New rules impact IP rights and patent protection

By Pravin Anand & Geetanjali Visvanathan, Anand and Anand

Recent times have witnessed a paradigm shift in India towards protection and promotion of intellectual property (IP) rights, and in particular, protection of patents. The start-up boom, the government’s “Make in India” campaign, and judicial intervention in the case of Nitto Denko Corporation v Union of India have all contributed to the passing of the Patents (Amendment) Rules, 2016.

Pravin Anand
Pravin Anand

The rules, passed by the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry, came into effect on 16 May 2016, and specifically address the issue of excessive delays, backlog of applications at the Indian Patent Office, and higher costs in prosecuting applications, especially for new businesses.

To foster innovation and promote investment in India, the rules now specifically recognize start-ups as patent applicants. The rules define a start-up as being any entity working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or IP, provided not more than five years have elapsed from the date of incorporation of such an entity, and the turnover does not exceed ₹250 million (US$3.7 million) for the said five financial years. Taking into account initial difficulties faced by such businesses, the rules provide for lower fees for prosecuting patent applications filed by such start-ups.

The rules have also introduced provisions to reduce delays at the Indian Patent Office. In particular, electronic filing of patent applications by a patent agent is now mandatory. Another salient change is the reduced time to put a patent application in order for grant, from 12 months to six months from the date of issuance of the first examination report, further extendable to a maximum of three months.

The Rules have also introduced a special provision for “expedited examination” of patent applications. An applicant can request an expedited examination of his or her application if he or she fulfils any of the two conditions, namely: (1) When the applicant has indicated India as the competent international searching authority, or elected India as the international preliminary examination authority in the corresponding international application; or (2) The applicant is a start-up. The period within which the examiner has to submit his or her report regarding patentability of the invention to the controller, and in turn the time the controller has to dispose of the report and issue the first examination report, has also been considerably reduced under this special provision, the total period being from one to three months. This provision is the direct result of a writ petition filed by Anand and Anand for Nitto Denko Corporation before the Delhi High Court, where the government of India also committed to spending more than ₹3 billion for recruitment and creation of new posts for patent examiners, training of patent examiners and solving issues relating to salaries, attrition rate at the Indian Patent Office, etc.

Geetanjali Visvanathan
Geetanjali Visvanathan

Another welcome change under the rules is that a hearing before the Controller of Patents can now also be held through video-conferencing or any other audio-visual communication device, and an applicant or a party to a proceeding is entitled to only two adjournments, with each adjournment not for more than 30 days.

In a pre-grant hearing, the rules provide that both the statement and evidence as filed by the applicant have to be served to the opponent, in addition to the same being filed at the Indian Patent Office. Further, the controller has to pass a speaking order within one month from the date of final hearing.

The rules also provide for a refund of fees in case an applicant withdraws his application before the issuance of the first examination report, and further provide a cap on fees for filing sequence listing, which in the case of a start-up is a maximum of ₹24,000 and in the case of other entities is a maximum of ₹120,000.

The much awaited Patents (Amendment) Rules 2016, lay down stricter timelines for compliance while providing the ease of modern technology and facilities, with lower costs to applicants. The rules lay down the foundation for expediting, streamlining and strengthening IP protection in India, bringing India in line with its global counterparts.The rules also aim to boost investment and foster innovation by promoting start-ups in India, and are a welcome change.

PRAVIN ANAND is the managing partner of Anand and Anand and GEETANJALI VISVANATHAN is a senior associate at the firm

Anand And Anand

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