Thursday, 24 May 2012

Date of Enforcement and Patent Amendments

The Indian Patents Act, 1970 has been amended in the years 1999, 2002, 2005 and 2006 to harmonize the patent laws and to make them more relevant to the new technologies. Some of the major changes have been allowance of product patents in drugs and chemicals, introduction of pre-grant opposition and changes in timeline and fee structure. Every amendment that is made is associated with a date of enforcement that tells us when the old provisions /act cease to exist and new provisions are enforced. 

This post deals with the apparent confusion that prevailed with respect to date of enforcement of patent amendments and interpretation of patent laws when scope of the laws is not easy to decode. The parties in contention are Philips Electronics India Limited (appellant), Asian Electronics Limited (respondent 1) and Controller General of Patents & Designs (respondent 2).  The appellant had filed an appeal in the High Court of Mumbai against the order of respondent 2 for granting of patent number 193436 (Application No. 545/BOM/1999) belonging to respondent 1. The matter was thereafter transferred by the High Court of Mumbai to the IPAB for hearing. 

Background of the case:

The patent application was accepted and notified in the Gazette of India Part III Section 2 dated July 17, 2004 under Patent Application No. 193436. The notice of opposition to the grant of patent under section 25 and Rule 55 was filed by the appellant on December 14, 2004(prior to the coming into force of the Patents (Amendment) Act, 2005). The opposition was filed on the grounds of non-compliance of section 8 by respondent 1. According to the appellant, respondent 1 has failed to disclose information about the status of foreign filing of the same application to the controller and as a result has failed to fulfill the statutory obligations. Failure to disclose the information about foreign filing has therefore established the grounds of section 25(1) and thus the patent application should not be granted.

The controller heard the matter on June 28, 2006 and ordered the grant of patent on July 24, 2006. The controller based his decision on section 15 of the Patents Act, 1970 as amended by the Patent Amendment Act 2002 (emphasis added), (hereinafter, “Old Act") rather than section 25. Aggrieved by the actions of the controller, the appellant alleged that the controller erred in construing that he could decide an opposition (that was filed under Section 25(1)) under Section 15 of the Patents Act. 

The counsel for the appellant argued that as the opposition was filed under section 25(1) of the Old Act, the decision on opposition should have been taken under the Old Act and not based on Patents Act 1970, as amended by Patent Amendment Act 2005 (emphasis added)(hereinafter, “Current Act”). According to the counsel, section 15 of the Current Act has no application in opposition proceedings and by considering section 15 rather than section 25, the appellant has been denied a statutory remedy by the controller thereby negatively affecting the outcome of the proceedings. 

The counsel based his reasoning on section 162(5) of the Current Act, the General Clauses Act and paragraph 7 of the Circular dated 14th March 2005 of the Controller General of Patents & Designs. Section 162(5) reads:

Notwithstanding anything contained in this Act, any suit for infringement of a patent or any proceeding for revocation of a patent, pending in any court at the commencement of this Act, may be continued and disposed of, as if this Act had not been passed.

In response to the allegations from the counsel of the appellant, the counsel for respondent 1 submitted that the provisions for continuing proceedings as described in section 162(5) cannot be extended and made applicable to all pending proceedings and were only applicable to specific pending proceedings. 

Decision of the IPAB Board:

After hearing the arguments of both the parties, the board observed that the opposition was filed on December 14, 2004 under the then existing section 25(1) and the matter was heard by respondent 2 on September 18, 2006. The board pointed out that before the matter was heard by respondent 2, the Patents (Amendment) Ordinance, 2004 had come into force amending the Patents Act, 1970 with effect from January 1, 2005 which was later replaced by the patents (Amendment) Act, 2005. The board brought to the attention of the parties the instructions given by the Controller General through office instruction dated January 14, 2005 on how to deal with the pending oppositions under section 25(1). 

The instruction read:

“The cases which have been accepted and notified in the Gazette for inviting opposition u/s 25(1) of the Act, before this Patents (Amendment) Ordinance, 2004 came into force, the opposition if any will be dealt with as per the old Act and rules and if no opposition is filed, the application shall directly proceed to grant.”

Further, sub-section 2 of section 1 of the Ordinance number 4 of 2004 stated:

“Sub-clause (ii) of clause (a), and clause (b), of section 37, sections 41, 42, 47, 58 to 62 (both inclusive) and 73 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint; and the remaining provisions shall come into force on the 1st day of January, 2005.”

Moreover, the board specified that the appellant has got a right to go for appeal before the Honorable High Court as per the provisions available under section 116 (2) of the principal Act that were operative and in force when the impugned order was passed.

Section 116(2) reads:

“116 (2) Save as otherwise expressly provided in sub-section (1), an appeal shall lie to a High Court from any decision, order or direction of the Controller under any of the following provisions, that is to say, section 15, section 16, section 17, section 18, section 19, section 20, section 25, section 27, section 28, section 51, section 54, section 57, section 60, section 61, section 63, sub-section (3) of section 69, section 78, section 84, section 86, section 88 (3), section 89, section 93, section 96 and section 97.”

 The board concluded that the respondent 2 wrongly applied section 15 and ignored the Office instruction 1/2005 dated January 14, 2005 because of which respondent 2 failed to notice the date of enforcement of the amendments. Consequently, the decision of the respondent 2 is erroneous as instead of referring to section 25, the respondent 2 has referred to section 15 to decide the proceedings. The board has directed the order to be amended and asked the controller to base his decision under section 8 and section 25 of the old act as applicable on the date of filing of the opposition and not on section 15.  For further information, please refer to the IPAB site.

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