legal background in order to grant interim relief to a breeder against any abusive third party act during the period its registration application is pending.This lead to arbitrary use of powers by the registrar.

Beside the above-mentioned developments and progressions, PM Narendra Modi’s “Make in India” initiative also aims to promoting foreign direct investment and implementing intellectual property rights. In these initiatives, the government has decided to improve the intellectual property rights for the benefit of innovators and creators by modernizing infrastructure, and using state of the art technology.

One of the most recent and effective change brought in the trademark rules was on 6th march 2017, where the number of trademark forms have been reduced from 74 to 8 with an aim of simplifying the process of trade mark applications. The new rules promote e-filling of the trademark applications. The fee for online filing of the application is 10 per cent lower than that of the physical filing.

Steps India can take to strengthen its IPR laws:

  • India should implement speedy examination and registration procedures.
  • It should take effective steps to achieve the target of one month (as stated in IPR policy 2016).
  • The number of patent examiners and trademark offices should be increased to improve efficiency and disposal speed.
  • Section 3(d) of India’s Patent Act 1970, relating to restrictions on patenting incremental changes should be amended. Norms relating ever greening should also be revised.
  • A new and revised IPR laws and policies should be implemented so as to make it compatible with IPR laws of WIPO, TRIPS and other major dominant countries like US & UK

Every fiscal year, enormous time and money is being invested on R&D to improve the existing status of the Intellectual property laws in India, to bring it at par with the IP laws of US. We hope by following the above guidelines and following the National IPR Policy, India’s position improves in the next International IP Index 2017.

References :

  1. Prashant Reddy, The Press Release Journalism Around the GIPC IP Index, February 13, 2017, < https://spicyip.com/2017/02/the-press-release-journalism-around-the-gipc-ip-index.html&gt; Last accessed: 28th February 2017
  2. Merck Sharp And Dohme Corporation. v. Glenmark Pharmaceutical, FAO (OS) 190/2013, C.M. APPL. 5755/2013, 466/2014 & 467/2014, (Delhi High Court) (20.03.2015)
  3. Telefonaktiebolaget LM Ericsson v. Competition Commission of India, W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014, (Delhi High Court) (30.03.2016)
  4. Phantom Films Pvt. Ltd. v. The Central Board of Film Certification, W.P.(L) 1529 /2016, (Bombay High Court) (13.06.2016)
  5. Eros International Media Limited v. Bharat Sanchar Nigam Limited, C.S. No.620 /2016 & O.A.Nos.763 to 765/2016 (Madras High Court) (25.10.2016)
  6. Eros International Media Limited v. Telemax Links India Pvt. Ltd., Suit no. 331 /2013, (Bombay High Court) ((12.04.2016)
  7. Prabhat Agri Biotech Ltd. v. Registrar of Plant Varities, W.P.(C) 250/2009, (Delhi High Court) (02.12.2016)

 

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

 

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/