Compensating delay in granting of patents

By Piyush Sharma and Joginder Singh, LexOrbis
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Over recent years, the Office of the Controller General of Patents, Designs and Trademarks (Indian Patent Office or IPO) has significantly reduced the backlog of patent applications pending for examination. There have been instances of the IPO issuing the first examination report (FER) within 25 months through the regular examination route. The IPO has a target of reducing the period to 12 to 18 months. For expedited examination requests, the IPO tries to begin the examination of a patent application within six months.

patents
Piyush Sharma
Managing associate
LexOrbis

However, there are many outstanding applications that have been delayed for significant and unacceptable periods. There have been several instances where the FER has been issued 10 years from the filing of the application, leading some to abandon their applications. Sometimes it was no longer practical for applicants to continue because market conditions had changed. In the competitive environment of today where most technologies are outdated within a few years, such delays in the processing of the applications cause serious harm to the interests of applicants. These delays not only affect individual applications but also discourage the filing of patent applications in general. This has been a significant reason for the stagnation in the number of patent applications filed recently. More than half a million Patent Cooperation Treaty (PCT) applications are filed globally every year whereas only about 25,000 PCT national phase applications are filed in India annually. This means that only 5% of PCT applications are filed in India; in the remaining 95%, applicants do not bother seeking patent protection in India. There may well be market reasons behind such decisions, but the IPO should also improve the speed of examination to attract such applications.

patents
Joginder Singh
Partner
LexOrbis

Such delays in the grant of patents increase when outside agencies become involved in reviewing patent applications. For example, in cases involving the sensitive subject of technologies such as defence or atomic energy, the IPO refers the patent application to the Ministry of Defence (MOD) for clearance. After the review the MOD may approve the application and return it to the IPO. Generally, this process generates significant delay. Further, during the period of review, the application cannot be published or, if the application had already been published the IPO may give directions prohibiting or restricting further publication. Since the patent application is not published during this period, the applicant cannot claim damages for violations of intellectual property rights even where the patent is granted at a later stage.

Similarly, there are cases where the IPO raises an objection during the examination regarding the presence of biological material from India. In such cases, the applicant is required to have the patent application reviewed by the National Biodiversity Authority (NBA) over the use of biological resources. This is a time-consuming process and delays the prosecution of the patent application. Such delay has resulted in some multinational biotech companies deciding not to file patent applications in India.

In order to encourage intellectual property owners to file their patent applications in India, provisions should be incorporated in the Patents Act to compensate applicants for delays in the grant of patents in line with international best practice. For example, the United States Patent and Trademark Office may grant patent term adjustments (PTA) and patent term extensions (PTE), where applications have been delayed. Such provisions should also be available in India.

PTAs will compensate for substantial delays in the application process caused by the IPO, by adding day-for-day credits to the normal patent term of 20 years. Such adjustments can also take into account any unnecessary delay caused by the applicants themselves. It appears that this remedy properly balances both the interests of the applicant and those of the public.

To account for delays caused to applications due to late responses from other authorities as set out above, PTE may be offered. Additional time periods can be added to the patent term based on the duration of the delay caused by other authorities. This would allow the applicants to enjoy patent rights for the term of a total of 20 years from the date of filing, irrespective of delays in the grant.

The intellectual property rights ecosystem is on the cusp of a major evolutionary change and it is important to ensure that the interests of applicants are given importance that is equal and balanced with the public interest. Incorporation of provisions, such as PTAs and PTEs, in the Patents Act would provide much needed encouragement to intellectual property rights owners considering whether to file their applications in India.

Piyush Sharma is a managing associate and Joginder Singh is a partner at LexOrbis.

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